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LP/84/2004

LANDS TRIBUNAL ACT 1949

RESTRICTIVE COVENANT – discharge – modification – whether restriction requiring approval of plans obsolete – modification of restrictions on height and number of flats within a purpose-built block – removal of garage block – whether practical benefits of substantial value or advantage secured to objectors – application for discharge refused – application for modification granted - Law of Property Act 1925, s84(1)(a)(aa)(1A)(1B).

IN THE MATTER OF AN APPLICATION UNDER SECTION 84 OF THE

LAW OF PROPERTY ACT 1925

CARBURY 2000 LIMITED

Re: Palmerston Court

Friars Stile Road

Richmond

Surrey

Before: Mr A J Trott FRICS

Sitting at Procession House, 110 New Bridge Street, London EC4V 6JL

on 13 and 14 March 2006

Giles Harrison-Hall instructed by Grove Tompkins Bosworth, Solicitors of Birmingham, for the applicant

Professor Alice Tomic, objector, in person

Mr Morgan Gillis, objector, in person

The following cases are referred to in this decision:

Re Turner's Application (2005) (Lands Tribunal, LP/45/2003)

Re Bates's Application (2005) (Lands Tribunal, LP/9/2004)

Westminster City Council v Duke of Westminster [1991] 4 All ER 136

In re Beechwood Homes Ltd's Application [1994] 28 EG 178

Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594

Re Bass Ltd's Application (1973) 26 P & CR 156

Gilbert v Spoor [1983] Ch 27

Shephard and others v Turner and another [2006] EWCA Civ 8, [2006] 20 EG 294

Re Fairclough Homes Ltd's Application (2004) (Lands Tribunal, LP/30/2001)

The following cases were also cited:

Re Parkinson's & Quiggin's Application (2006) (Lands Tribunal, LP/62/2004)

Re Chojecki's Application (2005) (Lands Tribunal, LP/32/2003)

Re Wilson's Application (2005) (Lands Tribunal, LP/39/2001)

DECISION

Introduction

This is an application by Carbury 2000 Limited (the applicant) under section 84 of the Law of Property Act 1925 (the Act) seeking the discharge of one and the modification of three other restrictive covenants affecting freehold land comprising a block of nine flats known as Palmerston Court, Friars Stile Road, Richmond, Surrey (the application land). If successful the application will allow the extension of the block by the development of three additional flats on a new fourth storey.

The restrictions in question were imposed in a conveyance of the application land dated 10 June 1959 between the Trustees for Methodist Church Purposes and Kingron Investments Limited. There were a total of eight restrictions contained in that conveyance of which the following four are the subject of this application:

"1. That no buildings shall be erected on the said property until the plans and elevations thereof have been approved by the Ministerial Training Committee of the Methodist Church.

2. That no building shall be erected on the land exceeding three storeys (including the ground floor) in height.

….

4. That there shall not be more than nine flats in all on the land and each flat shall have a superficial floor area of not more than eight hundred and fifty square feet.

5. Not more than nine garages shall be erected on the site and there shall be a single private garage for each flat.

….."

Detailed planning permission was granted on 2 January 2003 (reference No. 02/2033/FUL) for the construction on the application land of an extra storey to provide three one bedroom flats and the demolition of existing garages and alterations to the car park to provide 11 car parking spaces. This permission was subject to 11 conditions.

By an application dated 3 December 2004 the applicant seeks the discharge of restriction 1 on ground (a) and the modification of restrictions 2, 4 and 5 on ground (aa) of section 84(1) of the Act. The proposed modifications are:

Restriction 2 – the substitution of four storeys for three storeys. The applicant is willing for the Tribunal to add restrictions such as the height of the building to be erected.

Restriction 4 – the substitution of 12 flats for 9 flats, if necessary adding a substitute floor area restriction.

Restriction 5 – the deletion of the requirement for a single private garage for each flat.

There were three objections to the application outstanding at the date of the hearing. All three objectors are entitled to the benefit of the restrictions. The objectors are Professor Alice Tomic (long leaseholder of the first and second floors of 16 Friars Stile Road), Mr Morgan Gillis (freeholder of 14 Friars Stile Road) and Mr G R Gray (freeholder of 12 Friars Stile Road).

Mr Giles Harrison-Hall of counsel appeared on behalf of the applicant. He called Mr Michael Cartwright as a witness of fact and two expert witnesses, Mr Arnold Shepherd, FRICS, of Bigwood Chartered Surveyors, Edgbaston, Birmingham and Mr Colin Totney MRTPI, MRICS, also of Bigwoods.

Two of the objectors, Professor Tomic and Mr Gillis, appeared in person. The third objector, Mr Gray, did not appear and was not represented. At the start of the hearing Mr Harrison-Hall submitted that Mr Gray had withdrawn his objection. The Tribunal has not received written confirmation from Mr Gray to this effect and his objection is therefore treated as outstanding.

On the morning of 14 March 2006 I made an accompanied inspection of the application land and also viewed it from both inside and outside Nos.16 and 14 Friars Stile Road. I was not able to view the application property from any part of No.12 Friars Stile Road.

