UPPER TRIBUNAL (LANDS CHAMBER)

UT Neutral citation number: [2012] UKUT 300 (LC)

UTLC Case Number: LP/11/2010

 

 

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

 

RESTRICTIVE COVENANT – modification – additional dwellinghouse on garden land – impact of adjacent properties – disturbance during construction – compensation – application granted on ground (aa) – Law of Property Act 1925 s 84(1), (1A)

 

 

 

IN THE MATTER OF AN APPLICATION UNDER SECTION 84

OF THE LAW OF PROPERTY ACT 1925

 

by

 

ALAN PERKINS AND PAULINE PERKINS Applicants

 

 

  Re: 87 Peplins Way

Brookmans Park

Herfordshire

AL9 7UT

 

 

Before: The President

 

Sitting at: 43-45 Bedford Square, London WC1B 3AS

on

  15 August 2012 Sitting at:

 

 

 

 

The applicants in person

The objectors did not appear and were not represented

 

© CROWN COPYRIGHT 2012

 

The following cases are referred to in this decision:

Perkins and another v McIver and Others [2012] EWCA Civ 735

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

Shephard v Turner [2006] 2 P & CR 28

 

 

DECISION

1.               This application falls for determination following a decision of the Court of Appeal (sub nom Perkins and another v McIver and Others [2012] EWCA Civ 735) on 10 May 2012 allowing the applicants’ appeal against the decision of this Tribunal (P R Francis FRICS) [2011] UKUT 219 (LC) and remitting the application for fresh consideration of two particular issues.

2.               The application land is the major part of the rear garden of a three bedroom semi-detached house, 87 Peplins Way, which lies in an area of extensive development of similar houses carried out in the 1950s at Brookmans Park in Hertfordshire.  The houses are laid out facing the road and most of them have long back gardens.  As the number of the house suggests, Peplins Way is a long road, and the applicants’ house lies at the end of its principal section, where it is formed into a square fronted by two pairs of semi-detached houses on the west and three pairs of semi-detached houses on the north.  Number 87 lies at the far north-western corner of the square, and because of this it is a large plot that is triangular in shape.  On 17 December 2009 the local planning authority, Welwyn Hatfield District Council, granted planning permission for the erection on the application land of a four bedroom house.  It would be located towards the rear of the land.

3.               The plot of number 87, including the application land, is subject to a covenant contained in a transfer dated 21 March 1955 that “Not more than one dwellinghouse and garage shall be built on the land hereby transferred”.  The covenant was expressed to be “for the benefit of the Vendor’s adjoining and neighbouring land in Peplins Way Brookmans Park”.  On 3 March 2010 the applicants applied under section 84(1) of the Law of Property Act 1925 for the modification of the restriction to enable the development permitted by the planning permission to be carried out.  The application was made on grounds (aa) and (c). 

4.               There were some 47 objections from the owners of houses in the vicinity of the application land.  At the hearing the applicants contended that 20 of these did not have the benefit of the restriction because their plots had been transferred by the vendor before 21 March 1955 and there was no building scheme.  Among these was number 85, the adjoining house.  The Member concluded that there was no building scheme and that properties transferred before the 21 March 1955 did not have the benefit of the covenant.  He excluded 19 of the objections on this basis.  Number 85 had been transferred on the same day as number 87.  It had, however, been registered with the Land Registry the day after number 87, and in the light of this the Member inferred that it had been transferred after number 87.  He therefore proceeded on the basis that number 85 had the benefit of the covenant.  The Court of Appeal held that this was wrong.  Sullivan LJ (at paragraphs 10 and 11) said that the sequence in which the properties were registered provided no evidential basis for the sequence of their transfer.  Since, therefore, there was no evidence that the transfer of number 85 had taken place after that of number 87 the owners had not established their entitlement to the benefit of the covenant.

