[2025] UKUT 00121 (LC)

This is an application for modification of a restrictive covenant (“the restriction”) burdening land (“the application land”) forming part of 49 Main Street, Rotherby, near Melton Mowbray in Leicestershire (“the property”). The property is one of six houses erected on 5.41 acres of land which was formerly owned by the objector and known as Rotherby Nurseries (“the nursery land”). On 18 August 1999 the objector sold the nursery land at auction, in two lots, as a development site with outline planning permission for six houses at the front of the site. A restriction was imposed on the remaining nursery land, behind the area where houses were to be built, preventing its use for any purpose other than as a paddock, garden land or horticultural nursery.

The applicant purchased the property, which extends to 1.53 acres and includes land from both lots sold at auction, in March 2001. On 30 November 2022 he obtained planning permission for “conversion and extension of an existing outbuilding to create a sustainable single storey three-bedroom dwelling” (“the proposed development”). The existing outbuilding is situated on land behind his house which is burdened by the restriction and the restriction impedes the proposed development.

An application was made on 25 March 2024 for modification of the restriction, under grounds (aa) or (c) of section 84(1) of the Law of Property Act 1925, to permit implementation of the planning permission.

By section 84(1)(ii) of the 1925 Act, the Tribunal may, if it decides to release or modify a restriction order the payment of a sum of money as compensation by the applicant to an objector “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 its objection to the application the objector did not contend that the grounds for modification were not satisfied, but sought compensation of £116,000 under section 84(1)(ii) to make up for a reduction in the price achieved for the land on 18 August 1999 (the valuation date) due to the imposition of the covenant.

A hearing of the matter was listed on 23 January 2025. Evidence was provided by the applicant and by Mr Timothy Snowball, the objector’s Senior Estates Valuation Surveyor. Both parties relied on expert valuation evidence. The applicant’s expert assessed the sum due under section 84(1)(ii) at nil or, at most, £5,000. The objector’s expert assessed the sum at £50,000. On 14 January 2025 a joint application was made to adjourn the hearing for at least 28 days to allow further time for the experts to prepare their joint statement. Having read the reports of the experts I held a case management hearing on 17 January 2025 to propose that, since the Tribunal is an expert tribunal, instead of adjourning the hearing the determination of consideration could be dealt with more proportionately under the written representations procedure, supplemented by a site inspection. This was agreed by the parties.

Mr Toby Walker of Allan Janes LLP made written submissions on behalf of the applicant and Ms Sally Anne Blackmore of counsel made written submissions on behalf of the objector. In the submissions on behalf of the objector a new issue was raised concerning the applicant’s previous erection of an outbuilding (the one to be converted in the proposed development) on land burdened by the restriction. An application was made on 20 February 2025 to amend the objector’s statement of case and a response on behalf of the applicant was made on 21 February. After reading the submissions of the parties, on 26 February 2025 I made on order refusing permission to amend because it would have created disproportionate further costs and delay, both to the prejudice of the applicant. It would not have been fair or just.

I made a site inspection on 19 February 2025, accompanied by the applicant, Mr Timothy Snowball, and the objector’s valuation expert Mr Richard Cowling. I saw the application land and the location of the two building plots provided as sales evidence in Mr Cowling’s report.