UT Neutral citation number: [2010] UKUT 23 (LC)

LT Case Number: LP/52/2008

RESTRICTIVE COVENANT – modification – no objections – restriction prohibiting alterations etc without vendor’s approval of plans – whether obsolete – modification sought prohibiting alterations etc not in keeping with neighbourhood – held inappropriate to impose restriction that would present problems with implementation – application refused – Law of Property Act 1925 s 84(1) grounds (a) and (c)

                            TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

                                  IN THE MATTER OF AN APPLICATION UNDER

                              SECTION 84 OF THE LAW OF PROPERTY ACT 1925

                                                                           BY

                                                              LINDA FLOWERS                                                      

                                                         Re: 30 Burges Road,

                                                                Thorpe Bay,

                                                                Southend on Sea,

                                                                Essex SS1 3AY

                                                           Before: The President

                                     Sitting at Southend County Court, Tylers House,

                                                Tylers Avenue, Southend SS1 2AW

                                                              on 29 January 2010

The applicant in person

There were no objectors

The following case is referred to in this decision:

Crest Nicholson Residential (South) Ltd v McAllister [2003] 1 All ER 46

                                                                    DECISION

1. The applicant in this case, Mrs Linda Flowers, is the freehold owner of a house and premises, 30 Burges Road, Thorpe Bay, Southend-on-Sea.  It is a substantial house that was built in about 1923 and it forms part of the extensive Burges Estate (otherwise, I think, known as the Thorpe Bay Estate).  The applicant holds as successor in title under a transfer dated 23 April 1981 between Thorpe Bay Estate Company (called in the transfer “the Vendor”) and Anthony John Wood and Margaret Jessie Hopwood Wood, the purchasers.  Clause 2 of the transfer provided:

“For the benefit and protection of the Vendor’s adjoining lands and so as to bind (so far as practicable) the property hereby transferred into whosesoever hands the same may come the Purchaser HEREBY COVENANTS with the Vendor that the Purchaser and those deriving title under him will at all times hereafter observe and perform the restrictions stipulations and conditions set out in the First Schedule hereto.”

2. Clause 4 provides:

“4.  In this Transfer unless the context otherwise requires ‘the Vendor’ includes its assigns and the owners for the time being of the Thorpe Bay Estate aforesaid …”

3. Among the restrictions, stipulations and conditions set out in the First Schedule is the following:

“2.  Not at any time to make any alterations or additions whatsoever to the property hereby transferred nor to erect any other buildings whether of a permanent or temporary nature upon the property hereby transferred except in accordance with the plans previously approved in writing by the Vendor and to pay the Vendor’s Architect’s and Surveyor’s costs in connection with such approval.”

4. It appears that the freehold interests in many of the houses on the estate have been transferred to their leaseholders.  I was told that in about 25% of such transfers the same restriction as in 5 was imposed.  By a conveyance dated 12 July 1984 the Thorpe Bay Estate Company conveyed its freehold interest in its Burges Estate lands to Thorpe Estates Limited.  Set out in the First Schedule to the conveyance were details of conveyances of individual freehold interests in properties on the estate.  Number 30 Burges Road was among them.  They were referred to as “the Recited Conveyances”, and the conveyance conveyed “the rights excepted and reserved to the Vendor by the Recited Conveyances” and “the benefit of the covenants given by the respective purchasers in the Recited Conveyances with full power to enforce the performance and observance of the same”.  According to Mrs Flowers in 2006 Thorpe Estates Limited owned three houses among the 45 properties “in this portion of the Estate”.  The Thorpe Bay Estate Company has been dissolved.

5. The applicant has for some time been concerned that Thorpe Estates Limited has been demanding (and receiving) payments for the grant of its approval under provisions like restriction 5 where an owner has wished to redevelop or alter his property.  She is incensed at this, and she asserts that, since Thorpe Estates Limited is not the Vendor, and because, as she claims, the 1984 transfer was not effective to give it the power to enforce the restrictions on her property or others to which similar restrictions apply, it is not entitled to give its approval or to demand payment for doing so.  The application that she has made asserts that the part of the restriction that requires the approval of the Vendor is obsolete owing to the dissolution of the Thorpe Bay Estate Company and she seeks its modification on ground (a) of section 84(1) by the substitution of the existing wording of the restriction by the following:

“5.  Not at any time to make alterations or additions whatsoever to the property hereby transferred that are not in keeping with the scale, design and character of the neighbouring properties.  Not to erect any other building of a permanent or temporary nature upon the property.”

6. The application also seeks modification on ground (c) on the basis that, since the Vendor is dissolved, it would not be injured by the modification that she proposes; and that there would be no injury to others entitled to the benefit of the covenant because the covenant would remain enforceable by them but, as it is put, in clearer wording.