5.               Under ground (aa) the Member had to determine whether the power that the covenant gave to the objectors to prevent the development secured to them practical benefits of substantial value or advantage, and he expressed his conclusions on this by reference to the objectors’ concerns.  The principal concerns of the objectors had been on the grounds of overdevelopment and overlooking and the impact of additional traffic.  The Member prefaced his conclusions by saying that the issues bore remarkable similarities to those that he had considered in another case.  The case had not been referred to at the hearing.  The Court of Appeal (see the judgment of Sullivan LJ at paragraph 19: Pill and Kitchin LJJ expressed their agreement with his judgment) held that as a matter of procedural fairness the Member should have referred the parties to the decision and should have given them the opportunity to contend by way of evidence and submission that the two cases were not similar.

6.               At paragraph 66 of his decision the Member noted that considerable apprehension had been expressed by Mr Rubra (number 81), Mr Lowdon and Mrs Cottle (number 83) and Mr and Mrs Fagan (number 85) about potential overlooking from the proposed house, which would directly face their rear gardens.  The applicants argued that there was only one first floor window in the proposed house that would overlook those gardens, the other two being bathroom and landing windows which would both have obscured glazing; that they were far enough away to be of little concern, and, in any event, occupation or use of bedrooms would not normally coincide with garden use.  They also said that the location of the new house would be at an extremely obscure angle from Mrs Fagan’s first floor rear bedroom window.  In relation to these contentions the Member said:

“Whilst I agree with that latter point, and one does need to be very close to the window to be able to currently see Peplins Woods (at an angle of 57 to 67 degrees according to Mr Perkins’s plan), the new house will be very much closer.  Mr Perkins said that, at 30 metres away from no. 85, that was a significant distance.  I do not concur.  That is, in my view, close enough to give the impression of being somewhat overpowering, even with the garden of no. 87 in between.  It would, as Mr Sherlock [a witness for the objectors] said, be visually intrusive.  I also do not agree that the owners of the three affected properties should not be concerned that it is a bedroom that overlooks their gardens.  First floor bedrooms are frequently used for other purposes, for instance as a study or an office, and the argument, therefore, that use of them is not likely to coincide with use of gardens is subjective and, in my judgment, misses the point.  It is acknowledged that there are mature trees and shrubs along part of the boundary between nos. 85 and 87, but in the wintertime, the whole area will appear much more open.”

7.               The Member went on to express his conclusions on the matter (having set out earlier at paragraph 43 of his decision the seven questions referred to in Re Bass’s Application (1973) 26 P & CR 156 as relevant to applications based on ground (aa), number (3) of which was whether impeding the proposed use secured to the objectors practical benefits:

“68. I conclude, therefore, that question (3) in Re Bass  is answered in the affirmative as far as nos. 81, 83 and, particularly, 85 are concerned, in that the ability to impede the proposed use secures to them practical benefits.  The next question is whether those benefits are of substantial value or advantage.  Although the impact of the new property reduces the further away an objector’s property is, I believe that certainly as far as no. 85 is concerned, the ability to impede the overbearing influence of the new house, and the overlooking that will occur especially into the rear garden, is a substantial advantage.”

8.               Sullivan LJ, having quoted this paragraph, said this:

“16. Pausing there, it will be noted that although the Tribunal concluded that the covenant secured practical benefits to Nos. 81 and 83, it did not conclude that those benefits were of substantial advantage to those two properties.  Only the ability of No. 85 to impede the “overbearing… new house” was a practical benefit that was of substantial advantage in the Tribunal’s view.  If, as I have concluded above, No. 85 was not entitled to the benefit of the covenant, question (6) in Re Bass would need to be answered in respect of the loss of the practical benefits to Nos. 81 and 83.  Having regard to both the overlooking objection such as it was and the disturbance objection (see below), would money be adequate compensation for the loss of the practical benefits secured to those properties by covenant?  Because the Tribunal had answered question (4) in Re Bass in the affirmative in respect of No. 85 it did not proceed to consider question (6) in Re Bass.”

(Question (6), it should be noted, is whether money would be adequate compensation.)

