Not so very long ago, the Lands Chamber of the Upper Tribunal suggested that it might be disinclined to modify or discharge restrictive covenants where landowners have deliberately disregarded their legal obligations: Re George Wimpey Bristol Ltd’s application [2011] UKUT 91 (LC); [2011] PLSCS 146. What then are we to make of its decision in Re Trustees of the Green Masjid and Madrasah’s application [2013] UKUT 0355 (LC); [2013] PLSCS 243 to modify covenants to allow a building in Birmingham to be used as a mosque and madrasah?
The property used to be owned by the council and was subject to restrictive covenants prohibiting its use as anything other than a private dwelling house or as an office for a doctor, dentist, solicitor or other professional person. The council rebuffed an application to vary the covenants while the premises were on the market, which would have cleared the way for the property to be used as a mosque and community centre. However, the trustees for the Green Masjid and Madrasah Charity decided to proceed with the transaction and subsequently asked if they could use the land for “educational purposes”. The council refused, citing concerns about increased traffic and a shortage of parking.
The trustees made sure that their proposed use of the property would not contravene the planning regime and began using the property as a mosque and madrasah, despite the restrictions imposed by the covenants. It made an application under section 84(1)(aa) of the Law of Property Act 1925 when the council sought an injunction to stop the use.
The tribunal agreed that the covenants secured practical benefits, which protected the council’s adjoining properties, but refused to accept that the benefits were of substantial value since there was no evidence to suggest that the use of the property as a mosque and madrasah had generated intolerable levels of traffic or that there was insufficient parking in the vicinity. It also accepted that such use was reasonable, even though it was unpopular locally.
This did not mean that the trustees were entitled, as of right, to an order modifying or discharging the covenants. However, where it has jurisdiction to modify or discharge restrictive covenants, the tribunal considered that it should exercise its discretion to refuse the application cautiously. It was critical of the trustees’ sustained and wilful breach of covenant, but decided that their conduct was not sufficiently egregious or unconscionable to justify the refusal of their application. It took account of two mitigating factors in the trustees’ favour. They had not breached the covenants for profit. They were using the property for religious purposes, for which there was a significant demand, and there was no alternative venue in the locality. In addition, they had mistakenly had assumed that the fact that the use was a permitted use for planning purposes would, ultimately, be determinative, especially as the planning authority and the beneficiary of the covenants were one and the same person.
In the circumstances, the tribunal agreed to modify the covenants on condition that the parking areas outside the building should not be used for any other purpose and that calls to prayer should not be audible externally.
Allyson Colby is a property law consultant
