UPPER TRIBUNAL (LANDS CHAMBER)

	
UT Neutral citation number: [2012] UKUT 21 (LC)
UTLC Case Number: LP/2/2010

	TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

RESTRICTIVE COVENANT – modification – proposed replacement of single dwelling by three detached houses – benefited land held together with other land – whether consideration of practical benefits under ground (aa) extends to all land owned or just benefited land – whether alternative development not in breach of restriction would proceed if application refused –  held restriction secured substantial practical benefits –  application refused 

	IN THE MATTER OF AN APPLICATION UNDER SECTION 84
OF THE LAW OF PROPERTY ACT 1925

	by 

	JOHN HENRY STANBOROUGH	

Re: 10 Minterne Road,
Lilliput,
Poole,
Dorset,
BH14 8NA

	Before: A J Trott FRICS

	Sitting at:
Poole Magistrates Court, Law Courts, Park Road, Poole, BH15 2NS

on
                  15-16 November 2011	Sitting at:

Timothy Morshead QC, instructed by Rawlins Davy Plc, for the applicant
Tom Weekes, instructed by Turners Solicitors LLP, for the objectors

The following cases are referred to in this decision:
Gilbert v Spoor [1983] 1 Ch 27
Dobbin v Redpath [2007] 4 All ER 465
Re Fairclough Homes Limited’s Application [2004] LP/30/2001 (unreported)
Shephard v Turner [2006] 2 P&CR 28
Winter v Traditional & Contemporary Contracts Ltd [2008] 1 EGLR 80
Stokes v Cambridge Corporation [1961] 13 P&CR 77
Stannard v Issa [1987] AC 175 at 187
North Wiltshire District Council v Secretary of State for the Environment and Clover [1992] 65 P&CR 137
Shelfer v City of London Electric Lighting Co Limited [1895] 1 Ch 287.
The following further cases were referred to in argument:
Stockport MBC v Alwiyah Developments (1986) 52 P&CR 278
Re Collett’s Application (1963) 15 P&CR 106
Re Banks’ Application (1976) 33 P&CR 138
Re Carter’s Application (1973) 25 P&CR 542
Re Henderson’s Conveyance [1940] Ch 385
Re Zopat Developments’ Application (1966) 18 P&CR 156
Re Twiname Ltd’s Application (1971) 23 P&CR 413
Re Vaizey’s Application (1974) 28 P&CR 517
Re Cain’s Application [2009] UKUT 212 (LC)
R v Monitor ex parte Unison [2009] EWHC 3221 (Admin)
R ota Innovia Cellophane Ltd v Infrastructure Planning Commission [2011] EWHC 2883 (Admin)
Re Bass Ltd’s Application (1976) 26 P&CR 156
Wakeham v Wood (1981) 43 P&CR 40
Wood-Robinson v Secretary of State for the Environment Unreported, 3 April 1998

	DECISION
Introduction
1.	Mr John Stanborough (the applicant) owns the freehold of 10 Minterne Road, Lilliput, Poole, Dorset, BH14 8NA (the application land).  The property currently comprises a large detached house but Mr Stanborough wishes to demolish this and to erect three 4-storey detached houses.  Detailed planning permission for the current version of the proposed development was granted on appeal on 17 August 2010.
2.	Minterne Road lies to the north of the application land and runs in an east to west direction.  No.10 is set a long way back from the road and shares a driveway with No.12 to the east.  Immediately to the north of the existing house at No.10, and between it and Minterne Road, lies No.8.  To the west of No.10 is the chalet-bungalow at No.6.  No.6 is also set back from Minterne Road and its access lies between No.2 to the west and No.8 to the east.  This access also leads to the plot that was apparently going to be developed as No.4 (but never was) and which lies to the west and south of No.6.
3.	On 13 April 1955 the land which was to form plot No.4 was sold.  The retained land of the vendor included No.6 and part of No.10.  In clause 4 of the conveyance the vendor:
“with the interest and so as to bind the adjoining property coloured Yellow and hatched blue on the said plan and to protect the property hereby conveyed hereby covenants with the purchaser that the Vendor and its successors in title and assigns will at all times hereafter observe and perform the covenants and conditions set out in the Second Schedule.”
The land coloured yellow and hatched blue (the burdened land) comprises an area of some 610m2 of which approximately 585m2 is located in the rear garden of No.10 immediately to the south of the existing house.  The remaining 25m2 or so forms part of the rear garden of No.6.  The benefited land is the whole of the land that was sold under the 1955 conveyance.
4.	Two of the houses which the applicant proposes to build would encroach onto the burdened land.  The Second Schedule of the 1955 conveyance contains three restrictive covenants.  Restriction 2, which is the subject of this application, states:
	“Not to erect any building or structure on any part of the said land now belonging to the Vendor hatched blue on the said plan.”
5.	The applicant has applied to modify this restriction to enable the proposed development to proceed.  He relies upon grounds (aa) and (b) of section 84(1) of the Law of Property Act 1925. 
6.	There were originally three objections to the application but one of these, by Harbour Watch Residents Association Limited, was withdrawn by consent before the hearing.  The remaining two objectors are Mr Roger Cubberley and Miss Margaret Cubberley, the freehold owners of 6 Minterne Road.
7.	Mr and Miss Cubberley’s parents originally purchased 6 Minterne Road in 1970.  At that time it comprised a 1950s bungalow with a small rear garden.  In 1979 Mr and Miss Cubberley’s parents purchased part of the benefited land to the west of No.6.  This land was then incorporated with No.6 and effectively trebled the size of the garden.  Plot No.4 was not developed and that part of it acquired in 1979 and No.6 are now occupied together as a dwelling (a chalet-bungalow) and garden.  Mr and Miss Cubberley became registered proprietors of both Plot No.4 (part) and No.6 (under separate titles) on 26 June 1987.
8.	The restrictive covenants imposed under the 1955 conveyance benefit that part of the benefited land purchased by the objectors’ parents (hereinafter referred to as plot No.4 and shown in Title No. DT64194).  6 Minterne Road, which includes the existing dwelling (Title No. DT7836), does not have the benefit of the covenants.  Indeed a small nib of land at the south of the garden of No.6 is subject to the burden of those covenants. 
9.	Mr Timothy Morshead QC appeared for the applicant and called Mr Geoffrey David Bevans FRICS, a sole practitioner, as an expert valuation witness giving evidence about whether ground (aa) had been established and compensation; Mr David Andrew Jobbins BSc MRTPI, an Associate Director at Savills, as an expert planning witness; and John Henry Stanborough, the applicant, as a witness of fact.
10.	Mr Tom Weekes appeared for the objectors and called Mr Colin Peter Wetherall BSc FRICS, Director and Head of the Survey and Valuation Department of House and Son, as an expert valuation witness giving evidence about the impact of the proposed development and the compensation issues arising; Mr Malcolm David Brown FRICS MRTPI, Planning Director at Sibbett Gregory Wright & Coles Ltd, as an expert planning witness; and Mr Roger William Cubberley objector, as a witness of fact.  Miss Margaret Rose Cubberley and Mrs Diana Barbara Cubberley (who is not an objector) also submitted witness statements but were not called to give oral evidence.
11.	I made an accompanied site inspection of the application land and the objectors’ property on 15 November 2011.
Facts
12.	From my evidence and my site inspection I find the following facts:
13.	The application land is located in an area of low density good quality housing, with some flats, set on a wooded hillside sloping south east towards Poole Harbour.  6 Minterne Road, the objectors’ chalet-bungalow, is located to the north west of the existing house at No.10, close to the boundary.  At their closest the buildings at Nos.6 and 10 are approximately 11.5m apart.  There is a difference in ground levels of over 7m between No.6 and No.10, with No.6 being on the higher ground.  In broad terms the level of the main ridge of the existing pitched roof at No.10 is at about the same level as the ground floor of No.6, although a wing of No.10 has a ridge which is 3m higher, close to No.6 and running at right angles to the main ridge.
14.	The difference in levels takes place over a short horizontal distance, creating a sharp drop between the two properties requiring a retaining wall at the bottom of the slope in the grounds of No.10.  The boundary between the two properties is at the top of the slope and comprises a concrete block wall and well established hedges.
15.	The rear of 6 Minterne Road faces almost due south.  The pitched roof of the existing house at No.10 is visible to the left, from both within No.6 and from its patio.  No.10 is not visible from the front of No.6.  The rear garden of No.6 is terraced with that part of the garden which is plot No.4 being located at a higher level.  At the south west of the garden, situated on plot No.4, is a modern wooden structure, described as a garden room, which is furnished as a living area.  The main view from this garden room is towards the sea to the south east.
16.	10 Minterne Road has a complex recent planning history.  Outline planning permission was granted by the local planning authority in November 2005 for the extension and alteration of the existing house by the addition of a third storey (2nd floor), which would raise the ridge line of the pitched roof to the level of the existing wing adjoining No.6.  In April 2006 Stanborough (Developments) Ltd submitted an outline planning application for the redevelopment of the site as three detached houses.  Shortly afterwards, in May 2006 and November 2006, they submitted alternative applications, each of which proposed the erection of two three-storey detached houses.  All three applications were refused by the local planning authority and all three were allowed on appeal in July 2007.  The local planning authority granted reserved matters approval for the design and external appearance of the three-house scheme in June 2008.
17.	Stanborough (Developments) Ltd made two planning applications to revise the details of the reserved matters.  Firstly, it sought to add balustrades on top of the flat roof of the houses thereby enclosing a roof terrace.  The terrace would be reached by extending the existing staircase upwards.  The proposed balustrades were 1.8m high along the sides and 1.1m high at the front and back.  This application was refused on 11 September 2008.  The refusal was upheld on appeal on 25 June 2009.  Secondly, it made another application in October 2008 amending the design of the balustrades and raising the height on the front elevation to 1.8m.  The 1.8m panels would be obscure glazed.  The application was refused on 14 November 2008 but was allowed on appeal on 25 June 2009.  The inspector considered that the introduction of 1.8m high panels at the front of the new houses would overcome any problems of overlooking 8 Minterne Road to the north.
18.	The original application to this Tribunal under Section 84 of the 1925 Act dated 4 January 2010 sought to modify restriction 2 by reference to the planning permission granted on appeal on 25 June 2009.  However on 6 October 2009, Stanborough (Developments) Ltd made a detailed planning application for the construction of three 4-storey detached houses, the fourth storey being in respect of fully enclosed sun rooms rather than roof terraces surrounded by balustrades.  The local planning authority refused this application on 25 November 2009 but it was allowed on appeal on 17 August 2010.  Thereafter the applicant amended the section 84 application to seek modification of restriction 2 by reference to the latest planning permission granted in August 2010.  The objectors in the present application consistently objected to all the planning applications made by the owners of No.10.
19.	The plans which the applicant now wishes to implement show the house known as Unit 3 as closest to 6 Minterne Road.  At its nearest point Unit 3 will be 10.5m from the dwelling at No.6, which is 1m closer that the existing house at No.10.  Unit 3 will also be closer to the boundary between the properties, being 3.5m at its nearest point compared with just over 6.5m for the existing house.  The orientation of the rear of the existing house at No.10 is south south west.  The proposed units will be rotated onto a more southerly aspect.  The area of the combined floorplate of the three new houses would be larger than that of the existing house and the combined width of the new houses (including the gaps between the units) at just over 37m is significantly greater than the width of the existing house at just under 25m. 
20.	The western elevation of Unit 3 would face, and be closest to, No.6.  The highest point of Unit 3 (the southern end of the mono-pitch roof that overhangs the proposed sun room) will be 1.34m higher than the height of the existing ridge line of No.10 at this point.  The only upper level (second floor) window in this elevation is to the master bedroom.  This would be obscure glazed.  The balustrade to the roof terrace on the top floor (which extends to the south of the sunroom) would comprise 1.8m high acid etched obscure structural glass.  The remainder of the west elevation would comprise a light coloured render apart from an area of hardwood timber cladding to the north at second floor level.
21.	The northern elevation of Unit 3 would face, but would be offset from, the southern elevation of No.6.  The lower floor of this elevation would not be visible from No.6 (from either the chalet-bungalow or the garden) because of the difference in levels between the properties.  At second floor level there would be an aluminium brise soleil in front of the stairwell to the east of which are the windows of a double en-suite bedroom.  The sun room at the third floor level would have nine acid etched obscure fixed glazing panels facing north.
22.	A final sets of plans was produced by the applicant for the hearing.  These did not form the subject of a planning application but purported to show how three detached houses could be constructed at 10 Minterne Road without encroaching upon the burdened land.  Unit 1 (the house furthest to the east) was unaffected.  Unit 2 was stepped back in its south western corner and reduced in area.  Unit 3 was brought forward (northwards) by just under 4m bringing it to within approximately 7m of the bungalow at No.6 and within 2.7m of the boundary between the properties.  This alteration also brought the front (northern) elevation of Unit 3 ahead of that of Unit 2 and required significant amendment to the internal layout.  The footprint of Unit 3 was considerably reduced.  The length of the flank (western) wall adjoining No.6 was reduced in length from 16m to approximately 11m.  Under this revised scheme Units 2 and 3 did not have a roof terrace.
23.	Throughout this decision the proposed development for which planning permission was granted on appeal on 17 August 2010, and which forms the subject of the amended section 84 application, is referred to as the “preferred scheme” and the amended plans showing a development that does not encroach upon the application land is referred to as the “revised scheme”.
Issues
