Aesthetic judgments are inherently subjective, with the result that a building some would describe as a “monstrous carbuncle” may strike others as a masterpiece. So to what extent are aesthetic considerations relevant when landowners are asked to approve plans and drawings for a proposed development on land subject to restrictive covenants?
The development that was the subject of the dispute in 89 Holland Park (Management) Ltd v Hicks [2020] EWCA Civ 758; [2020] PLSCS 116 was conceived by an award-winning architect who had purchased a plot of land adjoining a listed Victorian building in Holland Park, which was divided into five leasehold flats. She hoped to build a modern glass cube on her land, providing an entrance at street level to living accommodation on two subterranean levels below. But her land was subject to restrictive covenants that were enforceable by the company, as the freehold owner of the adjoining building, and by all the leaseholders too, requiring the company’s approval of plans, drawings and specifications first.
Previous litigation between the parties established that such approval was not to be unreasonably withheld. But the company declined to approve the plans and drawings because, as was explained in court, the leaseholders did not want to live “next door to the creative and interesting, or to the unique, or to the contemporary, or to the unconventional… nor next to gently glowing boxes”.
First instance
The High Court ruled the company was not entitled to take the leaseholders’ interests into account when considering whether or not to grant approval (even though they enjoyed the benefit of the covenants and could compel the servient landowner to comply with them, if the company failed to do so).
The court also dismissed the company’s aesthetic objections to the “uncompromisingly contemporary” design of the development, ruling that the design did not relate to, or impact on, its reversionary interest. Consequently, the judge did not need to consider whether the company’s aesthetic objections were reasonable – and did not do so. But the judge did accept its concerns about the detrimental structural effects on its own building were legitimate – and must be addressed, to see whether the issues could be resolved with engineering design or management, before development could proceed.
Leaseholders’ interests
Did the fact the company had nothing more than a reversionary interest in its building – an interest that was “no more than a husk” – affect its ability to refuse to approve the plans? Lord Justice Lewison, who spoke for the Court of Appeal, explained it did not, as the covenants had been extracted for the benefit of the land, and not just for the benefit of the covenantee’s property interest in it.
Section 78 of the Law of Property Act 1925 deems a covenant to be made with the covenantee, and his successors in title, and the persons deriving title under them. And this led to the inescapable conclusion that the company was entitled to consider the interests of all those that benefited from the covenants, including the leaseholders, failing which the covenants would be “almost worthless”.
Aesthetic and other interests
The landowner’s argument that aesthetic objections cannot be objectively evaluated was a powerful one. But neighbours have a legitimate interest in the appearance of what is built next door. And one of the purposes of covenants relating to the approval of plans and drawings is to enable a decision-maker to see what a building will look like. So it would be extraordinary if it could not take this into account when considering them. Also, the fact the approval required was that of a company did not mean that aesthetics were forbidden territory; many corporations make aesthetic judgments, spending huge sums on corporate and product design. Consequently, aesthetic objections may be valid, even where a covenantee’s consent cannot be unreasonably withheld.
Lewison LJ observed that the tribunal has always taken a broad view of what amounts to a “practical benefit” secured by a restrictive covenant when dealing with applications to modify or discharge restrictive covenants under section 84 of the Law of Property Act 1925. And he suggested that, in cases involving covenants of this kind, a landowner’s “property interests” encompass its broader interests in a building; they extend beyond mere bricks and mortar, or the capital or rental value of land, to the amenity value of the right to enjoy the property, and may include a landowner’s trading interests as well.
What next?
The High Court will now have to determine whether the company’s refusal to approve the plans, drawings and specifications for the development was reasonable – following the guidelines laid down by the Court of Appeal.
Lewison LJ indicated it would not suffice for the company, or the leaseholders, to say that the proposed new building is not to their taste. But it might suffice to show that the development would be “out of keeping” with its setting, or that it would adversely affect the amenity of their land. The current state of the plot itself might also be relevant. The judge would certainly be entitled to take into account the fact that the original covenantors had positively covenanted to develop the plot, and also that the 1968 deed in which the covenants were imposed expressly approved a particular design.
Key points
- A landowner with the benefit of restrictive covenants was entitled to take its leaseholders’ interests into account when responding to requests from those bound by them
- It may be reasonable to refuse to approve plans and drawings for a development on aesthetic grounds
Allyson Colby is a property law consultant