Facts

Palmerston Court is located at the western end of Friars Stile Road close to its junction with Richmond Hill and immediately opposite its junction with Cardigan Road. It is approximately one mile to the south of Richmond town centre. The objectors' properties lie immediately to the south west of the application land with No.16 Friars Stile Road being the adjoining property. To the rear of Palmerston Court, and with the benefit of a vehicular access across the application land, is the Maria Grey Nursery School. Further to the south, with a separate access to Friars Stile Road, is the Vineyard School. Beyond the schools lie buildings belonging to the Richmond American International University. On the opposite side of Friars Stile Road to the objectors' properties is a five storey block of flats. The surrounding area is predominantly residential and the application land is situated within the St Matthias conservation area.

Palmerston Court was developed in the early 1960s. It is a three storey, purpose-built block of nine flats under a shallow pitched tile roof. At the time of inspection it was in a poor state of repair and in need of maintenance. To the rear of the property is a garage court comprising nine brick built, flat roofed garages. There is an electricity substation in the southern corner of the site. The substation, three of the garages and a row of seven brick built storage sheds adjoin the boundary of No.16 Friars Stile Road. The remaining garages are built in a block of six with three garages facing onto a central concrete apron and the other three facing onto the access road very close to the entrance gate of the Maria Grey Nursery School.

The south eastern boundary of the application land, which is the responsibility of the applicant under another restriction not forming part of the current application, is formed by a close boarded wooden fence. Until recently there was a mature evergreen tree screen behind this fence which shielded both the application land and the objectors' properties from the school buildings beyond. This screen was removed without warning in late summer 2005. The fence between the application land and No.16 is also a close boarded fence approximately 5 feet in height. This is in a poor state of repair, especially that part of it which runs behind the garages. Neither the applicant nor Professor Tomic accepts responsibility for the maintenance of this fence.

The front of Palmerston Court is open and laid to grass with a few planted shrubs and evergreens. The front boundary comprises a low brick wall. There is no gate. This contrasts with the adjoining properties which have enclosed front gardens with brick walls topped with wrought iron railings and brick pillars.

Nos.16 and 14 Friars Stile Road are a pair of early Edwardian semi-detached houses. No.12 is a detached house of approximately the same age. All three properties have three storeys. No.16 has a roof garden at first floor level which is enclosed by wooden fencing topped by trellis work. No.14 also has a roof garden at first floor level but without any means of enclosure. Both roof gardens have wrought iron spiral staircases leading to rear gardens. There is a tall, mature hedge separating the gardens of Nos.14 and 16. The application land is not visible from the garden of No.14. Both Nos.14 and 16 have rear facing dormer windows at second floor level.

Three of the existing flats in Palmerston Court directly overlook the roof garden of No.16. No.14 is obscured by No.16 from being overlooked by the lower two storeys of Palmerston Court. A further three flats face parallel to the rear garden of No.16 and have an oblique and partial view of it at first and second storey level. These flats are set back from the rear building line of No.16 and cannot see all of its roof garden and very little (if any) of the roof garden of No.14. The proposed fourth storey to Palmerston Court will have three roof lights (serving two kitchens and a bathroom) directly facing Nos.16 and 14. However it will not be possible to see out of these windows without standing on a chair. One of the proposed flats, adjacent to No.16, will have a dormer with patio doors and a small balcony. It faces parallel to the rear garden of No.16 and although it is set back from the rear building line of that property it will have an oblique view over the some of the roof garden and rear garden. It is unlikely to overlook the roof garden of No.14. There is a similar patio door arrangement along the southernmost elevation of Palmerston Court. This will overlook the bottom part of the rear garden of No.16, but neither the house itself, nor the roof garden, will be visible from this location.

Palmerston Court has an existing ridge height of 10 metres. Its height if extended will be 12.2 metres. No.20 Friars Stile Road is 12.6 metres high and No.16 is 12 metres. The net internal area of the existing nine flats is 6,177 sq ft (686 sq ft per flat). The proposed three flats at fourth floor level will fit within the existing floorplate.

The proposed extension to Palmerston Court as described in planning permission 02/2033/FUL will take approximately six months to complete.

The case for the applicant

The applicant contended that the proposed extension of Palmerston Court was a reasonable user of the application land for private purposes for which detailed planning permission had been obtained and which would be impeded by the restrictive covenants that it was sought to discharge and modify. It is not proposed to discharge restrictions 3, 6, 7 and 8. Nor was it suggested by the applicant that, in impeding the reasonable user, restrictions 2, 4 and 5 were contrary to the public interest (section 84(1A)(b) of the Act).

The covenants were imposed at a time when their purpose was to preserve the open nature of a large area of surrounding land owned by the Methodist Church. That land had now been sold and the Methodist Church no longer had any interest in the benefited land. Restriction 1, which was for the personal benefit of the Trustees for Methodist Church Purposes, is consequently obsolete. The open land originally owned by the covenantee had been sold and developed by the Vineyard School, the Maria Grey Nursery School and the Richmond American International University. The whole character of the surrounding area had therefore changed.

The proposals were not for a new building but for an extension of an existing building. The objectors would not have people living next door to them for the first time. They were already overlooked by some of the flats within Palmerston Court and the proposals would only involve a marginal difference. Any overlooking would be of the gardens and not the living accommodation.

