Anthony Rogers & Anor v Michael Dinshaw & Ors

Under Law of Property Act 1925, s.84, the Tribunal must first determine whether a statutory ground for discharge or modification is established and then exercise its discretion. A covenant requiring prior approval for extensions may impede a reasonable use of land, but the relevant question under ground (aa) is whether it secures practical benefits of substantial value or advantage, and whether money provides adequate compensation. The Tribunal should focus on the statutory grounds rather than simply deciding whether consent was unreasonably withheld. Where the covenant has limited continuing utility, the proposed works cause no material injury, and there is no evidence of compensable loss, modification may be preferable to discharge because it permits the existing works while preserving control over more extensive future alterations.

The applicants owned a bungalow subject to a 1980 restrictive covenant preventing extensions without the prior written consent of the vendors or their surveyor. They built kitchen and bedroom extensions in 2018 without obtaining that consent. When they later sought to sell the property, the covenant was discovered and the objectors, who claimed the benefit of adjoining retained land, refused to consent.

The applicants applied under s.84(1) of the Law of Property Act 1925, relying on grounds (a), (aa), (b) and (c). The central issues were whether the covenant was obsolete, whether it impeded a reasonable use while securing no practical benefits of substantial value or advantage, whether all persons entitled to its benefit had agreed, and whether discharge or modification would cause injury.

1. Ground (a). The covenant was not obsolete. Although the neighbourhood had been fully developed and the original context had changed, the covenant retained some utility by preventing development affecting amenity which did not require planning permission. Its original purpose therefore still had limited relevance.
2. Ground (aa). Retention of the extensions was a reasonable use of the property and was impeded by the covenant. The objectors did not establish a practical benefit of substantial value or advantage. The extensions were relatively inconsequential, nearby owners had not objected, and the asserted risk of future intensive development and increased road-maintenance costs was remote. Money would provide adequate compensation if loss were shown.
3. Ground (c). The objectors would not be injured by the discharge or modification. There was no evidence that their land had diminished in value or that the extensions caused other compensable disadvantage.
4. Ground (b). The evidence that one original covenantee had seen the plans and raised no objection was insufficient. All persons of full age and capacity entitled to the benefit had to agree, expressly or by implication, and the identity and consent of all such persons had not been established.
5. The Tribunal distinguished the question whether consent was unreasonably withheld from the statutory inquiry under s.84. Following the approach explained in Mahon v Sims [2005] 3 E.G.L.R. 67, any implied control over a consent power did not replace the need to address the statutory grounds.
6. Although the extensions had been built in breach, the applicants had not acted cynically for profit and the objectors’ interests would not be harmed. The Tribunal therefore exercised its discretion to modify, rather than discharge, the covenant. Modification permitted retention of the two existing extensions while preserving the requirement for approval of more extensive alterations. The compensation claim was rejected.