Land – Restrictive covenant – Refusal of consent – Defendants seeking to carry out development on land subject to restrictive covenants and commencing works – Claimant refusing consent – Claimant seeking final injunction restraining defendants from carrying out further works and declaration that consent reasonably refused – Whether claimant acting reasonably in refusing consent – Claim allowed
The claimant was the owner and/or estate manager of a significant area of land in East Sussex. Part of that land was located in the village of East Dean, East Sussex, within the South Downs National Park. The claimant’s various predecessors owned other areas of the village which they sold subject to restrictive covenants granted in favour of the vendor’s retained land.
The defendants were each the freehold owner of a parcel of land in the village, subject to restrictive covenants in favour of part of the claimant’s land. The defendants each wished to construct a detached residential property on their parcel of land as part of a scheme.
The claimant refused his consent to the defendants’ scheme on the basis that: (i) it would have a detrimental impact on the amenity value of the estate; and (ii) could threaten the future use and commercial value of the claimant’s neighbouring land. The claimant subsequently referred to other matters he had taken into consideration including the effect of the scheme on his neighbouring land, its impact on the amenity value of the estate as a whole and the effect on the boundary treatment and maintenance of adjoining land owned by him.
Despite the refusal of consent, the defendants carried out some works in breach of a restrictive covenant. The claimant sought a final injunction restraining the defendants from carrying out any further works without his consent, and a declaration that he had not unreasonably withheld consent to the defendants’ application.
Held: The claim was allowed.
(1) The primary finding of fact the court had to make was what were the reason or reasons which resulted in the refusal of permission. That required the court to find the reason or reasons that influenced the mind of the covenantee at the relevant time and not later.
The process by which the reason was come to, and the reason itself, had to be reasonable, requiring consideration of both limbs of the Wednesbury principle. It would be unreasonable for a covenantee to refuse consent for the purpose of achieving a collateral or uncovenanted advantage. A decision maker, as part of a reasonable decision-making process, had to exclude extraneous considerations whilst taking into account those considerations which were obviously relevant to the decision in question: Braganza v BP Shipping Ltd [2015] 1 WLR 1661 applied.
Not all considerations which were in the mind of the covenantee would influence the mind of the covenantee. Therefore, simply because a consideration had been taken into account did not mean it contributed to the reason as a consideration could be given a zero weighting in the decision-making process.
(2) Where approval was not to be unreasonably withheld and the covenantee refused consent for a mixture of reasons, some good and some bad, where the result would still have been a refusal without the bad reasons then the result would remain reasonable and would not be vitiated. That required the court to consider if there was a connection between the reasons or if the reasons were free-standing and the good reason, which was more than a makeweight, was not dependent on the bad: No 1 West India Quay (Residential) Ltd v East Tower Apartments Ltd [2018] PLSCS 34; [2018] 1 WLR 5682 applied.
It followed that considerations (the things taken into account by the covenantee) and reasons (the justification for the refusal) were not the same thing. Nor was it enough to say a consideration was taken into account, it had to be a consideration which contributed to the reason.
(3) A covenantee was not entitled to take into account matters that did not affect the land with the benefit of the covenant and it followed that they could not reasonably rely on reasons in relation to land without the benefit of the covenant.
In the present case, the first reason for refusing consent was unreasonable because the claimant had considered the impact of the proposed scheme on the wider estate, not just that part of it that enjoyed the benefit of the covenant. As such the claimant had taken into account irrelevant considerations and his refusal was the result of an unreasonable process. The defendants had shown on the balance of probabilities that the first reason was bad on its face.
Even if the reference to the estate in the reason was limited to the benefited land, the decision-making process employed by the claimant in relation to the first reason was an unreasonable process as the claimant took into account irrelevant considerations which directly contributed to the claimant giving the reason he did.
As such, the claimant’s first reason was not the result of a reasonable process as it either was a reason relating to land that did not benefit from the covenant or a consideration which led to the reason related to land that did not benefit from the covenant. It was not therefore reasonable.
(4) It did not follow that simply because a person had taken into account an irrelevant consideration, whether as part of their overall reasoning or their reasoning on a specific issue, that all their reasons were automatically bad. The consideration taken into account had to have been part of the considerations actively considered as part of the reason complained of.
The second reason was freestanding of the first reason and was of substance. Therefore, it had to be considered on its own merits in relation to process and outcome. The claimant had followed a reasonable decision-making process in relation to the second issue and reached a reasonable outcome when he refused permission on that basis. It was a decision the claimant was entitled to reach on the facts before him and which solely related to neighbouring land that did benefit from the covenant. That decision was not invalidated by the first bad reason. Therefore, the claimant had not unreasonably withheld his consent.
Accordingly, the claimant was reasonable in his refusal of permission to the defendants to construct the properties and the claimant was entitled to a declaration that he did not unreasonably withhold consent and an injunction or, alternatively undertakings by the defendants, if they could be agreed.
Caroline Shea QC and Gavin Bennison (instructed by Mishcon de Reya LLP) appeared for the claimant; Camilla Lamont (instructed by Fladgate LLP) appeared for the defendants.
Eileen O’Grady, barrister
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