The proposed roof height of Palmerston Court would be in keeping with that of its neighbours. At present the building was noticeably lower than Nos.16 and 20 Friars Stile Road. The introduction of dormer windows would produce a more sympathetic design with adjacent buildings. The front garden would be landscaped and enclosed by a boundary treatment that echoed the style of the neighbouring properties. The rear garden would also be landscaped and the sycamore tree adjoining the boundary with No.16 would be kept if possible.

The covenants gave no more protection than the local planning authority had already achieved by the conditions attached to the planning permission. The applicant would create temporary disturbance in any event by undertaking backlog maintenance, repair and redecoration which would not be in breach of the restrictive covenants. The applicant could also demolish the storage sheds without being in breach. Some of the objectors' suggested practical benefits were not actually secured by the restrictions.

Mr Cartwright considered that the proposals would lead to an improvement in the visual and practical amenity of both Palmerston Court and the neighbouring properties which would outweigh any benefit to the objectors in preventing the proposed development.

Mr Totney described the proposed development in the context of the relevant planning policies at both the date the planning permission was granted in January 2003 and the date of adoption of the first review of the unitary development plan on 1 January 2005. This was the current development plan. Policy BLT2 "Protection and Enhancement of Conservation Areas" allowed development that would contribute positively to the character or appearance of a conservation area. Mr Totney considered that the existing building detracted from the conservation area and that the proposals would create a building with an overall mass that sat more reasonably within the street scene and would be less visually intrusive. The overall effect would be to enhance the St. Matthias conservation area. Policy BLT11 dealt with "Design Considerations". Particular emphasis was placed upon the scale of development, its relationship to the existing townscape, height and detailing. Mr Totney considered that the proposed development satisfied all of these criteria. He also felt that other planning policies relevant to protecting amenity had been considered by the local planning authority and satisfied by the proposals, ie BLT4 "Protection of Buildings of Townscape Merit", BLT14 "Landscape and Development", BLT16 "Unneighbourliness" and BLT18 "High Buildings".

Mr Totney referred to the planning officer's report to the planning committee on the proposed development in which the officer concluded "…. that there would be no material impact on the amenities of neighbouring residents". The planning officer also considered that the demolition of the three garages fronting on to the access road to the Maria Grey Nursery School would be likely to improve highway safety. The local planning authority had agreed to 11 car parking spaces being provided, which was below its standards, because of the proximity of the application land to the town centre and its good public transport accessibility. The provision of three new small residential units was welcomed in terms of housing policy.

Mr Totney concluded that the amenity and aesthetic qualities of the existing Palmerston Court were extremely poor and were detrimental to the street scene. They were out of character and proportion with neighbouring properties. The improvements proposed meant that there would be no adverse impact upon the objectors' properties.

Mr Shepherd gave valuation evidence. He had not undertaken a valuation of the objectors' properties but described the factors which would give rise to changes in value. In doing so he compared Palmerston Court in its existing configuration to that following its proposed extension and upgrading. He concluded that the proposal would be more likely to enhance than detract from the value of either Mr Gray's or Mr Gillis's properties. He noted that Professor Tomic had attributed a large proportion of the value of her property to the rear garden but he considered that that was only one aspect that affects value. The garden itself would not be changed as a result of the proposals and its value to No.16 would not be diminished. Mr Shepherd believed that the general amenity and aesthetics of the locality were adversely affected by the existing state of Palmerston Court. The proposed development would not directly affect her property as all the works would be outside her boundary. Any additional incidence of overlooking would be marginal and would not affect value. He acknowledged that there would be some construction disturbance for up to six months. He concluded that in terms of the works to be undertaken and the question of overlooking there would not be any material change to the current situation. The proposal would lead to an enhancement of the locality and, potentially, of property values.

In his closing submissions Mr Harrison-Hall considered the effect of the proposed development on each of the objectors. He contended that Mr Gray in No.12 was too remote from the application land and that he would not be affected at all by the proposals. Mr Gillis in No.14 had a very restricted view of the application land. It was impossible to see Palmerston Court from either the ground floor or from the second floor if one was sitting down, given the height of the dormer window. From the inside of No.14 at first floor level the application land was barely visible. One could see it, however, from the first floor roof garden. But he queried how often this would be used given the lack of protective barriers and the intrusion of a large Perspex dome acting as a lightwell to the kitchen below. He did not believe that any additional noise resulting from two extra car parking spaces would adversely affect Mr Gillis. There were already cars using the Vineyard School and the Maria Grey Nursery School as well as those using Friars Stile Road at the front of No.14. Aircraft on the Heathrow flight path were more intrusive than the increased car usage on the application land was likely to be, as evidenced at the site inspection.

He noted that Mr Gillis had not known about the planning permission for the extension of Palmerston Court even though he purchased No.14 eight months after it had been granted. He suggested that it was strange that this had not been revealed in a land search.

Mr Harrison-Hall accepted that Professor Tomic was more affected than the other two objectors. He considered the extent of overlooking to be the essence of her objection. But her property was already overlooked and such overlooking was contemplated to a degree when the application land was originally sold. There would only be a marginal increase in overlooking from the dormer window and balcony to be located at fourth floor level. But this would be set back from the rear building line of No.16 which would obscure the view of the majority of Professor Tomic's roof garden. One would have to be standing close to the patio doors or on the balcony to have a sideways view of No.16. The roof lights in the side elevation of the new fourth storey would not give rise to any overlooking. The restrictions did not presume any right for No.16 not to be overlooked. Both her neighbours at Nos.12 and 14 could already see into her garden.

