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Restrictive covenant – costs against objector! Print
The Lands Tribunal can order that ‘the costs of any proceedings before it is incurred by any party shall be paid by any other party’. But, special rules apply in respect of restrictive covenant applications under s84 LPA 1925, although it is usual that an unsuccessful objector will not be ordered to pay the costs of the successful applicant. However, if the objector has acted unreasonably, or there has been an offer made to settle that has not been accepted, then costs may be ordered against the unsuccessful objector. That practice was confirmed in a PD of May 2006.

We now have the first reported case in which that discretion has been exercised, with an objector being ordered to pay the applicant’s costs. It is a decision that may well be quoted extensively in the future. The case was unremarkable, involving a building that was subject to restrictive covenants dating back to 1948, and in particular a restriction imposing a 50ft building line from the road (as well a restriction on the number of storeys). An application for redevelopment was made but this merely involved moving the building line 10ft, and also converting existing loft space into bedrooms (ie these were not major changes). However, a local solicitor lived in a house that formed part of the previous estate. Whilst she did not object to the application for planning permission, she did object when the developers applied to the Lands Tribunal to modify the restrictive covenants. She withdrew that objection three months later but was ordered to pay the developers’ costs. The point here was that the developer behaved entirely reasonably, whereas the objector behaved unreasonably throughout. The proposed works had no tangible impact on her, and the clear evidence was that her motivation was merely to maximise the amount of money she could generate from the situation. As a note in the Property Law Journal says, the judgment is a clear signal that an objector whose predominant motive in opposing proceedings for the modification or discharge of restrictive covenants is the extraction of a large sum of money, even though the objector is scarcely affected by the development in question, is at risk on costs. See note on Nester v Stuart [2007] in [2007] EWLandsLP 53 2005; in [2007] 194 Property Law Journal 18. © Practical Lawyer

September 2007
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