7. Notice of the application was ordered to be given to neighbouring properties on the estate and to Thorpe Estates Limited.  No objections were received.  At Mrs Flowers’s request I held a hearing into her application.  Her concerns, as she made clear are twofold.  Firstly there is the demanding of payments by Thorpe Estates Limited for its approval.  But, secondly, she is concerned that the quality of the estate should be upheld, and she considers that the planning regime is inadequate for this purpose.  The property next to hers has been redeveloped in a way that she considers out of keeping with neighbouring properties.  She therefore seeks to have imposed on her own property, which she is about to sell, a restriction that would prevent its redevelopment or its alteration in a way that was out of keeping.

8. The restriction would, it appears, be enforceable by Thorpe Estates Limited by virtue of the 1984 conveyance provided that at the time when it was imposed in 1981 the Thorpe Bay Estate Company had land that was capable of being benefited and, depending on the date of their conveyances, by the owners of neighbouring properties.  Mrs Flowers, for reasons that were not explored, does not accept that Thorpe Estates Limited did have such an interest.  I am unable to infer from the lack of objection on the part of Thorpe Estates Limited or the owners of neighbouring property that they agree with Mrs Flowers’s view.  Indeed all I can infer from the lack of objection is that none of them would mind if the restriction were modified in the way that she seeks.  Even if Thorpe Estates Limited does not have the benefit of the restriction, however, by reason of the 1984 conveyance it appears to constitute “the Vendor” within the meaning of clause 4 in the 1981 transfer.  The effect of this would be that, even if it could not enforce the restriction itself, another person with the benefit of the covenant would be able to enforce the requirement that its approval be obtained to alterations or redevelopment.  In the absence of any substantial argument on either side, however, I do not reach a conclusion on this matter (which, decided as I think it would be, would mean that the restriction was not obsolete).  I approach the matter, as Mrs Flowers asks me to, on the basis that there is no one who now constitutes “the Vendor” for the purposes of the restriction.

9. The problem that arises, in the case of a restriction prohibiting works to the subject property without the consent of a named person who has ceased to exist, has been considered in a number of cases, and the law is helpfully reviewed in Francis, Restrictive Covenants and Freehold Land: A Practitioner’s Guide, 3^rd Edn (2009), at paragraphs 14.32 to 14.36.  The effect may either be to render the prohibition absolute or, alternatively, to make it of no further application; and which of these is the effect is a matter that depends on the construction of the instrument in question.  In the absence of any legal argument, I would have tended to the view that the restriction in issue here would have been of no further application: see Crest Nicholson Residential (South) Ltd v McAllister [2003] 1 All ER 46.  But neither of these effects would assist Mrs Flowers.  What she seeks is a modification that requires alterations to be in keeping with the estate and prohibits redevelopment.  If, on a proper construction of the transfer, the restriction has become absolute, it is not obsolete; while, if it no longer has any application, it is difficult to see how it could properly be modified in order that it might be revived.

10. In any event, however, it seems to me that the application, both on ground (a) and on ground (c) (that no injury would be suffered by any person entitled to the benefit of the restriction) must fail because the modification is not one that it would be appropriate for this Tribunal to impose.  The new wording that Mrs Flowers seeks would have three effects.  Firstly it would prohibit unconditionally the construction of any building other than the existing house, eliminating, therefore, redevelopment.  If Mrs Flowers wishes to encumber her property with a restriction in these terms, I can see no reason why she should not do so.  Secondly it would deprive any successor of the Vendor of any power it might have to refuse approval to alterations or additions or new building.  Since Thorpe Estates Limited was served with notice of the application and has not objected I would not regard this as a reason for refusing the application, since it can be inferred that Thorpe Estates Limited does not consider that it would be injured by the proposed modification.  Neither of these effects would be of concern.

11. The third effect of the new wording, however, would be to prevent any alterations or additions to the property “that are not in keeping with the scale, design and character of neighbouring properties”.  This formulation would present insuperable problems of enforcement, in my view.  Although Mrs Flowers said she thought that what might be or might not be in keeping would always be obvious, on the contrary, in my view, it would inevitably be substantially a subjective judgment, and different views could no doubt in many instances reasonably be held.  In the absence of any person being identified as the arbiter of what is in keeping I would regard the provision as so fraught with potential problems of implementation that it should not be imposed.  I bear in mind that no objections to the application have been made, but in view of the manifest problems that could arise I do not think it right to infer that the modification would not cause injury.  In any event, it would not be appropriate for the Tribunal in the exercise of its discretion to impose a new restriction that could give rise to disagreement and possible litigation.

12. For these reasons the application fails on each of the grounds advanced.

Dated 2 February 2010

George Bartlett QC, President