24.	The applicant relies upon ground (aa) in respect of the remaining objections.  Ground (b) is no longer relevant. The applicant does not rely upon section 84 (1A)(b) of the 1925 Act (public interest).  For their part the objectors accept that the proposed user is reasonable and that it is impeded by restriction 2.  The outstanding issue is whether, under section 84(1A)(a) of the 1925 Act, the restriction, by impeding the preferred scheme, secures to the objectors any practical benefits of substantial value or advantage to them and, if not, whether money will be adequate compensation for the loss or disadvantage (if any) which the objectors will suffer.
The case for the applicant: evidence
25.	Mr Jobbins was instructed to prepare a planning appraisal for the redevelopment of 10 Minterne Road and, in particular, the revised scheme.  He was also instructed to consider whether there was a possibility of planning permission being granted for the erection of a dwelling on plot No.4.
26.	Mr Jobbins was very familiar with the application land having previously been employed by Poole Borough Council as Planning Team Leader from 1999 to 2005.  In that capacity he was acquainted with local planning policies and had direct experience of determining planning applications for development in Minterne Road and its locality.
27.	Mr Jobbins reviewed the planning history of the site and said that the previous planning appeals were a material consideration.  Given that the revised scheme followed very closely the design of the preferred scheme, for which planning permission had been obtained, he concluded that the local planning authority would have no reasonable argument that the proposal was contrary to local planning policy.  The planning inspectors (in 2007 and 2010) had given careful consideration to the potential impact of the preferred scheme (and its predecessors) upon neighbouring amenities.  They had concluded that the effect on those properties (Nos. 6, 8 and 12 Minterne Road) in terms of overlooking, outlook and loss of privacy would not be harmful and would not have an adverse impact on the character and appearance of the surrounding area.
28.	Mr Jobbins concluded that the revised scheme was very similar in terms of its design and impact to the preferred scheme that was granted planning permission on appeal in August 2010.  The amended designs were “equally complimentary to the character and appearance of the area” and would not harm the amenities of neighbouring property.  The revised scheme complied with relevant local plan and strategic policies and, in his opinion, was “wholly acceptable in planning terms”.
29.	In cross-examination Mr Jobbins said that he had considered the issue of overlooking arising from the revised scheme.  He acknowledged that the revised scheme for Unit 3 had more windows (four) in its northern elevation than there were in the preferred scheme (one) but stressed that, despite Unit 3 being closer to No.6 in the revised scheme, overlooking was not a problem due to the difference in levels between the neighbouring properties, the use of obscure glazing at third floor level and the effect of screening by vegetation.  The rule that there should be 20m distance between directly facing, clear glazed windows at the same level did not apply to No.6 and the application land (Unit 3) because they were not directly facing.  
30.	Mr Jobbins considered that the erection of a dwelling on plot No.4 would result in the loss of trees and mature vegetation to the serious detriment of the sylvan character and appearance of the Evelyn Hill Conservation Area.  Such development would be contrary to the Poole Core Strategy 2009 policy PCS5, which set out general criteria against which all residential development proposals were to be assessed, and policy PCS23 which required a high quality of design for all proposals.  The erection of a dwelling on plot No.4 would have a poor and cramped relationship with No.6 and would represent overdevelopment.  Car parking and vehicle movement would be very close to the existing dwelling and would create noise and disturbance.  Recent amendments to Government Planning Policy Statement 3 had removed gardens from the definition of brownfield land to avoid “garden grabbing” of the kind represented by the proposed development of plot No.4.  Mr Jobbins concluded that such development would be contrary to planning policy and would be refused by the local planning authority.  If an appeal were lodged, then it would be dismissed.
31.	Mr Bevans was instructed to consider (i) whether the restriction secured to the objectors substantial practical benefits under ground (aa) and, if not, (ii) whether money would be an adequate compensation for any loss or damage that the objectors would suffer and, if so, how much such monetary compensation should be.  
32.	He considered the impact of the proposed development upon the amenity of No.6 in terms of the density of development, noise, light and views.  He dismissed the first of these because the issue had not been raised in previous planning officers’ reports or in the appeal decisions and because the burdened land was only affected by part of two of the three proposed houses under the preferred scheme.  He did not consider “that the existence of those parts would necessarily create any additional noise, traffic or other disturbance” compared with the existing house at No.10 or with the revised scheme.  He concluded that the preferred scheme would not have any material impact upon the views from the objectors’ property, the most important of which, he said, were towards the sea to the south east.  In cross-examination Mr Bevans agreed that he had not considered the overall impact of the preferred scheme upon the amenity of, or views from, No.6.  He accepted that the preferred scheme was nearer, higher, wider and bigger than the existing house at No.10 and that, if implemented, it would have a significant detrimental visual effect on No.6 as a whole (including plot No.4).  
33.	Mr Bevans further concluded that there would be no diminution in the value of the objectors’ benefited land (plot No.4) as a result of the preferred scheme.  In his opinion plot No.4 only had value as amenity land and then only to the owners of No.6 (through which access had to be taken) and not to the market generally.  It did not have any development value.  He accepted that there would be some disturbance during construction but declined to give an opinion of what sum, if any, should be paid to compensate for such disturbance.  Mr Bevans said that he had not been instructed to value the whole of the objectors’ land ownership assuming (i) the restriction remained in place and (ii) the restriction was modified.
34.	In his supplementary report Mr Bevans was instructed to consider whether the revised scheme was viable.  He did this by reference to the profit that the revised scheme would make.  He first calculated the value of the land at 10 Minterne Road by deducting the total costs of the preferred scheme (approximately £3.73m) from its gross development value (approximately £5.73m) to give a site value of £2m (gross of finance costs).  He then calculated the gross development value of the revised scheme (£5.34m) and deducted the costs of construction (£2.52m) and the site value (£2m) to give a profit of £0.82m (rounded) or 15% of the gross development value before deduction of sale costs.  The difference in profit between the two schemes was approximately £60,000.  Mr Bevans concluded from his analysis that the revised scheme was “entirely viable”.
35.	Mr Bevans said that he did not disagree with Mr Wetherall’s valuation of the objectors’ total land holding (plot No.4 and No.6) in the sum of £1.75m nor his assessment that, if the preferred scheme were to proceed, that value would be reduced by £0.3m to £1.45m.
36.	Mr Stanborough explained that he had bought 10 Minterne Road in 1986 and had lived there for 23 years before moving out in 2009.  The property had been empty until June 2011 since when he had let the house to a large family until June 2012.  He explained that originally he had intended to remain at No.10 and had obtained planning permission to extend the existing house to provide another storey in order to enjoy the sea view.  But he had then found alternative accommodation and decided to re-develop No.10.  He described the revised scheme and said that although it would be profitable it was very much a second best option and that he strongly favoured the preferred scheme.  Nevertheless if he was unsuccessful in his application then he intended to proceed with the revised scheme.
37.	He said that the objectors’ view of the preferred development would have been screened but for the fact that they had cut back the leylandii hedge along the boundary without his consent, a practice that had continued for a number of years. 
38.	Mr Stanborough accepted that he was a well-known local property developer who had incorporated his business as Stanborough (Developments) Limited in 1971.  He accepted that he (or his solicitors) had not disclosed details of the lease of the existing house at No.10; any comparative financial analyses of the preferred and revised schemes; the funding for the revised scheme (although Mr Stanborough said that such funding was in place); other competing development opportunities available to the company; or whether the company intended to carry out the revised scheme. He agreed that it was difficult to form a firm view about what the applicant would do if the application was refused.  But he explained that, as sole shareholder of the company, he was able to express the company’s intentions without relying upon documented resolutions.  He could afford the revised scheme and felt that he would obtain planning permission for it even though Unit 3 might be marginally more problematic given the history of the site.  But the revised scheme was no more cramped in its layout than the preferred scheme and the proximity of Unit 3 to No.6 under the former would not cause problems with the retaining wall between the two.  There was very little difference between the schemes as to cost and construction difficulties.
The case for the applicant: submissions
39.	Mr Morshead said that the objectors were wrong to argue that, in considering whether the restriction secured to them any practical benefits of substantial value or advantage, it was possible to take into account the effect of the reasonable user upon the whole of their property ownership rather than that part of it which had the benefit of the restriction.  The objectors were not the original covenantees and were subsequent owners and occupiers of part of the land benefited by the restriction.  As such they only enjoyed the benefit of that restriction to the extent that they owned benefited land.  The practical benefits, if any, secured by the restriction could only be considered in relation to the benefited land (plot No.4) and not the remainder of the objectors’ ownership (No.6).
40.	The objectors had mistakenly relied upon Gilbert v Spoor [1983] 1 Ch 27 to support their position.  But that case was concerned with an applicant who was the owner of land conveyed pursuant to a building scheme.  There was no building scheme in the current application.  In building scheme cases it was sufficient for the benefit of the covenant to be annexed to the estate and then the estate as a whole would be benefited land.  Ownership of part of the estate enabled complaint about harm arising on another part of the estate.  The Court of Appeal in Gilbert only considered annexation in that context and that was the only issue of law arising in that case by which the Tribunal was bound.
41.	The issue was again considered by the Court of Appeal in Dobbin v Redpath [2007] 4 All ER 465.  In that case Lawrence Collins LJ distinguished between cases where there is no building scheme and cases where there is a building scheme.  He said at 471 [23]:
“Where there is no building scheme there may be a diminishing relationship as between the weight to be attributed to the source of the complaint and the physical distance of the objector’s land interest.  By contrast where there is a building scheme, so long as the objector has an interest inside the physical compass of the building scheme, the location of the objector outside his or her land interest inside the building scheme does not affect the matter as Waller LJ pointed out [in Gilbert].”
Mr Morshead submitted that it was only in building scheme cases that one could consider practical benefits that were secured to an objector on land outside of his ownership, the reason being that all the land in a building scheme benefited from the restriction under local law.  In non-building scheme cases one could only judge whether a restriction secured substantial practical benefits from the benefited land itself.  Any such benefits to land outside of that which was the subject of the restriction should not be considered.
