Transfer of land – Reserved rights – Claimants’ predecessor transferring land to defendants – Claimants wanting to exercise reserved right to construct road over land – Whether defendants unreasonably refusing consent – Declarations granted
In 1990, B Ltd transferred a strip of land (the strip) to the defendant council, reserving to itself and its successors in title certain adjoining land (the mill site) and various easements (reserved rights). Those included the right to construct a road, within 80 years, across the strip for use with or without vehicles. The exercise of the reserved rights was subject to a proviso that it would accord with the 1986 area development brief and with the consent of the defendants’ director of planning and development.
In 2005, the claimants owned the mill site and adjoining land. They submitted a planning application, which the secretary of state granted on appeal, to construct 184 residential units in nine blocks. They also wanted to construct a road across the strip to provide access to the mill site and adjoining land and asked for consent to exercise the reserved rights. Consent was refused and the claimants applied to the court for various declarations concerning the proper interpretation of the proviso. They claimed that the defendants had unreasonably withheld their consent and that they were entitled, as of right, to construct the proposed new road across the strip.
The defendants submitted, inter alia, that the first part of the proviso had not been satisfied since the development, which the reserved rights were intended to serve, did not comply with the provisions of the 1986 brief, with regard, for example, to the density of residential units. The claimants maintained that the proviso did not require the use of the mill site to be that envisaged at the time of the 1986 brief. They argued that the proviso was subject to an implied term that the consent of the defendants’ director would not be unreasonably withheld and that that consent had been unreasonably withheld.
Held: The declarations were granted.
(1) The claimants had satisfied the first part of the proviso. Although the 1986 brief expressly provided for the use of the mill site for industrial purposes, it also provided for a distributor road to the south to be used for the surrounding residential development. It was improbable that either B Ltd or the defendants had intended that the reserved rights would be circumscribed, for the 80 years following the transfer, by the current use of the mill site for industrial purposes at the date of the transfer or by the principles in the 1986 brief for residential development of the surrounding land.
Although it was unnecessary for the claimants to rely upon the principle that, as a last resort if the meaning otherwise remained unclear, the grant of a reserved easement was to be interpreted against the vendor as grantor, the presumption in the instant case reflected the commercial reality that, had the defendants intended such an unusual and restrictive qualification of the grant of the reserved rights, they would have made their position clear in the wording of the proviso: St Edmundsbury & Ipswich Diocesan Board of Finance v Clark [1975] 2 EGLR 115; (1974) 236 EG 343 considered.
(2) The second part of the proviso was subject to a qualification that consent was not to be unreasonably withheld. Each case depended upon the particular contract. The reservation in the instant case contained the grant of property rights in a commercial context to enable third parties to carry out a residential development for which a distributor road was required. Accordingly, any other conclusion would mean that the defendants could have been in a position, by the arbitrary and capricious withholding of approval of building plans, to prevent a development that had been contemplated by both sides. Moreover, in this context, a distinction did not arise between a qualification that consent should not be arbitrarily or capriciously withheld, on the one hand, and that it should not be unreasonably withheld on the other: Price v Bouch [1986] 2 EGLR 179; (1986) 279 EG 1226 applied; Cryer v Scott Brothers (Sunbury) Ltd (1988) 55 P&CR 183; and Mahon v Sims [2005] 3 EGLR 67; [2005] 39 EG 138 considered.
(3) In the context of the emphasis of the proviso on planning and related issues, the decision to refuse consent on the basis of the concerns of local residents, although well intentioned, was arbitrary, irrational and unreasonable.
Jonathan Gaunt QC and Mary Cook (instructed by Cameron McKenna LLP) appeared for the claimants; David Matthias QC (instructed by the legal department of Eastleigh Borough Council) appeared for the defendants.
Eileen O’Grady, barrister
