Vertical Properties Ltd v New Hampstead Garden Suburb Trust Ltd & Ors, Court of Appeal - Lands Tribunal, March 01, 2010, [2010] UKUT 51 (LC)

Resolution Date:March 01, 2010
Issuing Organization:Lands Tribunal
Actores:Vertical Properties Ltd v New Hampstead Garden Suburb Trust Ltd & Ors
 
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UT Neutral citation number: [2010] UKUT 51 (LC)

LT Case Number: LP/4/2007

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

RESTRICTIVE COVENANTS - modification-practical benefits of substantial value or advantage

IN THE MATTER OF AN APPLICATION UNDER SECTION 84 OF THE

LAW OF PROPERTY ACT 1925

BETWEEN VERTICAL PROPERTIES LIMITED Appellant

and

(1) NEW HAMSPTEAD GARDEN SUBURB TRUST LIMITED

(2) MR AND MRS BENNETT

(3) MR AND MRS SR COHEN

(4) MR M GERRARD and

(5) MR AND MRS MOSHEIM Objectors

Re: 24 Ingram Avenue,

Hampstead,

London NW11 6TL

Before: His Honour Judge Reid QC

Sitting at 43-45 Bedford Square, London WC1B 3AS

On 23, 24, 25 and 26 November 2009

Michael Driscoll QC instructed by Muscatt Walker Hayim, solicitors for the Applicant

Jonathan Small QC instructed by Lee Bolton Monier-Wlilliams, solicitors for the Objectors.

The following cases are referred to in this decision:

Driscoll v Church Commissioners for England [1957] 1 QB 330

Zeenab Al-Saeed LP/41/1999

Re Ghey and Galton [1957] 2 QB 560

Re Truman, Hanbury, Buxton & Co Ltd [1956] 1 QB 261

Re Martin's Application (1988) 57 P&CR 119

McMorris v Brown [1999] 1 AC 142

Shephard and others v Turner and another [2006] EWCA Civ 8

Re Fairclough Homes Ltd LP/30/2001

SJC Construction Co Ltd v Sutton LBC (1975) 29 P&CR 322

Winter and anor v Traditional & Contemporary Contracts Ltd [2007] EWCA Civ 1088.

Re Snaith and Dolding (l995) 71 P & CR 104

McMorris v Brown [1999] 1 AC 142

Estates Governors of Alleyn's College of God's Gift at Dulwich v Williams [1994] 1 EGLR 112

Dobbin v Redpath and anor [2007] EWCA Civ 570

Re Calthorpe Estate (1973) 26 P&CR 120

DECISION

INTRODUCTION

  1. This is an application to modify restrictions on the Property under section 84(1) of the LPA 1925. The application relies on ground (aa). The Property is 24 Ingram Avenue in Hampstead Garden Suburb. There are two sets of restrictions which the Applicant seeks to modify. They both reflect restrictions entered into in 1936 when a long leasehold interest was granted in respect of the Property on completion of the house that currently stands there.

  2. One set is contained in a 1981 Transfer of the freehold of the Property. These restrictions are enforceable by the original covenantees, one of which is the Hampstead Garden Suburb Trust Limited (``the Trust''), and by persons who have acquired title from the Trust to property within the Suburb since the date of the 1981 Transfer. The Trust asserts that it continues to have substantial landholdings in the Suburb (including interests on Ingram Avenue itself) which justify it in attempting to enforce the restrictive covenants.

  3. The 1981 restrictions are expressly not imposed pursuant to a building scheme. The first of the 1981 restriction is an absolute prohibition against use for two residences. Thus the Trust has an absolute right to refuse to waive the restriction, whether it is acting reasonably or not in doing so.

  4. The relevant restrictions in the 1981 transfer are:

    ``(1) Not to use or permit to be used the property or any part thereof otherwise than as a private dwellinghouse in the occupation of one family only and not to use any garage except as a garage for a private motorcar or motorcars in connection with the dwellinghouse....

    (3) Without the consent of Ashdale or the Trust which consent shall not be unreasonably withheld:

    (a) No garden or yard or forecourt of the property shall be built upon nor shall the general appearance thereof be substantially altered nor any garden substantially paved over

    (b) No alteration shall be made to the external appearance of any building for the time being standing on the property

    I No boundary or other -walls or fences shall be erected on any part of the property nor shall any trees or hedges growing thereon be cut down or destroyed or removed.''

  5. Ashdale Land and Property Company Limited was at the time a substantial owner of freeholds in the Suburb. It no longer is.

