89 Holland Park Management Ltd v Sophie Louise Hicks
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Flaux,Lord Justice Holroyde |
| Judgment Date | 16 June 2020 |
| Neutral Citation | [2020] EWCA Civ 758 |
| Docket Number | Case No: 2019/1573 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 June 2020 |
[2020] EWCA Civ 758
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
His Honour Judge Pelling QC
HC-2017-002119
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Lewison
Lord Justice Flaux
and
Lord Justice Holroyde
Case No: 2019/1573
John McGhee QC and Tim Calland (instructed by Gowling WLG) for the Appellant
Philip Rainey QC and Mark Sefton QC (instructed by Mishcon de Reya LLP) for the Respondent
Hearing date: 4 June 2020
Approved Judgment
Introduction
Ms Sophie Hicks is an award-winning architect. She owns a plot of land at the rear of 89 Holland Park (“the Site”) on which she wishes to build a house. But she is bound by a restrictive covenant which prohibits the making of any application for planning permission in respect of any plans, drawings or specifications which have not been approved by the freeholder of 89 Holland Park. Following previous litigation between the parties, it has been decided that approval cannot be unreasonably withheld. The principal issue on this appeal concerns the permissible grounds upon which the freeholder may withhold consent.
89 Holland Park (“the Building”) is a large detached Victorian building forming the end of a row of such buildings. It is divided into five flats, each held under a long lease, four of 999 years' duration, and one of 125 years. The freehold is owned by 89 Holland Park (Management) Ltd (“the Company”). Each of the flats' long leaseholders is a shareholder (or in the case of joint long leaseholders are jointly a shareholder) of a share in the Company. The Company retains possession of the common parts and external structure of the Building but is otherwise interested in the Building only as reversioner.
Although each of the leaseholders is entitled to enforce the covenant, the only person whose consent to plans etc is relevant is the Company. HH Judge Pelling QC held that in deciding whether or not to give consent, the Company was not entitled to take into account the views or interests of the leaseholders; and was not entitled to raise objections to Ms Hicks' proposal on aesthetic or environmental grounds, because there was no evidence that the structure or value of the freehold reversion would be affected by the aesthetics or environmental concerns. His judgment is at [2019] EWHC 1301 (Ch).
The facts
I can take the detailed facts from the judge's comprehensive judgment. I summarise only those facts which are necessary to an understanding of the issues raised on this appeal.
Originally, both the Site and the Building were in common ownership. By 1965, Brigadier W.B. Radford, the then freehold owner of the Building and the Site, had converted the Building into five flats with caretakers' accommodation in the basement. Each flat was let out on short contractual or statutory tenancies. By a transfer dated 10 December 1965 Brigadier Radford transferred the Site to Ms De Froberville. By that transfer (“1965 Transfer”) Ms De Froberville agreed within 2 years to build on the Site a building for which Brigadier Radford had obtained planning permission. The 1965 Transfer also contained a number of other covenants by Ms De Froberville. Those covenants were given by Ms De Froberville:
“… so as to bind the land hereby transferred and to benefit the Vendors property known as No. 89 Holland Park London W11”
She did not comply with that obligation and, on 10 July 1968, the obligations created by the 1965 Transfer were varied by the 1968 Deed, which was expressed to be supplemental to the 1965 Transfer. The 1968 Deed defined Brigadier Radford as being the “Adjoining Owner” and Ms De Froberville as the “Building Owner”. In so far as is material, the 1968 Deed provided that:
“2. The Building Owner hereby covenants with the Adjoining Owner that she will complete the development of the [Site] … not later than the expiry of 18 months after the date hereof.
(a) In lieu of the drawings referred to in [the 1965 Transfer] the Adjoining Owner hereby approves the general layout drawing no. 163/13 dated April 1968 prepared by Holmes and Gill.
