Zenios v Hampstead Garden Suburb Trust Limited

This is an appeal brought with permission granted by Mummery LJ on 3 May 2011 against a decision of the Lands Chamber of the Upper Tribunal, (Mr Bartlett QC President) dated 15 December 2010 by which the tribunal dismissed the appellants' application made under section 84(1) of the Law of Property Act 1925 for the modification of a restriction contained in a transfer of the freehold interest in the appellants' property and also in a scheme of management to which I will refer. The application was made in order to allow the appellants to construct a first floor extension over their garage.

The property in question is a substantial house at 25 Ingram Avenue in the Hampstead Garden Suburb. The President described Hampstead Garden Suburb in paragraph 4 of his judgment as follows:

The "present body" there referred is a company of the same name incorporated in 1968 following the coming into force of Part 1 of the Leasehold Reform Act 1967. It is the respondent to this appeal. Its principal object is to maintain and preserve the character and amenities of the suburb.

The right of enfranchisement given by the 1967 Act had obvious implications for the character of estates of dwelling houses let by a single landlord where, under the Act, the houses in the estate might pass to individual freehold owners. This was confronted in the statute by measures described by the President as follows at paragraph 6:

Paragraph 7 of the President's judgment :

Ingram Avenue is in an area added to the original suburb after acquisition by the Trust in 1930/1931. Many of the houses including No. 25 were designed by Soutar. No.25 was built in 1933. The majority of the houses have flat roof garages to the side. At two of them, Nos. 11 and 17, a first floor has been constructed above the garage. The restriction in question in this case is contained in a transfer of 9 March 1979 and so far as relevant provides that without the consent of the Trust:

The scheme of management authorised, as was explained by the Minister, contains this:

There is a little more history relating to the Hampstead Garden Suburb. It is described by the President at paragraphs 24 to 26:

Section 84(1) of the Law of Property Act 1925 allows the tribunal to modify or discharge in whole or in part the terms of a restriction such as that which applies in this case if certain conditions are met. Section 84(1C) allows that to be done if the tribunal is satisfied that the modification sought will not injure persons entitled to the benefit of the restriction. Section 84(1) (aa) applies "in a case falling within subsection (1A)”. If the continued existence of the restriction would impede some reasonable user of the land for private purposes, section 84(1A) and (1B) provide as follows :

The applicant had undertaken substantial works at number 25 quite aside from the first floor extension to the garage which they seek to construct. Ms Foster showed us plans and pictures. The appellants have remodelled the front elevation with a new porch, new dormer windows, built a single storey side extension, rebuilt a rear side extension, created a new dormer window in a second storey bedroom and constructed a substantial basement.

On 12 December 2006 the appellants applied to the London Borough of Barnet for planning permission and to the respondent Trust for consent under the transfer of the scheme, for the construction of a first floor extension over the garage. Because the property is within a conservation area the council in considering the planning application was required under section 72(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990 to "pay special attention to the desirability of preserving or enhancing the character of the area". They have a conservation officer and a Hampstead Garden Suburb Consultation Area Advisory Committee ("CAAC") to give advice. Moreover in 1994 the London Borough of Barnet and the respondent Trust produced a joint design guidance. It is stated to have been produced to ensure that "any advice given by both bodies is consistent”.

This is an aspect of the documentation upon which Ms Foster this morning laid particular emphasis. The guidance stated that, at least generally, planning permission should not be granted for "extensions above existing garages". The CAAC advised that the appellants' proposed first floor extension was "badly proportioned and inaccurately illustrated" and recommended that permission be refused on the ground that the development " conflicts with all guidance on two-storey side extensions".

The council's conservation officers had either not been consulted or had no comment to make. The note of a telephone conversation does not make it entirely clear which. The officers' report on the application, while noting the CAAC view, nevertheless stated that the proposal "would not detrimentally impact on the character of the house or the conservation area" and would be "in keeping with council policies and design guidance". On 19 April 2007, acting under delegated powers, a planning officer granted planning permission. However, the respondent Trust for its part refused consent on 15 May 2007.

The grant of planning permission was subject to a condition that the development be commenced within three years. On 18 January 2010, that not having been done, the appellants applied for a further permission. It seems that on this occasion the conservation officer was consulted. Planning permission was granted on 1 March 2010. The Trust's refusal of consent was, however, seemingly maintained. Hence the application to the Upper Tribunal pursuant to section 84(1).

