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You are here: BAILII >> Databases >> England and Wales Lands Tribunal >> Sutcliff & Anor v No Respondent [2006] EWLands LP_20_2005 (10 October 2006) URL: http://www.bailii.org/ew/cases/EWLands/2006/LP_20_2005.html Cite as: [2006] EWLands LP_20_2005

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Sutcliff & Anor v No Respondent [2006] EWLands LP_20_2005 (10 October 2006)

LP/20/2005

LANDS TRIBUNAL ACT 1949

RESTRICTIVE COVENANT – discharge – modification – absolute covenant against development – regulatory covenants – whether the former obsolete – change in character of property – whether practical benefits secured – substantiality – application for discharge refused – application to modify granted in part – compensation – Law of Property Act 1925, s84(1)(a) (aa) (c) and (ii)

IN THE MATTER OF AN APPLICATION UNDER SECTION 84 OF THE

LAW OF PROPERTY ACT 1925

By

ANTHONY SUTCLIFFE

and

JOYCE SUTCLIFFE

Re: Oak Tree Lodge

2 Old Court

Molescroft Road

Beverley

East Yorkshire

Before: A J Trott FRICS

Sitting at Kingston-upon-Hull Combined Court Centre

on 7 September 2006

Hugh Preston instructed by SHK Solicitors, solicitors of Scunthorpe, for the applicants.

Sara Hargreaves instructed by Sandersons, solicitors of Hull, for the objectors.

The following cases are referred to in this decision:

Shephard and Others v Turner and Another [2006] 20 EG 294

Re Martins' Application (1989) 57 P & CR 119

DECISION

Introduction

1. This is an application by Anthony and Joyce Sutcliffe (the applicants) under section 84 of the Law of Property Act 1925 (the Act) seeking the discharge or modification of restrictive covenants affecting freehold land comprising a dormer bungalow known as Oak Tree Lodge, 2 Old Court, Molescroft Road, Beverley, East Yorkshire (the application land). If successful the application will allow the extension of the dormer bungalow by the development of a new entrance hall and orangery, a conservatory, a dressing area and a den. The application also seeks to discharge or modify a number of restrictive covenants that regulate the use of the application land and that the applicants say prevent them from enjoying the reasonable use of their property.
2. The restrictions in question are contained in Schedule 3 to a transfer of the application land and other land dated 27 May 1999 between Michael Phillip O'Kane and Paula Jean O'Kane (the transferors) and Featureworks Limited (the transferee). There are a total of 11 restrictions in that schedule of which the following six are the subject of this application:

"1. That no building other than bungalows or dormer bungalows with garages shall be erected at any time on the land hereby transferred and that no part of the said land shall at any time be used for any purpose other than as private residences.

....

3. That no caravan, boat house on wheels or commercial vehicle shall be parked or stored on the property at any time and that only private motor vehicles shall be parked upon the property.

4. Not to maim injure or remove any tree shrub or conifer growing on the property at the date hereof and at his [the transferee's] own expense to replace any such tree shrub or conifer which may die.

....

6. Not at any time from the date hereof to erect or construct or suffer or permit the erection or construction of any buildings or structures on any part or parts of the land hereby transferred and not to make any structural alterations or additions or extensions to the buildings or structures and not to alter or remove any screen wall or fence.

7. Not to affix display or paint on any building or structures erected on the land hereby transferred or any part thereof any placard post sign or advertisement whatsoever except for a sale or to let sign.

8. Not to hang washing or clothes on any line for drying or cleaning purposes in front of the building of any property erected on the land hereby transferred and to ensure that all such washing or clothes are only hung out at the rear of the property. ...."

3. Detailed planning permission was granted on 20 August 2004 (reference no DC/04/03710/PLF) for the erection of single storey extensions on the application land. This was amended by a revised drawing (reducing the size of the proposed western conservatory) that was approved by the local planning authority on 2 February 2005.
4. By an application dated 17 May 2005 the applicants seek the discharge of restrictions 1 and 6 under grounds (a), (aa) and (c) of section 84 of the Act. In the alternative the applicants apply for an order under the same grounds that the restrictions be modified to the extent necessary to permit the implementation of the detailed planning permission. The applicants seek the discharge of restrictions 3, 4, 7 and 8 under grounds (aa) and (c). In the alternative the applicants apply for an order under the same grounds that the restrictions be modified to the extent necessary to prevent them from constituting an unreasonable interference with the applicants' reasonable use of the application land.
5. There was one objection to the application. This was made by Mr Michael O'Kane and Mrs Paula O'Kane who are the original covenantees under the transfer of the application land dated 27 May 1999.
6. Mr Hugh Preston of counsel appeared on behalf of the applicants. He called Anthony Sutcliffe as a witness of fact and Ian Adams MRICS of Thomson Stott, Chartered Surveyors of Hull, as an expert witness.
7. Miss Sara Hargreaves of counsel appeared on behalf of the objectors. She called Michael O'Kane as a witness of fact and Michael Glover MRICS, sole principal of Michael Glover LLP of Beverley, as an expert witness.
8. I made an accompanied site inspection of the application land on 6 September 2006. I inspected Oak Tree Lodge both internally and externally. I also viewed the application land from the objectors' property, from both inside the house and from the garden.

Facts

9. Old Court is a private cul-de-sac leading from Molescroft Road to the north east of Beverley town centre. It is located in a predominantly high quality, low-density residential area. Oak Tree Lodge is one of two dormer bungalows built in 1999, the other being 3 Old Court immediately to the south. Both properties were developed in the former grounds of the house known as Whitewalls, 1 Old Court. Whitewalls was built in 1962 and purchased by the objectors in 1982. The objectors purchased an additional area of land in 1987 which is located to the south of the access road and to the rear of 8 Molescroft Road. The total area of land owned by the objectors was 1.66 acres (0.67 hectares).
10. By 1997 Mr and Mrs O'Kane found that such extensive grounds were becoming difficult to maintain and so they decided to sell some of their land for residential redevelopment. They obtained planning permission for the development of two residential plots and sold them to Featureworks Limited for £60,000 each on 27 May 1999. Featureworks Limited was a company owned by trustees for the benefit of Mr and Mrs O'Kane's three children. That company then developed and sold the dormer bungalows that are now known as Oak Tree Lodge and 3 Old Court. The company was then put into voluntary liquidation having no further purpose. Featureworks Limited was the original covenantor of the restrictive covenants that the applicants now seek to discharge or modify.
11. Mr and Mrs O'Kane identified a third development plot on the land that they purchased in 1987. To date this land has remained undeveloped and is still owned by the objectors. They have also retained, and reside in, Whitewalls which now stands on a reduced site area of 0.61 acres (0.25 hectares). As a condition of the sale to Featureworks Limited that company agreed to construct at its expense a new brick wall along the southern boundary of Whitewalls, a new wooden fence along the eastern boundary and to resurface and extend the private drive that served the new development.
12. Oak Tree Lodge was sold by Featureworks Limited to Mr Sutcliffe on 1 February 2000 in the sum of £220,000. The property was subsequently transferred into the proprietorship of Mrs Sutcliffe on 30 January 2004. 3 Old Court was sold by Featureworks Limited to Mr and Mrs Jackson in March 2000. That property is subject to the same restrictive covenants as Oak Tree Lodge.
13. On 20 August 2004 the applicants obtained detailed planning permission for the erection of single storey extensions to Oak Tree Lodge. This permission was subsequently amended by a revised plan on 2 February 2005. The objectors gave their consent for the applicants to construct a conservatory on the western elevation of the dormer bungalow but did not agree to any of the other proposed extensions. The applicants constructed the said conservatory but were unable to undertake any of the other works for which planning permission had been granted.
14. At the hearing the applicants conceded that they were only seeking a partial discharge (modification) of restriction 1. They sought the removal of the words "that no building other than bungalows or dormer bungalows with garages shall be erected at any time on the land hereby transferred and ...." The restriction as modified would read:

"That no part of the said land shall at any time be used for any purpose other than as private residences."

15. The parties agreed at the hearing that restriction 4 should be discharged because it was obsolete.
16. The experts agreed that the applicants' proposals as shown on the revised drawing that was approved by the local planning authority on 2 February 2005 (drawing No.AS/002/02 Revision D) would not materially impact on the visual amenity of Whitewalls. They also agreed that there are only two windows within Whitewalls that directly face Oak Tree Lodge, these being the kitchen window and the first floor (rear) dressing room window.

The case for the applicants

Evidence

17. Mr Anthony Sutcliffe explained that the application land had been purchased for Joyce Sutcliffe following the couple's decision to separate in late 1999. The acquisition was completed in February 2000 and Joyce Sutcliffe moved in at that time. The couple were subsequently reconciled and Mr Sutcliffe has also lived at Oak Tree Lodge since 2002. They had no plans at present to sell the property.
18. In December 1999 the applicants had received permission from Mr and Mrs O'Kane to construct a conservatory on the western elevation of Oak Tree Lodge, to place a nameplate at the site entrance and to be allowed to work from home without being in breach of the restrictive covenants.
19. Mr Sutcliffe stated that the applicants wanted to extend Oak Tree Lodge to create further living areas. They had gone to great lengths to design the proposed extensions so as to minimise the visual impact upon the objectors and upon the adjoining properties to the east in Finch Park. They had tried, but failed, to discuss their proposals with the objectors and detailed planning permission had been obtained despite Mr and Mrs O'Kane's objection to the planning application. The conservatory on the western elevation had the greatest potential impact upon the objectors but they had already agreed to its construction. The remainder of the works would not be visible from the objectors' house and the objectors would not suffer any inconvenience or hardship as a result of the proposals.
20. Mr Sutcliffe did not accept that the proposals would change the footprint of the existing property nor that he would be building something completely different. He stressed that the proposals were for additions to the original building and that the fundamental character of the property would not change. He estimated the cost of the works to be £50,000 (excluding the western conservatory that had already been built in 2005). The works would take about two months to build provided the building programme was not interrupted. He was prepared to agree reasonable working hours with the objectors. Mr Sutcliffe did not think that construction traffic would be a problem. There had been no such problems when Mr and Mrs Jackson extended 3 Old Court a few years earlier.
21. Mr Sutcliffe's solicitor had been aware of the restrictive covenants at the time of purchase. Mr Sutcliffe had taken the view that Mr and Mrs O'Kane would be reasonable when considering any requests for permission to undertake works or activities that would otherwise be in breach of the covenants. To begin with Mr and Mrs O'Kane had indeed acted reasonably but unfortunately the relationship between them and Mr and Mrs Sutcliffe had deteriorated over the years to the extent that Mr Sutcliffe now felt that Mr and Mrs O'Kane were trying to enforce the restrictive covenants in a petty and unreasonable way.
22. Mr Sutcliffe considered that the restrictive covenants were draconian and largely unnecessary. They prevented the applicants from enjoying the normal concomitants of residential life. They could not, without the permission of the objectors, construct sheds, greenhouses or other outbuildings. They could not construct or remove fences. They were restricted in their freedom to enjoy their property beyond the usual constraints imposed under planning legislation. This was made worse by the fact that Mr and Mrs O'Kane had agreed to the extension of 3 Old Court, the neighbouring property owned by Mr and Mrs Jackson and subject to identical restrictive covenants to those imposed upon Oak Tree Lodge. Mr and Mrs Jackson had extended 3 Old Court by approximately one third. Their property was much more visible from Whitewalls than was the application land and the extension had a greater visual impact upon Mr and Mrs O'Kane than the applicants' proposals. Mr and Mrs O'Kane's approach to the current application had been inconsistent and intolerable.
23. Mr Sutcliffe considered that restriction 1 was unnecessary because the local planning authority would never permit any residential development on the application land other than dormer bungalows given the proximity of the site to the bungalows in Finch Park to the east. Restriction 6 was absolute and unreasonable. The regulatory covenants (Nos.3, 4, 7 and 8) were all unnecessary and unjustified. They imposed unreasonable restrictions upon the applicants' use and enjoyment of their property. Mr Sutcliffe admitted that, in practice, the prohibition against hanging out washing in front of Oak Tree Lodge did not impede his reasonable user of the application land. However he wished to park his speedboat at the premises and on one occasion had done so from the end of October until Easter. He had received no complaints from Mr and Mrs O'Kane even though he had parked it at the front of the property adjoining the boundary fence with Whitewalls. He was considering buying a new caravan and wanted to park it at Oak Tree Lodge. He also needed to use a commercial vehicle (a Mitsubishi pick-up truck) in connection with his work. All of these activities were unreasonably prohibited by restriction 3.
24. Mr Ian Adams gave expert evidence about the nature of the restrictive covenants, whether they were unduly restrictive and whether they were unusual in being absolute. He had not been instructed to prepare valuations nor to consider the assessment of compensation. He was therefore not able to comment upon the valuations prepared by Mr Glover on behalf of the objectors. Nor had he considered the detail of the agreed drawing that showed the plan of the proposals. He had not measured the property and could not comment upon Mr Glover's measurements.
25. Mr Adams said that although restrictions 1 and 6 were not unusual they were unnecessarily strict because they were absolute. Restriction 6 should be modified to allow the construction of buildings and structures with the consent of the covenantee, such consent not to be unreasonably withheld. Restriction 1 was obsolete as to the first part because the dormer bungalow had already been built. The future residential use of the property was a matter for the local planning authority to control rather than a restrictive covenant. He considered that the proposed extensions would not diminish the value of Whitewalls and that restrictions 1 and 6 were not of value to the objectors.
26. Although he had not been instructed to assess compensation Mr Adams said that he disagreed with Mr Glover's approach in principle, even though he had not analysed it in detail. Mr Adams stated that the covenants appeared to have been placed on the application land as a benefit to its occupants and to the surrounding properties. They had an uplifting effect upon values. He felt that it was therefore contradictory of Mr Glover to argue that the effect of removing those restrictions would have been to increase the value of the application land. Mr Adams did not accept that any compensation should be paid. He did not consider that the restricted size of the property developed on the application land was relevant because a dormer bungalow of a superior architectural style and specification would be more valuable than a larger house that was plain and basic. Mr Adams also observed that the sale of the application land to Featureworks Limited was not an open market transaction. That company was specifically established by the objectors for the benefit of their children. The original sale price was therefore not a reliable base figure from which to work.
27. Mr Adams considered the regulatory covenants to be poorly thought out, too restrictive and of no practical benefit to the objectors. It was not possible for the objectors to see any vehicle parked on the application land and so restriction 3 was unnecessary. Restrictions 7 and 8, dealing with signs and hanging out washing respectively, could be invoked to prevent normal day to day activities such as receiving deliveries or calls from tradesmen. They were simply not necessary to protect the objectors' amenity.