(b) The Building Owner shall make no applications to the appropriate planning authority nor apply for any other necessary permissions from the local or any other body or authority in respect of any plans drawings or specifications which have not previously been approved by the Adjoining Owner PROVIDED ALWAYS that if the Adjoining Owner shall approve the same but The Building Owner shall be required to modify or amend the same by the Planning Authority or any other authority or if the Building Owner shall herself desire to amend the same then no further application shall be made by her to any such Authority unless the revised or amended drawings and specifications have first been approved by the Adjoining Owner
3 No work shall be commenced upon the [Site] before the definitive plans drawings and specifications of the said buildings have first been approved by the Adjoining Owner or his surveyor.”
Clause 4 stated that subclauses 3 (i), (ii) and (iii) of the 1965 Transfer were abrogated but that in all other respects the covenants and provisions contained in the 1965 Transfer relating to the development of the building site remained in force to the extent they were not inconsistent with the provisions of the 1968 Deed. Clause 5 contained a covenant to pay to the Building Owner “the fees incurred by his Architect in connection with the approval of the revised plans drawings and specifications”.
Ms Hicks acquired the Site at auction on 12 December 2011. By that time, the freehold of the Building had become vested in the Company, and the long leases had been created.
The first dispute between the parties concerned the enforceability of the covenants, and the question whether consent could be unreasonably withheld. The dispute was determined by Mr Robert Miles QC, sitting as a judge of the Chancery Division. His decision is at [2013] EWHC 391 (Ch). He decided that both the Company and the leaseholders were entitled to enforce the covenants. The intention of the covenants was to benefit the owners for the time being of the Building. The entitlement of the leaseholders to enforce the covenants came about because of the effect of section 78 of the Law of Property Act 1925. He next decided that Ms Hicks was bound by the covenant. Finally, he decided that it was necessary to imply a proviso to the effect that consent (whether under clause 2 (b) or under clause 3) was not to be unreasonably withheld.
On 9 October 2013 Ms Hicks applied to the Company for consent under clause 2(b) of the 1968 Deed. The structure that she proposed was a single storey glazed building that constituted the entrance to two floors below street level. The Company, with the advice of experts, consulted the leaseholders and ultimately, on 20 November 2013, refused its consent. Meanwhile, Ms Hicks had applied for planning permission for the scheme. Although the local planning authority refused permission, Ms Hicks appealed; and on 27 October 2015 a planning inspector allowed the appeal and granted full planning permission.
On 4 November 2016 Ms Hicks applied to the Company for approval of a revised iteration of her previous proposed development under both covenants. In support of her application she submitted the whole of the material that she intended to submit to the local planning authority when seeking a revision to the permission previously granted by the inspector for her October 2013 scheme. This material was extensive and extended to some 3 lever arch files of material. The letter of application stated that the submitted drawings were “the final and definitive drawings of the building, including construction drawings and specifications.” The revised development for which she sought approval consists of a single storey entrance pavilion, which is described by the Company as being a glass cube structure, located at the eastern end of the Site, leading to a subterranean structure that covers most of the Site. Natural light is provided by a series of skylights and light wells. The design is uncompromisingly contemporary and it is common ground that it shares “… none of the design language of the listed buildings of Holland Park …”. The planning inspector who granted planning permission described the entrance pavilion as being “more noticeable at night as a gently glowing glass box” that was “… a somewhat unusual feature”. The 2016 scheme differed from that proposed in 2013 by being smaller in overall size, a change from king post to contiguous piling for the construction of the basement, the incorporation of a birch tree to the rear of the Site and some other minor alterations. Ms Hicks submitted this material to the Company before applying to the local planning authority for approval to the revised scheme.
On 20 January 2017 the Company refused approval under both clause 2 (b) and clause 3. It is that refusal which is in issue on this appeal. The refusal was contained in a 10-page decision letter. It stated that:
“… our decision is to refuse consent for aesthetic reasons and the loss of the amenity of the trees, but in any event … we must withhold consent unless and until you satisfy the serious concerns raised by Capita.”
Capita were engineering and hydrology experts retained by the Company. The letter went on to say that in arriving at the decision “… we have...
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