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How much protection does a protective covenant provide?

The family weekend cottage, together with its close neighbours, enjoys uninterrupted views from a rare Suffolk hilltop, over farmland to the village in the valley below, writes Kim Franklin.

The nearest residential outcrop, a smart cul-desac of modern detached houses, is shrouded by shrubs and trees. Even the view of the church is masked by several sizeable dark Lebanon cedar trees. It is very lovely. But lately the neighbours have been getting twitchy.

The field, which lies between them and the village, has been earmarked as 'the next to go'.

Certain that no arable farmer would be able to resist the lure of developers' millions, it has been suggested that the neighbours buy the field to protect their view. They would gladly agree to a restrictive covenant against development of any kind - that, after all, is the whole point. But how effective are such covenants, if, for example, the planners are prepared to permit the development, and what can the holder of the covenant do if it is breached?

These points were considered in a surprising judgment by the Court of Appeal in the case of Mortimer v Bailey (judgement 29.10.04). The Mortimer family owned The Heugh and The Old Barn, adjoining properties in North Yorkshire. When Gary Mortimer wanted to sell The Old Barn to the Baileys, he entered into a covenant with the owners of The Heugh, binding on the property and its subsequent owners, not to carry out additions or alterations to The Old Barn without the prior written approval of the Mortimers. Their approval was not to be withheld unreasonably.

In 2000 the Baileys wanted to extend The Old Barn. The Mortimers described the proposals as 'horrendous', not least because the extension would cut off their light and close them in. The Baileys concluded that the Mortimers were acting unreasonably and would never approve any development. They decided to go ahead with their plans without their neighbours' consent.

Despite the Mortimers' objections, planning permission was granted. The planning officer, who recognised that the extension would reduce direct sunlight into the kitchen, would not refuse permission on those grounds. Work started in June 2003. The Mortimers' solicitors required the Baileys to cease work immediately, failing which legal proceedings would commence. The Baileys relied on the granting of planning permission and carried on. In late July, when the works were some seven days from completion, the Mortimers applied for an interim injunction to suspend the works temporarily while their application for a permanent injunction was brought before the court. The judge refused the interim injunction, but said that had the application been made earlier it might have been different.

The application for a permanent injunction was heard later that year. The judge found that the Mortimers had not been unreasonable in their objections. The loss of direct sunlight during the winter afternoons was a significant matter which alone justified the refusal. Furthermore, planning considerations were quite different from those that affected the Mortimers.

Two experts in the case both agreed that the extension had an adverse effect on the value of The Heugh. The judge calculated the financial loss to the Mortimers to be in the region of £40,000, but concluded that damages of that level would not represent adequate compensation for the Baileys 'riding roughshod over their rights'. The Baileys, he said, had 'taken an enormous and costly gamble, and had lost'. He ordered that they restore The Old Barn back to its former state.

The Court of Appeal, upholding the decision, said that, had the Baileys been sensible, they could have found out, by reference to the court if need be, whether the restrictive covenant applied or whether consent had been unreasonably withheld. They took a chance that the Mortimers had been unreasonable and lost. The short delay in applying for the injunction did not affect this and the order requiring demolition and restoration of The Old Barn was reasonable.

This decision, it seems, offers hope for the Suffolk neighbours and others who want to use restrictive covenants to protect their view.

Kim Franklin is a barrister and chartered arbitrator at Crown Office Chambers. Visit www.

crownofficechambers. com

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