Paul Davies & Anor v Hazelle Jones

On an application under section 84 of the Law of Property Act 1925, planning permission is a persuasive indicator that the proposed use is reasonable, but it does not guarantee modification of a restrictive covenant. The Tribunal must assess the practical benefit secured by the covenant in the context of the particular proposed development. A benefit protecting privacy may be real without being of substantial value or advantage. The assessment is not determined by a fixed percentage diminution in value. The reasonableness of withholding contractual consent is distinct from the statutory question under section 84. Where the jurisdictional requirements are met, the Tribunal may modify only the relevant covenant and award compensation for a minor, remediable loss of amenity.

The applicants owned 15 Oaksway and sought modification of a plans approval covenant benefiting 11 Oaksway. The covenant required prior written approval, not to be unreasonably withheld, for building works. The proposed works had planning permission and involved extending and converting the existing garage, adding a first-floor dormer and making related alterations.

The objector opposed the application principally on grounds of overlooking and loss of privacy in her rear garden. The application relied on grounds (aa) 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 a practical benefit of substantial value or advantage, whether money would be adequate compensation, and whether the Tribunal should exercise its discretion to modify the covenant.

1. Jurisdictional stage. The application succeeded under ground (aa) of section 84(1) of the Law of Property Act 1925. The proposed extension was a reasonable use, and the covenant impeded it. Planning permission was a persuasive indicator of reasonable use, though not a guarantee. The Tribunal applied the two-stage approach described in Alexander Devine Children's Cancer Trust v Housing Solutions Ltd [2020] UKSC 45: first jurisdiction, then discretion (paras 39–40).
2. The covenant secured a practical benefit by protecting part of the objector’s patio from additional overlooking. It did not provide a practical benefit in relation to the front garden, noise, light, neighbourhood character, massing or the whole of the rear garden. The effect on the property as a whole was limited. The relevant question was the practical benefit of preventing this particular development, not whether consent had been reasonably withheld (paras 36–37, 44–50).
3. The benefit was not of substantial value or advantage. The Tribunal rejected a claimed £50,000 diminution in value because the existing garden was already subject to some overlooking and the additional overlooking could be mitigated by allowing the boundary hedge to grow. Whether a benefit is substantial is not governed by a fixed percentage or tariff. The Tribunal adopted the approach in Nathwani v Kivlehan [2021] UKUT 84 (LC) (paras 51–55).
4. Money would be adequate compensation. The Tribunal found no loss in property value, but awarded £5,000 for the minor loss of amenity and privacy (paras 56–57, 64).
5. Ground (c) was not made out because the modification would cause some injury. The Tribunal nevertheless exercised its discretion to modify the plans approval covenant. The omission of the separate nuisance and annoyance covenant was not a reason to refuse relief; the applicants remained exposed to any future claim for breach of that covenant (paras 58–63).
6. The covenant was modified to permit works in accordance with planning permission APPH/23/01942, or any non-material amendment under section 96A of the Town and Country Planning Act 1990, conditional on payment of £5,000 within three months. The parties were directed to submit an agreed draft order within 21 days (para 65).

First-instance application in the Upper Tribunal (Lands Chamber) under section 84 of the Law of Property Act 1925. The application succeeded under ground (aa), while ground (c) failed. The plans approval covenant was modified subject to compensation.