Restrictive covenant – Discharge or modification – Section 84(1)(a), (aa) and (c) of Law of Property Act 1925 – Applicants extending property in breach of restrictive covenant preventing extension without prior approval – Applicants applying retrospectively to discharge restriction – Whether covenant obsolete or securing practical benefits of substantial value or advantage – Modification granted
The applicants owned a property known as 7 Redwood Grove, Bude, Cornwall. The property was originally a detached bungalow with three bedrooms, one of which had an en-suite bathroom, kitchen, lounge and further family bathroom.
In 2018, the applicants made extensions to the kitchen area and third bedroom, which were conventionally constructed with rendered walls under a concrete tiled pitched roof. Both rooms had doors opening on to a small patio area. The kitchen extension had been constructed with a ceiling which was open to the underside of the roof structure and had full-height glazing in the gable end. The bedroom extension was approximately 2m deep by 2.5m wide and the kitchen extension was approximately 3.5m deep and 3.5m wide. The extensions did not require planning permission as their relatively modest size fell within the criteria for permitted development. Building control approval was sought and obtained.
A conveyance dated 18 December 1980 contained a restrictive covenant which prevented the construction of unauthorised extensions to the property without prior approval which had been breached by the applicants as a result of building works. The applicants were unaware of the covenant when they carried out the works.
In 2022, the applicants wished to sell the property and were made aware of the breach of covenant. The applicants applied to discharge the restrictive covenant under section 84(1)(a), (aa) (b) and (c).
Held: A modification was granted.
(1) The covenant did not constitute an absolute prohibition on extensions. There was only a prohibition on modification without the consent of the covenantee. No reasonable covenantee would have withheld consent for the 2018 works, but the covenant did not say expressly that the covenantee might not refuse consent unreasonably. If such a proviso was to be implied, it would prevent the covenantee from acting arbitrarily or capriciously or from improper motives: Mahon v Sims [2005] 3 EGLR 67 considered.
On the facts, it might be unreasonable to withhold consent but that was not the question posed by section 84; the tribunal’s task was to determine whether any of the statutory grounds were made out. Circumstances which went to establishing one of the grounds might also suggest that a refusal of consent was arbitrary, capricious or unreasonable, but the better approach was to concentrate on the grounds themselves.
(2) Ground (a) of section 84(1) was satisfied where it was shown that by reason of changes in the character of the property or neighbourhood or other material circumstances, the restriction ought to be deemed obsolete. In this case, the covenant was relatively modern, having been included in the 1980 transfer. However, 43 years later, the context was different. The whole area had been fully developed. The original purpose of the covenant now had limited relevance, the constrained nature of the site limited development options and the protection of amenity for nearby properties was to an extent controlled by the planning system. However, the covenant retained a modicum of utility for those, other than the objectors, who owned benefited land as it prevented development which might affect amenity but not require planning permission. Therefore, ground (a) was not made out.
(3) Ground (aa) was fulfilled where it was shown the continued existence of the restriction would impede some reasonable use of the land for public or private purposes or that it would do so unless modified. By section 84(1A), where condition (aa) was relied on, the tribunal might discharge or modify the restriction if it was satisfied that, in impeding the suggested use, the restriction either secured “no practical benefits of substantial value or advantage” to the person with the benefit of the restriction or was contrary to the public interest. The tribunal also had to be satisfied that money would provide adequate compensation for the loss or disadvantage (if any) suffered from the discharge or modification.
Here, the extensions were a reasonable use, and they were clearly impeded by the covenant. However, the owners of properties in the immediate vicinity were given notice of the application and there were no other objections. The extensions were relatively inconsequential, and not capable of setting any sort of precedent for more intrusive development. The ability to prevent the retention of the extensions was not a practical benefit to the objectors. Accordingly, ground (aa) was fulfilled. It followed that the objectors would not be injured by the discharge of the covenant and ground (c) was therefore also made out.
(4) Ground (b) required all those of full age and capacity entitled to the benefit of the restriction to agree, expressly or by implication to the proposed modification or discharge. There was no evidence that others with the benefit of the restrictions had consented, because it was not known who they all were, and they had not been asked, although neighbours had had the opportunity to object. Accordingly, ground (b) was not satisfied.
(5) The objectors sought compensation, but their approach was misguided. The purpose of compensation was to make good the loss or disadvantage suffered by that person resulting from the discharge or modification. It was usually quantified by the diminution in value of the benefited land, but in this case, there was no evidence that the objectors’ land had suffered any decline in value. Therefore, the claim for compensation was rejected.
(6) Where jurisdiction was established, the tribunal would not normally decline to exercise its discretion unless there was a compelling reason to do so. In this case the extensions were built in breach of the covenant and the application to the tribunal was after the event although the applicants were unaware of the restriction when they carried out the works.
There would be no harmful effects on the interests of the objectors. Any future application to modify similar covenants to permit work on other plots would be decided on the facts of each case. Although this was an application to discharge the covenant, it was preferable to allow its modification to enable the retention of the two extensions as built. That would enable the applicants to sell the property but left the neighbours with an assurance for the future that more extensive alterations could not be made without their approval.
James Jarvis (instructed by Paul Finn Solicitors, of Bude) appeared for the applicants; the objectors appeared in person.
Eileen O’Grady, barrister
Click here to read a transcript of Rogers and another v Dinshaw and others
