Carl Edward Williams v Aaron John Thompson-Hall & Ors

Mr Carl Williams (‘the Applicant’) and his wife Susan own and live in The Old Coach House (‘the Property’), part of which they have used for paying guests on a bed and breakfast (‘B&B’) basis. Additionally, the Applicant has run his building and latterly, site supervision businesses from the Property. These activities breach a restrictive covenant preventing business use of the Property. Mr and Mrs Thompson-Hall and Mr and Mrs Thompson (‘the Objectors’) own and live in the neighbouring Ystrad Hall (‘the Hall’). They have the benefit of the covenant.

The application seeks the discharge or modification of the covenant to permit the resumption of the B&B use. As I will explain later in the decision it is the Applicant’s contention that the use of the Property as an administrative base for his site supervision business does not breach the covenant.

I inspected the Property and the Hall on the afternoon of 21 April 2026. I viewed the rooms used by the bed and breakfast guests and the remainder of the house. I also inspected the grounds which contained, amongst other things, two shipping containers used for the storage of tools and building materials, a dilapidated single storey building, a small stable block, and multitudinous piles of bricks and other construction supplies. Having noted the spatial relationship between the Property and the Hall I then inspected the internal parts of the Hall and its extensive gardens.

At the hearing the Applicant was represented by Mr Peter Dixon who called Mr Mark Bullock BSc MRICS to provide expert evidence. Mr Mark Simeon Jones represented the Objectors and he called Mr D Huw Thomas BSc FRICS FCABE MEWI as an expert witness. I am grateful to them all.

The Property and the Hall are about 0.9 miles north of the centre of Llangollen, a small town in North Wales. The town itself, which is famed for its International Musical Eisteddfod, is about 10 miles south west of Wrexham and 9 miles north west of Oswestry. The A5 trunk road passes through the town and both the Property and the Hall are adjacent to it. The River Dee forms the eastern boundary to both properties.

The Property is a substantial two storey, four bedroom house occupying a site of approximately 0.6 acres. It was originally a coach house serving the Hall. It has red brick elevations and a slate roof.

The Hall is a substantial Victorian house set in grounds of some 6.4 acres which originally included the land and buildings which now constitute the Property. The Hall was subsequently used as a home for disturbed children and as a nursing home. In 2003, the Property was sold to the Applicant and Susan Morris who were later married. Two years later the nursing home closed down.

In March 2013 the Hall was purchased by Mrs Erlinda Parry and her husband David, from NatWest Bank who had acquired it after a previous owner had defaulted on his mortgage. They subsequently obtained planning permission for the Hall to revert to private residential use. In April 2013 the bank sold a further plot of land, to the rear of the Property to the Applicant and Mrs Williams. These various ownerships and the arrangement of the two properties are shown on the plan that follows this paragraph. The plan also shows the route of the driveway (’the Driveway’) which traverses the gardens of the Hall and serves both the Hall and the Property. In April 2025 the Objectors acquired the Hall as a ‘multi-generational’ home and set about a program of refurbishment and improvement. They paid £1,125,000 for the Hall in April 2025.

Having described how the Property and the Hall came into the ownership and occupation of the parties to this dispute, it is useful at this point to record how the applicant has used the Property. When the Property was acquired in 2003 it was in a run-down state and incapable of occupation. While works to renovate the Property were undertaken the Applicant and the then Ms Morris lived in a caravan on the site. This state of affairs continued for 13 years. In 2008 the Applicant established a small building business, Williams Property Services (‘WPS’) which was based at the Property. This involved the storage of building materials and machinery at the Property.

In 2020 the Applicant suffered a shoulder injury which temporarily prevented him from working and in November 2022 he became a site supervisor with J7 Construction Ltd. He now describes himself as ‘semi-retired’ working on an ‘as and when needed’ basis. During the years between setting up WPS and the sale to the Objectors the Applicant said that he undertook building and maintenance work at the Hall for successive owners.

In 2023 the Applicant and Mrs Williams started The Old Coach House B&B having created two en-suite rooms at the Property for this purpose. No other space was made available for guest use at the Property, continental breakfast was served on trays and eaten in the bedrooms, a small table and two chairs being part of the furniture. Guests could, however, relax in the gardens. In common with the owners of the Property, access either by car or on foot, was over the Driveway. On my inspection I was shown a third bedroom and ensuite bathroom as yet unfinished. The Applicant confirmed that it was not intended to let this room although he did acknowledge that his website incorrectly mentioned three letting rooms.