42.	Neither of the leading textbooks on restrictive covenants, Scamell’s Land Covenants (1996) or Preston and Newsom’s Restrictive Covenants (9th edition 1998) supported the objectors’ contentions on this issue.
43.	Mr Morshead gave three further arguments why the objectors’ case was wrong:
	(i)	in order for the objectors to sustain their argument that they could take into account the whole of their land ownership when considering the practical benefits secured to them by the restriction it would only be necessary for them to own a minuscule part of the benefited land itself.
	(ii)	the object of the restriction was to protect the land conveyed under the 1955 conveyance.  The restriction could bind in perpetuity because the benefit of it attached to the ownership of land.  That was fundamental to the operation of the 1925 Act; the essence of that Act was that one had to own the land which had the benefit of restrictive covenants in order to enjoy those benefits.  This was perfectly obvious to the draftsmen of the 1925 Act. 
	(iii)	it would be unfair if the vendor under the 1955 conveyance, who covenanted to restrict the development of his retained land in order to protect the land sold, were to find that, in effect, he had covenanted to protect a much larger area, including No.6, which was itself part of the retained land of the vendor under 1955 conveyance.  It was unfair that a benefit attaching to plot No.4 should be exploited by the owner of No.6.
44.	Mr Morshead submitted that, in considering what development might take place at No.10 if the application failed, the applicant fully accepted the test of “practical likelihood” set down by the President of the Lands Tribunal in Re Fairclough Homes Limited’s Application [2004] LP/30/2001 (unreported) and cited with approval by the Court of Appeal in Shephard v Turner [2006] 2 P&CR 28.  This was not a case where such alternative development (the revised scheme) was a flight of fancy.  The development was viable (Mr Bevans was not challenged on this point), was overwhelmingly likely to obtain planning permission (not to grant it would be perverse given the planning history of the site) and the applicant said that he intended to do the works.  The various questions that Mr Stanborough faced in cross-examination about his company had been ambush points.  No documents had been requested about such matters in the agreed disclosure.  Mr Stanborough controlled the company that would undertake the development; that company by the objectors’ own admission was a well-known local developer; the revised scheme was affordable; possession of No.10 was readily available at the end of the lease in June 2012; and the revised scheme would be pursued if the application failed.  
45.	The objectors had not offered any evidence about the effect of the revised scheme upon the value of either (i) the benefited land (plot No.4) or (ii) their total land ownership.  They had not compared the value effect of the preferred scheme and the revised scheme.  The correct inference to draw from this was that there was no additional adverse effect on value caused by the preferred scheme; otherwise the objectors would have referred to it.
46.	A comparison between the preferred and revised schemes did not show that by restricting development to the latter the objectors would secure practical benefits of substantial advantage.  The purpose of the covenant was to protect the views of the benefited land against obstruction by buildings.  The purpose was not to control noise, density of development or to prevent planting on the retained land.  There was a lack of moderation in the objectors’ case in suggesting that the applicant intended to allow the growth of a massive anti-social leylandii hedge.  The preferred scheme would not obliterate the objectors’ views.  The principal outlook from plot No.4 would not be affected.
47.	In his opening Mr Morshead, on behalf of the applicant, made what he hoped was a helpful concession.  He said that if the applicant was unable to satisfy the Tribunal that the revised scheme (or something similar) was a likelihood without a modification of the restriction, then, albeit it on balance and on the available evidence, the covenant would be securing a practical benefit of substantial value or advantage to the objectors.  In effect if the restriction was preventing development to the north of the burdened land as well as development of the burdened land then that was a substantial practical benefit to the objectors.
48.	The restriction should not be modified if the Tribunal were to award the level of compensation sought by the objectors because that would indicate that there were practical benefits of substantial value.  The applicant never suggested that there was any method for the Tribunal to modify the restriction if only the compensation were large enough.  Mr Morshead said that in Winter v Traditional & Contemporary Contracts Ltd [2008] 1 EGLR 80 the Court of Appeal had said that if a percentage of value was used in a “negotiated share” approach then this would be at or around 5% but given that the revised scheme was likely to proceed if the application failed the consideration of practical benefits in this case was one of advantage and not value.  In those circumstances the measure of compensation should be a solatium in range of between hundreds of pounds to a few thousand pounds. 
The case for the objectors: evidence
49.	Mr Cubberley described the history of his family’s ownership of 6 Minterne Road which he now occupied with his wife and sister.  Plot No.4 had been acquired by his father over 30 years ago.  The covenants that were imposed when the various plots were sold in 1955 secured that the purchasers would behave in a neighbourly and reasonable manner with regard to planting, garden management and fence height.  Plot No.4 had the benefit of a vendor’s covenant that restricted building on the burdened land to avoid spoiling the view.  He said that the reducing number of properties in the area that remained secluded, had a substantial garden and outstanding views made the benefit of the covenants more important to the objectors.  Mr Cubberley said that the objectors, all of whom were retired, “intended to enjoy the rest of our lives here”.  In a supplementary witness statement he said:
	“We have no present desire to sell; what we want is to preserve what we have.  Certainly we have no intention of selling the garden land at plot No.4.”
No.6 was not a holiday home but was occupied as the objectors’ main residence.  If the preferred scheme went ahead it would seriously impact upon the objectors’ enjoyment of their garden and the garden room.
50.	Miss Cubberley, who was sworn in but not cross-examined, and Mrs Cubberley who was not called to give evidence, both submitted witness statements.  Miss Cubberley said that the garden of plot No.4 was “cooler and breezier than the rest of the garden” in summer and afforded the opportunity “to sit, relax, eat and entertain family and friends.”  The garden room allowed the objectors to enjoy the outlook throughout the year.  Miss Cubberley stated that:
	“… in reality, it is when I am outside in the garden or in the summerhouse that I most enjoy the view, the feeling of openness and indeed the peace and tranquillity that is so much a part of this environment.”
Mrs Cubberley said that in 2006 the applicant had stopped maintaining the leylandii hedge that he had planted and at the same time had planted four large birch trees that were now 3m above the previous hedge line.  This had resulted in a reduction in light and the feeling of space previously enjoyed by the bungalow and had taken away the views.  This made it more important that the view from the upper terrace of plot No.4 was protected.  As the view from the bungalow had diminished, so too had the garden room become more important to the objectors.
51.	Mr Brown was instructed to consider whether the revised scheme would be granted planning permission.  He reviewed the planning history of 10 Minterne Road and the details of the revised scheme before considering relevant planning policy and other material considerations.  He said that the matters for consideration in determining a planning application for the revised scheme were limited to those features which were materially different from the preferred scheme as approved on appeal.
52.	Mr Brown said that in cases where a decision on a proposed residential development was made by an appeal inspector the principal issues were normally:
(i)	The effect of the proposal on the character and appearance of the surrounding area; and
(ii)	The effect of the proposal on the living conditions (amenities) of adjoining residents.
In the light of the relevant planning policies Mr Brown concluded that the revised scheme would not have any materially different impact to the preferred scheme upon the character and appearance of the surrounding area.  But he considered the differences between the two schemes would materially impact upon the amenities of the objectors.
53.	The northern elevation of the revised scheme contained more windows than the same elevation in the preferred scheme.  Those windows served two bedrooms and a study at second floor level and the kitchen to the sun room at third floor level.  The windows in the preferred scheme served a bedroom at second floor level and the kitchen, WC and stairwell at third floor level.  Unit 3 was closer to No.6 in the revised scheme.  The nearest windows to No.6 in the revised scheme were 9m away at second floor level and 11m at third floor level compared with 16m at third floor level at the latter.   
54.	Mr Brown considered that the reduced separation distances between the principal windows in the revised scheme and the existing chalet-bungalow at No.6 were not reasonable.  They produced an unsatisfactory visual arrangement that prejudiced the amenity of No.6 in terms of “actual and perceived” overlooking and a reduction in privacy, contrary to policies PCS5 and PCS23 of the Poole Core Strategy 2009.
55.	Mr Brown challenged the accuracy of the revised elevation drawing submitted by the applicant (drawing No.215 dated 12 September 2011) which he said showed Unit 3 as 4m from the boundary with No.6 whereas the actual distance was 2.6m.  Consequently the submitted elevation showed a retaining wall that was too small.  He considered that the ground works required to construct the revised scheme would be physically detrimental to the boundary hedge and would “impact upon its future potential growth”.  The hedge would therefore function less effectively as a screen between the properties.
56.	Mr Brown concluded that there would be unacceptable inter-visibility between the proposed habitable rooms in Unit 3 and those in No.6.  The fact that the views were oblique rather than direct was offset by their proximity.  The use of obscure glazing would not be appropriate for either bedrooms or a kitchen.  The conflict with the development plan could not be remedied by the imposition of conditions and Mr Brown said planning permission for the revised scheme should be, and probably would be, refused.
57.	Mr Wetherall was instructed to give his expert opinion about the impact of the proposed development at No.10 upon “the land adjacent to and within the curtilage of” No.6 (ie plot No.4) and the valuation considerations arising.  He was also instructed to give his opinion about the appropriate compensation payable if the preferred scheme proceeded.
58.	The preferred scheme was said by Mr Wetherall to have a “startling effect on the visual amenity” of plot No.4.  Its design and material were in “stark contrast” to the existing roof of No.10 which was finished in grey coloured concrete tiles with a plain tile ridge.  The existing roof blended in with the colouring of the setting and was hardly noticeable.  Furthermore the existing ridge line of No.10 was 9.2m from the boundary compared with the equivalent distance of the proposed west elevation of Unit 3 which was 3.4m.  The view from plot No.4 would also be affected by the whole of the southern elevation of the proposed Units 1-3.  The visible bulk of the neighbouring buildings would be increased:
	“The whole of the spatial area to the east of No.6 is being fitted with three vast lumps of masonry, aluminium and glass.”
At present there were no high level terraces or balconies at No.10 whereas, under the preferred scheme, there would be an open roof terrace behind a glazed screen “just over the hedge within a few metres”.  There was bound to be an increase in noise levels from the use of the terrace.  Mr Wetherall concluded that the preferred scheme would have a serious impact upon the objectors’ amenity. 
