Rajarajan Narayanasamy Naidu & Anor v Valerie Morton & Ors

Under section 84 of the Law of Property Act 1925, establishing a ground for discharge or modification does not require the Tribunal to exercise its discretion. A proposed development may be a reasonable use even without planning permission, but the Tribunal may defer modification where planning conditions and specialist evidence are needed to assess injury to neighbouring land. A restriction securing important structural and amenity benefits may nevertheless fail the substantial-advantage test where the planning system provides the principal protection. Ancillary home working does not necessarily amount to a use impeded by a covenant against business use.

The applicants owned a three-storey town house burdened by covenants preventing alterations to the external plan or elevation and business use. They sought discharge or modification under section 84 of the Law of Property Act 1925 to permit a three-storey side extension and associated business use.

The application was opposed by neighbouring owners. The Tribunal considered grounds (a), (aa) and (c), including whether the building covenant secured practical benefits of substantial value or advantage and whether modification would cause injury. Planning permission had not yet been obtained, and structural concerns remained regarding a retaining wall adjoining one objector’s property.

1. Ground (a). The applicants produced no evidence of sufficient change in the character of the neighbourhood. The restrictions were therefore not obsolete.
2. Business restriction. The proposed home working and possible home businesses would remain ancillary to the residential use. They did not require modification of the covenant, so ground (aa) was not satisfied in relation to that restriction.
3. Building restriction and ground (aa). The covenant impeded a reasonable use, namely the proposed extension. The restriction secured specific benefits to the owner of No. 51, including protection against risks to the structural integrity of the house and grounds and a limited protection of outlook. Those benefits were important but, in the circumstances, did not amount to practical benefits of substantial value or advantage. The planning system provided significant protection against adverse effects.
4. The concept of substantial advantage in section 84 was considered by reference to Shephard v Turner [2006] 2 P&CR 28, where it was described as something considerable, solid or big.
5. Under Alexander Devine Children's Cancer Trust v Housing Solutions Ltd [2020] UKSC 45, satisfying a statutory ground is only the first stage. The Tribunal retained a discretion whether to modify the covenant. Although lack of planning permission was not necessarily fatal, the structural concerns required specialist engineering evidence and could not appropriately be addressed by a conditional modification at this stage. This differed from Smith v Goodwin [2021] UKUT 145 (LC), where a conditional modification had been granted.
6. Ground (c) was not satisfied because, without planning permission and conditions, it was not possible to determine whether modification would cause injury. The application was refused. The applicants could renew it if planning permission were obtained.

This was an application to the Upper Tribunal (Lands Chamber) under section 84 of the Law of Property Act 1925. The application was refused, with liberty to renew it after obtaining planning permission.