PETER HULSE; JOSEPHINE HULSE v COLIN AND JEANNETTE THOMPSON; PATRICIA DUCKETT; JEFFREY FISHER; ALAN AND JACQUELINE PARRY [2021] UKUT 111 (LC)

UPPER TRIBUNAL
LANDS CHAMBER
[2021] UKUT 111 (LC)Case No LP/14/2020
Between
PETER HULSE; JOSEPHINE HULSEApplicantCOLIN AND JEANNETTE THOMPSON; PATRICIA DUCKETT; JEFFREY FISHER; ALAN AND JACQUELINE PARRYRespondent
Before
P D McCrea FRICS FCIArbDate 26 May 2021Property: Land to the rear of 56 Nantwich Road,, Middlewich, Cheshire, CW10 9HG, P D McCrea FRICS FCIArbCatchwords: RESTRICTIVE COVENANTS – MODIFICATION – planning permission for new house – covenants restricting development – held that covenants secure to the objectors a practical benefit of substantial advantage – Tribunal’s discretion – s.84(1)(aa) and (c), Law of Property Act 1925 - application refused
[1]Middlewich is an attractive town in the borough of Cheshire East. From the town centre, the A530 runs south to Crewe and Nantwich. Along its western side, a short distance from the town centre, there are a series of detached houses, five of which are nos. 56-64 Nantwich Road. Slightly to the north of no. 56 there is a minor road leading west off Nantwich Road, called Mill Lane.[2]Approximately three acres of the land to the rear of nos. 56-64 was owned by a Mrs Pickering who lived on Mill Lane. In 1996 she decided to sell the land, and asked Mr Jeffrey Fisher, who lived with his late wife Judith at no.64, if they would like to buy it. The Fishers in turn then approached their neighbours at 56-62, and it was agreed that the Fishers would buy the whole plot and simultaneously sell to the owners of nos. 56-62 the individual strips behind their properties.[3]The parties to the resulting Transfer dated 12 March 1996 were as follows. Peter and Josephine Hulse (no.56) purchased plot 5; Nigel and Julia Clayton (no.58) purchased plot 4, Philip and Ava Robinson (no.60) purchased plot 3; Eric and Patricia Duckett (no.62) purchased plot 2, while Jeffrey and Judith Fisher retained what was then known as plot 1.[4]Plot 5 was different from plots 1-4 in several ways. First, while plots 1-4 could be accessed directly from the rear of each property, the Hulses could not access plot 5 directly from their house (they later rectified this by buying the intervening land). Secondly, plot 5 had direct vehicular access from Mill Lane whereas while vehicular access to plots 1-4 might be possible, it would be more difficult and would require a vehicular access through the gardens of the houses. Thirdly, the topography of plots 1-4 was broadly similar, whereas at least part of plot 5, where it had access from Mill Lane, lay in a dip in the land and was noticeably lower. In plan form, this was the layout: 4[5]Since that plan was drawn, there has been further development on Mill Lane, including a new house on the land to the north-east of plot 5, known as Rosebank House.[6]The Fishers paid £40,000 for the larger tranche of land, which was divided equally – with the Ducketts, Robinsons, Claytons and Hulses each paying £8,000 to the Fishers for their respective plots. The Transfer dated 12 March 1996 between the Fishers and their neighbours contained a series of mutual covenants. They were as follows: “The parties hereto hereby covenant each with the other and so as to bind the Plot this day transferred to each of them respectively and so as to benefit and protect the other Plots this day transferred to each of the other parties hereto and each and every part of such land to observe and perform the following covenants –(a) no building shall at any time be erected on any of the Plots except in accordance with plans and specifications first approved in writing by the owners of all four of the other Plots;(b) within the area of land hatched pink on the Plan annexed hereto [shown on the plan above] no fences or hedges or trees or shrubs or structures or erections shall be permitted to exceed four feet in height;(c) no to carry on or permit or suffer to be carried on upon any of the Plots any activity which may be or become a nuisance, annoyance or danger to the owners or occupiers of the other plots;(d) forthwith to erect and thereafter to maintain a good and sufficient boundary fence or hedge along the northerly boundary of the Plot belonging to each party respectively.[7]The Transfer reserved to each of the purchasers a right of way for agricultural purposes only and limited to 12 times a year, over the each of the plots to and from Mill Lane. The proposed development[8]Mr and Mrs Hulse now wish to build a house (broadly on the area of plot 5 hatched red on the plan above). This is opposed by Mr Fisher, Mrs Duckett, and the current owners of no. 60 - Mr and Mrs Thompson, and no.58 - Mr and Mrs Parry.[9]Planning permission for the development was granted by Cheshire East Borough Council on 15 August 2019 under code 18/6299/C, following expiry of a previous consent, 14/5907/C. The permission is for the construction of one detached dwelling and the creation of a new access off Mill Lane. The house would be two-storey with a sitting room, family room, study/bedroom five, large kitchen/family room and playroom on the ground floor, and four bedrooms, a family bathroom and two en-suite bathrooms on the first floor. Owing to the sloping nature of the site, a double garage would be at basement level.