[2025] UKUT 139 (LC)

It was the crux of the objector’s case that even if I found that one of the grounds for modification was made out, I should refuse to exercise my discretion to grant it because the breach had been cynical in nature. Although I have concluded that I do not have jurisdiction to modify, and discretion does not therefore need to be exercised, I will comment on the nature of the breach, in recognition of the unfortunate circumstances in which the applicants find themselves.

Use of the phrase “cynical breach” in this context arose in the decision of the Supreme Court in Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd [2020] 1 WLR 4783 (SC) which considered in particular how an applicant’s conduct should be taken into account by the Tribunal in the exercise of its discretion. The Tribunal, at first instance, had described the behaviour of Millgate as “highhanded and opportunistic”. At [36] Lord Burrows said:

“36.

I interject here that the description of Millgate’s behaviour as “highhanded and opportunistic” is what some commentators, especially in the context of breach of contract, have described as “cynical”: see, for example, Peter Birks, “Restitutionary Damages for Breach of Contract: Snepp and the Fusion of Law and Equity” [1989] LMCLQ 421. In line with this, I shall use the phrase “cynical breach” as a useful shorthand description of the conduct of Millgate in deliberately committing a breach of the restrictive covenant with a view to making profit from so doing.”

The evidence of Ms Owinoron suggests that the applicants had suffered from anti-social behaviour in shared use of the communal porch and access path, so their determination to erect a private porch and a dividing fence is understandable in that context. It was naïve of them to carry out so little due diligence about the ownership of No 18 before commencing the works, but the fact that they applied for a LDC immediately they were told they needed consent points to misunderstanding rather than opportunism. When the applicants recommenced and completed the works they had the benefit of a LDC and nothing in writing to explain the effect of the covenant. By this stage they must have understood that the objector would try to prevent them from completing and retaining the works, even if the reason was still not clear to them. Their determination to proceed was a challenge to the objector’s opposition, but the works were carried out for peace of mind, not for profit.

It is unfortunate that the objector’s approach to estate management in this case did not include informed engagement with the applicants at the outset, when the works were commenced and then paused, so that they could have understood properly the nature of breach they were about to commit.

I determine that I have no jurisdiction to modify the covenant under ground (a), that it ought to be deemed obsolete.

I determine further that I have no jurisdiction to modify the covenant under ground (aa) because it secures to the objector a practical benefit of advantage, and money would not be an adequate compensation for the disadvantage it would suffer from modification.