Prior to the acquisition of the Hall by the Objectors, their solicitors sent Mrs Parry a pre-contract enquiry form to complete. The form asked for confirmation that no covenants benefitting the Hall were being breached. She replied in the affirmative. Shortly after moving in the Objectors issued proceedings to enforce the restrictive covenants claiming a declaration, an injunction and damages along with interim relief. The proceedings have been stayed by consent to allow the Applicant to make this application to modify or discharge the restrictive covenants insofar as necessary to permit the uses.

Apart from the works being undertaken by the objectors the only other change to the Hall has been the demolition (in 2016 or after) of a section of the northwestern part of the building containing 12 bedrooms.

The restrictive covenants are contained in the registered title number CYM142084 arising from a transfer dated 9 September 2003 and are as follows:

Section 84 of the Law of Property Act 1925 gives the Tribunal jurisdiction to discharge or modify restrictive covenants affecting freehold and some leasehold land. The section says this:

“(1)

The Upper Tribunal shall … have power from time to time, on the application of any person interested in any freehold land affected by any restriction arising under covenant or otherwise as to the user thereof or the building thereon, by order wholly or partially to discharge or modify any such restriction on being satisfied—

(a)

that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Upper Tribunal may deem material, the restriction ought to be deemed obsolete; or

(aa)

that in a case falling within subsection (1A) below the continued existence thereof would impede some reasonable user of the land for public or private purposes or, as the case may be, would unless modified so impede such user; or

(b)

that the persons of full age and capacity for the time being or from time to time entitled to the benefit of the restriction, whether in respect of estates in fee simple or any lesser estates or interests in the property to which the benefit of the restriction is annexed, have agreed, either expressly or by implication, by their acts or omissions, to the same being discharged or modified; or

(c)

that the proposed discharge or modification will not injure the persons entitled to the benefit of the restriction:

and an order discharging or modifying a restriction under this subsection may direct the applicant to pay to any person entitled to the benefit of the restriction such sum by way of consideration as the Tribunal may think it just to award under one, but not both, of the following heads, that is to say, either—

(i)

a sum to make up for any loss or disadvantage suffered by that person in consequence of the discharge or modification; or

(ii)

a sum to make up for any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it.

(1A)

Subsection (1) (aa) above authorises the discharge or modification of a restriction by reference to its impeding some reasonable user of land in any case in which the Upper Tribunal is satisfied that the restriction, in impeding that user, either—

(a)

does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them; or

(b)

is contrary to the public interest;

 and that money will be an adequate compensation for the loss or disadvantage (if any) which any such person will suffer from the discharge or modification.

(1B)

In determining whether a case is one falling within subsection (1A) above, and in determining whether (in any such case or otherwise) a restriction ought to be discharged or modified, the Upper Tribunal shall take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances.

(3A)

On an application to the Upper Tribunal under this section the Upper Tribunal shall give any necessary directions as to the persons who are or are not to be admitted (as appearing to be entitled to the benefit of the restriction) to oppose the application, and no appeal shall lie against any such direction; …

Importantly, section 84 confers a discretion on the Tribunal; if any of the various alternative conditions in sub-section (1) are satisfied, the Tribunal may discharge or modify the covenant, but it is not obliged to do so.

The application is made under grounds (a), (aa), (b) and (c) on the basis that covenants (b) and (c) are obsolete, that the current uses are reasonable and to impede them provides the Objectors with no benefits or advantages, or no substantial benefits that could not be compensated for by money. The restrictions should therefore be discharged or modified to allow the current uses to be continued unimpeded.

The Objectors say that the covenants are of substantial value and advantage to the Hall, because they preserve the peace, quiet and natural amenity of the Hall, being a substantial property within an Area of Outstanding Natural Beauty. They also restrict the excessive use of the easement of way over the Driveway and excessive use of the Property by imposing a natural limitation upon the number of visitors and frequency of visits by third parties to the Property, using the Driveway as means of access. Consequently, the covenants provide security for the occupiers of the Hall.