It was submitted that Professor Tomic had not produced any evidence to suggest that the value of her property would be diminished as a result of the proposals. The two valuations she produced to the Tribunal had both been undertaken before the application had been made and for an unconnected purpose. The applicant did not dispute that No.16 was a valuable property but it did contest any suggestion that its value would be diminished due to the proposals.

Mr Harrison-Hall referred to Re Turner's Application (2005) (Lands Tribunal, LP/45/2003) in which the Tribunal considered the effect of many of the same factors as are present in the subject case in the context of a building scheme. He contended that the test of practical benefit was stricter for such a scheme and that the objectors had not succeeded there in opposing an application under ground (aa). He concluded that the covenants did not secure any practical benefits of substantial value or advantage to Mr Gillis and that no compensation should be paid. Nor, he contended, did the covenants secure any practical benefits of substantial value or advantage to Professor Tomic and that money would be adequate compensation. In considering an appropriate figure he referred to the settlement in Re Bates's Application (2005) (Lands Tribunal, LP/9/2004) and suggested that compensation to Professor Tomic should be limited to £1,000.

The case for the objectors

Mr Gray lives at 12 Friars Stile Road. His objection, dated 10 March 2005, had not been withdrawn in writing by the date of the hearing. The grounds of his objection were that his privacy would be affected by the construction of the new flats. On purchasing his property his privacy was protected by the height restriction. The original covenants afforded him quiet enjoyment and the extension of Palmerston Court, with its increased height and number of windows, would adversely affect this. He also objected on the grounds that highway safety would be reduced especially as the application land shared the driveway with the nursery school. Mr Gray claimed compensation but did not specify the amount.

In his written objection Mr Gillis objected to the modification of restriction 2 on the grounds that an additional storey would be imposing and out of proportion to nearby properties as well as overlooking the rear garden of his property. He expanded upon these grounds of objection at the hearing and stated that he had purchased No.14 in the knowledge that the existing covenants would protect his peace and tranquillity. Their existence was an important factor in his decision to purchase. The proposal was for commercial development and profit and would undermine the quiet enjoyment of his house leading to a substantial reduction in the quality of the outlook at the rear of his property. This would change from an established view of the garages to one of a car park. He considered that his garden would be overlooked by the dormer window at fourth floor level despite the high hedge along his boundary with No.16. There would be disruption for six months during substantial demolition and development work which would affect all the objectors' properties. The addition of three flats would increase the density of housing and lead to additional congestion on Friars Stile Road close to two schools. He felt that the increased number of cars on the site would present a safety hazard given the proximity of the Maria Grey Nursery School.

Under cross-examination Mr Gillis stated that he had bought No.14 in September 2003, eight months after planning permission had been granted for the extension of Palmerston Court. He was unaware of that planning permission but aware of the covenants. Nor was he aware of the planning permission when he applied for planning permission to refurbish his own property in 2004.

Mr Gillis considered that the proposed extension would be out of proportion because it involves a significant increase in height of 2.2 metres and the enlargement of a block that was already out of keeping with neighbouring properties. He believed that aesthetic improvements could be made to Palmerston Court without the need to enlarge it. The property had been neglected.

Mr Gillis was unable to provide details of vehicular traffic using the access road to the Maria Grey Nursery School or to give an estimate of the increase in traffic arising from the proposals. But he considered that safety issues should be viewed in the round and that there was an increased risk due to an increased number of vehicles entering and leaving the application land. He also considered that the analysis of car parking and highway safety contained in the planning officer's report was flawed since there was no longer a bus route serving Friars Stile Road.

The removal of the garages and their replacement with car parking spaces would lead to increased noise. Mr Gillis did not hear the cars using Friars Stile Road when at the rear of his property nor those in the Vineyard School which was further away. He stated that his property was not directly under the Heathrow flight path and that there was very little noise from passing aircraft depending upon the wind direction.

Professor Tomic objected on the grounds that the proposal would adversely affect the quality of her life and the peace and tranquillity of her property. There would be a loss of privacy, the possible destruction of existing landscaping and a loss in the value of her property. Her objection was supported by two letters dated 8 March 2005 (accompanying the objection) and 12 January 2006. The latter enclosed copies of two valuation reports, one from Barnard Marcus dated 22 October 2004 and one from John D Wood & Co dated 18 August 2003.

At the hearing Professor Tomic stated that there was a conflict between her desire to maintain the natural overgrown garden environment that she had enjoyed for 26 years and the threat of change and disruption from the proposed development. This was purely a commercial proposal that would cause construction noise and increased traffic and which would materially affect neighbouring properties. She was the most affected of all of the objectors. She did not accept that raising the roofline of Palmerston Court would enhance the area. The outlook from her property, which had already been made worse following the removal of the Leylandi trees at the bottom of her garden, would now be over a car park rather than the moss covered roofs of the garages. The continued peace and tranquillity of her property was quite beyond monetary value.