9.               The Member dealt with the other principal issue as follows:

“69. I turn now to the argument, expressed by the majority of the objectors, regarding the impact during the construction period.  Delivery vehicles and contractors’ traffic will, in my view, create major problems and are likely to cause damage to roadways, verges and the square.  There is also the potential for considerable acrimony between the developer and residents, especially those that live nearest to the entrance of the site, and there will be a resultant temporary loss of amenity.  Mr Perkins was adamant that large vehicles (which I take to be brick lorries, concrete mixers, deliveries of timber, plasterboard and other materials) will be able to drive directly onto the site, turn around and leave in a forwards direction without difficulty before the house was actually erected.  Contractors and workmen’s own vehicles could also park on the site.  He said that the only potential difficulty he foresaw was delivery of pre-formed roof trusses once the shell of the house had been built (if indeed it was decided to use pre-formed materials).  The objectors pointed out just how narrow the roads are, and the fact that cars park half on and half off the pavement especially during the school run.  I agree that the photographs produced by the applicants were not representative, and certainly when I carried out the site inspection, there were a large number of cars dotted all along Peplins Way, and there were some around the square.  The photographs (including some from Google Streetview) produced by some of the objectors, showing cars parked all along Peplins Way and around the square, appear to me to confirm that their concerns are far from unfounded.

70.        The main problem, it seems to me, is just how narrow the road is, especially around the square and, even more importantly in terms of large delivery lorries, the very sharp (90 degree) corners on each side of the square.  Large vehicles approaching the site from the main part of Peplins Way will have to negotiate their way around two sides of the square, for a distance of approximately 80 metres, along a roadway which narrows in places to between four and five metres.  There is the potential for damage to be occasioned to parked cars, verges and planting on the square.  It will not be possible, I think, for large vehicles to pass parked cars on the square without encroaching onto the central part of the square itself, where there is no pavement around three sides, and the ornamental bushes and shrubs are located right up to the road edge.  Even with the best will in the world, however carefully the site foreman or manager tries to control contractors and visitors, there is in my judgment the potential for utter chaos to reign over a period of many months.  I do not accept the argument that large vehicles will be able to turn on the site (especially if there are contractors’ vehicles already there) and it will be necessary for them to carry out a reversing manoeuvre from the point in the corner of the square where there is a 90 degree turn. If there were to be a second vehicle parked on the front forecourt of no.87, that would also have to be moved.  Furthermore, I do not accept as realistic the statement that contractors and workmen’s vehicles will all be able to park on site.

71. Mr Bruce [counsel for the applicants] urged me to take into account the judgment of Carnwath LJ in Shepherd v Turner, and that, in the absence of special facts, I should ignore problems during the construction period.  In my view, the facts of this case are exceptional in terms of potential disturbance, and do justify giving special weight to this factor.  Whilst the primary consideration is clearly the value of the covenant in providing protection from the effects of the ultimate use, the impact of the short-term disturbance in this case is, I conclude, material…”

10.            In Shephard v Turner [2006] 2 P & CR 28, to which the Member referred, Carnwath LJ said this (at paragraph 58):

“In my view, account must be taken of the policy behind para (aa) in the amended statute.  The general purpose is to facilitate the development and use of the 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 redevelopment 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 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 short term 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.”

11.            Sullivan LJ noted at paragraph 22 that the Member did not suggest that there was anything in the form of the covenant in the present case which would justify giving special weight to disturbance during construction as a factor to be considered.  Indeed the transfer contained a right of way “at all times and for all purposes” over the roads around the square until such time as they had been adopted by the local authority.  That was a matter that should have been given appropriate weight (paragraph 23).  The Member had stated his view at paragraph 69 that delivery vehicles and contractors’ traffic would be likely to “cause damage to roadways, verges and the square”.  While increased traffic including construction traffic to and from a site was capable of being relevant for an objection under this head, the Lord Justice said (at paragraphs 25 and 26), the focus of such objection must be the impact of any disturbance by reason of the construction works on those objectors whose land had the benefit of the covenant.  The Member, however, had not carried out that analysis, which had therefore proceeded from an erroneous starting point.

12.            Moreover, said the Lord Justice (at paragraph 31), the Member had failed to engage with or give clear reasons for disagreeing with the evidence of the appellants’ expert witness, Mr Adams-Cairns, who had dealt with the issue of disturbance during construction in his written report.  It was not clear, therefore, whether in reaching his conclusion that there was “potential for utter chaos to reign over a period of many months” the Member had accepted or rejected Mr Adams-Cairns’s evidence that, over a period of six months or so, 10 to 15 heavy lorries in addition to the ordinary contractors’ traffic would be visiting the site or, if he did accept it, how he felt able to reach that conclusion.  The Member had also said that he did not accept the argument that large vehicles would be able to turn on the site and did not accept as realistic the statement that contractors and workmen’s vehicles would be able to park on the site.  But (paragraph 32) he had failed to put his concerns in this respect to Mr Adams-Cairns, whose evidence had contained this statement.

13.            There was, said Sullivan LJ (at paragraph 37), a further consequence of the issue not being explored with Mr Adams-Cairns.  In paragraph 37 of Shephard v Turner Carnwath LJ had said that in considering the practicality and substantiality of the benefits to the objectors of being able to prevent the proposed use there must be an element of comparison with what would happen if the modifications were not allowed.  The applicants had submitted to the Tribunal that extensions to properties in Peplin Way could be constructed without breaching the restriction.  Planning permission for a substantial extension to number 87 had been granted in 2001.  If the Member’s concern about the road had been put to Mr Adams-Cairns there was a real possibility, the Lord Justice said (at paragraph 36), that he would have sought to persuade him that in that respect there was no material difference between the impact of construction traffic for the proposed new house and the impact of construction traffic for the extension and that, if the application for modification was not granted, there was every likelihood that the applicants would wish to extend number 87 instead and that they would be able to obtain a fresh planning permission to enable them to do so. 

14.            The appeal was allowed because the Tribunal had been wrong to conclude that number 85 had the benefit of the covenant and because, in consequence, its conclusion that the overbearing nature of the new house and the potential for overlooking meant that ground (aa) was not made out could not stand; and because, in respect of the disturbance during construction objection, its conclusions were flawed, firstly because its primary concern appeared to be damage to the highway and the square rather than the impact of the works on those entitled to the benefit of the covenant, and, secondly because it was procedurally unfair not to have raised these concerns with the applicant’s expert.  Sullivan LJ concluded by saying:

“39. There was no criticism by the respondents of the Tribunal’s rejection of their objections on all grounds other than the two grounds of overlooking and disturbance during construction.  Moreover, there is no reason to revisit Mr Adams-Cairns’s opinion that the restriction does not add monetary value to the benefited properties.  In these circumstances I would remit the matter to the Upper Tribunal for it to consider afresh whether the benefits preserved by the covenant in terms of preventing 1) overlooking and 2) disturbance during construction are practical benefits which are of substantial advantage to any of those persons who are entitled to the benefit of the covenant and, if they are not, whether money would be adequate compensation.”

15.            Following the Court of Appeal’s decision I gave directions for a further hearing.  I ordered that the applicants and objectors must identify in writing which if any of the documents supplied for the hearing before the Member they wished to rely on and that any further witness statement and any further document on which either party wished to rely must be filed and exchanged.  The applicants lodged two bundles.  Included in these were a supplemental report by Mr Adams-Cairns and a statement by Mr Perkins, together with supporting documents.  Letters were sent by Mr Lowdon and Mrs Cottle of number 83, Mr Gubbins of number 91, Mr McIver of number 117 and Mr Sherlock of number 50.  The hearing was attended by the applicants and Mr Adams-Cairns, but none of the objectors appeared or were represented.  I inspected the subject property and the surrounding area following the hearing.

16.            The first of the two matters that I need to consider is the impact that the proposed house would have on neighbouring properties by reason of its physical presence or any overlooking.  In his supplemental report Mr Adams-Cairns said that the only two properties owned by those entitled to the benefit of the covenant that might be potentially overlooked were numbers 83 and 81.  The distance from the front of bedroom 4 in the proposed house (the only clear glazed window with a view to the south) would be 40 metres from the boundary fence of number 83 and 50 metres from the boundary fence of number 81.  Mr Adams-Cairns produced a cross-section plan to illustrate lines of sight.  He said that any view from the bedroom of the new house towards numbers 83 and 81 would be restricted by well-established mature trees and bushes so that any potential overlooking would be extremely limited.  In their statement for the 2011 hearing Mr Lowdon and Mrs Cottle said shortly that the proposed house would directly overlook their garden, that they disagreed that the loss of privacy would be acceptable and that it would adversely affect the enjoyment of their property.  Their more recent statement made detailed comments on what Mr Adams-Cairns had to say about disturbance during construction but said nothing more about overlooking.  Mr and Mrs Rubra of number 81 in a letter of 21 April 2011 had said that the house would overlook their garden and the rear of their house and that privacy would therefore be lost.  They have made no further statement.