Submissions

28. Mr Preston submitted that the absolute nature of the restrictive covenants had led to considerable acrimony between the applicants and the objectors. Although Mr O'Kane had argued that he was not concerned with trivial and inconsequential breaches of the covenants his actions suggested otherwise. Mr Preston identified the ongoing dispute between the parties about the construction by the applicants of a two brick high base for a fence as an example of how the objectors had treated restriction 6 as absolute in its effect. Mr O'Kane had argued that this wall was a "structure" for the purposes of that restriction. It was the absolute wording of all the covenants that had led the applicants to make the current application.
29. The dominant purpose of restrictions 1 and 6 was to enable the objectors to exert control over the nature of the development of the application land. Now that the development had been completed and, according to Mr O'Kane, sold at arm's length, that purpose was obsolete and the restrictions should be discharged under ground (a) of section 84 of the Act. The objectors contended that there was a continuing purpose of controlling future development after acquisition by the applicants. But the restrictions unreasonably restricted the applicants' ability to use and enjoy their property. The applicants did not object to reasonable restrictions on development but an absolute embargo left them entirely at the mercy of the objectors. The discharge of covenants 1 and 6 would still leave the objectors with protection under planning legislation. If discharge was not accepted then the covenants should be modified as suggested by Mr Adams.
30. Mr O'Kane had accepted during cross-examination that there was no requirement for an absolute bar on all building and construction. The need for restriction 6 (if it was not obsolete) was based on only two factors: visual amenity and the objectors' desire to discourage larger families from occupying the application land. The experts had agreed that the proposals to extend Oak Tree Lodge would not have a material impact upon the visual amenities of the objectors' property. There had been no criticism of the design of these proposals which were entirely unobtrusive. The objectors had not been able to identify any loss of value to Whitewalls as a result of the application. Mr Preston did not accept that averting a larger family from occupying Oak Tree Lodge was a practical benefit or would prevent an injury for the purposes of section 84 of the Act. It could not be shown as a fact that the proposals created any material risk of occupation by a larger family. Oak Tree Lodge already provided spacious family accommodation. The proposals did not include a granny flat. It was fanciful to suppose that the proposed extensions would be converted into bedrooms and it was unlikely that the internal space of Oak Tree Lodge would be reconfigured. Mr Glover had accepted that it was unlikely that the proposals would materially increase the risk of a larger family living there. In any event no injury would result to the objectors.
31. The regulatory covenants were also unreasonable because they were absolute and extended to trivial matters. Restrictions 3 and 7 should be discharged or alternatively modified so as to bring them within reasonable limits. Restriction 8 could have no adverse impact upon the objectors' amenity and should be discharged.
32. Mr Preston submitted that the discharge or modification of the restrictions would not cause the objectors any loss and that no compensation should be payable. Mr Glover for the objectors had commented upon loss of value but his evidence was scant and his conclusions rested upon assertions made by the objectors. Under cross-examination Mr Glover had accepted that the open market value of the application land in May 1999, subject to the assumption that restriction 6 was an absolute prohibition against development, was a speculative sum. The open market value of that land without an absolute embargo against development but with planning permission for the dormer bungalow was £60,000. Therefore the loss of value due to the restriction was £60,000 less the speculative sum. But the application land had actually been sold to Featureworks Limited for the full £60,000 and not for the lesser speculative sum. Consequently the objectors had not suffered any loss as a result of selling the application land subject to restriction 6. Mr Glover had argued that, in the absence of the restrictions, planning permission would have been obtained for a more valuable 4/5 bedroom house. But no such planning permission existed in May 1999 or subsequently and the possibility of such a development was speculation on Mr Glover's part.
33. Mr Preston submitted that any temporary disruption caused by the construction works would be de minimis and very little evidence had been adduced by the objectors to prove otherwise.