Professor Tomic submitted that in the light of her valuation reports the presence of a 100 foot rear garden such as hers would add £50-£100,000 to the price of a standard two bedroom flat. This premium value was threatened by the application. Under cross-examination she accepted that these reports had both been commissioned before the application had been made and for purposes that had nothing to do with it.

Professor Tomic accepted that the proposals may represent a marginal improvement in the appearance of Palmerston Court but felt that refurbishment of the existing structure would achieve this in any event. She denied that the extent of overlooking was the essence of her objection which she considered to be the materially adverse effect upon the quality of her life. She was particularly concerned at the prospect of the demolition of the garages and storage sheds damaging the plants and trees behind and which she especially valued. The new dormer window in the proposed fourth floor would look down from a higher angle and be able to see more of her rear garden. She considered the existing dilapidated boundary fence to be the responsibility of the applicant and said that had it been hers she would never have let it get into such a poor state.

Both Professor Tomic and Mr Gillis have claimed an unspecified amount of compensation in the event that the application is successful.

Additional submissions

After the hearing I invited the applicant and the objectors to make written submissions upon an issue that had not been raised previously but which I consider to be material in reaching my decision. The issue was whether restriction 5 is negative in substance (as opposed to form) as a whole, or in respect of the part which it is now sought to modify. I also asked the parties to consider whether this restriction could be complied with by inaction.

In its response the applicant contended that restriction 5 was negative in substance and that its interpretation should be made in the context of the deed and, in particular, in the context of restriction 4. It was submitted that restriction 4 permitted development of the site but limited the number of flats to nine. Restriction 5 permitted up to nine garages, but with no more than one per flat. The applicant suggested that restriction 5 be interpreted as if it had been written:

"No more than nine garages shall be erected on the site. No flat may be erected on the site unless it has a garage, but that each flat is limited to a single garage."

The deed did not contain a positive covenant to build garages, but a negative covenant not to build flats without garages.

Restriction 5 could have been complied with by inaction if the covenantor had not built flats. Alternatively the expression "…. there shall be a single private garage for each flat" could be interpreted as preventing the allocation of garages such as to allow any single flat to have more than one garage. The applicant submits that under this interpretation restriction 5 could be complied with by inaction.

Professor Tomic considered restriction 5 to be positive in substance because it required each flat to have a garage. She believed, however, that not all of the garages were used to park cars and that there were enough existing garages to accommodate the needs of further occupying tenants. That being so she believed that covenant 5 could be complied with by inaction. She also considered that because not all of the residents of Palmerston Court needed a garage the applicant would be able to rent out any surplus garages and that there was the potential for commercial gain by increasing the number of parking spaces (even if they were in the open air).

Mr Gillis considered that restriction 5 was positive in substance because it prevented disproportionately intensive development on the application land. Furthermore the requirement for garaging prevented the overburdening of limited on-street parking facilities and the creation of unsightly open air parking. He considered that restriction 5 could be complied with by inaction by not developing any further flats on the site or by allocating the existing nine garages between the 12 flats proposed under the applicant's scheme.

Conclusion: the construction of restriction 5

If, upon its true construction, restriction 5 imposes a positive covenant upon the covenantor then I have no jurisdiction to modify it as requested in the application. A positive covenant is one which, in substance rather than form, requires the performance of some act or the outlay of money. On the face of it restriction 5 is a hybrid with a restriction at the beginning not to erect more than nine garages but a positive obligation at the end that each flat shall have a single private garage. I agree with the applicant's submission, however, that the deed does not contain a positive covenant to build garages and that the substance of restriction 5, when read in the context of the deed as a whole, is that of a negative covenant restricting the construction of flats without garages. The words "… and there shall be" in restriction 5, taken in context, do not show "a clear shift of meaning from restraint to activity" (per Harman J in Westminster City Council v Duke of Westminster [1991] 4 ALL ER 136 at 147d).

Conclusion: restriction 1

Restriction 1 states that no building shall be erected on the application land until the plans and elevations thereof have been approved by the Ministerial Training Committee of the Methodist Church (MTC). The applicant seeks to discharge this restriction on ground (a) of section 84(1) of the Act which states that the Tribunal shall have power to discharge any such restriction on being satisfied:

"(a) that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Lands Tribunal may deem material, the restriction ought to be deemed obsolete".

The test of obsoleteness is whether the original object of the restriction can still be achieved.

The MTC were made the duly authorised managing trustees of the vendor's (covenantee's) property under a scheme dated 15 August 1935 and thereafter it exercised all the functions of management in respect thereof on behalf of the Methodist Church Conference.

I accept the applicant's unchallenged submission that since the conveyance of the application land in 1959 the Trustees for Methodist Church Purposes have sold their remaining freehold interest in all the property that has the benefit of the stipulations and restrictions under that conveyance. Their estate has now been broken up into several ownerships. That being so there is now no person from whom the necessary approval can be obtained. The MTC, if it still exists at all, has no continuing interest in the management of the benefited land under the 1959 conveyance. However restriction 1 is a dispensing power that is attached to an otherwise absolute prohibition that no building shall be erected on the application land. The fact that the MTC is no longer able to exercise that dispensing power, which has consequently become obsolete, does not mean that the restriction itself is obsolete and incapable of exercise (see In re Beechwood Homes Ltd's Application [1994] 28 EG 178 per Dillon LJ at 179M-180C). Restriction 1 has therefore become more onerous as a result of the dispensing power having become obsolete. That being so the question I have to answer in the context of the current application is whether the original purpose of that restriction remains capable of being fulfilled.

The 1959 conveyance involved the sale of a parcel of land for development. That land was apparently an infill plot between Nos.16 and 20 Friars Stile Road, the depth of which matched the length of the adjoining gardens. From the (undated) plans attached to the conveyance it appears that the Methodist College building was approximately 200 metres from the application land. In my opinion the primary purpose of the restrictions placed on the 1959 conveyance was to ensure that the development that took place upon the application land was not inappropriate to its immediate residential surroundings. Restriction 1 gave to the vendors, through the MTC, the right of approval of the plans and elevations of any buildings whilst the other covenants placed specific restrictions upon the height, user, size and the number of flats and garages that could be built. Whilst I accept Mr Harrison-Hall's submission that there has been a material change in the character of the neighbourhood to the south of the application land, I do not think this is true of the adjoining residential properties to the east and west, the amenity of which I consider to have been the main protective purpose of the 1959 restrictions.

Mr Harrison-Hall submitted that restriction 1 was a covenant for the personal benefit of the Trustees for Methodist Church Purposes (through the approval of the MTC) and that the objectors had not challenged this submission. But if that restriction was intended to benefit successors in title to the Trustees by preventing development not approved by the MTC then that objective can still be achieved notwithstanding the demise of the dispensing power within the restriction. The effect of that demise is that all development rather than that not approved by the MTC is excluded. It has not rendered acceptable all development including that which would not have been approved by the MTC. For the reasons I have stated above I consider that the primary purpose of restriction 1 was to benefit the occupants of the houses adjoining the application land, those houses being in the ownership of the Trustees for Methodist Church Purposes at the time of the 1959 conveyance.

The benefit of restriction 1 is effectively annexed to the land so as to run with it by virtue of clause 2 of the conveyance dated 10 June 1959:

"The purchasers with intent and so as to bind (so far as practicable) the property hereby conveyed into whosoever hands the same may come and to benefit and protect the vendors' retained land abutting on such property (which retained land is edged green on the plan numbered 2 annexed hereto) hereby covenant with the Vendors that they the Purchasers and their successors in title will at all times hereafter observe and perform the stipulations and restrictions in relation to such property which are set out in the First Schedule hereto."

The objectors' property forms part of the said land edged green. Although clause 2 of the conveyance does not refer to the stipulations and restrictions as benefiting and protecting each and every part of the retained land, this will be its effect by virtue of section 78 of the Act:

"(1) A covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed.

For the purposes of this subsection in connection with covenants restrictive of the user of land 'successors in title' shall be deemed to include the owners and occupiers for the time being of the land of the covenantee intended to be benefited."

There are limits to this statutory form of annexation. In the case of Federated Homes Limited v Mill Lodge Properties Limited [1980] 1 WLR 594 at 606 Brightman LJ stated:

"A covenantee may expressly or by necessary implication retain the benefit of a covenant wholly under his own control, so that the benefit will not pass until the covenantee chooses to assign."

In my opinion it was the dispensing power, rather the benefit of restriction 1 itself, that was retained under the sole control of the Trustees for Methodist Church Purposes through the MTC. The benefit of the restriction, as I have described it above, was enjoyed by the occupiers of the houses within the land edged green, including those of the objectors, and not just by the original covenantee.

For these reasons I find that restriction 1 is not obsolete and that the application for its discharge under ground (a) is refused. The applicant relied solely upon ground (a) for the discharge of this restriction in both the originating application and in Mr Harrison-Hall's submissions at the hearing. Grounds (a), (b) and (c) were relied upon in the publicity notice but ground (aa) was not relied upon at any stage. Despite the reference to grounds (b) and (c) in the publicity notice I do not consider that I have jurisdiction to consider the application to discharge restriction 1 on those grounds (nor on ground (aa)) since the applicant did not refer to them, either in the originating application or at the hearing.

Conclusion: restrictions 2, 4 and 5

The applicant relies upon subsection (aa) of section 84(1) of the Act for the modification of restrictions 2, 4 and 5. The relevant provisions state:

"(aa) that (in a case falling within subsection (1A) below) the continued existence thereof would impede some reasonable user of land for public or private purposes or, as the case may be, would unless modified so impede such user….

(1A) 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 Lands 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.

(1B) In determining whether a case is one falling within subsection (1A) above, and in determining whether (in any such case or otherwise) a restriction ought to be discharged or modified, the Lands Tribunal shall take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances."

The applicant has accepted that in impeding the proposed user the restrictions are not contrary to the public interest. The requirements of these provisions may be stated as a series of questions (see Re Bass Ltd's Application (1973) 26 P&CR 156 at 157):

Is the proposed user reasonable?

The proposed extension of Palmerston Court has received detailed planning permission and conforms with current development plan policies. The existing residential use will be maintained. The height of the extended building will be in keeping with neighbouring properties and its floorplate will remain unchanged. The proposals will repair and improve a building which has become tired and rundown. I therefore find that the proposed user is a reasonable user of the land for private purposes.

