Landlord and tenant – Breach of covenant – “Live/work” concept – Respondents holding lease of “live/work” unit in mixed development – Lease containing covenant against use of premises other than “live/work” unit under terms of planning permission for development – Appellant landlord bringing unsuccessful claim against respondents for breach of covenant – Appellant appealing – Whether phrase “live/work” in lease requiring leaseholders to “live and work” at premises – Appeal dismissed
The appellant was the freehold owner of Bickels Yard, 151-153 Bermondsey Street, London SE1. Bickels Yard was a mixed development of flats, offices, and one “live/work” unit. The respondents were the leaseholders of unit 8, the “live/work” unit under a 999-year lease. A clause in the lease contained a covenant against use of the premises other than as a live/work unit in accordance with the terms and conditions of the relevant grant of planning permission.
The appellant brought proceedings against the respondents for breach of covenant and an issue arose as to the proper construction of the phrase “live/work” in the lease. The county court held that the phrase meant “live and/or work” and made a declaration to that effect. The claim for breach of covenant was dismissed.
The appellant appealed contending that the phrase “live/work” in the lease required the leaseholders to “live and work” at the premises rather than being able to choose whether to live and/or work there. The High Court agreed with the county court’s interpretation and dismissed the appeal.
The appellant appealed to the Court of Appeal contending, among other things, that the words “live/work” in the lease and grant of planning permission were ambiguous and had to be interpreted in the light of the supplementary planning guidance (SPG) issued by the local authority, which made it plain that “live/work” meant “live and work”. The courts below had indicated that the court should be slow to interpret the planning permission in the light of the SPG, which was not incorporated into or referred to in the grant of planning permission.
Held: The appeal was dismissed.
(1) When interpreting covenants in leases or grants of planning permission, the court had to ask itself what a reasonable reader would understand the words to mean when reading the condition in the context of the other conditions and the consent as a whole. The particular legal and factual context of a planning permission was that it was a public document which might be relied on by parties unrelated to those originally involved and that planning conditions might be used to support criminal proceedings. That justified a relatively cautious and strict approach to limit the categories of documents which might be used in interpreting a planning permission. The reasonable reader could be taken to understand the role of permission, conditions and any incorporated documents. It was permissible to have regard to documents incorporated into the permission, although in reality there might be some inconsistencies between all the documents incorporated into the grant of permission. Courts should be extremely slow to consider the intention behind conditions from documents which were not incorporated, particularly if they were not in the public domain: Cherry Tree Investments v Landmain [2012] 2 EGLR 141; Trump International Golf v The Scottish Ministers [2015] UKSC 74; [2015] PLSCS 362; [2016] 1 WLR 85 362 and UBB Waste Essex v Essex County Council [2019] EWHC 1924 (Admin); [2019] PLSCS 138 and Hillside Parks Ltd v Snowdonia National Parks Authority [2023] EGLR 4 considered.
(2) In the very particular circumstances of this grant of planning permission for this “live/work” unit, the phrase “live/work” meant “live and/or work”. As was common ground, the phrase “live/work” in this lease was ambiguous and could mean “live and work”, “live or work” or “live and/or work”. The relevant plan which formed part of the planning permission showed the whole of the premises shaded as “live/work” which meant that there was no sub-division imposed by the planning permission into separate “live” or “work” areas. It would be for the leaseholder to determine where to live and where to work. Leaving such matters to the discretion of the leaseholder suggested a permissive approach to the phrase “live/work” meaning that the leaseholder might decide only to live at the premises, or only to work at the premises, or to do both in parts of the premises at their choosing. Further, because a leaseholder might be served with enforcement notices and might ultimately be the subject of criminal proceedings for breach of planning permission, if it was intended that lawful use of the premises required both living and working, that would be spelled out using language that was clear and unambiguous.
(3) That was a conclusion reached without the use of any extrinsic materials, and the reasonable reader of the grant of planning permission would not have regard to the SPG, the earlier plan, or the planning officer’s deferral report. Those documents were neither referred to nor incorporated into the grant of planning permission.
If, however, regard was to be had to any of those documents then each of the documents supported the interpretation that the phrase “live/work” meant “live and/or work” for this grant of planning permission for this “live/work” unit. The thrust of the SPG was that the general intention behind the concept of a live/work unit was to create a situation where the occupier would both live and work at the relevant planning unit. However, the SPG also specifically recognised that if that general intention was to be achieved in relation to a particular planning unit, the areas of the unit which were for living and those that were for working should be delineated, and that the work area should be designated for B1 use. That was because conditions which did not refer to a defined area of working floor space appeared to allow single-person operations of the type which could be carried out from a dwelling house without planning permission to operate legitimately.
(4) In the present case, if a reasonable reader was to have regard to the SPG, that reasonable reader would be struck by the absence of any sub-division of the premises into separate areas for live and work and the absence of conditions in the grant of planning permission relating to the premises, and would infer that, although the general spirit of live/work units was to deliver units where the occupier both lived and worked, that had not been required in relation to the premises.
Nathaniel Duckworth (instructed by Colman Coyle Solicitors) appeared for the appellant; Myriam Stacey KC and Nick Grant (instructed by Payne Hicks Beach LLP) appeared for the respondents.
Eileen O’Grady, barrister
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