An application for consent to alterations can be a process which continues up to the issue of proceedings where consent is withheld rather than refused. The reasonableness of the landlord’s withholding of consent is to be judged at that time.
The High Court considered such an application in Messenex Property Investments Ltd v Lanark Square Ltd [2024] EWHC 89 (Ch).
Messenex was the long leasehold tenant of Marina Point, Lanark Square, a four-storey mixed-use building on the Isle of Dogs, E14. Lanark was the freehold owner of the wider estate and also intermediate leasehold owner of Marina Point.
The lease prevented the erection of any “additional or new building or structure” on the premises and any alterations to the structure, external appearance or layout without the landlord’s prior written consent which was not to be unreasonably withheld.
Messenex wanted to add three floors to the building and to convert the ground-floor offices to residential units for which it had obtained planning permissions. Landlord’s consent for the works was sought in May/June 2020 and negotiations on the terms of draft licences followed.
Engrossed licences for the works were issued in February 2022 but negotiations continued over the drawings to be attached, outstanding service charges and costs. In March 2023, Messenex sought a declaration that Lanark was unreasonably withholding consent.
Lanark was not required to demonstrate that all its reasons for withholding consent were reasonable provided that some of them were [No.1 West India Quay (Residential) Ltd v East Tower Apartments Ltd [2018] EWCA Civ 250].
Those reasons and the court’s conclusions were:
- i) Messenex was asked to provide structural engineer’s drawings for the works but failed to do so.
Reasonable. The structural integrity of the building was a legitimate concern for Lanark. It was also reasonable – due to the interrelationship between the rooftop and ground floor works – for Lanark to treat them as a package. Messenex’s failure to provide drawings for the substantial rooftop works entitled Lanark to refuse consent to the entire project. - ii) The works involved trespass on Lanark’s retained property.
Unreasonable. The question of additional rights to address this issue had been resolved by the date engrossments were circulated. Making the grant of consent conditional on settlement of a separate dispute ie payment of service charges, was also unreasonable. - iii) Messenex failed to provide unconditional undertakings for Lanark’s reasonable costs;
Potentially reasonable. Messenex had provided unconditional cost undertakings at various stages but imposed conditions on the last one, in November 2022, which were unacceptable to Lanark. - iv) Lack of clarity in Messenex’s proposals.
Unreasonable. By the time engrossments of the licences were circulated both parties were clear as to the nature and scope of the works.
Louise Clark is a property law consultant and mediator