17.            Mr Adams-Cairns said that he had also given consideration to number 91.  This lies on the north side of the square beyond number 89.  Any views over that property from the proposed house, Mr Adams-Cairns said, would be at an oblique angle from a distance in excess of 30 metres.  Because of the distance, the oblique angle and the established mature trees and bushes in the garden of number 89 he did not think that number 91 would be overlooked.  In his statement for the 2011 hearing Mr Gubbins had said that this was back land development that would result in the overlooking of the rear gardens of adjacent properties and, when viewed from the gardens of numbers 87, 85, 89 and 91, and to a lesser extent 83, 81, 93, 95, 97 and 99, it would stand out like a sore thumb.  His letter of 17 July 2012 added nothing to this short expression of view and concentrated on the question of disturbance during construction.

18.            In the light of the evidence and my site inspection I am satisfied that the overlooking of properties with the benefit of the covenant from the bedroom window of the proposed new house would be extremely limited.  Because of the layout of the existing semi-detached houses there is inevitably a degree of overlooking of gardens from adjacent houses, and the very limited views that there would be from one window of the proposed house would constitute a very small addition to this.  I think that views from some of the gardens would be affected by the presence of a house where only trees and shrubs are at present to be seen, but, again, the effect would be limited, and it is significant that, although the owners of numbers 83 and 81 have expressed concern about loss of privacy, they have not referred to the impact of the house on views from their gardens.  I conclude that, in enabling the objectors to prevent development that would cause some overlooking and would be a visible presence, the covenant does not secure to these owners a practical benefit that is of substantial advantage.  Beyond number 81 to the south I do not think there would be any material effect.  I think it unlikely that number 91 would suffer from overlooking, but the house would be visible from the garden, although the impact on existing views would be very small.  Beyond number 91 to the east I do not think that there would be any appreciable effect.  The conclusion I have reached thus accords essentially with the conclusion of the Member once the effect on number 85 is disregarded.

19.            The second matter is disturbance during construction.  The representations of objectors show this to be overwhelmingly their principal concern; and that concern itself is concentrated on the traffic that would pass along the road and the extra parking that, it is suggested, would occur.  The approach that the Tribunal should take in considering objections of this sort when addressing itself to ground (aa) is clear from the judgment of Sullivan LJ in the present case and that of Carnwath LJ in Shephard v Turner.  Two principles in particular are established by those judgments.  The first (see Shephard v Turner at paragraph 58) is that the primary consideration is the value of the covenant in providing protection from the effects of the ultimate use rather than from the short term disturbance that is inherent in any construction project.  The qualification to this is that there may be something in the form of the covenant or the facts of the case which justifies giving special weight to this factor (ibid).  Secondly, although the impact of construction traffic on the highway is capable of being relevant, the focus of an objection based on disturbance during construction must be the impact by reason of construction works on those objectors whose land has the benefit of the covenant (Sullivan LJ’s judgment at paragraphs 25 and 26).

20.            There is nothing in the form of the covenant in question which would justify giving special weight to disturbance during construction.  Nor in my view do the facts of the case suggest that this should be done.  Of particular significance in this respect is the planning permission granted in 2001 for the extension of number 87.  What was permitted was a two storey side extension of a width of 3.8 m and to the full depth of the house; a single storey rear extension of a depth of 3.2 m and to the full width of the house as extended; and a detached garage alongside the flank boundary of number 89, 6 m wide and 7.6 m deep, with a pitched roof rising to 5 m in height and accommodating a games room.  Mr Adams-Cairns’s evidence was that there was no reason at all why the planning authority would not now grant permission for such an extension.  It would be consistent with extensions that had in fact been carried out at numbers 99 and 101 Peplins Way, which occupy similar sites on the north-east corner of the square.  I accept this, and it is clear that if such an extension were to be carried out (and this would, I accept, be likely if the present application were to fail) adjacent houses would experience disturbance during construction that would be very similar to that arising from the proposed development.  Indeed the disturbance could be worse, since, as Mr Adams-Cairns showed with drawings that he produced (in response to the observations made by the Member in his decision), the subject land could accommodate all construction vehicles throughout the period of construction.  The same, it appears, would not be the case with a major side extension to the existing house.