The case for the objectors

Evidence

34. Mr Michael O'Kane explained that the objectors wanted to retain control, through restrictive covenants, of any future development of the two building plots that they had sold. They wanted to restrict the size of family that lived in the new properties. They felt that large families would create noise and have an adverse impact upon the privacy and enjoyment of Whitewalls. They consequently decided to proceed with the sale of the plots on the basis that the dormer bungalows that were built should only be suitable for small families. They also designed the development to minimise any overlooking of Whitewalls. They decided upon a maximum of three dormer bungalows so as to reduce the impact upon the objectors' amenity and to minimise the use of the private drive. In the event only two building plots were sold. The third is retained by the objectors.
35. The objectors agreed to sell the two building plots to Featureworks Limited for £60,000 each. It was made a condition of the sale that Featureworks Limited would develop the two dormer bungalows that the objectors had designed. Mr O'Kane explained that restriction 6 had not been meant to apply to the original construction of these properties but had been intended to prevent any future extensions. The objectors' main concern was to restrict the size of families living in the bungalows and to protect the visual amenity of Whitewalls. The objectors had no problem with minor works which did not affect either of these two objectives. Nor were the regulatory restrictions intended to prevent normal day to day residential activities. The difficulty was in where one drew the line against activities that would prejudice the amenity of the neighbourhood. Mr O'Kane acknowledged that this was not a building scheme and that Mr and Mrs Jackson did not have benefit of the covenants imposed upon the applicants. However he felt a moral obligation to both of his neighbours to ensure that the covenants on each of their properties were applied consistently and to the benefit of all.
36. Mr O'Kane said that the sale to Featureworks Limited had been an arm's length transaction. He had spoken to as many as 10 people to ensure that the structure of the deal and the price paid were appropriate and not open to challenge. He had received no written valuation of the development plots but had spoken to several agents who advised him orally about site values and the value of the completed dormer bungalows. He had been advised that he could realise £80,000 per plot for five two storey 4/5 bedroom houses. One agent had approached him with an offer of £100,000 for the third building plot although this was based upon a development by a four bedroom house. Mr O'Kane acknowledged that the objectors had not tested the market for the sale of the building plots.
37. The objectors granted consent in 2004 for the extension of Mr and Mrs Jackson's house at 3 Old Court because the extension was situated at the southern end of the property, as far away from the objectors' house as it was possible to get. Besides Whitewalls and 3 Old Court did not share a common boundary.
38. The present application showed that the applicants wanted to extend Oak Tree Lodge by approximately 50 percent which would make it the size of a substantial four bedroom house. Covenants 1 and 6 were imposed precisely to prevent this type and size of property from being built.
39. Mrs Paula O'Kane had submitted a witness statement but was not called to give evidence. Mr Preston said that her statement had not been agreed but he agreed to its admission as hearsay evidence.
40. Mr Michael Glover gave expert evidence about the impact of the proposals upon the residential amenity and market value of Whitewalls. He also gave evidence about the appropriate figure of compensation should the Tribunal decide to discharge or modify the covenants. Mr Glover agreed with Mr O'Kane that the proposals would increase the net internal area of Oak Tree Lodge by nearly 50 percent. However he concluded that the impact of the proposed development was likely to be very limited due to its single-storey height and the difference in levels between Whitewalls and Oak Tree Lodge. He did not believe that there would be a material reduction in either residential amenity or the market value of Whitewalls as a consequence of the proposed development. These conclusions depended upon retaining the boundary fence and Hawthorn hedge that separated the two properties.
41. Mr Glover stated that in Molescroft, even since the introduction of the revised PPG3 in March 2000 and the associated pressure for the release of brownfield land for development, planning permission granted for the sub-division of large grounds had tended to be for low scale, low density development of individual houses. The application land was within the Development Limit as shown in the Beverley Borough Local Plan 1996.
42. Mr Glover believed that the objectors would have realised a greater price for the building plots had they agreed to develop more, or larger, properties. He referred to a recent sale of a site at Cherry Burton (some 2½ miles from the application land) where an improved planning permission, from three dormer bungalows to three two-storey houses, had led to an increased sale price of approximately 38 percent.
43. Mr Glover analysed the consideration paid by Featureworks Limited. He added £8,500 to the price paid for each of the two building plots to reflect Featureworks Limited's obligation to resurface and extend the access road and to build a new boundary wall to the south of Whitewalls. This gave what Mr Glover described as an equated consideration of £68,500 as the value of the application land on 27 May 1999 with the benefit of planning permission for the original dormer bungalow of 2,125 sq ft (as agreed to by the objectors and as built by Featureworks Limited). He then increased this value by 25% or £17,125 to reflect the uplift in market value at that date had the plot been developed with the benefit of planning permission for the enlarged dormer bungalow, taken by Mr Glover to be 2,818 sq ft, as proposed under the current application. This gave a (rounded) plot value of £85,600. If restriction 6 was discharged (rather than modified by proviso to allow the development currently proposed) Mr Glover considered that this value would increase to £89,000, an uplift of 30% from the equated consideration received by the objectors in 1999. This valuation was based on the assumption that the discharge of restriction 6 gave a purchaser the right to construct additional rooms and extensions that did not form part of the original building, but which might have been more extensive than the applicants' proposals. On the other hand if the discharge of restriction 6 meant that it could be assumed that a purchaser would have been able immediately to build a dormer bungalow unfettered in terms of size and subject only to planning permission, then Mr Glover said that the increase in value over £68,500 should be 38% or £26,000 in line with the comparable site at Cherry Burton.
44. Mr Glover concluded that restriction 6 has resulted in the objectors having received a reduced consideration for the subject plot of £17,100 (£85,600 ... £68,500) in the event that the restriction was modified by proviso or by either £20,500 (£89,000 ( £68,500) or £26,000 (£94,500 ( £68,500) in the event that the restriction was discharged.