[10]The southern elevation of the proposed building would face plots 1-4. At ground floor level the full height glazed elevation to the kitchen/family room, leading to a terrace, would face south but because the house would be set down in the dip, this would not really overlook the 5 objectors’ property. At first floor level, the southern elevation would only have one window, that to the ensuite bathroom of the master bathroom. The application[11]The application is to modify the restrictions to the extent necessary to enable the planning consent to be implemented. It relies on grounds (aa) and (c) of section 84(1) of the Law of Property Act 1925 (“the Act”).[12]So far as is material, ground (aa) requires that, in the circumstances described in subsection (1A), the continued existence of the restriction must impede some reasonable use of the land for public or private purposes. The circumstances in subsection (1A) which must be demonstrated are as follows:
“Subsection (1)(aa) above authorises the discharge or modification of a restriction by reference to its impeding some reasonable user of land in any case in which the Upper Tribunal is satisfied that the restriction, in impeding that user, either — (a) does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them; or (b) is contrary to the public interest, and that money will be an adequate compensation for the loss or disadvantage (if any) which any such person will suffer from the discharge or modification.”
[13]The Tribunal is required, when considering whether sub-section (1A) is satisfied and a restriction ought to be discharged or modified, to take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permission in the area as well as the period at which and context in which the restriction was created or imposed and any other material circumstances (section 84(1B)).[14]To succeed under ground (c), the Tribunal must be satisfied that the proposed discharge or modification will not injure the persons entitled to the benefit of the restriction. Evidence[15]On 30 March 2021 I carried out a site inspection accompanied by Mr Hulse and his solicitor, and objectors Mrs Parry and Mr Thompson. I inspected the application land, viewed it from Mill Lane and also from Mrs Parry’s plot, being the closest of the objectors’ plots to the application land. Those accompanying me agreed that nothing further would be gained from viewing the application land across the low dividing fences dividing the gardens of 60-64.[16]I received written witness statements from all of the parties.[17]Mr and Mrs Hulse said that by 2004 plot 5 was becoming difficult to maintain. Their daughter had expressed a wish to build a house on the land, and the Hulses are happy for that to happen. They successfully obtained planning permission for a house and made a previous 6 application to the Tribunal, but the planning permission expired before the hearing date and the application was withdrawn. They then reapplied for planning permission and secured the further consent referred to above. They say that any concerns about the application being the thin end of the wedge are unfounded, owing to the unique access that plot 5 has from Mill Lane. They also argue that the proposed house would not have any impact on the objectors’ properties, as it would be at a much lower level and screened by trees – they would want the house to retain its “wooded” feel.[18]The Hulses said that the new house would be sited in the deep hollow of the land, immediately below Rosebank House. When built, only the upper section and the roof and chimney would be visible from the benefitting land. From the objectors’ rear gardens, which the Hulses say do not benefit from the covenants, the development would be hardly visible. From the objectors’ houses, which do not benefit from the covenants, the development would only be visible from upstairs windows, of which (being former bungalows) there were very few. They rely on visual impact assessment documents in support of these contentions.[19]Mr Fisher said that his and his late wife’s agreement with Mr Pickering was that if Mr Pickering gave the Fishers the first option to purchase the three acres upon Mr Pickering’s death, the Fishers would split the land with their neighbours if they all agreed to enter into a covenant to protect the land “for at least the live span of the present residents”, and that is what happened. He said that there was a previous attempt by the residents of 66 and 60 Nantwich Road to build executive houses behind their properties, but this failed on environmental grounds. The threat of that development partly led to the covenants being entered into. Mr Fisher said his objection was based on four reasons. – to test the validity of a covenant, particularly a short-lived one; to restrict a precedent being established by others; to continue to protect and care for the environment; and to stop financial gain by the Hulses because their action would certainly mean financial loss to the objectors’ properties.