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Restrictive covenant – costs against objector! |
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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
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September 2007 |