Submissions

45. Miss Hargreaves submitted that it was not the function of the Tribunal to rewrite restrictive covenants at will. Its jurisdiction was limited to the grounds contained within section 84 of the Act. In this case the objectors were the original covenantees and they imposed the restrictive covenants on the application land only seven years ago. The objectors still lived in Whitewalls, the property that the restrictive covenants were intended to protect. The restrictions were imposed because Mr and Mr O'Kane felt (and continued to feel) strongly about the need to protect their residential amenity. Mr O'Kane's evidence was not challenged in this respect.
46. Turning first to restrictions 1 and 6 Miss Hargreaves submitted that no relevant social or environmental changes had occurred since 1999 to justify a finding that these restrictions were obsolete under section 84(1)(a) of the Act. Both the immediate and surrounding environments had at all times been high class residential areas. This point had been conceded by Mr Sutcliffe.
47. The first part of restriction 1 was not rendered obsolete by the construction of the dormer bungalow in 1999. The purpose of the restriction was to ensure that only bungalows or dormer bungalows should be erected "at any time". The restriction was a continuing one and was still cable of fulfilling its original purpose. The restriction continued to protect the objectors from the possibility that Oak Tree Lodge was demolished and replaced with a two (plus) storey building with negative consequences. The applicants had accepted that the second part of restriction 1 should not be discharged.
48. Miss Hargreaves accepted that a building had been constructed on the application land despite the first part of restriction 6 but she submitted that this should be read subject to restriction 1 which clearly permitted the building of bungalows etc. She did not accept, as a matter of construction, that because there was now a building on the application land the covenant against any such building must now be obsolete. For the restriction to be deemed obsolete under section 84(1)(a) it must become so by reason of changes in the character of the property. The development of the application land by the dormer bungalow (even if that constituted a change of character) did not satisfy that causal nexus. The purpose of the covenant to protect the residential amenity of the covenantees still existed. Restrictions 1 and 6 remained alive. Indeed both Mr and Mrs Sutcliffe and Mr and Mrs Jackson had sought the consent of the covenantees under these covenants.
49. The absolute nature of the covenants and the fact that Mr Adams was of the opinion that similar covenants were often qualified by a reference to the obtaining of consent (whether or not to be reasonably considered) did not make the wording of restriction 6 obsolete within the meaning of the Act.
50. Miss Hargreaves submitted that there was no case to support the application for discharge of restriction 1 and 6 under ground 84(1)(aa) of the Act. No evidence had been submitted other than the suggestion of both Mr Adams and Mr Sutcliffe that the objectors should rely upon the local planning authority to protect their interests when considering future development. But the objectors had protected such interests through the control afforded to them in person under the Act. The two legal regimes were distinct and restrictions imposed under the latter could not be rendered obsolete merely by the existence of the public controls available under the former.
51. The objectors accepted that the proposed user was reasonable and that restriction 6 (but not restriction 1) impeded that user. It was agreed by the experts that the development proposals would have no material impact on the visual amenity of the objectors' property. But restrictions 1 and 6 still secured practical benefits to the objectors. These included the control and prevention of additional building works, construction and other noise and increased user of the access road. They also included controlling the impact of the development upon the unsold plot still owned by the objectors and the risk of an enlarged Oak Tree Lodge being sold to a larger family. Miss Hargreaves stated that the question of whether these practical benefits were of substantial value or advantage was a matter of fact and degree to be determined by the Tribunal in the light of the evidence submitted. But it stood as a major point that the objectors were the original covenantees, that the covenants were recent and that, to all intents and purposes, the applicants were the original covenantors. The objectors had imposed the restrictions as part of a deliberate plan to be able to control the type and use of development around their family home. The exercise by them of such control, without reliance upon the local planning authority, was a practical benefit of substantial value. The proposed development would be the thin end of the wedge by removing the ability of the objectors to control and preserve their immediate environment in the future.
52. Miss Hargreaves submitted that the Tribunal had no choice but to prefer Mr Glover's evidence. He had considered the full range of issues at stake and had consistently fulfilled his duty to help the Tribunal. Mr Adams on the other hand had been instructed on a limited brief that was restricted to a commentary upon whether the covenants were over-restrictive. He had not considered any technical, valuation or compensation matters.
53. Mr Glover's evidence was that compensation for the loss or disadvantage suffered by the objectors from the discharge or modification of restrictions 1 and 6 would be payable under section 84(1)(ii) of the Act. That was a reasonable approach. The objectors sought to be compensated for the fact that the price they obtained from Featureworks Limited in 1999 was depressed by the imposition of the restrictive covenants. There were no historical difficulties in establishing this approach and evidence of value was recent and ascertainable. Mr Glover's evidence in this respect had been unchallenged.
54. The application under ground (c) carried no weight. It was accepted that the proposals would not injure the market value of the objectors' property nor its visual amenity. However the proposal represented the thin end of the wedge and the injury to the objectors lay in the loss of the practical benefits previously outlined. The objection was not frivolous or vexatious.
55. Miss Hargreaves submitted that the application to modify the regulatory covenants was so hopelessly vague that it could not be seriously considered by the Tribunal and should be rejected. It was not possible to modify these covenants in a meaningful way. The applicants had not suggested any proposed wording and it was not the job of the Tribunal to redraft them. The objectors saw the application as being one for the discharge of those covenants. The regulatory covenants simply did not suit the applicants who considered them to be a nuisance. Mr Sutcliffe's evidence amounted to nothing more than a complaint that the restrictions interfered with his rights as a householder. Mr Sutcliffe's written statement had not referred to his boat, caravan or pick-up truck. He had not explained why the covenants were a problem nor had he shown that their continued existence impeded some reasonable user of the applicants' property. There was no evidence directed at the requirements of section 84(1)(aa) of the Act. In any event the regulatory covenants did secure practical benefits (of amenity) which were substantial (the preservation of the high quality of the residential environment and the potential loss of value and desirability of the objectors' house and their remaining development plot). Money would not be adequate compensation for the discharge of these covenants.
56. The discharge of the regulatory covenants would injure the objectors because they contained restrictions that had considerable practical and visual value to them in preserving the amenity of their property.

Conclusions: restrictions 1 and 6

57. Mr O'Kane explained the apparent contradiction between these restrictions. He gave evidence that the sale to Featureworks Limited had been made conditional upon the requirement for that company to build the two dormer bungalows (Oak Tree Lodge and 3 Old Court) in accordance with the planning permission already obtained. Mr and Mrs O'Kane waived restriction 6 in order to allow the construction of those properties. Thereafter there was an absolute prohibition upon the extension or alteration of the new dormer bungalows or indeed upon any further building or construction work. This was to enable the covenantees to control all future development in order to protect their residential amenity. I am satisfied from the evidence, and in particular from the testimony of Mr O'Kane as an original covenantee, that this explanation reflects the true intention of the parties (the objectors and Featureworks Limited) at the time the restrictions were imposed and that the meaning and scope of restrictions 1 and 6 should be interpreted in this context.

Ground (a)

58. The applicants argued that restrictions 1 and 6 had been imposed at a time when the application land was undeveloped. Their purpose was to enable the objectors to control the nature of the development on that land. Once the development of Oak Tree Lodge was completed and it had been conveyed to the applicants this purpose was fulfilled and the restrictions became obsolete. The character of the application land had been changed by the construction of the dormer bungalow.
59. In his closing submissions Mr Preston acknowledged that this was not the applicants' strongest argument and I think that he was right to do so. The test of obsoleteness is whether the restriction remains capable of fulfilling its original purpose. I do not accept the narrow and limited interpretation of that purpose that the applicants have adopted. The applicants stated at the hearing that they were not seeking to discharge the second part of restriction 1. Their argument under ground (a) was directed at the first part which they said was obsolete following the construction of Oak Tree Lodge. In my opinion the purpose of restriction 1 is to restrict the nature of the permitted residential use of the application land to bungalows or dormer bungalows with garages "at any time". This purpose is not limited by a specific construction event.
60. The absolute prohibition contained in restriction 6 was seemingly breached by the construction of Oak Tree Lodge and its purpose might therefore be considered obsolete. But in the context of the background to the imposition of the restrictions outlined above I consider its purpose to be extant and fulfillable "at any time" in relation to any further development.
61. The applicants also argued that these restrictions are over-restrictive and unreasonable but this is not relevant as to whether they are obsolete. In my opinion they are not obsolete and the application in respect of restrictions 1 and 6 fails under ground (a).