21.            Such a comparison is important in determining whether, in preventing disturbance during the construction of a new house, the covenant confers a practical benefit of substantial advantage: see Shephard v Turner at paragraphs 37 to 40 and Sullivan LJ at paragraphs 33 to 35.  I also note that in a letter dated 17 July 2012 sent to the Tribunal for consideration at the hearing, an objector, Mr Sherlock of number 50, is chiefly concerned to point out that, since the hearing before the Member, he has been subjected to a large extension to number 52, which, he says, caused considerable nuisance.  It is clear, therefore, that, disturbance from the construction of house extensions in the neighbourhood arises at present, and that arising from the construction of the proposed house would be no different in nature.

22.            My conclusion in relation to disturbance during construction is that there is nothing in the terms of the covenant or the facts of the case that would justify giving special weight to this as a consideration, and that in any event a comparison between what could be expected to occur if the application was granted and what could be expected to occur if it was refused, suggests that such practical benefit as the covenant confers in enabling the objectors to prevent the construction of a new house is of little advantage.  That is a conclusion that applies to those in the immediate vicinity of the subject land.  Those further away would in my view suffer no disadvantage in the enjoyment of their land during or after the construction period.  The effect of construction traffic on the public highway (and the square) is not a matter, in my view, to which any significant weight can attach for the purposes of the application of these particular statutory provisions both for the reasons that I have just given and because of what Sullivan LJ said at paragraphs 23 to 26.  Approaching the matter as I do (in the light of Sullivan LJ’s observations) differently from the Member I accordingly reach a different conclusion from him.

23.            While, therefore, the covenant does, in my judgment, secure to the owners of numbers 81, 83 and 91 practical benefits by enabling them to prevent development that would have some adverse effects upon them, those benefits are not of substantial advantage to them.  I do not think those further away would suffer any injury that it was the purpose of the covenant to prevent.  Subject to the consideration of compensation (which I will deal with next), ground (aa) is made out in relation to all those with the benefit of the restriction and ground (c) in relation to all those except the owners of numbers 81, 83 and 91. 

24.            Since ground (c) is not made out in relation to all those entitled to the benefit of the restriction, the application can only succeed on ground (aa); and, under section 84(1A), ground (aa) will only be made out if money will be adequate compensation for the loss or disadvantage (if any) which any person entitled to the benefit of the covenant will suffer from the discharge or modification.  Those other than the owners of numbers 81, 83 and 91 have suffered no loss or disadvantage, and in relation to them, therefore, I do not consider that the question of compensation arises.  Mr Adams-Cairns’s view was that the restriction does not add monetary value to any of the benefited properties, and the Court of Appeal (see Sullivan LJ at paragraph 39) said that there was no reason to revisit that opinion.  In my judgment the small disadvantage suffered by each of the owners of those three properties can adequately be met by an award of compensation of £2000 in respect of each of numbers 81 and 83 and £1000 in the case of number 91.  On this basis, I am satisfied, therefore, that the application should succeed.

25.            The restriction is modified so as to permit the development of one new dwellinghouse on the land as permitted by Welwyn Hatfield Borough Council under planning permission S6/2009/2081/FP granted on 17 December 2009, subject to the payment of compensation as stated above. 

26.            The parties are now invited to make representations on costs, and a letter about this accompanies this decision, which will become final when the question of costs has been determined.

Dated 4 September 2012

 

George Bartlett QC, President

 

Addendum

27.            In a letter to the Tribunal dated 17 September 2012 Mr Perkins draws attention to the fact that the planning permission referred to in paragraph 25 of the decision is due to expire on 17 December 2012 so that the applicants will need to apply for its renewal.  He asks me make provision for this in the modification.  It is clearly appropriate to do so.  There are therefore to be added to the modification made by paragraph 25 the words “or any subsequent planning permission for the same development”.

