Kevin James Harrison-Ellis & Anor v Stuart Gerald Hunt & Anor

Under section 84 of the Law of Property Act 1925, restrictive covenants may be modified where they impede a reasonable use, secure no practical benefits of substantial value or advantage, and any loss can be adequately compensated by money. Visual amenity and privacy may constitute practical benefits, but their value depends on the evidence and the extent to which the covenant actually protects them. A possible future application by neighbouring owners carries limited weight without evidence of an appetite for similar development. In exercising the discretion to modify, the Tribunal must assess the applicant’s conduct. A mistaken or naïve breach is materially different from a deliberate or cynical breach. The covenants were modified to permit the completed extension, subject to compensation.

The applicants owned Hillside, a bungalow burdened by 1965 restrictive covenants benefiting the objectors’ property, Korobe. The covenants restricted building height, the number of storeys, the position of dormer windows and the forward building line.

The applicants constructed a first-floor extension with dormer and roof windows in breach of the covenants. Planning permission had been obtained, but the objectors later brought County Court proceedings. The applicants obtained a stay and applied under section 84 of the Law of Property Act 1925 for modification under grounds (a), (aa) and (c).

The issues were whether the covenants were obsolete, whether they secured practical benefits of substantial value or advantage, whether money would adequately compensate the objectors, and whether the Tribunal should exercise its discretion to modify them.

1. Application allowed. The covenants were modified to permit the extension of Hillside as constructed, subject to payment of £25,000 compensation to the objectors.
2. Ground (a) was not established. Changes to the neighbourhood, including redevelopment and differing architectural styles, had not made the covenants obsolete. The covenants could still fulfil their purpose of controlling the height and appearance of development affecting Korobe’s outlook.
3. Ground (aa) was established. The extension was a reasonable use of Hillside. The restrictions secured practical benefits relating to the preservation of the original height-line and the prevention of overlooking. Those benefits were real, but neither was of substantial value or advantage. The extension did not block the wider view across the Goring Gap, and the visual effect of the development was not protected by provisions controlling architectural style or quality.
4. The valuation evidence did not support the objectors’ claimed £230,000 diminution. The Tribunal considered £25,000 adequate compensation for the limited visual and privacy impacts. The possible future development of Claremont or Gap House did not materially alter the conclusion. There was no evidence of an appetite for development, and any future application would be decided on its own merits.
5. Ground (c) failed because the modification would cause some diminution in value. That did not prevent modification under ground (aa), where adequate monetary compensation was available.
6. In exercising its discretion, the Tribunal distinguished the deliberate or cynical conduct considered in Alexander Devine Children's Cancer Trust v Housing Solutions Ltd [2020] UKSC 45 and Fosse Urban Projects Ltd v Whyte [2023] UKUT 286 (LC). The applicants had misunderstood the covenants and planning process, but had attempted to engage with the objectors and were not acting cynically. The objectors’ delay and conduct outweighed the applicants’ carelessness or naivety.

The application followed proceedings in the Oxford County Court concerning the same covenants. On 22 July 2024 the County Court determined a preliminary issue in favour of the objectors, holding that the covenants applied to Hillside itself. Those proceedings were stayed so that the applicants could pursue this section 84 application. The Upper Tribunal modified the covenants and permitted the completed development subject to compensation.