There is no contest, as I understand it, but that the restrictions continuing in force would impede some reasonable user of land for private purposes. The first floor extension would constitute such a user. Accordingly the issue on Section 84(1) (aa) was as to the applicability of Section 84(1A). The President succinctly described the case for the respondent Trust as follows (paragraph 13):

It was submitted to the tribunal for the appellants that the proposal was by no means inappropriate in design terms, the President observing, correctly in my judgment, that :

One issue before the Upper Tribunal which is also very much alive on this appeal concerns the nature of the Trust's interest. Its case was, as recorded by the President at paragraph 17, that the disadvantage which would be occasioned to it by the development was in its role of capacity as guardian of the public interest. Observations of Fox LJ in Re Martin [1998] 57 P&CR 119 at 126 were relied on as effectively applied in Re Willis [1997] 6 P&CR 97 see page 114. The President accepted that the Trust's interest was that of the public interest. The appellant says by Ms Foster QC that this conclusion was not open to the President and I shall return to it. A linked point was the submission (paragraph 34 of the skeleton) that the Trust's decision whether or not to consent should largely be driven or at least heavily influenced by the council's grant of planning permission. In fact Ms Foster submitted this morning that in the circumstances of this case the grant of permission should have concluded the question for the purposes of the Trust's function. The President effectively concluded that it was for the Trust to reach its own independent view. This debate has been at the centre of the submissions in the argument this morning.

In considering the environmental effects of the proposal, the President referred to and relied on the evidence of a Mr Velluet, a chartered architect, who gave evidence for the Trust. The president described his evidence at some length at paragraphs 37 to 39. I will just set out paragraph 38 and the first sentence of 39:

By contrast Mr Pask for the appellant said (paragraph 40 of the judgment):

There follows a passage (paragraphs 43 to 45) in which the President also accepted the Trust's case that the development if allowed would constitute a deleterious precedent. In this passage the President referred to the evidence given for the Trust by Mrs Blackburn, who was also an architect. She figures in one of Ms Foster's submissions.

I may now turn to the grounds of appeal. The first ground is compendiously expressed as follows in Ms Foster's junior’s skeleton:

As will be apparent from that formulation, this ground embraces a number of points. It is convenient first to take the submission that Mr Velluet's evidence, accepted as I have said by the Upper Tribunal, proceeded upon a false basis of fact and the Upper Tribunal failed to appreciate as much. The alleged error was that No. 25 is not a surviving original property as designed by Mr Soutar. It had been much modified by the appellants, as I have described, and Mr Velluet appears not to have appreciated the fact or at any rate not to have acknowledged it. Mr Velluet had indeed described the house in his report or statement as "a surviving original property" -- Ms Foster showed us the document. But so it was, subject of course to such modifications as had been carried out. In their joint report Mr Velluet and Mr Pask agreed that the house had been "subject to physical modification". It is beyond reasonable contemplation that Mr Velluet somehow was unaware of the fact or had forgotten it. The President's reasoning owes nothing to any perception that the house had not been modified and it follows that this point is at best marginal in any event. However, in refusing permission to appeal to this court the President himself said this :

I see no basis on which the court can go behind those observations of the President. It follows there is nothing in the point relating to Mr Velluet. I should add that Ms Foster, entirely rightly in fairness to her junior, was at pains to point out that although Mr Zwart may have said nothing about the point in closing it was indeed referred to in opening. If that be so I readily acknowledge it.

It is next suggested under the first ground that the Upper Tribunal misunderstood and in consequence undervalued the 2010 planning permission, effectively treating it as a mere rubber stamp for the continuance of the expired 2007 permission. In his judgment at paragraph 33 the President said this :

This narrative is in my judgment a very far distance from a conclusion to the effect that the local planning authority had unlawfully fettered its own discretion in 2010 by simply waiving the renewed application through. In my judgment the President neither so held nor manifestly was it the case. Ms Foster also points to the fact that for the 2010 application the council had the advice of their Conservation Officer and no doubt they did.

In any event, as it seems to me, points as to the soundness or integrity of the grant or grants of planning permission ought to be viewed in the context of the second ground of appeal to which I will come shortly. First, still under the first ground, there is an argument as to the President's approach to precedent. As I have said, the President accepted the Trust's contention that the proposal would constitute an undesirable precedent. In the course of doing so he said this:

The appellants submit (see paragraph 39 of the skeleton) that communal decisions do not set a precedent, but it seems to me to be plain that the Upper Tribunal was not purporting to create any legal precedent and was by contrast entitled to consider this proposal's likely precedent effect as a matter of fact, as is often done in planning appeals. The President's conclusion on the point is in my judgment free from legal error. This includes his treatment of Mrs Blackburn's evidence. The appellants say she was only called as a witness on and only gave evidence of fact, but the President treated her as an expert. However, clearly she had detailed local knowledge and the President was entitled to consider that to be a helpful resource.

Ms Foster submits that there was no evidence for the President's conclusion on this aspect of the case. However it seems to me as I have said he was entitled to rely on Mrs Blackburn's judgment on the matter. I have considered the reasoning of HHJ Reid QC in Vertical Properties Limited[2010] UKUT 51 (LC) to which Ms Foster referred in the course of her submissions. Particular passages are at paragraphs 144 to 146 and 148 to 149. The case was concerned with another house, indeed the next door house, No. 24 I think, in Ingram Avenue. However, the judge's observations in that case are largely fact sensitive. His reasoning does not seem to me to undermine the President's conclusions. While it may be said there is no factual history of similar developments at Ingram Avenue or very little, the President was here undertaking a judgment assessing the position in the light of Mrs Blackburn's evidence as to the possible or likely impact of this proposal. It seems to me he was entitled to conclude as he did.