The application was made under all of the available grounds in section 84. Mr Dixon accordingly made submissions in connection with each of them, and I will therefore deal with them in order, starting with the question of whether the covenant is obsolete.

The Applicant says that at the time of the transfer to him the Hall was used as a care home and the primary purpose of the covenant was to protect the Hall against competing or incompatible uses. The covenant allows for three dwellings to be developed at the site of the Property and therefore permits three times the level of activity that might be associated with a single dwelling. The Applicant also says that the Hall is no longer used for commercial purposes and the covenants do not therefore protect it from a competing use on a neighbouring site. In that regard the covenants ought to be deemed obsolete.

The objectors refer to Adams v Sherwood [2018] UKUT 411 (LC) where at paragraph 35 the Tribunal (Martin Rodger QC, Deputy Chamber President and A J Trott FRICS) said that:

“In determining whether the 1929 covenant can be discharged under ground (a) it is therefore necessary to consider a number of connected matters.  It is first necessary to identify the purpose or object of the covenant, which may be stated in the instrument imposing the restriction or may be inferred from the nature of the restriction or from the known circumstances.  Next it is necessary to ask whether the character of the property or the neighbourhood has changed since the covenant was imposed.  Thirdly, whether the restriction has become obsolete by reason of those changes, in the sense that the object for which the restriction was imposed can no longer be achieved. Fourthly, and finally, whether some material circumstance other than a change in the character of the property or the neighbourhood has had that effect.”

The Objectors submit that the clear purpose of the covenants was firstly to preserve the peace, quiet and natural amenity of the Hall, secondly to restrict excessive user of the easement of way over the Driveway, thirdly to restrict excessive user of the Property, and finally to impose a natural limitation upon the number of visitors and frequency of visits by third parties to the Property who would us the Driveway as means of access, thus increasing the sense of security enjoyed by the Objectors. In other words, to limit the impact of the occupation of the Property on the Hall.

The Objectors also say that although the character and use of the Hall has changed since the inception of the covenants, it has always been in residential occupation. The demolition of part has in no way altered the proximity of the Hall to the Driveway or lessened the impact of the excessive use of the Driveway on the Objectors. Similarly, neither party has submitted that there has been a change in the character of the neighbourhood.

The covenants have three parts; not to develop more than three dwellings, not to use any of them other than as a home for a single family and not to carry out any trade, business or profession at the Property. It seems to me the overriding objective was to preserve the amenity of the Hall by limiting use of the Property to a residential occupation that was compatible with the use of the Hall as a nursing home, insofar that it did not compete with or disrupt the nursing home business.

Although the Applicant has spent considerable time and money in renovating and enlarging the Property, by any objective measure the neighbourhood has not changed. The use of the Hall has changed from a residential nursing home to a residential house. Both occupations are residential in character and Mr Jones conceded that while the character and use of the Hall have changed to a limited degree, it has always been used for residential occupation. I am not aware of any other material factor which requires consideration.

In my judgement the covenants are still capable of fulfilling the purpose for which they were intended, and they ought not to be deemed obsolete.

The Applicant says that the Objectors have misunderstood the use of the Property made by the Applicant in his capacity as a self-employed site supervisor. The use has been variously described in evidence as a ‘property management business’ and as a ‘base for a building company’. The Applicant says that the Property is simply the place from which he travels to work (and returns afterwards), it is where he administers his self-employment and is a repository for his tools.

Mr Jones submitted that the use of the Property for the purposes of the Applicant’s clerical tasks, if limited to that alone, would be inoffensive, cause no interference with the Objectors’ enjoyment of their property, and indeed go undetected. He went on to say that low level use of a room in a home in connection with a small-scale business is not necessarily inconsistent with residential use. In Hodgson v Cook [2023] UKUT 41 (LC) this Tribunal noted at paragraph [54] that:

“In my view the covenant was not intended to prevent owners from occasionally working from home, alone on a laptop in a spare room. I do not regard such activity as being in conflict with the covenant and for that matter, it does not in my view, offend the second limb of the covenant that the plot should not be used for any other purpose that as one private dwelling. A covenant against carrying on a trade, business or profession in a residential property does not prohibit all activity with a commercial purpose and tasks which are consistent with ordinary residential use which are undertaken in connection with a business which is mainly carried on elsewhere are unlikely to be a breach.”