Ground (aa)

62. The proposed development is to extend the existing dormer bungalow. Restriction 1 does not limit the size of such development and I consider the proposal to be a permitted user under that restriction. The continued existence of restriction 1 does not impede the proposed user and therefore there are no grounds for its discharge or modification under ground (aa) of section 84(1) of the Act. The applicants produced no evidence of any proposals for residential development other than for an enlarged dormer bungalow.
63. The objectors conceded that the proposed user is reasonable and that the continued existence of restriction 6 would impede it. The question now to be determined is whether in impeding that user the restriction secures to the objectors practical benefits of substantial value or advantage. For the objectors Mr Glover, whose evidence was commendably objective and impartial, agreed with the applicants that the proposals did not adversely affect the visual amenity of the benefited property (Whitewalls). I agree with this conclusion. The proposed extensions to Oak Tree Lodge have been carefully designed to complement the existing building and to minimise the visual impact upon the objectors' property. The element of the proposals that was most likely to have such an impact, namely the western conservatory, was agreed to by the objectors in December 1999 and has already been built. The application land is well screened from Whitewalls by a fence and a Hawthorn hedge and by virtue of the difference in levels between the two properties. Only two windows in Whitewalls overlook the application land.
64. The other practical benefit that was said by the objectors to be of significant value or advantage was their ability under restriction 6 to limit the size of family living at the application land through the absolute control of any further development. The advantage thus gained was said to be the avoidance of noise and disturbance from a growing family with children. But that is not a benefit that is necessarily secured by the restriction. Oak Tree Lodge already has three bedrooms and is therefore capable of housing an average size family in its existing configuration. Mr Glover accepted, albeit with some reservations, that it was unlikely that the proposals would materially increase the risk of a larger family living there. Furthermore the objectors agreed to an extension of 3 Old Court to enable a further bedroom to be added and in the express knowledge that the owners, Mr and Mrs Jackson, intended to increase the size of their family. That property, which is more visible than Oak Tree Lodge from inside Whitewalls, is subject to the same restrictive covenants as the application land. I acknowledge the objectors' comments with regard to the extension of 3 Old Court but nevertheless that concession and the inconsistency of approach to restriction 6 seems to me to undermine the asserted value and advantage which this ground of objection seeks to protect. I do not accept on the facts that by impeding the proposed development restriction 6 secures to the objectors a benefit of substantial value or advantage in terms of restricting family size.
65. The objectors gave other examples of the practical benefits that they secured by impeding the proposed user under restriction 6. They cited in particular the avoidance of increased construction noise and disturbance, increased user of the access road and the ability to control the impact of development upon the remaining unsold development plot. I do not consider any of these practical benefits to be of substantial value or advantage to the objectors. With regard to construction noise and disturbance the effect of such a short term disruption was recently considered by Carnwath LJ in Shephard and Others v Turner and Another [2006] 20 EG 294 at 302

"The primary consideration [under section 84(1)(aa)], 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 a particular covenant, or in the facts of a particular case, which justifies giving special weight to this factor."

In my opinion there are no facts in this case to warrant placing a special weight on short term disruption due to the proposed building works. Nor can I see a reason why the proposed user would lead to a permanent increase in the use of the access road. The proposed development would have no direct impact upon the undeveloped plot which lies some distance to the south. The extended dormer bungalow at 3 Old Court is likely to have a greater impact upon the unsold plot, both physically and in terms of the precedential affect of its size. I therefore find that by impeding the proposed user restriction 6 does not secure to the objectors any practical benefits of substantial value or advantage. The objectors did not dispute that money would be an adequate compensation for the loss or disadvantage (if any) that they will suffer from the discharge or modification of restriction 6.

Ground (c)

66. I consider that the proposed discharge or modification of restriction 1 would injure the objectors because that restriction enables them to control the type of residential property that is built on the application land. They are personally interested in, and affected by, enforcement of the restriction and their objection to the current application was not frivolous or vexatious. It is not necessary for me to consider ground (c) in respect of restriction 6 because I have already found that the requirements of ground (aa) have been satisfied in respect of it.

Discretion

67. I have found that the requirements of section 84(1)(a) of the Act have not been satisfied in respect of either restriction 1 or 6 and that neither of these restrictions is obsolete. The requirements of ground (aa) and (c) have not been met in respect of restriction 1 but those of ground (aa) have been satisfied in respect of restriction 6. I therefore have jurisdiction to discharge or modify restriction 6 but not restriction 1. This being so I must now consider whether it is appropriate for me to exercise my discretion under such jurisdiction. In reaching my determination I am obliged to take account of the factors listed in section 84(1B) of the Act.
68. I have taken account of the existence of the detailed planning permission for the proposed development and its conformity with the development plan. I have also taken account of the fact that the restrictions were imposed only seven years ago and that the objectors are the original covenantees. The objectors submitted that the applicants are, for all practical purposes, the original covenantors, having purchased the application land from Featureworks Limited some seven months after the restrictions were first imposed. The applicants were the first and, to date, the only occupiers of the completed development. But they were not the original covenantors. Mr Sutcliffe bought the application land subject to the covenants and the discharge or modification of restriction 6 would not release the applicants from a contractual obligation that Mr Sutcliffe had entered into with the covenantees.
69. The applicants submitted two further material circumstances that I should take into account when exercising my discretion. Firstly, they argued that the objectors should rely upon the planning authority to protect their residential amenity and not rely upon an absolute restrictive covenant. Secondly, they argued that such an absolute covenant was not the norm and placed an unreasonable burden upon the applicants in their day to day enjoyment of the application land.
70. I do not accept the applicants' first submission. As Fox LJ said in the case of Re Martins' Application (1989) 57 P & CR 119 at 124:

"Thus, it seems to me that, while the two regimes [planning control and the jurisdiction under section 84 of the Act] impinged upon each other to some extent, they constitute different systems of control and each has, and retains, an independent existence."

There is an express statutory jurisdiction conferred by section 84 that cannot be substituted by the decisions of the local planning authority.

71. I also reject the applicants' second submission. There is no intrinsic reason why a restrictive covenant should not be absolute in its effect. The reasons why such a restriction was imposed by the original covenantees were fully explained by Mr O'Kane. He said in his evidence that the objectors have no desire to be unreasonable or obstructive. The applicants on the other hand submitted that the objectors had acted arbitrarily in refusing to allow Mr and Mrs Sutcliffe to construct a brick base for a new fence. I saw this construction on my site inspection and from its location I can understand the objectors' fears that it was in fact part of the proposed development for which planning permission had been granted but for the construction of which they had not given their consent.
72. The applicants applied for an order, in the alternative to its discharge, that restriction 6 be modified to the extent necessary to permit the erection of the structures for which planning permission has been granted. That modification can be achieved through a proviso to the restriction. It not necessary, nor in my opinion appropriate, that the restriction should be further modified to make any future building works conditional upon the consent of the covenantee such consent not to be unreasonably withheld. I do not agree that restriction 6 should be discharged since it remains capable of protecting the amenity and value of the covenantees' property and it is not necessary to do so in order for the planning permission to be implemented.
73. The application was made only six years after the restrictions were imposed. The objectors are the original covenantees and still derive practical benefits from the restrictive covenants. But the objectors have shown themselves willing to agree to further development on both the application land and at 3 Old Court by the consents they have given, in the case of the former as early as December 1999. I therefore conclude that the relatively short period of time since the restrictions were imposed is not of itself sufficient reason for not exercising my discretion. Having considered the above factors I find no reason for refusing the relief sought as a matter of discretion, such relief to be by way of modification by proviso to enable the proposed development to proceed.

