[2024] UKUT 384 (LC)

In response to our suggestion at the start of the hearing that a complete discharge of the covenant might have much wider consequences than a modification to permit continuation of the current use, Mr McKie, who represented the applicant, withdrew the application for discharge. We can therefore restrict our consideration to the request for modification.

We begin by considering whether the modification of the covenant would injure any person entitled to the benefit of it; in accordance with the applicant’s admission we assume that cohort comprises all of the homeowners on the Estate. “Injury” in this context means any adverse impact on the property of an objector or on their enjoyment of their property, and it is not restricted to something which causes a diminution in the value of the property in financial terms.

The most frequently expressed objection to the application was based on concern about the consequences of the current use of the House for on-street parking.

The larger group of objectors referred to occasions when there have been up to five vehicles parked at or in the vicinity of the House. One objector whose home is not in the Redwing Close referred to parking in adjacent roads. The frequency of these occasions was not stated by any of the objectors, nor did any individual objector say that they personally had observed or been inconvenienced by inconsiderate or excessive parking or made a complaint about it.

Because the objectors gave very few examples of occasions when the parking to which they objected had taken place, and none said how often it had happened, there was no necessary inconsistency between their evidence and Mr Chalenor’s account of how the House operates. The objectors said that they had contacted Mr Russell about parking on more than the one occasion of which Mr Chalenor was aware, but none of them suggested that they had contacted Mr Chalenor himself and we infer from the absence of any such suggestion that his evidence is accurate on that point. We accept Mr Chalenor’s evidence that all of the neighbours have his personal phone number, but none has contacted him to complain about parking. If they have contacted Mr Russell on more than one occasion, he chose not to pass their observations on to Mr Chalenor or his staff.

The covenant prohibits business use or use other than as a private house. It says nothing about parking. It is a perfectly normal feature of residential estates that cars may be parked on the street and no homeowner has an entitlement to expect that such parking will not occur. As our visit to the Estate confirmed, it is no different in that regard. Mid-morning on a weekday we saw two cars parked on the road in Overton Lane and two in Siskin Close. We assume none of these was associated with the House as one of the spaces on its drive was vacant. None of the parking we saw on the Estate was inconsiderate and we can see no reason why anyone would be inconvenienced by it (except a wheelchair user or pedestrian pushing a pushchair who would have found the pavement on Overton Lane narrowed significantly by one of the cars parked there).

On the evidence we have been provided with we have no hesitation in concluding that the suggested problems of parking generated by the use of the House as a children’s home are illusory – they do not exist. There is ample space on the drive for the carers who work in the House and who come and go less frequently than householders who drives to work every day. Without causing an obstruction there is space in the Close for the relatively infrequent visitors, should they choose to park there. Mr Chalenor himself sets an example of consideration for others and good neighbourly conduct by parking at the cricket club, but there is no obligation on him to do so.

Of course, the absence of evidence of any regular issue with parking does not mean that there might not be occasions when an unusual number of vehicles might be parked in the Close. Mr Chalenor was aware of one such occasion when there were five cars belonging to the applicant’s staff outside the House and the objectors mentioned another occasion when three ambulances attended when one of the neighbours was taken seriously ill. It was not suggested that on either of these occasions access was obstructed, but if it had been that would simply have been one of the normal exigencies of everyday life on a residential estate. We are satisfied that such occasions are no more likely to occur while the House is used as a children’s care home than if it were occupied by a family, who might easily have more then two cars or frequent visitors or large social events.

As for the fear of intensification of the use of the House, or its development either by physical expansion or by a change in the activities conducted there, the starting point is that these are fears of what the House might become, rather than concerns about what it currently is and which the applicant wishes it to continue to be. When it is exercising its power to modify a restriction, the Tribunal carefully considers the consequences of the proposed modification and any realistic evolution of the use which it is intended to facilitate, but it gives no weight to unsupported fears or speculation. In this regard it is significant that the Tribunal has power, when modifying a covenant, to impose further restrictions; that power may be used to reduce the risk that a modification could give rise to wider changes than those currently proposed.

As for any physical development of the building, the applicant has a short term tenancy of the House and no opportunity to undertake significant works of any kind, nor is there any suggestion that Mr Russell wishes to. In any event, the covenant does not restrict physical alterations and any which were ever contemplated would require planning permission in the usual way.

Mr Chalenor confirmed that he has no intention of changing the nature of the applicant’s business, which specialises in the needs of vulnerable children and young people under the age of 18. He explained that it is a condition of OFSTED registration that children be provided with their own rooms and on that basis the House cannot accommodate more than two. Any change in the number or age of those who are accommodated at the House can also be controlled by the Tribunal imposing a restriction limiting the use to providing care for not more than two children under the age of 18. There is therefore no prospect that the relaxation of the covenant might lead to a change in the number of children, or the use of the House to accommodate adults with support needs.

A modification of the covenant by the Tribunal to permit the current use would not have any consequence for the planning status of the House. Anyone who wished in future to use it as secure accommodation for children or young people, in the sense of a place of detention such as a secure training centre or custody centre, would require planning permission as such a use is not within class C2 (residential institutions) but is a class C2A use (secure residential institutions). A change from class C2 to class C2A would be a material change of use for which planning permission would be required (as well as a further modification of the covenant).

Concern was also expressed by objectors about the use of the House for a business, and whether permitting that to continue might lead to other business uses on the Estate. The applicant has sensibly acknowledged that, although the House is used as a home, that use is a business use because the home is provided by the applicant as part of its business. On the other hand, not all business uses are the same. If what is sought is a modification of the covenant to permit the existing business use to continue the question for the Tribunal when it considers ground (c) is whether that modification would cause injury to any person entitled to the benefit of the covenant.