It is certainly the case that the Applicant has a large quantity of tools at his home and piles of building materials. These may well have been the consequences of running his building business but there is no evidence that he is using either for his current self-employment. I noted on my inspection that he still had works to complete at the Property and the presence of tools and material are entirely consistent with that activity. In my judgement the view the covenant does not impede this the use of the Property as an administrative base.

It is accepted by the Applicant that the covenant impedes the use of the Property for the bed and breakfast business.

Mr Dixon submitted that the use of the Property as an administrative base and as a bed and breakfast operation are reasonable uses. Neither requires planning permission and the residential use of two out of four bedrooms should be seen in the context of the alternative permitted use of the Property as three separate dwellings. The Objectors concede that using the Property for two small business might objectively be considered reasonable but the level of traffic that the businesses generate demonstrated unreasonable use of the driveway.

I agree with Mr Dixon, the proposed uses are reasonable and the lack of a requirement for planning permission for either is indicative of the minor nature of the alterations to the use of the premises.

Mr Jones identified a multiplicity of practical benefits to the Objectors including space, peace, quiet, security, limitation of increased activity and movement of vehicles and unknown third parties. Putting it another way, the uses of the Property made by the Applicants generated increased traffic (vehicular and foot) which caused noise and a loss of security.

Mr Dixon asserted that since the covenant permits the use of the Property as three dwellings he found it difficult to comprehend any real benefit to the restrictions as the traffic flowing from three such hypothetical dwellings would far outweigh the increase that would arise from the Applicant’s occupation with the letting rooms used for a third of the year.

Mr Jones challenged this approach, submitting that the Tribunal should not assume the worst case scenario but rather the assessment to be undertaken is one of examining the practical benefits of the restriction in the context of the actual breach. In this connection he relied upon Lord Oliver’s comments in Stannard v Issa [1987] AC 175 where at 188 E he said:

“The question is not “what was the original intention of the restriction and is it still being achieved?” but “does the restriction achieve some practical benefit and if so is it a benefit of sufficient weight to justify the continuance of the restrictions without modification””

Mr Jones also said it was absurd to imagine that a further two houses might be built at the Property. Although neither party submitted any planning evidence, at the hearing the Applicant confirmed that a planning appeal had been necessary to gain planning permission for the conversion of the original coach house, and it therefore seems unlikely that planning permission for two additional houses would be readily granted.

Mr Dixon provided a worked example of the number of vehicular movements that could be expected if the Property were to be occupied by a multigenerational family (in the same way as the Hall), and the result was up to 30 journeys a day over the Driveway. Both parties had kept logs of vehicular movements. The Applicant appears to have simply counted the different vehicles that entered the grounds of the Property whereas the Objectors logged every in and out movement as separate items. The data compiled by the Applicant showed that in the period from 1July to 30 September 2025 the lowest and highest number of vehicle movements per day was 0 and 6 respectively. The average, which included 18 days when the Applicant and Mrs Williams were themselves on holiday, was 1.86. By way of comparison, admittedly over a shorter period, the first 18 days of November produced low and high figures of 0 and 3 and an average of 1.5. These figures show the difference between the high and low seasons.

The Objectors’ vehicle logs compiled from their CCTV showed a very different picture. The figures were based solely on September but showed a range between 0 and 22 movements. The average was 9.23. I have found some difficulty in correlating the two sets of data. For instance, on 18 September the applicant recorded no movements, but the objector noted 22. The following day, when the Objectors record 21 movements, by cross referencing to the Applicant’s data, 8 of the movements seem to relate to B&B guests, 4 to friends of the Applicant, 6 to deliveries, 2 to the Applicant himself and one other was unidentifiable. In other words, 38% of the movements related to B&B guests and the remaining 62% were the consequences of normal day to day life at the Property.

The Objectors’ CCTV also picked up the pedestrian movements. Ignoring the Applicant and Mrs Williams walking their dogs, during September 2025, there were 12 instances of individuals walking either to or from the gate on to the main road. The identities are obviously not known but looking at the time stamps they appear, in the main, to be B&B guests walking into Llangollen for dinner and then returning later. Others appear to guests going for a morning jog.

