Residential development — Neighbouring properties — Additional building — Covenant restricting use of land for access — Whether claimant having benefit of covenant — Whether defendant breaching covenant — Whether permanent injunction appropriate — Whether damages adequate remedy — Claim allowed in part
The claimant and the defendant owned houses, nos 12 and 8 respectively, on a residential estate. Their properties were separated by no 10 and all formed part of the original plot 9. The defendant development company obtained planning permission for a development, including an additional house on land behind no 8.
The claimant argued that, by using part of the original land at no 8 for access to the new development, the defendant was in breach of a restrictive covenant contained in a transfer of plot 9 in 1925, restricting the use of the land to private residences.
The claimant applied to the court for a permanent injunction to prevent access to the new development, contending that he was entitled to the benefit of the covenant by annexation, or owing to the existence of a building scheme.
The defendant admitted that the land at no 8 was burdened by the covenants contained in the 1925 transfer but denied that the claimant had the benefit of those covenants or that the development infringed any of them.
The court was asked to decide whether: (i) the claimant had the benefit of the covenant; (ii) the defendant had committed a breach; (iii) a permanent injunction was an appropriate remedy; or (iv) it was appropriate to award damages in lieu.
Held: The claim was allowed in part.
The claimant had the benefit of the relevant covenant by annexation, although not because the two properties formed part of a building scheme. Access to the development amounted to a breach but it was inappropriate to grant a permanent injunction. Damages of £3,270 in lieu of an injunction were adequate.
The requirements of a building scheme were that the land should have a common owner, should be sold in lots, any restrictions should benefit all the lots and the obligations in the covenants should be reciprocal. In the present case, although the claimant had established the first three requirements, he had failed to show that the several purchasers of properties on the estate were aware of the reciprocal nature of the obligations in the covenants. Even though there was a strong suspicion, based upon the near uniformity of the covenants and their near total coverage of the estate, that the purchasers over the years were likely to have known of the intended reciprocity, to make the move from suspicion to inference was a step too far: Elliston v Reacher [1908] 2 Ch 374; Reid v Bickerstaff [1909] 2 Ch 305; and Jamaica Mutual Life Assurance Society v Hillsborough [1989] 1 WLR 1101 considered.
The claimant did have the benefit of the relevant covenant by reason of the annexation of its benefits and, since the covenant did not authorise the use of the land for access, the defendant was in breach thereof. However, a permanent injunction would be oppressive to the defendant since it would landlock the new house and would deprive it of an access to a highway, thus rendering the development valueless: Jarvis Homes Ltd v Marshall [2004] EWCA Civ 839; [2004] 3 EGLR 81; [2004] 44 EG 154 considered.
As regards damages in lieu, one effect of the covenant was to maintain low-density occupation, which was an important and valuable asset for neighbouring owners. Equally, the infringement of the covenant in this case was not minimal from their viewpoint. In all the circumstances, it was appropriate to award damages in the sum of £3,270: Wrotham Park Estate Co Ltd v Parkside Homes Ltd (1973) 229 EG 617; Amec Developments Ltd v Jury’s Hotel Management (UK) Ltd [2001] 1 EGLR 81; [2001] 07 EG 163; Lane v O’Brien Homes Ltd [2004] EWHC 303 (QB) and Gafford v Graham [1999] 3 EGLR 75; [1999] 41 EG 159 considered.
The claimant appeared in person; Edward Denehan (instructed by Derrick Bridges & Co) appeared for the defendant.
Eileen O’Grady, barrister