59.	In a supplementary report Mr Wetherall considered the impact of the preferred and revised schemes upon the chalet-bungalow at No.6 and not just the impact on plot No.4.  He produced photomontages showing the before and after views from the rear ground floor bedroom and the first floor bedroom at No.6.  He said that the view from the ground floor would be “obliterated” by the preferred scheme, rendering the outlook “landlocked”.  The view from the first floor was now filled with buildings creating an outlook that was “harsh and busy”.  Mr Wetherall noted that the revised scheme placed the front elevations of Units 1-3 more or less in line and significantly reduced the length of the west elevation of Unit 3 that adjoined No.6.  He said:
	“Viewed from the adjacent land, the visual impact is much reduced as the width of the building is less as, to a certain extent, the units hide behind each other.
But the effect of the revised scheme was more imposing upon the chalet-bungalow at No.6 because Unit 3 was closer to both the dwelling and the boundary.  
60.	In cross-examination Mr Wetherall said that, even if it survived the proximity of Unit 3 under the revised scheme, the vegetation screen between the two properties would not significantly mitigate the view of the new development from No.6.  The view towards the sea to the south would be blemished and significantly impaired under either the preferred or the revised scheme.  
61.	In his first expert report Mr Wetherall valued the chalet bungalow at No.6 without the additional land at plot No.4 at £1.25m.  He considered whether plot No.4 could be sold separately and said that he believed planning permission “could be achievable” for a luxury 4 bedroom house.  He valued plot No.4 with the benefit of such planning permission at £0.9m.  He thought that the plot could be sold unconditionally at a one third discount, ie for £0.6m.  If the restriction was modified to allow the preferred scheme to proceed Mr Wetherall said that the value would be further diminished by a quarter or £0.15m.  He then increased this amount by a multiple of three (based upon “valuer’s intuition”) to give an appropriate compensation figure of £0.45m in the event that the application was successful. 
62.	Mr Wetherall then considered what effect the continued existence of the restriction would have upon the value of No.10.  The preferred scheme produced a land value of approximately £2.96m.  Mr Wetherall compared this with the value of the existing house which he said was £1.5m. Thus the “value that is unlocked by the modification” was £1.46m (rounded).  Because the loss of amenity to plot No.4 would be substantial, and “particularly again [because] the applicant is a developer”, Mr Wetherall said the objectors should share one third of the development gain that would be realised, namely £0.486m.
63.	Mr Wetherall considered that there was merit in both valuation approaches, but said that the compensation awarded should go “beyond valuation issues” because the loss of amenity to the objectors was so great.  He then split the difference between the two approaches to give an award of £467,750 in the event that the modification of the restriction was allowed.
64.	Mr Wetherall revised his approach in his supplementary report.  He said that 2 Minterne Road had by then been sold as a building plot with planning permission for the construction of a single house in the sum of £1.25m.  He substituted this figure for that of £0.9m which he had previously taken for the value of plot No.4 with planning permission.  He discounted the revised figure by one third to reflect the lack of planning permission, giving a value of £837,500.  Upon reflection he considered that his previous allowance of 25% for the diminution in the value of plot No.4 due to the release of the restriction was too high.  Nevertheless he still adopted the figure of £0.15m as being an appropriate reflection of the reduction of value if the restriction were to be modified.  Mr Wetherall conceded that his previous use of a multiplier of three to adjust this figure to fully compensate for the loss of amenity was wrong. 
65.	In his supplementary report Mr Wetherall, upon counsel’s advice, considered the diminution in the value of 6 Minterne Road as a whole, i.e. by reference to the objectors’ total land ownership.  He estimated that the value of that total ownership was £1.75m.  If the restriction were to be modified so as to permit the preferred scheme to proceed he estimated that that value would diminish by £0.3m to £1.45m.  In answer to questions from the Tribunal he said that half of this amount (£0.15m) was attributable to the diminution in value of plot No.4. 
66.	Mr Wetherall thought that the revised scheme would not obtain planning permission but considered that a smaller scheme, omitting Unit 3, probably would.  In effect he thought that the restriction prevented the construction of Unit 3.  He reworked his previous residual valuation on the basis that, without modification to the restriction, two houses would be built.  This showed an increase in the value of No.10 of £0.471m.  He then deducted this figure from his calculation of the increase in the value of No.10 were the restriction to be modified and three houses built (£1.457m) to give £0.986m as being the increase in value attributable to the modification of the restriction.  He took one third of this amount, following what Mr Wetherall said was the approach that had been adopted in Stokes v Cambridge Corporation [1961] 13 P&CR 77, to give £0.329m.
67.	Mr Wetherall took the average of his figure for the diminution in the value of the objectors’ total land ownership (£0.3m) and his figure for the one third share of the increase in the land value of No.10 if the restriction were modified (£0.329m) to give a revised compensation figure of £0.315m. 
68.	In cross-examination Mr Wetherall acknowledged that the fact that the applicant was a developer had nothing to do with the assessment of compensation.  Having conceded this point he justified his figure of one third of the increase in development value as being “an equitable amount”.  He had followed the approach in Stokes and not that in Winter because the impact on the amenity of the objectors was so great.  
The case for the objectors: submissions
69.	Mr Weekes submitted that, on the clear wording of section 84 of the 1925 Act, the Tribunal was required to have regard to the practical benefits that were secured to the whole of the objectors’ land ownership and not just those secured to the burdened land.  Section 84(1A) referred to any substantial practical benefits that the restriction secured to persons entitled to the benefit of it.  It was not restricted in terms to the benefited land.  The Court of Appeal considered whether the practical benefits should be limited to the benefited land in Gilbert v Spoor.
70.	In that case it was submitted by the applicant that as the view which would be affected by the proposed development was not enjoyed from the land of the objectors then it could not constitute  a practical benefit within the meaning of section 84(1A).  The covenants in that case ran with the land and the applicant said that practical benefits were restricted to benefits the observance of which directly benefited the land of the covenantee.  Eveleigh LJ said at 32C that the court was concerned to construe the words of a statute and noted that section 84 was not solely concerned with cases which could only arise when the covenant was in its inception capable of benefitting the land of the covenantee.  Section 84 applied to restrictions of any kind and Eveleigh LJ said at 32E to 33A:
	“I therefore do not think that it is permissible to construe section 84(1A) only in the context of restrictive covenants which run with the land.  The first task is to construe the section in isolation and then to relate it to the facts of the present case.
The words of section 84(1A)(a), in my opinion, are used quite generally.  The phrase “any practical benefits of substantial value or advantage to them” is wide.  The subsection does not speak of a restriction for the benefit or protection of land, which is a reasonably common phrase, but rather of a restriction which secures any practical benefits.  The expression “any practical benefits” is so wide that I would require very compelling considerations before I felt able to limit it in the manner contended for … 
 ….
In my judgment the Tribunal was entitled to hold that the view was a benefit whether or not that benefit could be said to touch and concern the land.  However, I am also of the view that the land of the objectors is, in each case, touched and concerned by the covenant.”
71.	Mr Weekes submitted that Eveleigh LJ’s judgment on this point, with which Waller LJ and Kerr LJ agreed, had nothing to do with building schemes and was a statement of principle of general application which bound the Tribunal.  Nor was there anything in Dobbin that cast doubt on the decision in Gilbert, being a case about the weight to be given to the existence of a building scheme.
72.	The practical benefits that could be considered were not limited to those within the original purpose of the restriction.  Incidental and uncovenanted benefits could also be taken into account although, per Carnwath LJ in Shephard at 525 [41], the Tribunal was entitled to give less weight to these in its overall judgment of substantiality.
73.	For the purpose of considering the practical benefits that were secured by the restriction the Tribunal should be cautious about the applicant’s portrayal of the terrible consequences that might happen anyway under the revised scheme.  It should be wary of what Lord Oliver described in Stannard v Issa [1987] AC 175 at 187 as:
	“colourful or hypothetical examples of things which could be done within the framework of the covenants as they stand and which, if done, would substantially repair or defeat the purpose for which the covenants were imposed, ….”
74.	If the Tribunal allowed the application and awarded compensation on the basis of the diminution in the value of the objectors’ land, that exercise should include any land owned by the objectors that, while occupied with benefited land, did not itself have the benefit of the restriction.  Section 84 referred to a sum to make up for any loss suffered and it was a matter of basic fairness that full compensation should be paid. 
75.	The correct approach to the assessment of such loss was to be found in Winter where Carnwath LJ said at [35] that the award of a share of development value while not an established practice:
	“… is a possible approach in circumstances where a simple estimate of the diminution in the value of the objectors’ properties is unlikely to be a fair reflection of their subjective loss.”
The negotiable share approach adopted by Mr Wetherall was therefore permissible on the facts of the case. 
76.	Turning to the issue of whether the restriction secured substantial practical benefits Mr Weekes said that both valuation experts had agreed that if the covenant were modified it would reduce the value of the objectors’ total land ownership (No.6 and plot No.4) by £0.3m.  He submitted that the Tribunal could place weight on Mr Bevans’ agreement to this figure since, Mr Weekes said, he was markedly reluctant to give evidence contrary to his client’s interests.  If the Tribunal accepted this figure then that would take the case outside the ambit of ground (aa) and the application must fail.
77.	He emphasised the impact of the preferred scheme compared with that of the existing house and submitted that it would have a disastrous impact upon the visual (and other amenity) of the objectors’ property.  Such an impact struck to the heart of the objectors’ enjoyment of their garden with its “magnificent views, privacy, seclusion and mature landscape.”
78.	There was no reason to suppose that the purpose of the restriction was limited to the protection of views.  There was no reference to views in the 1955 conveyance.  The protection of visual amenity inevitably meant placing constraints upon the density of development on the burdened land.  The preferred scheme substantially undermined the objects of the restrictions and would obscure what Mr Bevans had described as “superlative” views.  The proposed houses were unattractive and out of place.
