Landlord and tenant — Covenant against change of user without conset — Landlord refused consent — Landlord as local authority granted planning permission and gaming licence for new user — Whether landlord’s refusal of consent reasonable — Whether tenant must show reasons are unreasonable — Whether new reasons can be thought up later
Tollbench Ltd, the respondent tenants, hold a lease of premises at 93 Cornwell Street from Plymouth City Council, the appellant landlords. The lease contains covenants on the part of the tenants not to use the premises other than as a shop (and especially not for living or office use purposes) without the consent of the landlord. A further covenant by the tenants requires them not to use the premises for illegal, immoral or noxious purposes which may constitute a nuisance to either the landlords or the neighbours. At some earlier date the use of the premises had changed to that of a restaurant.
The tenants alleged that by reason of a pedestrianisation scheme their business trade had dropped; accordingly they sought the landlords’ consent to a change of use to restaurant and amusement facilities. The landlords refused that consent. Meanwhile the landlords as the local authority granted planning permission for the proposed change of use in July 1987 and a licence for the amusement facilities in August 1987. The tenants applied to the county court under section 53 of the Landlord and Tenant Act 1954 for a declaration that the landlords had unreasonably refused consent under the lease to the proposed change of use. Section 53(2) of the 1954 Act provides that “Where on the making of an application to the county court for such a declaration the court is satisfied that the licence or consent was unreasonably withheld, the court shall make a declaration accordingly”. His Honour Judge Clarke, in the Plymouth County Court, had found that the landlords reached their decision unreasonably, as they acted on misconceptions, but this did not mean the decision was unreasonable; he declared that the refusal of consent was unreasonable.
Held The landlords’ appeal was allowed; the principles in International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] 1 EGLR 39, a case on a landlord’s refusal of consent to an assignment, were to be followed. The court must consider the reasons for the refusal of consent, and the onus is on the tenant to show the refusal is unreasonable; the court would more readily infer an unreasonable refusal if no reasons were given. The purpose of section 53 of the 1954 Act was to permit the court to consider the decision-making process in so far as it was material to the reason for the decision, but not qua as a procedure.
The only reasons that could be considered by the court were those at the date of the decision, and reasons thought of later, or arising ex post facto, must be excluded. In the present case the county court went wrong in considering the reasonableness of the procedure for arriving at the decision; it should have confined itself to the reasons for the decision.
International Drilling Fluids Ltd v Louisville Investments
(Uxbridge) Ltd
[1986] 1 EGLR 39 applied;
Berry v Royal Bank of Scotland [1949] 1 KB 619;
Lovelock v Margo [1963] 2 QB 786 and
Bromley Park Garden Estates Ltd v Moss [1982] 1 WLR
1019 considered.
The Hon Michael Beloff QC and Clive Newberry (instructed by Sharpe Pritchard, as agents for the city council) appeared for the appellant landlords; and Anthony Donne (instructed by Goldbergs, of Plymouth) appeared for the respondent tenants.
