Land – Restrictive covenant – Discharge or modification – Applicant proposing to erect five dwellings in breach of agricultural buildings only covenant – Applicant applying to discharge or modify restrictive covenant – Whether proposed use of site reasonable – Whether restriction impeding that use – Whether covenant securing practical benefits of substantial value or advantage – Application granted
The applicant developer held an option over 1.24 acres of land adjoining the village of Lower Moor, Pershore, in Worcestershire. Outline planning consent was granted in December 2016 for five detached dwellings on the site which, if constructed, would be in breach of a covenant restricting buildings on the land to those of an agricultural nature. The applicant applied to the Upper Tribunal to discharge or modify the restrictive covenant.
The restriction was contained in a conveyance of the site dated 7 September 1972 for the benefit of adjoining land belonging to the vendors, which had since been developed with residential property, known as Old Manor Close. Objections were received from the owners of all six houses in the close.
The application was made on grounds (aa) and (c) in section 84(1) of the Law of Property Act 1925. The applicant argued that the restriction should be modified under ground (aa) to permit the development because it impeded a reasonable use of the land and did not secure to the objectors any practical benefits. Equally, since no injury would be caused to the objectors by implementation of the development, the restriction should be modified under ground (c).
The objectors said that the purpose of the restriction could still be served and that the restriction secured practical benefits of substantial value or advantage to them, including the preservation of the visual amenity of a rural view and of tranquillity.
Held: The application was granted.
(1) The proposed use of the site was a reasonable one. The development had received scrutiny through the planning process, with amendments and conditions to ensure that it met the criteria for sustainable development. The parties agreed that the restriction did impede the development.
(2) There was no evidence of any practical benefit secured by the covenant for the objectors living at Nos 1, 2, 5 and 6 Old Manor Close. They had no view of the site and were separated from it by Nos 3 and 4. From the tribunal’s own inspection, it was clear that the restriction secured practical benefits to the owners of No 4.
Modification of the restriction to permit the development would alter the setting completely by moving the edge of the village to the southern boundary of the site and leaving No 4 surrounded by residential development. That would be very apparent from the south facing windows and garden until some mitigation was provided by the approved tree and hedge planting.
The current outlook of No 3 was already screened by a more significant hedge and tree boundary, and that would be changed very little by the development due to the siting of a significant area of green infrastructure in front of that boundary. The tribunal could not identify a practical benefit secured to the owners of No 3 by the restriction.
(3) Whether a benefit was substantial required a subjective judgment to be made in the particular circumstances of each application and of each property of an objector where benefits were secured. Shephard v Turner [2006] 2 EGLR 73 considered.
The value or advantage of the practical benefits secured to No 4 by the restriction was not substantial. Although the only alternative form of development which could be carried out without being in breach of the restriction was for the purposes of agriculture, the land was likely to remain essentially redundant for that purpose as a result of surrounding residential development and restricted access. The resulting reversion of grassland to scrub and waste was typical of land with no economic purpose and, in that state, it was not particularly attractive. Preventing development which would change the setting was of greater advantage than preservation of the immediate outlook.
A less than substantial advantage, as here, might well be recognised by the market in terms of value, but not substantial value.
(4) For the purposes of section 84(1A)(b) of the 1925 Act, it was not the short-term consequences of the threat of modification which were significant, but the longer-term perspective. Development was currently prevented by the restriction, and temporary uncertainty created by the proposal to develop the site had to be left out of account when considering whether the value of the objectors’ property would be diminished.
Whilst the construction period would be the most disruptive phase for the owners of No 4, that would be temporary. During the period between removal of trees on the site for the construction and the point where the approved new planting had become sufficiently established to provide an effective screen, the impact would be more than temporary, and the change in the setting of No 4 would be a permanent disadvantage. The value of No 4 was agreed at £600,000 and adequate compensation for the disadvantage arising from modification would be £25,000.
(5) Section 84(1)(B) required the tribunal to take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant area. From the planning officer’s report and the residential development which had taken place all around the site since the restriction was entered into, the tribunal was satisfied that the pattern for granting consent was established and apparent.
(6) The tribunal was also required to take into account the period at which and context in which the restriction was created or imposed and any other material circumstances. When the covenant was entered into, an agricultural business was still operating in the village and the planning policy framework would have been very different. Councils were now required to deliver a sufficient supply of homes and promote sustainable development. The site of former agricultural activity in the village had been developed for housing and the restriction to agricultural use had ceased to have relevance.
Accordingly, the tribunal was satisfied that ground (aa) was made out and that it had discretion to modify the restriction. The amount of £25,000 would be adequate compensation to the owners of No 4 for the loss of practical benefits secured by the restriction.
It followed that ground (c) was not made out because the proposed modification would injure the owners of No 4.
David Mitchell (instructed by DF Legal LLP) appeared for the applicant; The objectors appeared in person.
Eileen O’Grady, barrister
Click here to read a transcript of Mill Strand Developments Ltd v Tapp and others
