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Re Surana's Application [2016] UKUT 368 (LC)

Summary

The applicant sought to modify restrictive covenants affecting land adjoining her house on a residential estate, in order to construct two houses. The land had originally been intended for recreation but had never been used for that purpose. The application was granted under s.84(1)(aa) LPA 1925 since the covenants did not secure substantial practical benefits to the beneficiaries.

Facts

The applicant had secured planning permission for the construction of two detached houses on the land adjoining her home (one of a number of areas within the estate known as “closes”). 

The covenants affecting the land provided that:

  • “no building or erection of any description” should be erected on the close; and
  • the close should not be used for any purpose other than as a green, garden, open space or pleasure ground for the benefit of residents.

Although the land was originally intended to be retained by the estate company for recreational use by the residents, it was sold to the applicant’s predecessor-in-title by the company in 1952 and the other residents effectively had no access to it from that time.  The applicant therefore argued that the covenants were obsolete under s.84(1)(a) and that the residents’ prolonged period of non-use constituted implied agreement to the modification of the covenants under s.84(1)(b).

The applicant also argued that the covenants should be modified under s.84(1)(aa) on the basis that there was no substantial practical benefit to the objectors in retaining the covenants and blocking the proposed development, especially since the land in its current condition was prone to acts of trespass, vandalism and littering, and therefore a source of nuisance. The application was opposed by 13 owners of houses on the estate, who argued that the gap in development was part of the estate’s natural beauty and attraction.

 Issues

(1) Whether the Tribunal should exercise its discretion to modify the restrictions under s84(1)(a) LPA 1925, i.e. on the basis that they ought to be deemed obsolete.

(2) Whether the residents’ prolonged period of failing to use the land for public recreation meant that there was implied agreement to the modification so as to satisfy s.84(1)(b).

(3) Whether the Tribunal should exercise its discretion to modify the restriction under s.84(1)(aa) LPA 1925, i.e. on the basis that it impeded a reasonable user of land.  (Under s84(1A), modification is permitted where the Tribunal is satisfied that: (a) the person who is entitled to the benefit of the restriction does not secure any practical benefits of substantial value or advantage from it; or (b) that the restriction is contrary to the public interest.  For the purposes of section 84(1A), consideration also has to be given as to whether money is adequate compensation for the loss or disadvantage to the beneficiary as a result of the modification of the restriction.)

Decision

Grounds (a) and (b) – obsolescence/implied agreement

Although most of the estate closes had not been used for public recreation, the Tribunal did not consider that this justified the conclusion that the covenants had been abandoned or become obsolete since they continued to perform their intended purpose of preventing the development of blocks of land in certain positions.  In the Tribunal’s view, the covenants were still able to achieve this purpose despite the public no longer exercising rights of access to use the relevant land for public recreation.  It also noted that mere prolonged non-use did not necessarily constitute abandonment of the rights of access. 

The Tribunal considered that its decision not to allow the applicant to succeed on grounds (a) or (b) was further supported by the fact that the covenants had been asserted and relied on by the estate company whenever it had come to its knowledge that a breach was threatened or had taken place.

Ground (aa) – substantial practical benefits?

In relation to the potential practical benefit of preserving the integrity of the building scheme and the closes as undeveloped land, the Tribunal rejected the suggestion that the applicant’s proposed development would be the “thin end of the wedge” so as to create an adverse precedent which would jeopardise the future utility of the scheme of covenants as a whole. The Tribunal pointed out that it was the sale of the land by the estate company to private owners which had destabilised the scheme of covenants and enabled them to be considered for modification based on their individual merits.

In relation to the visual and other amenity of the estate, the Tribunal gave no significant weight to the current overgrown condition of the application land.  The Tribunal noted that the key determinant of the character and amenity of the estate was the system of greenways on either side of the road, rather than the presence of the undeveloped closes which were shielded from view.  In the view of the Tribunal, the proposed development would be in keeping with the type, size, style and density of the existing houses and the visual amenity of the Estate would be retained provided that the hedge there was kept to a minimum height of 2.5m.

The Tribunal considered whether the temporary disturbance from the construction of two new houses is capable of being a practical benefit of substantial value but noted that the objectors had not identified any facts to justify giving special weight to the possible effects of such temporary disturbance.

Although the objectors suggested amounts of compensation for any modification of the covenant in sums between £50,000-£750,000, there was no expert valuation evidence to support these claims.  The Tribunal accepted the evidence from the application’s expert that there would be no diminution in the value of the objectors’ properties caused by the proposed development and concluded that the covenants did not secure practical benefits of substantial value to the objectors. 


This article was written by Emma Humphreys, for more information please contact Emma on +44 (0)20 7203 5326 or emma.humphreys@crsblaw.com

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