[20]Mrs Duckett said that the purpose of the covenant was to stop any building being permitted. Referring to the right of access 12 times a year to Mill Lane, Mrs Duckett said that this was of value to her and to the owners of nos. 60 and 64, as they have no substantial access from the front of their properties for large machinery to maintain their land. She said that if the application were granted the covenant would be worthless; they all entered into the agreement in good faith so that there would be no building, and to keep the natural environment overlooking the countryside. Mrs Duckett said that the correspondence she had received from the applicants’ solicitors made her feel bullied and intimidated, causing her great stress.[21]Mr Thompson said that some of the main factors which in 2005 drew him and Mrs Thompson no.60 were the outlook, the open aspect to the rear, and the knowledge that the land benefitted from a restrictive covenant. He said that the modest price the neighbours each paid reflected the agreement that these were not development plots, and the spirit of the agreement was as valid today, with five [at the time he made his statement] of the six parties still involved. The covenants prevent development on any plot, securing the rear open space and property values unless they all agreed otherwise. The applicants, however, did not benefit from such views so their value was not as significant. Mr Thompson argued that the applicants’ suggestion that the objectors would not see the proposed building was nonsense. The masking trees could be felled tomorrow (some of them have been as I describe below) and in any event they have no foliage for six months of the year. Mr Thompson thought that the proposed terrace would have views across 7 the objectors’ gardens. As for the applicants’ reliance on their plot being different from the objectors’ plots, again Mr Thompson disagreed, referring to the applicants’ planning report which indicated that number 58 might also be able to access the rear land, having slightly wider side access than that of the other houses.[22]Mrs Parry said that her family moved into no.58 in January 2021; the principal factor in their purchase was the garden and that the restriction prevented development of the rear plots. They were not made aware of the application to the Tribunal; it was not mentioned in the Law Society property information form, nor during any of the numerous conversations between the applicants and Mrs Parry’s father when he was carrying out much cutting back of vegetation (with the vendor’s consent) before the Parrys moved in. Mrs Parry was concerned that the design of the proposed development was such that the patio doors and external terrace directly faced her garden, only eight feet from her border. She was upset that when her father was cutting down trees and vegetation, prior to purchase, the applicants did not mention this. To enable development, many other trees on the border would also be removed, significantly affecting the privacy of her rear garden – the border fence is low level. Part of the reason, Mrs Parry said, that they had cut so many trees down was to comply with the restriction – but this now meant that the effect of the proposed development on her and the other objectors had increased. It also meant that the visual representations in the applicants’ documents were no longer a fair and accurate representation of the situation. Mrs Parry agreed with Mr Thompson that her property was such that vehicular access to the rear could be achieved, so the application land was not unique in that respect.[23]Mrs Parry said that she and her husband were the ‘innocent parties’. For some time, they had been looking for a house with a large garden which was not overlooked nor spoilt by new developments. No 58 was ideal, with a river at the rear and the restrictions both preventing development. She said that they would not have bought the house had they known of the application to modify the restriction, which if successful would impact on their welfare and mental health, and would devalue their property. She felt that they would have no option but to apply for planning permission themselves to try to recoup some of their financial loss and sell both the plot and their house. Ground (aa) – practical benefits of substantial value or advantage[24]I start with the proposed use (or “user” in the terminology of the Act). The proposed development has the benefit of planning permission. It is a residential development in a residential area, and I am satisfied that for the purposes of the Act it represents “some reasonable user” under sub-section (1A). Restriction (b) of the Transfer impedes the user, since it would amount to an erection greater than four feet in height.[25]Next, the following question arises – does impeding the user secure to the objectors any practical benefit of substantial value or advantage? Taking that in stages, I am satisfied that the ability to prevent the development by relying on the restriction secures to the objectors a practical benefit. Is it of substantial value? In the absence of any expert evidence that is a difficult question to answer. There was lay witness evidence from Mr Fisher and Mrs Parry that there would be an effect on the value of their properties, but little else and no reference to any figures. While the Lands Chamber is an expert tribunal, it is difficult to come to a view in an evidential vacuum. But the value and advantage questions are alternatives, and to succeed the applicants must demonstrate 8 that the impeding the proposed use secures neither substantial value nor substantial advantage to any of the objectors.