Overall, in relation to the first ground of appeal I would reject Ms Foster's suggestion that this is a case in which the Upper Tribunal arrived at a perverse conclusion. The President has carefully and properly rehearsed the reasons why he considers that the application under section 84 ought to fail. They are all matters of planning merit. They are based on the evidence which the President heard. Another tribunal might perhaps have come to a different conclusion. The President in my judgment was entitled to arrive at the one at which he did.

I turn to the second ground of appeal, which is articulated in the skeleton as follows:

This ground seems to me to have some connection with the points made under the first ground as regards the force of the local planning authority's grant of permission. The principal argument on this ground is that the Upper Tribunal mischaracterised the Trust's role or function as "guardian of the public interest". It is said that the Trust is not a public body and therefore not "capable as a matter of public law" of being a guardian of the public interest. The source of its legal power is essentially contractual. The statutory scheme, says Ms Foster, tends against the possibility that the Trust has a freestanding role to play in circumstances where the facts before it and the facts before the local authority when an application for permission is made are the same.

In the case of Martin to which I have referred in passing, dealing with a like legislative scheme, Fox LJ said this at page 126:

The respondent Trust also cites (see Mr Weekes' skeleton argument) Willis’s Application [1997] 76 P&CR and Thames Valley Holdings Limited's Application [2010] UKUT 325. With respect I need not set out any text from those authorities. The case of Martin I note was the subject of some doubt expressed by Carnwath J as he then was in Cardiff City Council [1998] 3 PLR 55 to which Ms Foster took us in the course of her submissions.

I am unable to accept Ms Foster's argument. First, the question is not whether the Trust is a public body such that it might be amenable to the judicial review jurisdiction. It seems to me plain that, as a matter of fact, the Trust's powers of control over applications to set aside restrictions such as here in play exist for the preservation of maintenance of the amenities of the suburb. So much is stated at paragraph 31 of the Trust's Memorandum of Association, which Ms Foster showed us. Ms Foster accepted, so far as it went, that this was so, but in my judgment that amounts to an acceptance also that the Trust's duty was to consider and act for the promotion of the public interest, not in some sense the general public interest, obviously and not the national public interest; not even perhaps the London wide public interest, but certainly the public interest in the amenities of this area.

This brings me to the question which is at the centre of the second ground of appeal, whether the Trust is to arrive at its own decision on an application of this kind or effectively be driven by the local planning authority's view of the planning merits. In my judgment the President was right to conclude that the Trust has its own decision to make. The planning authority's decision falls to be considered but should not drive the decision to be made by the Trust. Ms Foster does not accept this. She submits that where the considerations before the Trust and the local planning authority are identical, where that is there are no separate or special supervening circumstances for the Trust alone to consider, then the Trust must bow to the planning authority's view expressed in the grant of planning permission. She said, in answer to a question from Black LJ, that if the Trust had disagreed with the grant of permission, then they may seek judicial review. That would not of course, in the ordinary way, give the Trust any voice on the factual merits. I see nothing in the scheme of management to justify a construction of the power to refuse consent which contemplates that the discretion so to refuse may be wholly fettered in some or any circumstances. I see nothing in the amendments to section 84, that is section 84(1)(aa) and section 84(1A) and 1B, which supports Ms Foster's position. Nothing in Shephard v Turner [2006] 2 P&CR 28 to which Ms Foster went this morning, in which the amendments are discussed at paragraph 16 and following, seems to me to assist the appellants. There is, in my judgment, nothing unorthodox or eccentric in a state of affairs where there are two controls, the local planning authority and the Trust, rather than just one upon the implementation of proposals such as that before the Upper Tribunal here. Moreover if it was intended that the view of the local planning authority should prevail as a matter of principle in the hard-edged manner submitted by Ms Foster, one would expect that to be provided for in terms in the legislation.

I would therefore reject the principal argument advanced by Ms Foster on the second ground of appeal.

I would also hold that, on the true construction of section 84(1A), the reference to the circumstance that money might not be an adequate compensation for any loss or disadvantage is simply a condition for the satisfaction of Section 84(1) (aa), so that in this case that condition is not met since the damage to the public interest represented by the Trust could not sensibly be compensated by money. The Upper Tribunal accepted this construction at paragraph 13. I am, with respect, not assisted by Ms Foster's reference to Stockport MBC v Alwiyah Developments 52 P&CR 278. Loss of an amenity such as a view or a vista may perhaps be compensatable in money where the loss is that of an individual, but it is quite another thing to postulate an award of compensation to a representative body guarding the public interest, as I have held the Trust may properly be described.

For all these reasons, then, I would reject the second ground of appeal as I have rejected the first and for my part dismiss the appeal. I would add only that it is as well to have firmly in mind the proper scope of an appeal such as this. It is an appeal on law only: see the Tribunals, Courts and Enforcement Act 2007, section 13(1) and 2.

I agree.

I also agree.