There are two separate aspects to be considered here.

First, there is any impact which the proposed modification might have on neighbours by reason of the continuation of the current use. But as is reflected in the very narrow grounds of objection based mainly on parking, this particular business use does not have any greater impact on the enjoyment of neighbouring properties than the use of the House as a family home which the covenant is intended to secure.

Secondly, there is any effect which the relaxation of the covenant might have on the enforceability of the covenants which bind other properties on the Estate either by creating the impression that the restrictions need not be observed, or by encouraging others to seek the modification of their own covenants. As to this second aspect, it is relevant that the use of the House as a children’s home is not a use which is obvious. A visitor to the Estate who was asked to pick out the one house in which a business was being conducted would be unable to do so. Authorisation of the current use through a modification of the covenant would not change the baseline against which any future proposal for a modification would be measured. Any application to the Tribunal by another homeowner who wished to relax their own covenant would be determined on its merits and would be neither more nor less likely to be granted if this application has been successful. Nor do we think there is any real risk that other residents of the Estate might decide that they can now ignore the covenants which apply to their own properties. The scale of opposition to the application, at least initially, demonstrates that the residents are well aware of the enforceability of the covenants and quick to take action if they are breached. Subject to the modification requested, the covenants will be no less enforceable and no less potent.

We do not think it matters that the applicant seeks to make a profit from the use of the House. The use would be contrary to the covenant whether it was undertaken by a charity or on a purely commercial basis. The suggestion of some objectors that the applicant is a very large company with numerous homes around the West Midlands is not correct; it is, as we have described, a small, recently established company running two homes with ambitions to open a third but no expectation of growing beyond that.

Finally, in response to the question asked by one objector, who queried the point of having covenants at all if they can be removed by the Tribunal, our answer is that all restrictive covenants exist in a legal landscape which allows any person bound by the covenant to apply to the Tribunal to have it modified or discharged. Parliament determined in 1925 that, in the interest of freeing up the use of land, restrictive covenants should be susceptible to modification on limited statutory grounds. The covenants which bind houses on the Estate appear to have been very successful in preserving it as a pleasant residential environment. They will continue to protect that environment even if they are modified to permit the continued use of the House as a children’s home.

Having now considered all of the objections voiced by the applicant’s neighbours on the Estate, we are satisfied that none of them has identified any injury which they will sustain if the proposed modification is permitted. We are therefore satisfied find that ground (c) is made out.

Having decided that ground (c) is made out it is not necessary to consider ground (aa), which would repeat or include the same issues.

As we have previously explained, proof of one of the grounds of application in section 84(1) does not guarantee an order modifying or discharging the relevant covenant. Instead, the Tribunal is given a discretion to modify. In this case there are four matters to which we ought to have regard when considering whether to exercise that discretion.

The first is the point emphasised by the objectors who made joint representations, that the covenants which the applicant seeks to have modified were entered into by Mr Russell, whose tenant the applicant is and who supports the application, and that many of the objectors are the original beneficiaries as first purchasers from Walton Homes. This is not strictly a case of an application by an original covenantor, since that was Mr and Mrs Russell and not the applicant, but the applicant has only a short interest and derives it directly from the original covenantor, so there might be said to be some analogy. We do not consider that some of the objectors having acquired their own interests directly from the original covenantee, Walton Homes, is of much significance. They have enjoyed the benefit of the restriction for 35 years and their interest has always been susceptible to modification under the Act. The fact that the ground which has been established is the “no injury” ground, also seems to us to be material in reducing any significance which their participation as early subscribers to the covenants might otherwise conferred.

The second point is that the applicant has been in breach of covenant while it has been pursuing this application. In some circumstances that might be a weighty consideration against the exercise of the Tribunal’s discretion, and it will always be a factor to be taken into account. But this is not a case where the applicant has sought to gain an advantage by changing the facts on the ground, stealing a march by continuing to build a new development in the face of opposition (compare Alexander Devine Cancer Trust vHousing Solutions Ltd [2020] UKSC 45). The applicant’s breach has had no adverse impact on those of its neighbours who have objected and has been supported by others with the benefit of the covenant. If use were to be discontinued tomorrow there would be no visible evidence that the covenant had ever been broken.

Thirdly, and weighing on the opposite side of the balance, in favour of modification, is the fact that the applicant’s proposed modification is in furtherance of the common good. The availability of supported accommodation for young people who because of their life experiences and disadvantages need to live apart from their own families is one aspect of a civilised and compassionate society. The House is suitable to provide that sort of accommodation and the public interest in its use for that purpose is a good reason for the Tribunal to modify the covenant to permit it.

Finally, we have regard to our own power to modify the covenant only to the degree necessary to enable the current use to continue without leaving open the possibility of different business uses in future.

Taking all of these matter into account we are satisfied that this is an appropriate case for the Tribunal to exercise its discretion to modify the covenant. The restriction in clause 2(a) of the Transfer of 29 April 1988 between Walton Homes Limited and Mr and Mrs Russell will be modified so that it now reads as follows:

“To use the premises hereby transferred as a private dwellinghouse and not to carry on any business or trade thereon provided that the use of the premises for the business of a care home for up to 2 children or young persons under the age of 18 in accordance with class C2 (not C2A) of the Schedule to the Town and Country Planning (Use Classes) Order 1987 (as amended) shall not be a breach of this restriction.”