A COUPLE could end up paying their neighbours £40,000 in a court battle over a "claustrophobic" kitchen and a 12- year-old covenant.

The 200sq ft extension at the home of Colin Bailey and Pamela Waterton-Bailey is due for demolition.

But yesterday the couple were given leave to appeal against the demolition of the extension, at The Barn, Ainderby Steeple, Northallerton, North Yorkshire, and are to resume the battle at London's Court of Appeal.

Neighbours Martin and Jocelyn Mortimer had successfully proved the extension was unlawful as their former friends, the Baileys, had to seek their written permission to build it under a 1992 covenant.

The covenant, created during a land transaction with the previous owners, stated that consent for an extension could be withheld if it was "reasonable" to do so.

At Middlesbrough County Court in December last year, a judge ruled the Mortimers were entitled to block the building work as it reduced the value of their home.

Judge Peter Bowers said the extension significantly affected the amount of light the Mortimers' property received during the winter.

A view of the sky that "gives a sense of openness" was removed by the extension, said the judge, while an expert concluded it was "overwhelming" and created a feeling "close to claustrophobia".

But the Baileys argued that the Mortimers often used blinds in their kitchen, and had other windows that were not affected.

They said it was not until three months after building commenced that the Mortimers tried to have it stopped - even though they knew about the covenant.

After listening to legal argument, Lady Justice Arden, sitting with Lord Justice Waller, gave permission to appeal.

If they are successful, the Baileys will be able to keep the extension - but only if they pay £40,000 in damages to their neighbours.

Work on the extension started last June and was completed two months later.

No date was given for the full hearing of the Baileys' appeal.