Mr Jones and Mr Thomas referred to a loss of peace arising from an increase in vehicular traffic. Nothing was adduced in evidence to support this proposition but Mrs Thompson- Hall asserted in her witness statement that after moving in she and her family discovered that life at the Hall ‘was far from peaceful’.

Mrs Thompson-Hall described her family’s privacy as being ‘greatly compromised’ by the activities of the Applicant and Mrs Williams. She recalled how drone footage of the Hall was used to promote the B&B business and how the Applicant and Mrs Williams had dismissed her concerns. Guests of the B&B, particularly in the warmer months, frequently walked through the gardens of the Hall, stopping to admire the view or seeking to make conversation with Mrs Thompson-Hall or her family. Others jogged through the grounds or walked through smoking. Guests of the B&B have on occasion called at the Hall, believing it to be the B&B despite signs to the contrary.

Electric gates installed at the entrance to the Hall have proved to be of no practical benefit as any key code for opening or closing the gates would need to be disseminated so widely it would be of no value. Mrs Thompson-Hall said that she and her family have no means of assessing whether someone entering the garden is a B&B guest, part of the Applicant’s property management business, a visitor or an intruder. At night guests of the B&B walk through the grounds with torches but could just as easily be potential burglars. She also spoke of traffic coming and going but also a revolving cast of strangers passing through the gardens and past the Hall on a daily basis.

To assess the impact on the amenity of the operation of the businesses at the Property on the occupants of the Hall it is necessary to differentiate between the activities that can be expected to arise from the use of a shared driveway. It is clear that the traffic generated by the Property is a significant concern for the Objectors. However, the covenant does not prevent normal use by the Applicant and Mrs Williams or their family; it is the additional traffic caused by the businesses that this case is concerned with.

In my judgment the fact that the Applicant is self-employed in a site supervisory role does not amount to running a building company from the Property. He may have been in breach of the covenant whilst running WPS (prior to his injury) but that is a matter for the exercise of the Tribunal’s discretion should the need arise. I accept that the Applicant keeps some tools, equipment and building materials at the Property but I am satisfied with his explanation given in evidence that these are required for this continuing renovation of the Property, its grounds and outbuildings. The fact that some of the Applicant’s work colleagues occasionally visit the Property to pick him up on the way to a site is nothing to the point.

I am therefore just concerned with the traffic generated by the B&B business. The Applicant says that the business operated between mid-February and the end of October but taking in to account the family’s own holiday requirement was typically open for about a third of the year. The purpose was to generate enough income to facilitate his retirement from the building trade. I find the Objectors’ data on traffic movements to be more useful than the Applicant’s despite it covering a shorter period. Bearing in mind that the maximum guest capacity of the B&B is four people it is likely that only two vehicles will visit at any one time. It is also likely that on the day of their arrival there will be one inward journey and the possibility of a journey out and back for dinner. During their stay the probable movement is out in the morning and back in the late afternoon, followed by a journey out and back for dinner. That is consistent with the Objector’s observations. It means that on a normal day of B&B of operations there would likely be eight vehicle movements over a 14 hour period (8.00am to 10.00pm). That equates on average to one movement every 1 hour 45 minutes.

Mr Dixon submitted that the orientation and layout of the Hall was such that the effects of traffic on the Driveway on the use and enjoyment of the Hall were not serious. On the site inspection I asked the parties to measure the distance between the Driveaway and the closest part of the Hall. The measurement was about 10 metres. Since acquiring the Hall, the Objectors had removed fencing enclosing part of the garden nearest the Hall and close to the Driveway. They had also removed much of the planting directly in front of the Hall which would have provided some screening from vehicles using the Driveway. This is, of course, the Objectors prerogative but it seems a curious course of action if privacy is a concern. As Mr Dixon observed, the gardens amount to six acres in total and there is private amenity space all around the Hall which is entirely unaffected by the Driveway.

Mr Jones said that the B&B lettings are arranged in part through third party booking websites means there is no means of filtering or vetting the B&B guests. They will not be interested in forming mutually beneficial neighbourly relations with the occupiers of the Hall. He went on to say that the disruption caused by a constantly changing cast of visitors will be demoralising when experienced on regular basis. Modifications which seek to control the control the number of B&B guests would not be workable or deal with the security concerns that the current uses in breach of covenant creates.