79.	The applicant had conjured up spectres by arguing that the revised scheme would have an equal impact to the preferred scheme.  The plans for the revised scheme had, by the applicant’s own admission, been prepared for the purpose of the application.  Mr Stanborough had not disclosed details of his intention to implement the revised scheme and it was difficult to take a firm view about those intentions.  No expert evidence had been called to consider the available options.  There were a number of problems associated with the revised scheme, particularly the proximity of the new retaining wall between Unit 3 and No.6 and the uncertainty about whether planning permission would be granted.  A local planning authority was not bound by previous appeal decisions on the site, per the Court of Appeal in North Wiltshire District Council v Secretary of State for the Environment  and Clover [1992] 65 P&CR 137.  The local planning authority’s previous refusals of planning permission were relevant and Mr Brown’s expert view about overlooking between Unit 3 and No.6 was credible.  The objectors might have to accept an alternative form of development in the future but there was a good chance that it would be significantly better than the revised scheme; for instance a two house scheme. 
80.	The starting point when considering compensation was the fact that the law did not require money to be accepted for loss or damage to real property.  It was only exceptionally that damages in lieu of an injunction would be granted accordingly to the “good working rule” in Shelfer v City of London Electric Lighting Co Limited [1895] 1 Ch 287.  The statutory test under ground (aa) envisaged circumstances where practical benefits which were not substantial would not be adequately compensated by a monetary payment.  That was a question of fact and in this case the facts showed that the objectors’ loss of a view could not be adequately compensated by money given their long standing connection to the property, the amount of time all three objectors spent there and their use and enjoyment of the property, especially the garden and the garden room.
Conclusions
81.	I deal firstly with the objectors’ submission that, when considering section 84(1A)(a) of the 1925 Act, it is possible to take into account any practical benefits of substantial value or advantage which the restriction secures to them in respect of the whole of their land ownership, whether or not it is land which has the benefit of the restriction in the 1955 conveyance.
82.	There is no dispute about the extent of the land that has the benefit of the restriction.  Under clause 4 of the 1955 conveyance the vendor covenanted to observe and perform the covenants and conditions contained in the Second Schedule “to protect the property hereby conveyed.”  Part of the land that was conveyed is owned by the objectors (plot No.4) and there is no suggestion that the restrictions contained in the Second Schedule only apply to the land conveyed as a whole rather than to part of it. 
83.	Mr Weekes relies upon the Court of Appeal’s decision in Gilbert in support of the objectors’ argument.  In Gilbert Eveleigh LJ construed section 84(1A) “in isolation” and then related it to the facts of that case.  In doing so he held that the phrase “any practical benefits of substantial value or advantage to them” was wide (see paragraph 70 above).  But, in my opinion, Gilbert is not an authority which supports a parasitic claim for benefits based upon the coincidence of common ownership of the benefited land and other land, where such other land is not part of a building scheme.  6 Minterne Road does not have the benefit of the restriction.  It was excluded from the benefited land because it was part of the vendor’s (the covenantor’s) retained land.  In fact a small part of No.6, at the southern tip of title No.DT7836 (shown coloured brown on the office copy entry plan) is part of the burdened land.  The effect of the objectors’ argument is that this part of the burdened land, because it is now owned together with plot No.4 (the benefited land), can be integrated into the objectors’ total land ownership for the purposes of considering any substantial practical benefits that are secured to them by the restriction.  This part of the burdened land thus becomes entitled to the benefit of the restriction by virtue of its particular ownership.  In my opinion that argument, unless there is a building scheme, is wrong and it is only the benefits secured to the objectors by the restriction through their ownership of the benefited land, plot No.4, and no other land, that falls to be considered.
84.	Gilbert involved a restriction that was imposed as part of a building scheme.  In the case of a building scheme the restrictions are enforceable by and against all owners of plots within the boundary of the scheme regardless of when they or their predecessors acquired their plots from a common vendor.  It is a system of reciprocal rights and obligations amounting to a local law.  Thus in Gilbert Waller LJ said at 35B:
	“As between each of these owners, including the applicant, there were mutual rights and mutual obligations.  These rights and obligations were for the benefit of the whole estate.  Each owner would be aware of the restrictions imposed on the other owners including the restriction imposed on the applicant.  These restrictions would influence and control the development of the whole estate.  Accordingly if the restriction remains in force, the objectors or other owners of land within the building scheme could enforce the restriction.”
And later at 36A:
	“If a building estate contains a pleasant approach with restrictions upon it and some building is done contrary to those restrictions which spoils the approach, if then the owner of a plot complains about that breach, the fact that he does not see it until he drives along the road, in my opinion, does not affect the matter.  He is entitled to the estate being administered in accordance with the mutual covenants, or local law; so in this case.”
85.	There is no building scheme in the present application and the context in which the restriction was created (to which I am directed to have regard under section 84(1B) of the 1925 Act) is different.  There is a specific covenant restricting use of defined (burdened) land for the benefit of defined (benefited) land.  It is not possible to pray in aid the system of local law that would apply were both parcels of land to be within a building scheme.  The benefits which are secured by the restriction in the present case are those which enure to the benefited land only.
86.	The effect of this conclusion is that no account is to be taken of any benefits that the restriction secures in respect of the objectors’ use and enjoyment of No.6 and, in particular, from their occupation of the chalet-bungalow.  The benefits which are to be considered are only those which the restriction secures in respect of plot No.4, including the garden room.  This is the approach adopted by the applicant and is the way in which the evidence of Mr, Mrs and Miss Cubberley and the first expert report of Mr Wetherall was presented. 
87.	The reasonable user which is impeded by the restriction is the preferred scheme.  The applicant argues that for the purpose of examining the benefits secured by this impediment it is necessary to compare the preferred scheme not with the existing house at No.10 but with the revised scheme.  This type of argument was considered by the President of the Lands Tribunal in Fairclough Homes in which he said at paragraph 30:
“In such a case as this, the provision [section 84(1A)], it seems to me, operates in this way.  By preventing development that would have an adverse effect on the persons entitled to its benefit the restriction may be said to secure practical benefits to them.  But if other development having adverse effects could be carried out without breaching the covenant, these practical benefits may not be of substantial value or advantage.  Whether they are of substantial value or advantage is likely to depend on the degree of probability of such other development being carried out and how bad, in comparison to the applicant’s scheme, the effects of that development would be.”
In Shephard Carnwath LJ said about the same issue at 624 [37]:
“… in considering the practicality and substantiality of the benefits to the objectors of being able to prevent that use, there must be an element of comparison with what would happen if the modifications are not allowed.  If an equally damaging development could be carried out without breaching the restrictions, and there is evidence that it is likely to happen, then the apparent benefits of impeding the proposed development may be illusory.
…
… in judging the effectiveness of the protection provided by the covenants, one is concerned with practicality, not theory.”
In my opinion this guidance requires an assessment of whether the revised scheme would proceed in the event that the application is refused.  This in turn depends upon the answer to three questions: 
(i)	would planning permission be granted for the revised scheme;
(ii)	would the revised scheme be viable; and
(iii)	does the applicant intend to proceed with the revised scheme.
I deal with each of these in turn.
Planning Permission
88.	The revised scheme is designed to ensure that no development takes place on the burdened land.  To achieve this there are minor alterations to the design of Unit 2 and significant alterations to the design and siting of Unit 3.  Unit 1 is not affected.  The effect of these changes is to reduce the size of Units 2 (minor) and 3 (major).  Unit 3 is brought forward, the effect of which is to bring it closer to No.6 (from 11.5m to 7m) and closer to the boundary between the properties (from 3.5m to 2.7m).  Whereas in the preferred scheme the front elevation of each unit was set back from its neighbour, under the revised scheme the front elevation of Unit 3 stands proud of Unit 2 and the garage entrance is rotated through 90 degrees to face Unit 2.  The overall effect is to give the revised scheme a cramped appearance where it adjoins No.6.  It is a contrived design solution and compresses Unit 3 solely to avoid the burdened land.  The length of the side (western) elevation of Unit 3 facing No.6 is reduced (from 16m to 10.3m).  The internal layout of Unit 3 is reconfigured, increasing the number of habitable rooms in the front (northern) elevation which are potentially visible from No.6.  There would be no roof terrace at Unit 3 in the revised scheme.
89.	There are therefore advantages (reduced size, reduced length, and no roof terrace at Unit 3) and disadvantages (closer proximity of Unit 3 to the house and boundary at No.6, more habitable rooms in the northern elevation and a generally cramped appearance) of the revised scheme to the objectors in their capacity as neighbouring land owners for planning purposes.  I do not accept that it is “overwhelmingly likely” that planning permission would be granted as submitted by Mr Morshead.  I think that there are real concerns about moving Unit 3 closer to No.6 and to the boundary between the properties.  The reconfiguration of the layout of Unit 3 means that it is in closer proximity to No.6 but any problems of overlooking will be mitigated by the significant differences in level between the properties, the use of obscure glazing on the top floor (assuming that this would be acceptable for a kitchen) and the fact that the properties are offset and do not directly overlook each other.  But the siting of Unit 3 is significantly less satisfactory than under the preferred scheme.  The previous decisions of the inspectors on appeal are a material consideration but I do not accept that the local planning authority would be “perverse” not to follow them as suggested by Mr Morshead.  In this connection Mr Weekes relies upon the decision of the Court of Appeal in North Wiltshire District Council in which Mann LJ said at 145:
“In this case the asserted material consideration is a previous appeal decision.  It was not disputed in argument that a previous appeal decision is capable of being a material consideration.  The proposition is in my judgment indisputable.  One important reason why previous decisions are capable of being material is that like cases should be decided in a like manner so that there is consistency in the appellate process.  Consistency is self-evidently important to both developers and development control authorities.  But it is also important for the purpose of securing public confidence in the operation of the development control system.  I do not suggest and it would be wrong to do so, that like cases must be decided alike.  An inspector must always exercise his own judgment.  He is therefore free upon consideration to disagree with the judgment of another but before doing so he ought to have regard to the importance of consistency and to give his reasons for departure from the previous decision.”
90.	In my opinion, the revised scheme presents novel planning issues to those found within the preferred scheme.  They are not de minimis details but are matters which the local planning authority would need to consider carefully.  Mr Stanborough said that he had not discussed the revised scheme with the planning officers and there is no evidence about what their view of that scheme would be.  I do not accept Mr Jobbins’ view that the preferred and revised schemes are “almost identical”, at least insofar as Unit 3 is concerned.