Conclusions: Restrictions 3, 7 and 8

Ground (aa)

74. The part of the application that seeks to discharge or modify the regulatory covenants does not directly relate to the proposed development for which planning permission has been granted. Instead this part of the application appears to be the result of the applicants' asserted frustration at the circumscription of normal residential activity that these restrictions are said to have caused. It seems to have been initiated because the opportunity to do so arose from the making an application in any event. The applicants were frustrated by the well-documented argument with the objectors over the construction of a brick base for a fence which the objectors opposed as they considered it to be a breach of restriction 6. The applicants hold this to be an exemplar of the difficulties they will face due to the absolute nature of the regulatory covenants. But the applicants have produced no substantial evidence that the continued existence of those covenants would impede some reasonable use of the application land.
75. Mr Sutcliffe conceded in answer to a question from the Tribunal that restriction 8 did not impede his use of the application land because the applicants do not hang their washing outside at all, let alone in front of the dormer bungalow. The tenor of his argument was that it was unreasonable that the applicants could not hang their washing in front of the property if they wanted to. But they have no proposals to do so in the future. Nor did Mr Sutcliffe cite any example of how restriction 7 had impeded the reasonable use of the application land. The applicants have no proposals to display any sign on the application land other than their house name for which the objectors gave their consent in December 1999. It is not difficult to conjure up colourful hypothetical examples of the reasonable user that a set of absolute restrictions such as these might prevent. For instance Mr Adams suggested that the applicants might, in the extreme, be prevented from putting up a sign displaying "Merry Christmas". On the facts before me the objectors have not in the past sought to invoke restrictions 7 and 8 in any such petty way and I find that their continued existence would not impede (in a real and sensible way) some reasonable user of the application land. Consequently the application to discharge or modify restrictions 7 and 8 fails.
76. It was only under cross examination that Mr Sutcliffe described how restriction 3 impeded the applicants' reasonable user of Oak Tree Lodge. I am surprised that nothing was said in his witness statement about the previous storage of a speedboat and a caravan on the application land nor about his parking of a commercial pick-up truck. None of these activities, although apparently in breach of the restriction, had led to any complaint or action by the objectors. In considering this part of the application I accept Miss Hargreaves' submission that it is not possible to modify this restriction in a meaningful way. I also accept that restriction 3, alone and as part of the suite regulatory covenants including restrictions 7 and 8, does secure to the objectors practical benefits of substantial advantage. The covenantees have been consistent in their desire to preserve the residential amenity of this private and high quality residential development. The storage of a caravan and/or a speedboat and the parking of commercial vehicles on the application land may affect the visual amenity of the objectors' property. It would also set a precedent in respect of 3 Old Court which is subject to identical covenants and for the undeveloped plot still retained by the objectors. The fact that the previous use of the application land for these purposes did not elicit a response from the objectors does not mean that these benefits are neither practical nor substantial. Nor do I consider that money would be an adequate compensation for the loss or disadvantage which the objectors would suffer from the discharge or modification of restriction 3. There would be a loss of amenity rather than value. I therefore find that the requirements of ground (aa) have not been satisfied in respect of restriction 3.

Ground (c)

77. The applicants also rely upon ground (c) in respect of the regulatory covenants. The objectors' objection is not frivolous or vexatious. It was made to protect a system of regulatory covenants that were recently imposed to safeguard the amenity of the whole of Old Court and not just Whitewalls. Although there is not a building scheme the objectors were a common vendor and they made clear at the hearing that they consider themselves under a moral obligation to Mr and Mrs Jackson to enforce and protect these regulatory covenants. To discharge or modify several of them would undermine their collective benefit and would, in my opinion, injure the objectors. I therefore find that the requirements of ground (c) have not been satisfied in respect of restrictions 3, 7 and 8.

Conclusions: Compensation

78. The objectors seek compensation under section 84(1)(ii) of the Act having accepted that the proposed development will not affect the present open market value of Whitewalls. That section provides that an order modifying a restriction may direct the applicants to pay to the objectors such sum by way of consideration as the Tribunal may think it just to award being:

"(ii) A sum to make up for any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it."

79. The applicants produced no valuation evidence and argued that no compensation was payable. In support of this Mr Adams stated, without evidence, that the existence of the covenants had an uplifting rather than a depreciatory effect upon value. Mr Preston submitted that there had been no demonstrable reduction in consideration received by the objectors at the time they sold the application land to Featureworks Limited. I prefer Mr Glover's evidence to either of these two approaches. I do not accept that restriction 6 enhanced the value of the application land. In the context of the covenants as a whole this restriction is an absolute veto against any form of development other than the construction of the original dormer bungalow. I agree with Mr Glover that restriction 6 had the effect of reducing the consideration received at the time of the sale to Featureworks Limited. Mr Glover based his opinion upon comparable evidence and sought to analyse this in a reasoned and objective way. The substance of his evidence was not challenged by the applicants.
80. Having determined that restriction 6 should be modified rather than discharged I have only to consider the objectors' claim in the sum of £17,100 (see paragraph 44 above). The starting point for the calculation of this figure is the open market value of £68,500 (which includes an allowance for the works that Featureworks Limited agreed to undertake). I share the concerns of the applicants about the lack of exposure of the application land to the market. Nor is there written evidence of any independent valuation having been undertaken. Nevertheless during cross examination Mr Adams stated that he agreed with Mr Glover's figure of £68,500 which he took to be approximately one-third of the value of Oak Tree Lodge as built by Featureworks Limited.
81. Mr Glover estimated that the market value of the application land at 27 May 1999 was £85,600 on the assumption that a dormer bungalow with 2,818 sq ft of accommodation could be built. This figure excludes the area of the western conservatory for which consent was given by the objectors in December 1999 and which has already been developed. This amounted to some 320 sq ft. The total floor space of Oak Tree Lodge after the implementation of the planning permission granted on 20 August 2004 (as amended) would actually be 3,138 sq ft. In calculating the consideration that I consider just to award under section 84(1)(ii) of the Act I have made no allowance for any value attributable to the western conservatory. The objectors freely, and without receiving any consideration, consented to its construction shortly after the date of transfer to Featureworks Limited and before the date of transfer to the applicants. Mr Glover has also left this conservatory out of account given the area he has assumed for the dormer bungalow that could be built.
82. Mr Glover's valuation was based upon a number of comparable residential building plots which he had sold at or about 1999. He stated that all of these had planning permission but he gave no details. Mr Glover identified the two best comparables as being in Kirkella. One plot of 0.154 acres was sold in December 1999 for £72,500 and another of 0.15 acres was sold at the end of February for £74,000. Mr Glover argued that the application land was located in a better area and that it was a larger plot (0.28 acres).
83. In my opinion Mr Glover's valuation of £85,600 is too high. There is no detail of what type of residential development was to take place on the comparable sites referred to. The supporting evidence of the development at Cherry Burton upon which Mr Glover relies is based upon a deal that was completed in February 2006, nearly 7 years after the valuation date for current purposes and in different market conditions. Nor am I able to place much weight upon the various offers that Mr O'Kane referred to in his evidence. They were not supported by documented evidence of offers or valuations. Furthermore Mr Glover's analysis relies, at least in part, upon a comparison between sites developed with dormer bungalows and sites developed with houses. That is not the relevant comparison in this case. The comparison is between the value of the application land with the benefit of the original planning permission and its value with the benefit of the planning permission granted in August 2004 (as amended) but excluding any value attributable to the western conservatory. I have also had regard to the fact that, at the valuation date of 27 May 1999, no planning permission existed for the enlarged dormer bungalow. Taking all these factors into account I consider it just to award the sum of £7,500 to make up for the effect that restriction 6 had, at the time it was imposed, in reducing the consideration then received for the land affected by it. The objectors did not give any evidence or make any submissions about whether compensation should be adjusted for inflation from May 1999 until the present and I therefore make no such adjustment.