  6. The other set of restrictions is contained in a Scheme of Management established by order of the High Court under section 19 of the Leasehold Reform Act 1967 on 17 January 1974 pursuant to section 19 of the Leasehold Reform Act 1967 and subsequently amended by a further order dated 17 February 1983. This set of restrictions prohibits the construction of two new houses without the consent of the Trust, such consent not to be unreasonably withheld. These restrictions are enforceable only by the Trust.

  7. The relevant restrictions are in these terms:

    ``(1) Without the prior written consent of the Trust no garden or yard or forecourt of an enfranchised property shall be built upon nor shall the general appearance thereof be substantially altered nor any garden substantially paved over.

    (2) Without consent as aforesaid no alteration shall be made to the external appearance of any building for the time being standing on an enfranchised property....

    (4) Without the consent as aforesaid no boundary or other walls or fences shall be erected on any part of an enfranchised property nor shall any trees or hedges growing thereon be cut down or destroyed or removed.''

  8. There are now four objectors, namely, the Trust and three owners of properties within the Suburb (only one on Ingram Avenue). The substantial objector is the Trust. The Trust is, among other things, the owner of the freehold of 9, 20, 23, 30 and 31 Ingram Avenue and of Turners Wood. The other individual objectors adopt the same grounds of objection as the Trust, and are represented by the same lawyers. There were two other objectors, Mr and Mrs Mosheim, the owners of the adjoining property, 22 Ingram Avenue, but they withdrew their objections before the hearing.

  9. The objectors accept, at least for the purposes of these proceedings, that the Lands Tribunal has jurisdiction under section 84(1) to modify the restrictions.

  10. The application is for an order modifying the restrictions to enable the Property to be developed as two houses notwithstanding that the Trust has withheld its consent to the development.

  11. Vertical has owned the Property since 19 December 2002, when it bought the Property for £3.9 million. Initially it applied for planning permission and conservation area consent to build a single large house in the middle of the Property. Planning permission and conservation area consent were both refused. The refusals were appealed but on 5 March 2004 the Planning Inspector dismissed the appeals. Partly as a result of the views expressed by the Inspector a fresh application for the relevant permission and consent was made.

  12. Vertical obtained planning permission and conservation area consent for two separate schemes to develop the Property as two houses. On 27 July 2005 the Applicants obtained planning permission to demolish No. 24 and to construct two houses in its place (``Scheme A''). This planning consent has lapsed. On 9 November 2006 it obtained planning permission for an alternative plan (``Scheme B'') to replace the existing house with two houses. The two schemes are similar, the main difference being that the proposed house on No 24 more closely resembles the existing house in its external appearance.

  13. The Trust determined to refuse its consent to Scheme A on 6 December 2005. This decision was communicated to the Applicants in a letter of 12 December 2005. In broad terms the expressed reasons for refusal were: (i) that the existing house contributed positively to the character and amenity of the Suburb in a manner which required it to be maintained and preserved; and (ii) the development of the large garden plot would terminate a welcome break in the street and block the only significant view to Turners Wood behind; this view (it was suggested) is an important feature of the amenities in the Suburb which should be maintained and preserved.

  14. The Trust determined to refuse its consent to Scheme B on 20 March 2007. This decision was communicated to Vertical by a letter of 29th March 2007. In broad terms the reasons for refusal were the same as the reasons for the refusal of Scheme A. The decision was taken with reference to the Trust's published Design Guidance and Guidelines for the Demolition of Buildings.

  15. The decisions were taken by the Trust's Council of eight volunteer members, four of whom are elected from residents in the Suburb and four appointed by the Royal Institute of British Architects, the Royal Town Planning Institute, the Law Society and the Victorian Society respectively. Before considering the application in respect of Scheme A the Trust had received the independent advice of the specialist architectural and building conservation practice, Donald Insall Associates. The decisions were taken with reference to the Trust's published Design Guidance and Guidelines for the Demolition of Buildings.

  16. In the light of what the Trust perceived to be a lack of openness on the part of Vertical and a recent unhappy experience where injunctive relief was refused as a result of delay in applying to the Court, the Trust threatened to apply to the Court for an injunction if the development was commenced.

  17. Once the application to the Lands Tribunal was underway the Trust undertook an exercise in drumming up support for its opposition by circulating a letter in tendentious terms to a selected number of residents in the Garden Suburb. On 21 February 2007 it was sent to 464 residents: there are over 3,500 residences and 13,000 residents in the Suburb. As Mr Iwi, a former Trustee and not one of those to whom the letter was sent, noted in his comments to the Trust: ``Plainly there cannot be genuine consultation when, as is obvious from the letter, the Trust has already decided to reject the application, and is only inviting responses from those opposed to the development, and not from persons who do not care about the development proceeding. Equally there cannot be a genuine consultation when the Trust only...

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