Dealing with the benefits of restrictive covenant modification

The Upper Tribunal was not persuaded to discharge or modify a restrictive covenant that prevented building in front of a line 50ft from the boundary of Oldways,

a vacant plot on Twitchells Lane, Jordans, Beaconsfield. The applicant in Creebray Ltd v Deninson & Anor was the registered proprietor of Oldways and sought the discharge or modification pursuant to section 84 of the Law of Property Act 1925, so they could build a house, for which they had planning permission, in a position that would breach the restrictive covenant.

Mr and Mrs Deninson were the registered proprietors of Severalls, the house next door to Oldways. They had the benefit of the restrictive covenant and they objected to its discharge or modification because of the detrimental effect this would have on their property.

The Upper Tribunal considered:

• Whether the proposed use of Oldways was reasonable;
• Whether the covenant impeded that use;
• Whether the impeding of the proposed use secured practical benefits to the objectors;
• Whether, if so, those benefits were of substantial value or advantage;
• If they were not, whether money would be an adequate compensation.

The Upper Tribunal said: “The building of a house on Oldways was obviously reasonable and indeed desirable. This particular proposed house is large and could be regarded as overbearing but it has planning permission and we regard its construction as a reasonable use of the land.”

It then considered whether the covenant impeded that use. It was not in dispute that the building of the proposed house would be a breach of the covenant; accordingly the covenant did imped that reasonable use of the land.

Did the impeding of the proposed use secure for the objectors practical benefits of substantial value or advantage? The Upper Tribunal concluded that the restrictive covenant, in preventing the building of the proposed new house in front of the building line, did secure a practical benefit to the objectors and the Tribunal regarded that practical benefit as being of substantial advantage to them.

Because of that conclusion the Upper Tribunal did not need to consider the further question of whether, by impeding the proposed use, the restriction secured to the objectors practical benefits of substantial value. But it did comment briefly on the evidence offered which it found to be largely irrelevant and directed at the wrong questions. Accordingly, the application failed and the restrictive covenant was neither discharged nor modified.