Thackray Williams

The recent case of Davies v Dennis and others (2009) illustrates the common pitfall of failing to check whether there are any covenants on the title to the land which could restrict a proposed development, including a house extension, even if planning permission has been obtained. In this particular case, the Court of Appeal upheld the High Court's decision that building a house extension was, in the circumstances, in breach of a restrictive covenant against nuisance and annoyance. The judgment highlights the fact that restrictive covenants cannot be ignored by home owners and developers when considering the feasibility of a development.

Background

In 1987, Heron Homes redeveloped the site of a former mill on the Thames at Caversham. Heron transferred the management of the communal areas and mooring facilities to Peverel OM Ltd (Peverel). The buyers of the homes each covenanted:
• Not to develop or build on their properties without the approval of Peverel.
• Not to do anything that "may be or become a nuisance or annoyance to the owners or occupiers for the time being of the estate or the neighbourhood".

In October 2005, the local authority granted planning permission for Mr Davies to build a three–storey side extension to his property. Work began in May 2007, but it was halted when legal proceedings were begun by some of the residents who claimed that the extension would obscure their view of the Thames and therefore constituted a nuisance or annoyance.

Mr Davies argued that he was not in breach of the  covenant against nuisance and annoyance because; (i) this only applied to activities on the property rather than the building itself or any extension of it;  and (ii) if there had been any annoyance, it was too trivial to amount to a breach of covenant.

The High Court held that the extension would constitute an "annoyance" within the meaning of the annoyance covenant as it "would trouble the minds of the ordinary sensible English inhabitant" of any of the houses in question.

Mr Davies appealed the decision but the Court of Appeal agreed that the test was whether reasonable, sensible people would, having regard to the ordinary use of the houses for pleasurable enjoyment, be annoyed and aggrieved by the building extension (Tod-Heatley V Benham (1888) and that it must be assessed objectively by robust and common sense standards (Wood v Cooper (1894). It was decided that the ordinary and natural construction of this covenant gave rise to a wide interpretation, including building an extension to a house. Once built, the extension would be capable of continuing to be an annoyance and, therefore, would constitute an annoyance for the purposes of this covenant.

Implications for Home Owners and Developers

Home owners and developers must take heed of this decision and ensure that their proposed development is permitted from both a title and planning law perspective. The fact that Mr Davies had obtained planning permission for the extension did not prevent the Court of Appeal from finding that the extension was capable of breaching the restrictive covenant.
If your title contains restrictive covenant(s) which could potentially restrict your proposed development, then your solicitor should advise you of the following options:
• Enquire as to the availability of indemnity insurance. This should be considered before exploring the other options, as the insurance route may be thwarted (or may only be available at a prohibitive cost) if, for example, an approach has been made to the land owner who has the benefit of the restrictive covenant.
• Obtain counsel's opinion. However, there is no guarantee that the Lands Tribunal or court will agree with the expert view.
• Approach the individual(s) with the benefit of the covenant to request either a release, or a waiver in respect of the specific development. The risk is that this will alert them to their rights and the proposed development and they could ask for a premium to be paid for the release or waiver.
• Apply to the Lands Tribunal to have the restriction discharged or modified if you can satisfy one of the grounds under section 84(1) of the Law of Property Act 1925.
• If the development is the conversion of a single house into flats within section 610 of the Housing Act 1985, then apply to the county court for a variation of the covenant.

For more information contact Yildiz Betez on 020 8290 0440 or email: yildiz.betez@thackraywilliams.com