Rajarajan Narayanasamy Naidu & Anor v Valerie Morton & Ors

Under section 84 of the Law of Property Act 1925, satisfying a statutory ground for modification of a restrictive covenant does not remove the Tribunal’s separate discretion whether to grant relief. A restriction is not obsolete merely because development within the neighbourhood has been permitted; the development must amount to a relevant change in its character.

A modification under ground (aa) may be granted where approved plans address the identified permanent effects on neighbouring land and the restriction secures no practical benefit of substantial value or advantage. An application to modify a business-use covenant must identify the proposed use sufficiently to permit assessment of the statutory grounds and its likely effects.

The applicants made a renewed application under section 84 of the Law of Property Act 1925 concerning restrictive covenants affecting their house at 52 Beechcroft Manor. The covenants prevented alteration of the external plan or elevation and business use.

In the earlier determination, Naidu & Anor v Morton & Ors [2022] UKUT 172 (LC), the Tribunal found jurisdiction under ground (aa) to modify the building covenant but deferred relief pending planning scrutiny of structural concerns. Planning permission, including drawings for a retaining wall, was subsequently granted. The applicants also sought a broad modification of the business covenant, but did not identify a proposed business activity.

1. The application was granted in part. The Tribunal modified the building restriction under ground (aa) of section 84(1) of the Law of Property Act 1925. It refused discharge of that restriction under ground (a), and refused the proposed modification of the business restriction.
2. The additional storeys being constructed on nearby blocks of flats did not change the character of the neighbourhood. They matched the existing materials, did not alter the blocks’ footprints, and were not harmful to the character or appearance of the area. The building restriction had therefore not become obsolete for the purposes of ground (a).
3. The Tribunal had already found that the building restriction impeded a reasonable use of the property and did not secure practical benefits of substantial value or advantage. The planning permission now supplied scrutinised plans and a retaining-wall specification. The evidence did not show any remaining permanent loss or disadvantage to the adjoining owner. The Tribunal therefore exercised its separate discretion to modify the restriction, as Alexander Devine Children's Cancer Trust v Housing Solutions Ltd [2020] UKSC 45 confirms it must decide whether to do after a statutory ground is made out.
4. The modification permits implementation of the planning permission granted on 16 September 2022, subject to its conditions, approved drawings, renewals, and matters approved in satisfaction of its conditions. No monetary compensation was required.
5. The proposed business modification failed because the applicants gave no adequate detail of any intended business use. Without that detail, the Tribunal could not assess the statutory grounds or whether the feared effects on access and parking would arise. The evidence nevertheless showed that the objectors did not object to the applicants continuing to work from home.

• Upper Tribunal (Lands Chamber): This was a renewed section 84 application following Naidu & Anor v Morton & Ors [2022] UKUT 172 (LC). In that earlier determination the Tribunal found jurisdiction to modify the building restriction under ground (aa), but declined relief pending planning scrutiny. The renewed application was determined after planning permission was obtained.