Richard Charles Hodgson & Anor v Terence Cook & Ors

Under section 84 of the Law of Property Act 1925, planning permission does not determine whether a restrictive covenant should be modified. A use may be reasonable in planning terms yet confer substantial practical benefits on those entitled to the covenant.

A covenant preventing business use on a residential estate may protect amenity, quiet enjoyment, the character of the estate and property values. Those benefits may be substantial even where the particular business causes little noise or visual disturbance. The public interest in maintaining recently and freely accepted property rights may outweigh the public interest in permitting a small business from the property.

The applicants sought modification of a restrictive covenant affecting their house on a residential estate. The covenant prohibited trade, business or professional use of the plot and required it to be used only as one private dwelling.

The applicants wished to operate a beauty therapy business from a cabin in the rear garden. The local planning authority had granted retrospective permission for a restricted mixed residential and beauty salon use. The neighbouring owners objected, relying on the covenant’s protection of estate amenity, parking, privacy and the character and value of the development.

The application was made under grounds (aa), (b) and (c) of section 84(1) of the Law of Property Act 1925. The central issues were whether the covenant impeded a reasonable use, secured no practical benefits of substantial value or advantage, was contrary to the public interest, or would cause no injury to those entitled to its benefit.

1. Ground (aa): reasonable use and substantial practical benefit. The proposed use of the cabin for a small-scale beauty business was a reasonable use of the land and was impeded by the covenant. Occasional home working compatible with ordinary residential use would not necessarily breach such a covenant, but the whole of the applicant’s business was conducted from the cabin.
2. Planning permission was relevant but not determinative. The covenant formed part of a scheme intended to preserve the residential character, appearance and effective management of the estate. A commercial use generating regular customer parking over most days of the week was prohibited whether or not it was acceptable in planning terms, and whether its noise or pollution was minimal.
3. The covenant protected the quiet enjoyment and amenity of the estate, preserved certainty about future uses, and supported the value of the properties. The risk that modification would make enforcement against similar businesses difficult was a legitimate consideration. These protections were practical benefits of substantial value or advantage. The requirements of section 84(1)(aa) were therefore not satisfied and the Tribunal had no jurisdiction to modify the covenant.
4. The alternative public-interest limb of ground (aa) also failed. It was generally in the public interest that businesses and employment opportunities should exist, but the statutory question concerned the prevention of this business from this property. No significant public benefit outweighed the public interest in maintaining recently and freely accepted covenants for the benefit of the estate.
5. Ground (c) failed because it would be contradictory to find that the objectors would not be injured after finding that the covenant conferred substantial practical benefits on them.
6. Ground (b) failed. The applicants did not establish agreement to modification. Silence when first informed of the business could not be treated as acquiescence or consent, particularly when objections were later made.
7. The Tribunal did not need to determine whether the applicants’ breach was cynical. It found that the applicants had operated the business in breach throughout the application, but treated the case as one involving private individuals making a living from their home rather than large-scale developers seeking substantial profit.
8. The application was dismissed.