The Order

84. The applicants have not stated the modifications that they are willing to accept. Under section 84(1C) of the Act I have the power to add such further provisions restricting the user of or the building on the application land as appears to me reasonable in view of the relaxation of the existing provisions, and as may be accepted by the applicants. I may refuse to modify a restriction without some such addition.
85. The following order will accordingly be made:

In the transfer dated 27 May 1999 –

Restriction 4 is discharged on ground (a)

Restriction 6 is modified on ground (aa) by insertion of the following:

"provided that the erection of single storey extensions may be constructed in accordance with planning permission DC/04/03710/PLF/EASTSE issued on 20 August 2004, as amended under reference DC/04/03710/PLF/EASTSE/MJ/JAB on 2 February 2005, and the terms and details referred to therein and the approved drawing number reference AS/002/02/revision D.

86. Reference to planning permission DC/04/03710/PLF/EASTSE (as amended) shall include any subsequent planning permission that is the renewal of that planning permission and any matters approved in satisfaction of the conditions attached to such permission.
87. An order modifying restriction 6 in accordance with the above shall be made by the Tribunal provided, within three months of the date of this decision, the applicants shall have

(i) signified their acceptance of the proposed modification, and

(ii) paid the sum of £7,500 to Mr and Mrs O'Kane.

88. A letter on costs accompanies this decision which will take effect when, but not until the question of costs is decided. The attention of the parties is drawn to paragraph 22.4 of the Lands Tribunal Practice Directions of 11 May 2006.

Dated 10 October 2006

A J Trott FRICS

ADDENDUM ON COSTS

89. I have now received submissions on costs on behalf of the applicants and the objectors.
90. The objectors ask for their costs. They argue that the applicants have only succeeded in obtaining an order in respect of their alternative (not primary) case in respect of one of the five restrictions that were the subject of evidence and submissions at the hearing and upon terms as to compensation (£7,500). The applicants failed in their primary aim to obtain the discharge of the covenants that were the subject of their application. The objectors argue that no costs consequences arise in relation to restriction 4 which the parties agreed was obsolete.
91. In a letter marked "without prejudice save as to costs" dated 8 June 2006 the objectors offered to consent to the modification of restriction 6 to permit (only) the proposed development of the applicants. They sought compensation of £12,000 and their costs of the proceedings. This offer was rejected by the applicants in a letter dated 20 June 2006. The applicants stated in their reply that they were not prepared to pay the objectors any money. The objectors argue that their offer, made two months before the hearing and kept open by them, reflects the order made subsequently by the Tribunal except as to the quantum of compensation and costs. The applicants were unreasonable in refusing to negotiate on compensation or costs which therefore made the hearing inevitable. The objectors say that they did better by proceeding to the hearing than they would otherwise have done by accepting, or negotiating upon, the applicants' stated counter-position.
92. The applicants do not ask for their costs but resist the objectors' application for costs. They argue that there were two broad areas of dispute. Firstly, whether the applicants should be permitted to proceed with their development proposals and, secondly, whether a number of regulatory covenants should be discharged or modified. The applicants argue that it was the first issue that was the central area of dispute and upon which they succeeded in their application. They say that it does not matter upon which of the alternative grounds they succeeded nor whether they succeeded by way of discharge or modification. The fact that some grounds prevail and others do not ought not be significant on the issue of costs. It is common (and good) practice for an applicant to provide alternative arguments and/or grounds in support of the same broad issue.
93. The applicants argue that the objectors abandoned their opposition to discharge restriction 4 during the oral hearing and that therefore the applicants were successful on this issue. The remaining three regulatory covenants were dealt with briefly in evidence and, in any event, were of peripheral importance. The applicants also say that they were right to refuse the offer made by the objectors on 8 June 2006 and that they have done better by proceeding to a final hearing.
94. The applicants succeeded in their application to modify restriction 6, but failed in their application to discharge that restriction or to discharge or modify restrictions 1, 3, 7 and 8. Restriction 4 was discharged following the agreement of the parties that it was obsolete. Whilst I agree with the applicants that the issue of the discharge or modification of restrictions 1 and 6 to allow the proposed development was the main dispute between the parties, the issue of the regulatory covenants occupied a significant minority of the evidence and of the time taken at the hearing. The applicants did not present their case by referring to the regulatory restrictions as being of secondary importance and the objectors were reasonable in not treating them as such. I have also had regard to the fact that the applicants failed in their application to discharge or modify restriction 1 which application formed part of their main dispute.
95. I accept the applicants' argument that they did better by proceeding to a hearing than by accepting the objectors' offer and I consider that they acted reasonably in their refusal.
96. It is not incumbent upon an applicant to argue in the alternative both as to the appropriate grounds of application and as between modification and discharge. If an applicant chooses to do so then there may be consequences as to costs in the event of the failure of part of the application. By pursuing a comprehensive range of alternative arguments the applicants lengthened the hearing and the evidence that was required. The applicants failed on all but one of those arguments (excluding restriction 4 which was a matter of agreement and did not feature in evidence). I am of the opinion that, in all the circumstances of the case, the applicants must pay one-half of the objectors' costs, such costs if not agreed to be the subject of detailed assessment by the Registrar on the standard basis.

Dated 9 November 2006

A J Trott FRICS