Do the covenants impede that user?

Restrictions 2, 4 and 5 impede the proposed user; No.2 by limiting the number of storeys to three, No.4 by limiting both the number and floorspace of the flats and No.5 by restricting the number of garages to be built and (as determined above) requiring that the flats shall not be constructed without garages.

Does impeding the user secure practical benefits to the persons entitled to the benefit of the restrictions?

By preventing the extension of Palmerston Court the objectors claim that restrictions 2, 4 and 5 secure a number of practical benefits. These comprise the prevention of additional overlooking of their properties; protection of their outlook over the application land; the creation of a boundary with No.16, formed by the garages and storage buildings, which affords privacy and tranquillity; avoiding temporary disruption during building works which are expected to last for six months; protection of the open market value of their properties; preventing increased congestion in Friars Stile Road and avoiding the creation of a traffic safety hazard in proximity to the Maria Grey Nursery School.

The expression "practical benefits" in section 84(1A)(a) is to be given a broad interpretation and is not limited to financial factors (per Eveleigh LJ in Gilbert v Spoor [1983] Ch 27 at p.32). On this basis I find that the practical benefits outlined above are secured by impeding the reasonable user. However, I find that the last of the cited practical benefits, ie that concerning highway safety, does not secure any practical benefit to any of the three objectors. Such benefit only accrues to the Maria Grey Nursery School which, whilst having the benefit of the restrictions, withdrew its objection in April 2005. I deal with this point more fully at paragraph 76 below. I also consider that Mr Gray's property (No.12) is too remote from the application land to be affected by the proposed development and that impeding the reasonable user under these restrictions will not secure any practical benefits to him.

Are the practical benefits of substantial value or advantage?

The practical benefits described above must be of substantial value or advantage to defeat an application under paragraph (aa). With regard to value Professor Tomic produced two valuation reports in support of her contention that a premium value of between £50-£100,000 which was attributable to her garden would be threatened by the application. I did not find these reports to be of assistance in establishing a potential loss in value. They were both produced before the date of the application and for unconnected purposes. Consequently they did not address the possible effect of the proposals upon the value of Professor Tomic's leasehold interest in No.16. Furthermore the premium value attributed to the garden represented the difference in value between a flat with no garden (or perhaps a small garden) and a flat with a garden of the size enjoyed by Professor Tomic. That argument addresses a different point since in the present case there will be no loss of any of the garden of No. 16. Mr Gillis gave no valuation evidence. Although Mr Shepherd did not undertake valuations of the objectors' properties he gave evidence about how the proposed development would affect their value. He argued, and I agree with him, that the proposal will improve the appearance of the application land and that the general amenity and aesthetics of the locality will be enhanced as a result. I am satisfied that the application will not result in a diminution in the value of the objectors' properties.

The second part of this question requires me to consider whether the practical benefits are of substantial advantage. The first two practical benefits concern overlooking by the new development and the outlook from the objectors' properties. The gardens and roof gardens of Nos.16 and 14 are already overlooked by Palmerston Court. The degree of overlooking is significantly greater in the case of Professor Tomic's property than Mr Gillis's which is shielded both by No.16 and by a tall hedge running the length of his garden. Given the layout of the proposed extension there will be no new windows (other than roof lights) directly overlooking Nos.16 and 14. There will be two new rooms with patio doors and a small balcony on the fourth floor which face parallel to the garden of No.16. One of these is set back from the building line of Professor Tomic's property and will only overlook part of her roof garden and not the rear of the house itself. It is unlikely that any of the building of No.14 will be visible from here. The other room will only have a restricted sideways view of the end of the gardens of No.16 and, possibly, No.14. I do not consider that the prevention of a marginal increase in overlooking will secure a practical benefit of substantial advantage to the objectors.

The outlook over the application land will be altered in two ways, firstly by the addition of a fourth storey and secondly by the demolition of the garages and stores and their replacement by a new car park with 11 parking spaces. The height of Palmerston Court following its extension will be 12.2 metres, an increase of 2.2 metres. This new height will be consistent with that of its neighbours although the mass of the block of flats is greater than the neighbouring houses and the hipped roof to the southern elevation will be replaced by a gable end. Neither Professor Tomic nor Mr Gillis will overlook windows in the new flats except as described above. I do not consider that the change in outlook caused by the additional storey will in itself amount to the loss of a practical benefit of substantial advantage to either Mr Gillis or Professor Tomic.

It is the second aspect of the change in outlook which attracted the most criticism from the objectors. Both Professor Tomic and Mr Gillis were strongly opposed to the loss of the garages and their replacement by a car park. In the case of Professor Tomic this loss also gave rise to another ground of objection, namely the removal of a secure boundary treatment which maintained the privacy and seclusion of her rear garden. Both objectors prefer what Professor Tomic has described as "the moss covered existing garage roofs [which] are mellow enough and relatively 'green' to be acceptable" to the prospect of 11 parked cars in the open air.

