[2025] UKUT 00339 (LC)

It can be discerned from my comments in relation to each of the practical benefits conferred by the covenant that I do not regard any of them as being of substantial value or advantage, nor are they in aggregate when the cumulative effect of all the benefits is taken into consideration. I am therefore of the view that I have jurisdiction under ground (aa) to modify the covenant. That being the case I have no need to consider whether the application also succeeds under ground (c).

Although the jurisdiction is established, I must also decide whether I should exercise my discretion to modify the covenant. At this point the objectors’ argument concerning the age of the covenant is germane. The covenant was imposed in 1999 and is not therefore particularly recent. Mr Baker is one of the original parties. In Anthony v Hardy[2025] UKUT 209 (LC) the Tribunal was faced with similar circumstances in so far as the covenant had benefited Mr and Mrs Hardy for twenty one years at the time the case was heard and they were, of course, an original party. At paragraph 56 of its decision the Tribunal noted:

“In Cresswell v Proctor [1968] 1 W.L.R. 906 CA the Court of Appeal (Harman and Danckwerts LLJ) took the view that the Tribunal’s discretionary powers ought not to be exercised in the case of a very recent covenant where the application was made by the original covenantor. In Hodgson v Cook [2023] UKUT 41 (LC) at [62] the Tribunal said that:

“Even if I had come to the opposite conclusion on whether the ground (aa) conditions were satisfied, I would have been very reluctant to lift a restriction which the applicants themselves freely accepted less than ten years ago. The more recently a restriction has been imposed the stronger the case for modification must be.””

The Tribunal took the view that notwithstanding the facts of that case the covenant should still be modified. In my judgement a covenant that has been in place for twenty five years is not one that can be described as ‘very recent’ and the circumstances at Brunswick Court are not comparable to those in Hodgson v Cook. Taking the age of the covenant into account, I do not place any weight on the fact that Mr Baker was the original covenantor. I therefore exercise my discretion to modify the covenant.

I now turn to the question of compensation. I have power under section 84(1), if I think it just to do so to award as compensation either a sum to make up for any loss or disadvantage suffered by the objectors in consequence of the discharge or modification; or a sum to make up for any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it. In a case where the restriction was imposed on retained land of the vendor the first of these alternatives is the more likely to be engaged.

The applicant’s primary position is that modification of the covenant will not injure the objectors, and the covenant does not secure any practical benefits of substantial value or advantage to them. It follows, the applicants say, that the question of compensation does not arise. The objectors had previously turned down compensation offered by the applicant (in the sums arrived at by Mr Catley) because they felt strongly that the covenant should remain in place in its existing form and that compensation could not make up for the loss of amenity, safety and security that would be a consequence of modification.

The applicants acknowledge that Mr Catley appeared to have formed the view that the objector’s properties would suffer a modest reduction in value if the covenant were modified. However, they say that on closer examination of his conclusion it seemed that Mr Catley had said that compensation should be awarded for disturbance from the construction works and for the added difficulty of negotiating the narrow drive notwithstanding that the narrow drive already existed and would not be altered.

Mr Taylor therefore submitted that the proper approach to compensation was to award a sum for loss of amenity rather than any diminution in value. He further noted that the sums arrived at by the experts represented percentages which were equal to or less than the parameters identified by Mr Catley as representing the range of possible values for the properties with the benefit of the covenant in its unmodified form. He further submitted that if the Tribunal were minded to award compensation it should be below the level suggested by Mr Catley or in the alternative, Mr Catley’s figures.

Mr Taylor identified two cases which provided guidance as to the level of compensation in a modification case under s.84(1) where some injury, loss or damage is caused by reason of the modification of the covenant which did not amount to a diminution in value of the benefitted land. The first was Re Perkins Application [2012] UKUT 300 (LC), where an award of £2,000 and two further sums of £1,000 each were made to objectors who were impacted to much the same degree as the objectors in the present case.The second case is Re Laav [2015] UKUT 448 (LC), where an award of £2,500 was made to objectors in respect of the visual impact upon their garden caused by a proposal to erect a garage within a metre of the boundary.

The only evidence before me is that provided by Mr Catley and Mr Purkiss, the rationale for which is rather nebulous. In common with the experts, I am of the view that Mr and Mrs Cucknall at 1 Brunswick Court will be most affected by the modification of the covenant. They will suffer a loss of privacy to a small degree and will be closest to the building works while they are going on. Mr and Mrs Simpson and Mr and Mrs Li Yan Hui will also suffer some temporary construction disturbance. All three couples will be affected by access issues during the building period.

Although the experts did not adequately articulate the reasons for their figures, I find the figures to be mostly correct. I start from the position that in my judgement £10,000 is appropriate compensation for Mr and Mrs Cucknall. The figure is composed of £4,500 for disturbance, £3,000 for the impact on privacy and £2,500 for access issues.

I award £5,000 to Mr and Mrs Simpsom which comprises £2,500 for disturbance and £2,500 for access issues. The compensation to Mr and Mrs Li Yan Hui is £3,500 representing £2,500 for access issues and £1,000 for disturbance.

The following order shall be made:

An order modifying the restriction shall be made by the Tribunal provided, within three months of the date of this decision, the applicant shall have: