Birdlip Limited v Hunter and Hunter [2015] EWHC 808 (Ch)

Useful clarification of the test when deciding whether estate scheme restrictive covenants are enforceable.

In this case the parties owned adjoining properties which were both subject to a restriction not to construct more than one or two detached houses on each property. The restriction was over 100 years old and was put in place when the properties were sold off as plots of land. The properties were subsequently constructed, but Birdlip, the new owner of one of the properties, wanted to build a further two houses on the property. The Hunters objected relying on the restrictive covenant, but Birdlip argued that the covenant was not binding because there was no defined estate which could benefit from the covenant and the covenant was for the benefit of the vendor, not other purchasers, like the Hunters.

The Court confirmed that for the scheme restrictive covenant to be enforceable, the extent of the estate had to be defined at the date of the crystallisation of the scheme. The problem in this case was that the conveyances containing the restriction did not define the estate, instead the Hunters relied upon plans showing the estate which were attached to sale contracts for other lots and not all of these plans were the same. The Court was prepared to infer that a plan of the estate would have been attached to the agreement for the parties’ plots and further held that the differences were immaterial so the estate could still be defined. It went on to find that the estate, as defined, had many of the classic features of a building scheme, for example it was laid out in lots. This was evidence that the covenant was intended to benefit purchasers as there was value to them, not just the vendor. It followed that the covenant was enforceable and the claim failed.

Whilst providing useful clarification on scheme restrictive covenants, it may not be the end for Birdslip, who may appeal, but who also have lodged an application with the Upper Tribunal (Lands Chamber) to modify or discharge the covenant. Whilst this can present an alternative or fall back option for those bound by a scheme covenant, it is arguably the harder route as there is a greater presumption with covenants of this type that they will be upheld and a greater onus of proof upon those seeking to modify (Gilbert v Spoor [1983]). The key warning for developers here is to investigate the issue early on before significant development costs are incurred as there is no easy option when it comes to removal.

 

Bennett v Winterburn [2015] UKUT (TCC)

Welcome clarification for landowners as to what steps they need to take to prevent prescriptive rights being acquired.

The Upper Tribunal has overturned a decision of the First Tribunal and has held that signage indicating land as being private property was sufficient to prevent a right of way and right to park being acquired by prescription.

In this case, the land in question was owned by a Conservative Club and was a car park serving the club. Adjoining their property was a fish and chip shop and users of the fish and chip shop would use the Conservative Club car park to park their vehicle and as a right of way to the chip shop. The use continued despite the fact that signs had been erected some time before the fish and chip shop opened indicating “Private car park. For use of club patrons only. By order of the committee.”

The test for whether a use of a right is contentious is whether the servient owner, the burdened owner, is doing everything consistent with his means and proportionately to the user to contest and endeavour to interrupt the user. The Tribunal held the Conservative Club had not done enough and had failed to satisfy the test. It held that the notices were inadequate because they predated the arrival of the chip shop and were not specifically directed at the chip shop or its customers. The Upper Tribunal disagreed and held that there was no minimum test and that it was irrelevant that the signs were not directed specifically at the chip shop owners. It said that they were directed at the world at large and, therefore, the use was contentious and no right to park had been acquired.

It should be noted that because the signs only related to parking, the Conservative Club did not dispute that the use of their property as a right of way was contentious and that right was acquired.

This will provide comfort to landowners who are concerned about third parties using their land for access or parking as suitable signage it seems will prevent rights being acquired. However, it is important to note that the signage must pertain to the right being exercised e.g. ‘No Right of Way. Private Land.’ Or ‘No Parking. Private Land’, a one size fits all sign may not be enough.

 

R (Ecotricity) v SoSCLG [2015] EWHC 801

A worrying decision for developers and a reminder that all planning objections should be considered and addressed even if they don’t appear to be a threat.

The High Court has held that it was not procedurally unfair for the planning authority to rely on an objection to a planning application to refuse a developer’s appeal even though the objection had not been raised at the inquiry.

Ecotricity made an application for a two-turbine scheme in Norfolk which was considered at an inquiry lasting 6 days. Prior to the inquiry, numerous objections had been received, including an objection from Shipdham Flying Club who asserted that the turbines would cause danger to low-flying aircraft. Ecotricity responded to the objection by letter to the Council, but did not respond to the Flying Club’s second letter sent to the Planning Inspector.

The Flying Club took no part in the inquiry and, at the inquiry the issue regarding low-flying aircraft was not mentioned. Ecotricity were, therefore, surprised when their appeal was turned down because of the aviation concerns.

Ecotricity appealed to the High Court on the basis that it was unfair to accept the Flying Club’s arguments, particularly as the views expressed were not shared by the national aviation authorities or Norwich Airport.

The High Court Judge had no sympathy for Ecotricity and found that it should have been obvious that the inspector would have to deal with the Flying Club’s objection so Ecotricity should have produced a written report or expert evidence to deal with it.

The Judge found that whilst it would have been helpful for the inspector to have raised his concerns at the inquiry, he was not obliged to do so and as the objection was on file, fairness required him to deal with it. In the absence of any evidence to the contrary, he accepted the objection and this could not be regarded as unfair

This is a decision that will cause concern for developers who need to ensure that, even if the objection appears unthreatening, a comprehensive response should be submitted.

For more information about any of these cases or for advice on a contentious property issue please contact Michael Clark