In considering whether impeding the removal of the garages will secure a practical benefit of substantial advantage to the objectors and, in particular, to Professor Tomic, I have had regard to whether the quality of the outlook and the protection afforded by the garages to the boundary of No.16 are incidental practical benefits that were not the original intention of restriction 5. The purpose of the requirement to provide each flat with a garage is not certain and I received no evidence on the point. It is possible that the covenantee wanted to ensure that the occupiers of each flat had the benefit of a garage parking facility but equally it is possible that the covenantee imposed this requirement in order to protect the amenity of neighbouring residents and to avoid open-air car parking. On the other hand I am satisfied that it was not the purpose of restriction 5 for the garages to provide a particular form of boundary treatment.

In Shephard and others v Turner and another [2006] 20 EG 294 Carnwath LJ said at paragraph 40 that:

"…in judging the effectiveness of the protection provided by the covenants, one is concerned with the practicality, not theory"

Although the purpose of restriction 5 was not to secure a particular boundary treatment, it did in fact secure this benefit to Professor Tomic. Nevertheless this benefit was uncovenanted and arose coincidentally from compliance with the deed, namely not to provide flats without garages, and the weight to be given to it is reduced accordingly:

"That does not mean that such a benefit is irrelevant. It does however mean that it is a factor which the Tribunal is entitled to give less weight in the overall judgment of substantiality" (per Carnwath LJ in Shephard, paragraph 41).

From the evidence before me and from my inspection of the application land and the objectors' properties I am satisfied that Mr Gillis will have a very limited view of the application land from within his house or from his garden. It will be visible from his first floor roof garden but only across the garden of No.16. I am not satisfied that Mr Gillis has established that the practical benefit of protecting the outlook afforded by the continued presence of the garages is of substantial advantage to him. Replacement of these garages with a surfaced and marked out car park subject to a landscaping scheme will change, but, in my opinion, not adversely affect the outlook from his property so as to constitute the loss of a substantial advantage.

Professor Tomic is more directly affected in terms of the outlook and is alone in being affected by the alteration to her boundary. The applicant contended that the storage sheds that formed part of the protective boundary screen that Professor Tomic was seeking to retain could be demolished without breach of restriction 5. I have considered this point in the light of the comments of the President in Re Fairclough Homes Limited (2004) (Lands Tribunal, LP/30/2001) where he said:

"29…How the character of the area and the amenities would be affected by the modification of the restriction is not in my view to be judged by envisaging the worst that could be done without breaching the restriction and comparing it with what the proposed modification is intended to permit ….

30. In such a case as this, the provision, it seems to me, operates in this way. By preventing development that would have an adverse affect on the persons entitled to this benefit, the restriction may be said to secure practical benefits to them but if other developments having adverse affects could be carried out without breaching the covenant, these practical benefits may not be of substantial value or advantage. Whether they are of substantial value or advantage is likely to depend on the degree of probability of such other development being carried out and how bad, in comparison to the applicant's scheme, the effects of that development would be."

There will be a significant effect upon the boundary between the application land and No.16 caused by the removal of the garages and the stores. I do not believe that the stores are likely to be demolished in any event, regardless of the current application. The applicant could do so without breach of restriction 5 but in my opinion there would be no reason for, or advantage to, the applicant to do so and I attribute little weight to this argument. However the purpose of restriction 5 is clear on its face and it was not intended to secure a particular form of boundary for the benefit of No.16. That it does so, and in so doing creates a secluded rear garden, is coincidental.

No evidence was given as to the boundary treatment that would replace the garages and stores. There is no condition attached to the planning permission dealing with this aspect. The applicant and Professor Tomic each consider the other to be responsible for the maintenance of the existing close boarded wooden fence that separates their respective properties. That fence is in a poor state of repair towards Friars Stile Road and is derelict as it passes behind the stores and garages. There will need to be a new fence constructed once those buildings are demolished. I think it probable that the repair of the fence is the responsibility of Professor Tomic, if only because the supports and cross members of the close boarded structure face her property. That being so the continued presence of the garages and stores is of practical benefit to her, although the fence beyond those buildings towards Friars Stile Road will soon need to be replaced in any event. On balance, and having regard to the fact that the protection and privacy afforded by the garages and stores are incidental to, and not the purpose of, restriction 5 I do not consider the benefits secured to Professor Tomic by this restriction to be of substantial advantage in themselves.

Little evidence was given at the hearing about the length of the construction works. The applicant suggested they would last for a maximum of six months, a figure which was not challenged by the objectors. It is not disputed that during that time there will be temporary disruption to neighbours caused by construction noise, dust, fumes etc. I have accepted that this is a practical benefit secured to the objectors by impeding the reasonable user under the covenants. The question now is whether a short term disruption can constitute a practical benefit of substantial value or advantage to them. This point was recently considered by Carnwath LJ in the Shephard case in which he said:

"In my view, account must be taken of the policy behind paragraph (aa) in the amended statute. The general purpose is to facilitate the development and use of land in the public interest, having regard to the development plan and the pattern of permissions in the area. The section seeks to provide a fair balance between the needs of development in the area, public and private, and the protection of private contractual rights. 'Reasonable user' in this context seems to me to refer naturally to a long term use of land, rather than the process of transition to such a use. The primary consideration, therefore, is the value of the covenant in providing protection from the effects of the ultimate use, rather than from the short-term disturbance which is inherent in any ordinary construction project. There may, however, be something in the form of the particular covenant, or in the facts of the particular case, which justifies giving special weight to this factor." (paragraph 58)