In my judgment the covenant, insofar as it prevents the B&B use, does provide the objectors with the practical benefit of being able to apply some measure of limitation on who enters the grounds of the Hall. To a small degree that restriction increases privacy and security. However, the Objectors purchased a property with a driveway over which a neighbouring property has a right of way. This means that in the normal course of events there will be traffic and pedestrians traversing the Driveway. If an intercom access system were to be installed at the electric gates the Objectors would still have unidentified vehicles and occupants passing their house.

The question for the Tribunal is whether reducing that flow of individuals amounts to a practical benefit of substantial value or advantage to the Objectors. The movements associated with the two B&B rooms are infrequent. On some days there are none at all, on others they are more noticeable. Rarely they constitute most of the traffic. I consider it unlikely that any operator of the B&B would have guests staying all year round. While most paying guests are likely to arrive by car some might take the opportunity to walk into Llangollen. However, there is nothing to stop personal visitors to the Applicant and Mrs Williams arriving on foot and the site of the Hall is not secure in any case. Even if the gates were closed it would be very easy to gain access to the grounds from Berwyn Street or from the neighbouring hotel. The covenants make it slightly less likely that the Objectors might meet an unidentified pedestrian but there is nothing that currently guarantees that if they encountered a person walking down the Driveway at any time of the day that person would be the Applicant, Mrs Williams or anyone known to them.

The expert evidence regarding the impact on the value of the Hall if the B&B business were permitted to continue was not particularly helpful. Mr Bullock thought there would be no impact on the value whereas Mr Thomas considered (without any evidence) that the value would be diminished by 10% if the covenant were to be modified to permit the operation of both the building and B&B businesses. In cross examination Mr Thomas said he drew no distinction between discharge and modification of the covenant implying that the effect in terms of diminution in value would be the same. However, he then confirmed that the whole of his 10% reduction could be accounted for by apportioning 75-80% to the B&B and 20-25% to the ‘builder’s yard’. I think the answer, as far as the impact of the continued operation of the B&B is concerned, lies between the positions adopted by the experts. It is not necessary for me to put a precise figure on the effect, but I am satisfied that it does not amount to substantial value. I therefore conclude that this ground is made out and I have jurisdiction to discharge or modify the covenant.

In the absence of any evidence of an express agreement, the Applicant’s case under this ground is based on an alleged implied agreement of Mrs Parry to use the Property initially for the building business and latterly for the B&B. In his witness statement the Applicant recalled how he undertook various tasks for Mrs Parry such as repairing the driveway and moving a shipping container. He also referred to a conversation with Mrs Parry in the late summer of 2021 in which he explained that he and his wife were intending to start a B&B but the restrictive covenant prevented it. He said to Mrs Parry that he would like to have the covenant removed and offered to pay the legal costs of doing so. According to the Applicant Mrs Parry dismissed the subject saying that the Applicant and Mrs Williams were ‘not to worry about the covenant’.

Mr Jones submitted that there was no evidence that Mrs Parry consented to the discharge or modification of the covenant. At the time the B&B started to trade she was apparently unwell, did not live on a full time basis at the Hall and was actively marketing the Hall for sale. At the same time she installed the electric gates, action, said Mr Jones, that was a reaction to an increase in unknown persons entering the grounds of the Hall.

The Applicant’s account of his conversation with Mrs Parry does not demonstrate that she had agreed to the discharge or modification of the restriction. She merely indicated that she had no intention of enforcing that covenant at that time. She was not called as a witness and her response to the pre-contract enquiries raises the prospect of her not knowing about the business use of the Property, at least as far as the B&B was concerned. Either way, there is no evidence that she agreed, either expressly or by implication, to the covenant being discharged or modified and thisground is therefore not made out.

The Applicant says the B&B use causes little or no harm to the Objectors’ use and enjoyment of the Hall. The Objectors’ submit that the discharge or modification of the covenant would cause significant injury, not least in a situation where the experts suggest compensation in the order of £130,000 is appropriate if the covenant is discharged.

Bearing in mind that I have already found that ground (aa) is fulfilled there is no need for me to make a decision under ground (c).