Viability
91.	 Mr Bevan’s supplementary report was produced only a fortnight before the hearing and, in my opinion, his analysis of viability showed signs of having been prepared rather hurriedly.  For instance Mr Bevans recognised, in answer to the Tribunal’s questions, that he had used gross internal areas rather than gross external areas when calculating building costs.  The effect of this would be to understate the cost and overstate the profit.  But the objectors did not challenge Mr Bevans’ analysis of the viability of the revised scheme which he said showed a difference in profit of only £60,000 compared with the preferred scheme.  I am satisfied that although Mr Bevans’ calculations may not have been fully robust, they can be relied upon to demonstrate that the revised scheme would be viable.
Intention
93.	Mr Stanborough acknowledged in cross-examination that it was difficult to form a firm view on the evidence about what he would do if the application was dismissed.  He also accepted that he had not disclosed any evidence that he intended to carry out the revised scheme and that there were a number of alternative forms of development that he could pursue.  He had not disclosed any comparative financial analyses of any of the other development options, e.g. the extension to the existing house for which planning permission had already been obtained or of the two house scheme (omitting Unit 3) that the objectors referred to.  Nor had Mr Stanborough provided any evidence that his company could afford the development.  In short Mr Stanborough’s evidence as to intention consists only of his word, uncorroborated by any comparative appraisal or documents.  But the objectors accept that Mr Stanborough’s company is a well known local developer that has undertaken many developments.  As the sole shareholder of his company Mr Stanborough says he does not require anybody else’s permission to undertake a development nor does he need to minute any decision in writing.  I am satisfied on the evidence that Mr Stanborough intends to maximise the value of 10 Minterne Road.  He no longer lives there and for him No.10 is now purely a business asset.  I consider that his intention is to maximise the returns from it.  
94.	The revised scheme was prepared at short notice and, on the evidence, in a cursory manner.  I have already referred above to Mr Bevans’ financial appraisal.  The architect’s plans of the revised scheme also show signs of hasty preparation.  Mr Brown correctly points out that the elevations (“proposed street scene”) of the revised scheme (drawing No.215) appear to show Unit 3 further away from the boundary with No.6 than is shown on the plans.  Also the second floor plan of Unit 3 (drawing No.214) does not show the obscure glazed windows to the two bathrooms along the western elevation facing No.6.  The revised scheme was prepared for the purposes of the hearing as Mr Stanborough acknowledged in examination in chief.  He said that following advice from counsel in August 2011 his solicitors had advised him to look at an alternative scheme excluding the burdened land.
95.	I am satisfied that the applicant intends, and is able, to redevelop No.10 but I am not persuaded that the revised scheme would necessarily be the alternative form of redevelopment to the preferred scheme.  I treat it, when considering the practical benefits secured by the restriction, as a realistic possibility, not the overwhelming likelihood suggested by the applicant.  Under these circumstances, and given the uncertainty surrounding its implementation, I do not attach significant weight to the revised scheme.  It is a moot point whether this conclusion is sufficient to trigger the concession that Mr Morshead made in his opening (see paragraph 47 above), but on balance I do not think that it does and I have therefore continued to examine whether the restriction, in impeding the preferred scheme, secures to the objectors practical benefits of substantial value or advantage.
96.	In considering those practical benefits I have had regard to the use that the objectors make of the benefited land which they and their family have owned for more than 30 years.  Plot No.4 has now been integrated into the garden of No.6 but still retains a characteristic identity, being generally on a higher terrace than the original garden.  The objectors, who are all retired, make full and regular use of the benefited land which houses the garden room.  To all intents and purposes this is fitted out as a large, fully furnished lounge and it is wholly different in scale and character to a typical summer house.  I am satisfied on the evidence that the objectors place considerable importance on the peace and tranquillity of the setting as well as the specific sea view to the south east.  They have expressed the intention to remain at the property and they have no desire to move or to sell plot No.4.  They have consistently opposed the grant of planning permission for the various schemes leading up to, and including, the preferred scheme.  I have no doubt that they would also vigorously oppose the grant of planning permission for the revised scheme.
97.	Clause 4 of the 1955 conveyance said that the intention of the restrictive covenants contained in the Second Schedule was to “protect the property” conveyed under that conveyance.  The principal purpose of restriction 2 was, in my opinion, to protect the views towards to sea from the land that was sold under the 1955 conveyance.  Mr Cubberley accepts this in terns in his witness statement.  Mr Weekes submitted that the purpose of the restriction was not limited to protecting that specific view but was also intended to protect the visual amenity of plot No.4 generally.  I accept that argument, based on the wording of clause 4 of the 1955 conveyance, but nevertheless place more weight upon the protection of the view to the south east.  Other practical benefits which are secured by the restriction, such as visual amenity, noise and density of development, can be taken into account but they may be accorded less weight.  In Shephard Carnwath LJ said at 625 [41]:
“The purpose of the present restrictions is also apparent on their face: in summary, to preserve the character and environment of the Close, by limiting density, preventing disturbing activity, and restricting building and other clutter in the garden areas in front of the houses.  Notably absent is any restriction designed to protect the continuity of the facades.  “The largely unbroken façade” may be an attractive feature of the Close, but its protection is not part of the contractual scheme of which the restrictions form part.  At most it can only be an incidental and uncovenanted benefit of the achievement of the other contractual objectives.  That does not mean that such a benefit is irrelevant.  It does however mean that it is a factor which the Tribunal is entitled to give less weight in the overall judgment of substantiality.”
98.	The main view from the octagonal garden room at No.6 is south eastwards towards the sea.  The parties helpfully erected two scaffolding poles on the application land to assist my understanding of the height and southward extent of Unit 3 under the preferred scheme.  Inside the garden room looking towards the sea the preferred scheme would not impede the view, although it would be visible from some of the other windows.  The visual impact is greater from outside the garden room on that part of plot No.4 that now forms the upper part of the garden to No.6.  The further north on plot No.4 one goes the more the preferred scheme comes into the line of sight of the sea view.  
99.	Although the preferred scheme would not directly interfere with the view of the sea from the garden room or from the southern end of the benefited land, it would nevertheless, in my opinion, detract from that view further to the north and would adversely affect the visual amenity and quiet ambience of plot No.4 generally.  While I do not share Mr Weekes’ colourful description of the preferred scheme as being akin to a “hideous spaceship” having landed next door I do think that it would indeed be a stark contrast to the existing outlook. It would, as Mr Weekes said, “strike to the heart” of the existing amenity enjoyed by the objectors on the benefited land, the visual focus of which is towards the boundary with No.10.  In my opinion the restriction, by impeding the preferred scheme, does secure to the objectors practical benefits of substantial advantage when those benefits are considered together, including the incidental benefits identified by the objectors.  In reaching this conclusion I have taken into account the matters identified in section 84 (1B) of the 1925 Act.
100.	Having determined that the restriction secures practical benefits of substantial advantage to the objectors it is not necessary for me to comment in detail upon the evidence about value.  It is sufficient that I summarise my conclusions on the main valuation points which I do below:
(i)	I do not consider that the negotiated share approach is appropriate in this instance.  In Winter the Court of Appeal said that it is a possible approach in circumstances where a simple estimate of the diminution in value of the objectors’ property is unlikely to be a fair reflection of their subjective loss.  If a percentage is used in such cases it is likely to be at or around 5%.  Mr Wetherall used 33% based on the Stokes approach.  I do not think that this is a reasonable method to adopt and it is not one which reflects the practical benefits secured by the restriction.
(ii)	I reject Mr Bevans’ opinion that the preferred scheme would have no effect on the value of the benefited land.  He considers the question in the context of a hypothetical sale of the benefited land to a third party in the absence of a right of way.  What should be determined, in my opinion, is the amount of value secured by the restriction to the persons who have the benefit of it, namely the objectors, given the factual context in which the benefited land is owned together with No.6.  As was stated in Winter at [35] it is the measure of the subjective loss of the objectors that should be assessed.
(iii)	The effect of the preferred scheme on the value of No.6 (the chalet-bungalow) is not relevant since it does not have the benefit of the restriction.  It is only the effect of preferred scheme on the benefited land that should be considered.
(iv)	Mr Wetherall’s alternative valuation of the benefited land is on the basis that it is a residential redevelopment site.  Mr Wetherall conceded that he is not a planning expert and his views are speculative and unsupported by expert planning evidence.  Indeed Mr Jobbins produced cogent arguments why planning permission would not be granted for a house at plot No.4.   I do not accept that plot No.4 should be valued as a development site.  
(v)	There was no agreement between the parties about the value of the benefited land.  Mr Bevans accepted that the value of the objectors’ total land ownership was £1.75m and that the effect of the preferred scheme on that total land ownership would be to reduce it by £0.3m to £1.45m.  Mr Wetherall said that half of this diminished value, or £0.15m, was attributable to the benefited land.  
(vi)	In my opinion the sum of the values of plot No.4 and 6 Minterne Road when valued separately would be less than their value as a combined site.  In other words the combination of the sites creates marriage value.  There is only indirect evidence of the value of plot No.4 on its own (other than as a redevelopment site).  This shows a value of £0.5m, being the difference in the figures that Mr Wetherall gave for the value of the combined site (£1.75m as agreed by Mr Bevans) and the value of No.6 on its own (£1.25m but not so agreed).  Adopting this figure in the absence of any other evidence (and which I take to include any marriage value) then if the restriction were modified to allow the construction of the preferred scheme I consider that it would be reduced by 10% or £50,000.  In my opinion this would represent a practical benefit of substantial value secured by the restriction in impeding the preferred scheme.
Decision
101.	The applicant has not succeeded in establishing ground (aa) in respect of restriction 2 and the application is therefore refused.  A letter on costs accompanies this decision which will take effect when, but not until, the question of costs is decided.  The attention of the parties is drawn to paragraph 12.5 of the Practice Directions of the Lands Chamber of the Upper Tribunal dated 29 November 2010.

