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The applicants established their entitlement to rely on ground (aa) so as to modify a covenant restricting the use of land and allow its use as a mosque. Despite conduct constituting a sustained and wilful breach of the covenant, the Tribunal felt it would be inappropriate to use this as a reason to exercise its discretion to refuse the modification of the covenant, although it penalised the applicants by requiring them to pay 50% of the objector Council’s costs.
The applicants own the freehold interest in a property in Birmingham, which had previously been owned by Birmingham City Council. Following the sale of the land by the Council (and a Deed of Variation made in May 2000), the land was subject to a restrictive covenant "for the benefit and protection of so much of the adjoining or adjacent land of the Corporation as is capable of being benefited thereby" which prohibited the use of the land other than as a private dwelling-house and/or “for the practice of a medical practitioner dentist solicitor or other professional person".
The property was marketed for sale in 2008. The freeholder at that time wrote to the Council in November 2008 to inform it that the proposed purchaser wished to use the property as a mosque and Community Centre and asking whether the Council would vary the restrictive user covenant accordingly. The council refused.
The property was sold to a company in April 2009, which held it for the Green Masjid and Madrasah Charity. In June 2009, the company wrote to the Council to inform it that it proposed to let the property "for educational purposes". The Council replied in August 2009 to say that it did not consider the property suitable for this purpose due to the likely volume of traffic that would be generated and the limited on-street parking available.
Despite this response, the applicants proceeded to use the property as a mosque and madrasah since 2009 (once it was advised by the Council that and were continuing to do so in October 2011 when they applied under section 84 of the Law of Property Act 1925 to modify the restrictive covenant so as to permit the use of the land as a mosque and madrasah or, alternatively, as a place of worship including associated or ancillary religious education. (This followed the transfer of the property from the company to the trustees of the charity.) The applicants submitted that they had anticipated that the variation of the restrictive covenant would not be an issue given that the Council was also the relevant local planning authority, which had advised that planning permission was not required for the change of use to a mosque. The Council objected to the application.
The evidence in support of the application focused on the importance of the mosque to the local community, the fact that there was no similar facility in the relevant area and the lack of complaints to the trustees about any problems resulting from the use of the property. The applicants also produced expert evidence to show that the traffic and parking implications from the use of the property as a mosque were imperceptible. In response, the Council called no expert traffic evidence but relied upon complaints made to Councillors and the local MP by local residents - relating to increased traffic, problems with on-street parking on nearby service roads and noise from the property late at night
and early in the morning.
To assess the land enjoying the benefit of the covenant, the Tribunal reviewed the guidance in Re Ecclesiastical Commissioners for England's Conveyance  Ch 430 - noting that "adjoining" means “that which lies near so as to touch in some part the land which it is said to adjoin" and "adjacent" is "that which lies near but is not in actual contact with land". Having assessed the Council-owned properties to be regarded as “adjoining” and “adjacent”, the Tribunal then considered whether the applicants had established grounds (aa) and/or (c) in order to secure the modification of the covenant.
In assessing the availability of ground (aa), the Tribunal firstly considered whether the proposed user of the property was reasonable and found in the applicants’ favour. It rejected the Council's argument that the unreasonableness of the user was evidenced by the "considerable local opposition" to the mosque, stating that an unpopular proposed use may still be a reasonable one.
The Tribunal then moved on to consider whether the restriction secured practical benefits to the Council. It concluded that this was the case in respect of at least some of its adjoining and adjacent properties, noting the benefits of preventing the lawful parking of additional cars on the street and avoiding the intensification of traffic movements and noise from people leaving the mosque.
The Tribunal then reviewed whether the practical benefits are of substantial value or advantage. The Tribunal accepted the evidence of the applicant's expert that the impact of additional traffic from the mosque was minimal and therefore felt that the covenant did not secure a substantial practical benefit to the Council in terms of preventing increased traffic. Similarly, the Tribunal decided that there was insufficient evidence of problems being caused from additional non-street parking and therefore concluded that the restriction did not secure to the Council a practical benefit of substantial advantage regarding the prevention of on-street parking.
On the issue of noise, the Tribunal felt there was a lack of specific evidence of complaints from the occupiers of the relevant adjoining or adjacent properties, so it concluded that the covenant did not secure any practical benefits of substantial advantage to the Council in this regard. As to the impact on local property values, the Tribunal noted that it had seen no evidence that the negative effect (if any) of increased noise, traffic and on-street parking would outweigh any premium that Muslims would pay to live close to the mosque.
Since the Tribunal had concluded that the proposed modification would not adversely affect the value of any adjoining or adjacent property belonging to the Council, it confirmed that there was no loss or damage arising from the modification of the covenant so as to give rise to monetary compensation or the question of whether this would be adequate.
The Tribunal therefore concluded that the applicants had satisfied ground (aa) and that it therefore did not need to consider the arguments in relation to ground (c).
The Tribunal noted that establishing ground (aa) did not lead to an automatic entitlement to the modification of the covenant; under section 84(1B) of the 1925 Act, the Tribunale is required to take into account "any other material circumstances" when exercising its discretion as to whether a restriction ought to be modified. The Council invited the Tribunal to exercise its discretion against the applicants due to their conduct in committing a wilful and sustained breach of covenant, whereas the applicants argued that refusing relief would be wholly disproportionate and unduly harsh.
(The applicants admitted that they knew of the Council’s previous refusals to modify the covenant to allow the proposed use. Moreover, despite being in breach of covenant and eventually aware of the need to apply for the modification of the covenant, the applicants had implemented a planning permission granted for a side extension to the mosque, which the Tribunal regarded as exacerbating the breach of covenant.)
The Tribunal agreed that the applicants' conduct constituted a sustained and wilful breach of the covenant and that such conduct "is to be deprecated". However, having been satisfied on the facts and on the law that it had jurisdiction to modify the covenant, the Tribunal was loath to exercise its discretion so as to deny the applicants the relief sought. It commented that:
"Where jurisdiction has been established I consider that the discretion of the Tribunal to refuse the application should only be cautiously exercised. It should not be exercised arbitrarily and, in my opinion, should not be exercised as, effectively, a punishment for the applicants' conduct unless such conduct, in all the circumstances of the case, is shown to be egregious and unconscionable. On balance I do not consider that the applicants' conduct was so brazen as to justify my refusal of their application".
The Tribunal noted that it had taken into account two factors as mitigating the applicants' conduct: they had not sought to profit from the breach of covenant, but believed that they were satisfying an urgent requirement in the area for a place of religious worship; and they had mistakenly assumed (which is not uncommon) that the existence of planning permission for the proposed use would eventually mean that the Council would agree to modify the restrictive covenant.
The Tribunal therefore confirmed that the covenant should be modified, subject to the inclusion of conditions that: the property should not be used for a call to prayer audible outside of the building and the parts of the land presently used for car parking should not be used for any other purpose.
On the question of costs, the Tribunal took account of the applicants' conduct as being a sustained and wilful breach of the covenant and therefore regarded their conduct as unreasonable. Taking account of the mitigating factors referred to above, it ordered the applicants to pay 50% of the Council’s costs, to be assessed on the standard basis unless agreed.
For more information please contact Emma Humphreys, Partner
T: +44 (0)20 7203 5326