As I mentioned at [13] above even where a ground is fulfilled the Tribunal is under no obligation to make an order for the discharge or modification; it has a discretion. In Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd [2020] 1 WLR 4783 Lord Burrows said at [52]:

“ …. I also accept that the Upper Tribunal in the Trustees of the Green Masjid case was correct to say, at paragraph 129, that once a jurisdictional ground had been established, the discretion to refuse the application should be “cautiously exercised””. 

Mr Jones submitted that the Tribunal should be cautious in exercising that discretion for the following reasons. Firstly, the Applicant is an original covenantor and agreed to the restrictive covenants. It is not a situation where he inherited something he did not understand from predecessors in title. Secondly, the covenant is relatively recent and thirdly, although the Applicant knew of the covenant, he ignored it and ran businesses from the Property in breach. Mr Jones did not characterise the breach as cynical.

The covenant was imposed in 2003 and is therefore not particularly recent, but the Applicant is one of the original parties. In Cresswell v Proctor [1968] 1 W.L.R. 906 CA the Court of Appeal (Harman and Danckwerts LLJ) expressed the view that the Tribunal’s discretionary powers ought not to be exercised in the case of a very recent covenant where the application was made by the original covenantor. In Hodgson v Cook [2023] UKUT 41 (LC) at [62] the Tribunal said that:

“Even if I had come to the opposite conclusion on whether the ground (aa) conditions were satisfied, I would have been very reluctant to lift a restriction which the applicants themselves freely accepted less than ten years ago. The more recently a restriction has been imposed the stronger the case for modification must be.”

The circumstances of this case can be differentiated from Cresswell and Hodgson. The covenant in this case has been in place for some 23 years and cannot, in my view, be described as in any sense contemporary. Similarly, the fact that the Applicant was an original party is relevant to the determination but not decisive. In Ridley v Taylor [1965] 1 W.L.R. 611 Russell LJ commented at 623 A as follows:

“Finally I come to the question of exercise of discretion, assuming there was jurisdiction. I do not for myself think that the particular situation of the applicant, as having not very long since struck a bargain inconsistent with this particular outcome, is a factor in the exercise of discretion.”

Nevertheless, there have been wilful breaches of the covenants in this case and that requires consideration in the application of discretion. From 2008 to 2020 when the Applicant was running a building business from the Property it appears that successive owners of the Hall (including Mrs Parry) turned a blind eye to the Applicant’s activities and even employed him for works of their own. Whether they were ignorant of the covenant or simply disinterested I cannot tell.

The Applicant was clearly aware of the covenant’s existence as it was on his mind when he spoke to Mrs Parry in 2021. It appears that the Applicant’s motivation in both breaches was monetary in the sense that the activities provided him and his family with a living. His actions were not akin to those of a cynical developer seeking profit. In 2021 he attempted to engage Mrs Parry in a dialogue about discharging or modifying the covenant and even went as far as to offer to pay the legal costs involved. Mrs Parry’s answer in 2025 to pre-contract enquiries is at odds with her previous actions but I am prepared to accept that the Applicant acted in good faith when Mrs Parry told him not worry about the covenants.

Guidance about the degree to which the Applicant’s past conduct should inform the Tribunal’s decision can again be found in Ridley v Taylor, where at 623 B Russell LJ said:

“I do not think that the personality of the applicant or his past behaviour is relevant to the exercise of the discretion. I refer again to the fact that tomorrow an assign may make the same application. I think that the decision (including the exercise of discretion) must be related to the property and its history as such.”

As to the use of discretion, in The Trustees of The Green Masjid and Madrasah [2013] UKUT 0355 (LC) the Tribunal, (A J Trott FRICS), commented at [129] that:

“The purpose of section 84 of the 1925 Act is to enable applicants to obtain modification or discharge of restrictive covenants in circumstances where they can demonstrate statutory jurisdiction. Having satisfied me on the facts, and on the law as applied to those facts, that the Tribunal has such jurisdiction in this case, I am loath to exercise my discretion so as to deny the applicants the relief that they seek. Where jurisdiction has been established I consider that the discretion of the Tribunal to refuse the application should only be cautiously exercised. It should not be exercised arbitrarily and, in my opinion, should not be exercised as, effectively, a punishment for the applicants’ conduct unless such conduct, in all the circumstances of the case, is shown to be egregious and unconscionable. On balance I do not consider that the applicants’ conduct was so brazen as to justify my refusal of their application.”