28.            Mr Perkins’s letter also contains his submissions on costs.  These submissions relate to the costs both of the original hearing before Mr Francis and the hearing before me.  He asks that the 19 objectors who unsuccessfully claimed the benefit of a building scheme should be ordered to pay 1/47^th of the applicants’ costs of the original hearing and that all objectors, with the exception of the owners of numbers 81, 83 and 91 should each pay 1/24^th of the costs of the hearing before me.  He also asks that the costs of £168 claimed by Mr Gubbins in respect of the 7 objectors who appeared at the original hearing should be reduced to 4/7^th of the amount, ie £96.

29.            In his decision Mr Francis refused to order costs against the objectors who he found did not have the benefit of the covenant and he awarded the costs of £168 sought by Mr Gubbins in respect of the 7 objectors.  Although the applicants’ application for permission to appeal to the Court of Appeal sought to challenge the Member’s decision on costs it is not clear to me that this challenge was pursued before the court.  Certainly there is no mention of it in the judgments.  The order of the court says simply that the appeal is allowed, and I have therefore treated it as having the effect of setting aside the Member’s decision in all respects, including costs.  All three elements of the costs applications (see paragraph 25 above) therefore require consideration.

30.            As far as concerns the costs relating to the 19 objectors who were found not to have the benefit of the covenant, the material matters appear to me to be these.  Rule 35 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 makes provision (in accordance with section 84(3A) of the Law of Property Act 1925) for the admission of objectors.  The applicant is required within 14 days of receipt of a notice of objection, if he does not accept that the objector is entitled to the benefit of the restriction, to serve notice stating why he does not accept the objector’s entitlement.  The rule then makes provision for resolving the question.  The purpose of the provision is to resolve at the outset any dispute as to an objector’s entitlement to the benefit of the restriction, thus leaving the subsequent proceedings free to address the merits of the application in terms of section 84(1).  In his letter to the Tribunal of 2 June 2010 enclosing a schedule of the 45 objections received by the applicants Mr Perkins said: “We accept that all of these objectors have the legal entitlement to the benefit of the restrictive covenant.”  It was only about a week before the hearing on 6 June 2011 (and a year, therefore, after this letter) that in counsel’s skeleton argument for the hearing the applicants sought to question the entitlement of 20 of the 47 objectors.  The Member permitted the matter to be dealt with as a preliminary issue, although he was evidently concerned about the difficulties in which raising the point in this way caused to the objectors.  The hearing was thus encumbered, as it should not have been, with an issue that should have been determined long before.  In my judgment it would be clearly inappropriate for the applicants, having failed to follow the procedure provided for in the Rules, to have any part of the costs this issue.  Paragraph 12.5 provides no justification for awarding part of the costs of the substantive hearing to an applicant who has not challenged an objector’s entitlement in accordance with rule 35.

31.            The second element for consideration is the applicants’ submission that each of the admitted objectors other than the owners of numbers 81, 83 and 91 should pay 1/24^th of the costs of the hearing before me.  The basis for the submission is the contention that, in the light of the reasons stated by the Court of Appeal those objectors who were not overlooked and would not suffer any disturbance during construction should have withdrawn their objections.  I do not accept this.  The costs of the hearing were not increased significantly, or possibly at all, by the fact that there were 27 objectors rather than 3.  The issues of overlooking and disturbance during construction had to be addressed because it was in respect of those matters that the case had been remitted.  In any event the Court of Appeal had not determined (nor could it have done) that none of the 24 properties would suffer any disturbance during construction.

32.            As for the objectors’ costs, I accept that the two objectors (out of the 7), whose names appeared in Schedule 2 to the Member’s decision, as not being entitled to the benefit of the restriction, and number 85 also, which the Court of Appeal held not to be entitled, should not have their costs and that the relevant proportion of the sum demanded, £96 should be paid to the other four.  Apart from this I make no order as to costs.

Dated 25 October 2012

 

George Bartlett QC, President