Landlord and tenant – Planning permission – Interim injunction – Claimant freehold owner of land adjacent to property owned by defendant management company – Claimant seeking to build property on adjoining plot – Claimant being required by deed to obtain consent of defendant prior to applying for planning permission – Defendant applying for interim injunction to prevent claimant from making planning permission – Whether balance of convenience justifying grant of injunction – Application dismissed
The claimant architect owned the freehold owner of a piece of empty land immediately adjacent to the south of a property in Holland Park, London W11. The property was a large Victorian villa which had been converted into five flats held under long leasehold interests. The defendant management company owned the freehold of the property. The claimant applied for planning permission to build a house on the adjoining plot. The defendant took the view that the proposed development, as described in plans, was an undesirable addition to Holland Park. It relied on restrictive covenants in the deed by which the adjoining plot had been transferred to the claimant in 1968.
Clause 2(b) of 1968 deed provided that no planning application was to be made to the appropriate planning authority without approval of the requisite plans and drawings by the adjoining owner. Clause 3 of the deed provided that no work was to be commenced on the building site before definitive plans, drawings and specifications of the proposed buildings had been approved by the adjoining owner or its surveyor. On 28 February 2013, the High Court held that the management company and the lessees of the flats at the property were entitled to enforce clause 2(b) and 3 of the deed: [2013] EWHC 391 (Ch); [2013] PLSCS 66.
In June 2013, excavations started on the adjoining plot. The defendant alleged that some Victorian steps had been removed without giving notice. The claimant subsequently applied to the defendant for approval of plans and drawings under clause 2(b) of the deed but it was refused. The claimant sought a declaration that the defendant had unreasonably refused consent and that she was entitled to apply for permission to carry out the proposed development, without being in breach of the covenants in the deed. The defendant applied for an interim injunction to prevent the claimant from applying for planning permission. The claimant said she was willing to give undertakings, pending the determination of the claim, to notify the defendant that an application for planning permission had been made and, if her claim failed, to withdraw the application and not give effect to any permission granted.
Held: The application was dismissed.
For the purposes of the application, it was accepted by both parties that the pleadings in the claim raised a triable issue whether the defendant’s refusal of approval for the claimant’s plans was reasonable. In considering the whether an injunction should be granted were that the court had to consider first whether, if an injunction was not granted and the defendant succeeded in showing at trial that it was entitled to withhold consent, an award of damages would compensate it for any loss it suffered by the making of a planning application, and whether the claimant would be able to pay such damages. If damages would be an adequate remedy, then no interlocutory injunction should be granted, however strong the defendant’s claim appeared to be. Secondly, if damages would not be an adequate remedy for the defendant, the court had to consider whether, if the injunction was not granted and it turned out at trial that the claimant was entitled to apply for planning consent because the refusal of approval by the defendant was unreasonable, whether the claimant would be adequately compensated by damages. If she would be adequately compensated, and if the defendant would be in a position to honour a cross-undertaking in damages, then there was no reason to refuse to grant the injunction. Thirdly; if there was a doubt as to the adequacy of the respective remedies in damages, the question of the balance of convenience arose. The extent to which the disadvantages that each party would suffer could not be compensated in damages was always a significant factor in assessing where the balance of convenience lay. Fourthly, where other factors were reasonably balanced, it was a counsel of prudence to take such measures as were calculated to preserve the status quo. However, there might be other special circumstances that needed to be taken into account: Fellow & Sons v Fisher [1976] QB 122 applied.
Applying those principles to the present case, the claimant’s concerns about her likely loss were more justified than those of the defendant, and the risk of her suffering substantial unquantifiable loss if an injunction was granted were much greater than the risk to the defendant of not granting an injunction, having regard to the undertakings which the claimant had offered. Turning to the balance of convenience, that difference in the risk of unquantifiable damage pointed firmly in favour of not granting the injunction. The court’s concern was to arrive if possible at a result that minimised the likelihood of future friction between the parties with further resort to more contentious correspondence and threatened or actual court proceedings. In the circumstances, it would not be right to grant an injunction, the court accepted the claimant’s undertakings and the defendant’s application was refused.
Mark Sefton (instructed by Mishcon de Reya) appeared for the claimant; Katherine Holland QC (instructed by Pinsent Masons LLP) appeared for the defendant.
Eileen O’Grady, barrister