[26]As I mentioned above, the applicants say in their statement of case that neither the immediate back gardens (i.e. the land lying outside that conveyed in the 1996 transfer) nor the houses themselves benefit from the restrictions. At my site visit, both Mr Thompson and Mrs Parry seemed to agree with this, and it is clearly correct (the restrictions in the 1997 transfer were expressly entered into “so as to benefit and protect the other Plots this day transferred”). Neither side made any submissions about the significance of this fact and, in particular, about whether the question whether the restrictions secures a substantial practical benefit to the objectors is to be considered having regard exclusively to their ownership of the 1996 plots or may also take into account any benefits they derive as owners of their own houses and their original gardens. There are a number of decisions of the Tribunal, and one of the Court of Appeal, which are relevant to that issue, and these were reviewed most recently by the Tribunal (Mr A.J. Trott FRICS) in Copleston and Norton’s Application [2021] UKUT 0018 (LC) at [49-67]. For the reasons I will explain below, I do not think the outcome of this case turns on which of the rival positions is correct, and in the absence of legal submissions there is nothing to be gained by me adding to the previous discussion on the point.[27]When I carried out my site inspection, I was struck by the open nature of the plots – the boundary fences have been kept below four feet and are in themselves insubstantial structures, such that the area of each plot which was hatched red is entirely visible from the other. In my view the visual impact documents submitted by the applicants now paint a historic picture – many of the trees have now been removed, particularly on the Parrys’ plot. (I should add, to the extent that it matters, that I am satisfied that the Parrys have not done this arboricultural work with an eye on defeating the application - much of it was done before they bought the property). I accept that the proposed development would be low lying, with only the upper portion visible from the land of the objectors transferred in the 1996 conveyance.[28]Does that matter, particularly when their gardens would not be overlooked owing to the design of the house? In my judgment it does. This is a fairly unique situation. Each plot runs down from the original gardens to a river at the bottom of the valley, and the general feel is one of quiet tranquillity. While there has been some further development on Mill Lane since the transfer was entered into, but I accept the objectors’ evidence that in general terms, the sense is one of unspoilt countryside, with no “back land” development. In my judgment, maintaining that by impeding the proposed use secures to the objectors a practical benefit of substantial advantage in their capacity as owners of the land transferred to them in 1996, whether or not any additional benefit they enjoy as owners of their houses and original gardens is taken into account. This is especially the case for Mr and Mrs Parry, for whom the development, whilst relatively low in the ground, would be notably close.[29]Accordingly, the application under ground (aa) fails. Ground (c)[30]It follows from the above that since modification of the restriction would cause injury to the objectors, the application under ground (c) is also dismissed. 9 The Tribunal’s discretion[31]In Alexander Devine Children's Cancer Trust (Respondent) v Housing Solutions Ltd (Appellant) [2020] UKSC 45, the first occasion on which the Supreme Court has considered an application under section 84 of the Act, Lord Burrows explained that while an applicant may be able to make out one of the grounds of section 84(1) (the ‘jurisdictional stage’) - it is then necessary for the Tribunal to decide whether it should exercise its discretion to modify (the “discretionary stage”).[32]In this application, concerning a set of restrictions entered into relatively recently, and in circumstances where the original covenantee and two of the four original covenantors are involved, even had I accepted that the restrictions did not secure to any of the objectors a practical benefit of substantial value or advantage, I would have declined to exercise my discretion to modify the restriction. Disposal[33]For the reasons given above, the application is refused. This decision is final on all matters except the costs of the application. The parties may now make submissions on such costs and a letter giving directions for the exchange and service of submissions accompanies this decision. The attention of the parties is drawn to paragraph 24 of the Tribunal’s Practice Directions of 19 October 2020. P D McCrea FRICS FCIArb Dated: 26 May 2021