It is my judgement that in the instant case the Applicant’s behaviour cannot be shown to be egregious and unconscionable. There are no other material factors to consider. The proper exercise of the Tribunal’s discretion, taking all the relevant factors into account, is to allow the application to modify the covenant.

At the conclusion of the hearing I invited the parties to consider the appropriate modification of the covenant if the Tribunal was minded to give effect to an alteration allowing bed and breakfast use at the Property. I have reviewed the parties’ suggestions and determine the following modification:

Both experts provided reports covering the factual elements of the dispute and detailed descriptions of the properties. However, their respective approaches to the valuation of the properties and their views on compensation were quite disparate.

I will start with Mr Bullock. He firstly dealt with the market value of the Hall at the date of inspection (29 January 2026) on the basis that the covenants on the Property were discharged all together. He noted that since the purchase some nine months earlier the Objectors had been undertaking reconfiguration work and at the valuation date this meant that the house was in a worse state than at the time of purchase. His valuation of £995,000 was 11.5% less than the purchase price. Surprisingly, having in his report attributed the whole reduction to the physical state of the Hall he changed tack in cross examination and confirmed that all of the reduction related to the prospective discharge of the covenant. He said at the hearing that he had apportioned a third of the 11.5% to uncertainty about the future uses of the Property, a third to changes in the type of traffic using the Driveway and a third to noise and nuisance. There was no mention of the components of the reduction in his report.

He then moved on to the value of the Hall with the covenants on the Property modified to accommodate the bed and breakfast business and a ‘home office for a commercial business’. His valuation was £1,125,000.

His next consideration concerned the value of the Hall with the covenants modified to allow the continuance of the bed and breakfast business. His valuation was again £1,125,000 but the rationale for this position was that in his view the Objectors must have known about the bed and breakfast business before making their purchase and therefore the purchase price reflected the operation of the business. In cross examination Mr Bullock was very reluctant to concede that he might be wrong about the extent of the Objector’s knowledge. He did not provide a valuation on the basis that he might be incorrect about his assumption. His valuation with the covenant modified to allow a home office use was, unsurprisingly, also £1,125,000.

He valued the Property at £725,000 regardless of whether the covenants were discharged completely or modified to permit the bed and breakfast and/or the home office.

Mr Thomas valued the Hall at £1,200,000 having taken in to account the works done by Objector since the purchase and he also applied a combination of ‘indices’, none of which were submitted in evidence, to the purchase price. He had formed the view that the Property was being used as a base for a building company as well as a bed and breakfast business. In his opinion these uses enhance the value of the Property to the detriment of the Hall. Mr Thomas arrived at a figure of 10% for the decline in value of the Hall, although he acknowledged that he had no firm evidence to support his selected figure.

Turning to the valuation of the Property Mr Thomas noted that the Applicant had some outstanding works to finish before it could be described as complete. Once undertaken he thought the value would be in excess of £800,000 and perhaps as high as £825,000. However, in its current condition he opted for £775,000.

Mr Thomas then considered whether there would be any uplift in value should the covenants be removed. He thought it would be obvious that there would be an increase in value when ‘someone can work from home and generate an income from home’. His conclusion was that an uplift of 10% was appropriate resulting in a figure of £77,500.

Mr Thomas’s approach to compensation for discharge of the covenants was to aggregate the diminution in value at the Hall and the enhancement of value at the Property. However, he thought it would be appropriate to retain some value for the Applicant and therefore divided the enhancement one third/two thirds in favour of the Objectors. This resulted in a figure of £51,615 which he rounded to £52,000. The total compensation therefore amounted to £172,000. Mr Dixon submitted that Mr Thomas’ approach should be treated with caution as there was no developer’s profit to share and no real adverse impact on the value of the Objectors’ property.

Mr Jones referred to the substantial level of compensation that the experts agree would be warranted were the covenant to be discharged “or it is submitted, substantially modified”.

I do not regard the modification as substantial and there is little assistance in the experts’ opinions in relation to discharge or modification. I find Mr Thomas’ approach to compensation generally to be inappropriate and excessive. In my judgment the compensation due can be adequately accounted for in the sum of £10,000.