Dated 9 February 2012

A J Trott FRICS

Addendum on Costs
102.	I have now received submissions on costs from both parties.  
103.	The objectors argue that they have been successful in opposing the application and deny that they have acted unreasonably.  They accept that the original valuation prepared by the objectors personally, before obtaining expert valuation evidence, was high but argue that the evidence of both parties on the point was effectively overruled by the Tribunal’s decision.  The objectors submit that the applicant was unreasonable in producing the revised scheme late in the proceedings.  They say that there were no offers of settlement that were relevant.  The objectors ask for their costs on the standard basis and seek a payment on account of £55,000 (out of an estimated total of £85,000) within 21 days of the date of the decision.
104.	The applicant submits in the alternative that the objectors have acted unreasonably; or even if they have not so acted that in the circumstances of the case they should not receive their costs in full; or in respect of 6 Minterne Road the provisions of Practice Direction 12.5 should not apply.
105.	The applicant says that the objectors were unreasonable in three respects:
	(i)	They were late in raising the argument that 6 Minterne Road had the benefit of the restriction.  The objectors failed on this issue.
	(ii)	They exaggerated their claim in their notice of objection.  Their expert, Mr Wetherall, supported this exaggerated claim in his evidence.
	(iii)	On 18 March 2011 the applicant made an offer (lodged with the Tribunal as a sealed offer) to redesign Units 2 and 3 to reduce the height of the flank wall to below the height of the boundary hedge.
106.	Even if the objectors did not act unreasonably this is not a case where the usual presumption in paragraph 12.5 of the Tribunal’s Practice Directions should apply given the above matters and the findings of fact and law which the Tribunal made.
107.	The attempt by the objectors to annex the benefit of the restriction to 6 Minterne Road was not particularised in full until the filing of their counsel’s skeleton argument.  The issue should have been dealt with as a preliminary issue in which case the provisions of Practice Direction 12.5 would not have applied; per Carnwath LJ in Winter at paragraphs 20-22.
108.	The applicant submits that the Tribunal should exercise its discretion and disallow the element of the objectors’ costs in respect of those issues where they were unsuccessful.  It argues that the appropriate order should be that the applicant should pay a proportion of the objectors’ costs and that the appropriate proportion should be 65% assessed on the standard basis.
109.	The applicant opposes any payment of costs on account to the objectors because there is nothing to corroborate the objectors’ assertion that they are living off income from (unspecified) capital and their costs are said to be estimates.  Alternatively any payment on account should be limited to the sum of £25,000.
110.	Three sealed offers were made by the applicant.  The first, referred to in paragraph 105(3) above, was made on 18 March 2011.  Apart from providing details of a compromise scheme design that letter also offered a payment of £25,000 to the objectors “in full and final settlement of their claims and to withdraw their notice of objection on the basis that each party pays their own legal costs”.  The second offer was made on 17 October 2011 and was in the sum of £30,000 together with payment of the objectors’ legal costs.  The offer was time limited until 25 October 2011.  The third offer was made on 8 November 2011 and was in the sum of £60,000 together with payment of legal costs.  The offer was time limited until 10 November 2011.
111.	In my opinion the failure of the objectors to accept any of these sealed offers is not relevant to the issues in the case.  They were opposed to the application in principle and produced cogent arguments why the revised scheme was not acceptable.
112.	While the objectors succeeded in their objection, there are two aspects of the case where they were unsuccessful.  Firstly, in their argument that the benefits of the restriction should be considered by reference to their total land ownership, including 6 Minterne Road, and, secondly, in Mr Wetherall’s valuation evidence which he based upon the negotiated share approach.
113.	The objectors argue that the issue about whether No.6 had the benefit of the restriction was a matter of legal submission only and added little to the costs of the hearing.  But those submissions took up a significant part of the hearing and required the preparation of a supplementary report by Mr Wetherall involving new evidence and the preparation of photo montages.
114.	Mr Wetherall persisted in pursuing a negotiated share approach despite his professed acquaintance with the Court of Appeal’s decision in Winter.  I found that this was not a reasonable approach under the circumstances (see paragraph 100(i) above).  Mr Wetherall’s initial valuation had included the unexplained use of a multiplier of three (based solely it seems upon “valuer’s intuition”) which he, correctly in my opinion, abandoned in his supplementary report.  I did not generally find Mr Wetherall’s evidence to be helpful and his persistent use of the negotiated share approach to give what he described as “an equitable amount” did not, in my opinion, reflect an objective approach to the required valuations.  His alternative approach was based upon the assumption, found to be erroneous and, by Mr Wetherall’s own admission, not based upon any planning expertise, that No.4 could be developed by a house.   Again I do not think that this demonstrates the necessary objectivity of approach.    
115.	I am invited by the applicant to award only a proportion of the objectors’ costs.  In view of the fact that the objectors were not successful on the issues outlined above and given their expert’s unreasonable persistence with the negotiated share approach I agree with that proposal in principle.  However I do not accept that the objectors should only receive 65% of their costs.  In my opinion the objectors should receive 85% of their costs, such costs to be assessed by the Registrar on the standard basis unless agreed.
116.	The objectors have asked for a payment on account.  They are both retired persons but their financial circumstances are not known and their actual (as opposed to estimated) costs have yet to be finalised and substantiated. I do not consider it appropriate to order a payment on account before the costs are agreed or assessed.  In any event there is doubt whether this Tribunal, under its own rules, has the power to order a payment on account in the circumstances of this case.  The application of the Civil Procedure Rules (under which payments on account can be ordered) under rule 10(5)(c) of the Lands Chamber Rules only applies, in my opinion, where an application is made to the Senior Courts Costs Office for the detailed assessment of costs.  
Dated 29 February 2012
A J Trott FRICS