GMD Developments Ltd v Leeds City Council
| Jurisdiction | England & Wales |
| Judgment Date | 19 May 2006 |
| Neutral Citation | [2006] EWHC 1142 (Ch) |
| Court | Chancery Division |
| Docket Number | CASE NO. HC05CO2893 |
| Date | 19 May 2006 |
[2006] EWHC 1142 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr. Paul Morgan QC Sitting as a Deputy Judge of the High Court
CASE NO. HC05CO2893
Mr. Michael Driscoll QC (instructed by DLA LLP India Buildings, Water Street, Liverpool L2 0NH) for the Claimant
Ms Sonia Rai (instructed by The Council, Legal & Democratic Services, Civic Offices, Civic Hall, Leeds, LS1 1UR) for the Defendant
APPROVED JUDGMENT
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
(Mr Paul Morgan QC, sitting as a Deputy Judge of the High Court)
The Deputy Judge
Leeds City Council ("the Council") is the freehold owner of an irregularly shaped plot of land on the north east side of Woodhouse Lane, Leeds. Woodhouse Lane is in the university area of the City of Leeds.
GMD Developments Limited ("GMD") is the lessee of the land referred to above. The lease now vested in GMD was granted on the 11 th December 1981 by West Yorkshire Metropolitan County Council to the British Broadcasting Corporation ("the BBC"). The West Yorkshire Metropolitan County Council was disbanded in 1986 when title to the land and the reversion on the lease vested in the Council.
On 1 st June 2002, the Council and the BBC entered into a Deed of Variation of the lease.
In around November 2003, the Council consented to an assignment of the term of the lease to GMD and the lease was duly assigned on the 28 th November 2003. Neither the Licence to Assign nor the Assignment is in evidence but it was common ground that there was no provision in those documents which was material to the present dispute.
I will now summarise what has led to the present dispute. On the 8 th July 2005, Solicitors for GMD applied to the Council for approval pursuant to the terms of the lease to the erection of a building (or part of a building) on the demised premises. On the 8 th September 2005, the Council replied to that application and the burden of the reply was that GMD was not entitled under the then existing terms of the lease to carry out its proposed development on the demised premises. However, the Council went on to state that the Council was willing to enter into a Deed of Variation of the lease so as to permit the proposed development but in circumstances where the Council would require the payment of "a proper consideration".
Further correspondence between the parties did not result in the matter being resolved and on 20 th October 2005, GMD commenced the present proceedings claiming a declaration that the Council had unreasonably withheld consent to its proposal and, further, a declaration that the erection and use of the building on the demised premises as proposed by GMD was a development which it was entitled to carry out under the terms of the lease.
Although a number of additional issues were raised in the witness statements that have been served on behalf of the parties, at the trial, the number of issues remaining for decision was reduced to two.
The first issue is as to the meaning of clause 4(viii) of the lease and, in particular, whether GMD's proposal comes within what is permitted by clause 4(viii), subject only to obtaining the approval of the Council, which approval is not to be unreasonably withheld.
The second issue is whether the Council did unreasonably withhold approval pursuant to clause 4(viii) of the lease in response to the application made by GMD.
I will now refer to the relevant provisions of the lease. The original lessor was West Yorkshire Metropolitan County Council which was described in terms which included the reversioner for the time being on the lease. The original lessee was the BBC described as "the tenant", which expression included its successors in title and assigns.
By clause 1 of the lease, in consideration of a premium of £50,000, the land in question was demised for a term of 99 years from the 11 th December 1981 at a peppercorn rent. The land was described as a plot of land containing an area of 1707 square yards.
By clause 2(a) of the lease, there was reserved to the lessor out of the demise a right of way with or without vehicles over a part of the demised land shown hatched blue on the plan to the lease. This reservation can be understood when taken together with clause 3 of the lease whereby the BBC, which was the freeholder of land adjoining the demised premises, granted to the Council a right of way with or without vehicles over a strip of land which was part of the BBC's freehold land and which ran alongside the demised premises. The effect of the reservation and grant of these easements was that although the Council had demised the land in question, the Council had a right of way over the BBC freehold land and then a right of way over a part of the demised land to gain access to a further area of land retained by the Council. This area of land consisted of the area of a bridge over a dual carriageway which crossed under Woodhouse Lane at one point. The area of the bridge was used for car parking and the access to this car parking area was enjoyed pursuant to the easements referred to above.
By clause 4(viii) of the lease, the lessee covenanted:
"To use the demised premises for the parking thereon of motor vehicles and the erection and use of a building in accordance with Planning Permission first having been obtained from the Local Planning Authority and approved by the Council (such approval not to be unreasonably withheld) and for no other purpose whatsoever and not to use the demised premises or any part thereof or permit or suffer the same to be used for any offensive noisome noxious noisy or dangerous trade business or occupation whatsoever or so as to cause nuisance annoyance or inconvenience to the Council its tenants or occupiers of adjoining or neighbouring property."
By clause 4(ix), the lessee covenanted not to park motor vehicles on the part of the demised premises shown hatched blue on the lease plan so as to prevent access by the lessor with or without motor vehicles to the lessor's car parking area on the bridge over the dual carriageway. The purpose of this covenant is obvious; it was to prevent parking which would block the lessor's enjoyment of the reserved right of way.
By clause 4(x) of the lease, the lessee covenanted to comply with any Act of Parliament for the time being in force and in particular to comply with the obligations imposed upon the lessee or tenant or occupier under or by virtue of the Offices Shops and Railway Premises Act 1963 and the Factories Act 1961.
By clause 4(xiii), the lessee covenanted, in effect, not to commit a nuisance or annoyance or interfere with the quiet and comfort of the occupants of neighbouring or adjoining premises. This clause was subject to the proviso that such user permitted by clause 4(ix) (sic) should not constitute such a nuisance or annoyance. It may be that the intention was to cross-refer to clause 4(viii) rather than clause 4(ix).
By clause 4(xv), the lessee covenanted not to underlet the demised premises or any part of them and not to assign or part with the possession of the demised premises or any part of them.
By clause 4(xviii), the lessee covenanted to yield up the demised premises at the determination of the term in good and tenantable repair and condition. There was no general repairing covenant upon the lessee during the term.
By clause 5(b), the lessor covenanted not to park motor vehicles on the part of the demised premises referred to in clause 3(ix)(sic). This would seem to be a reference to clause 4(ix) which itself contained a reference to the part of the demised premises shown hatched blue on the lease plan. Again, the purpose of clause 5(b) is obvious; it served to prevent the lessor using the land hatched blue otherwise than for passing and repassing and so that the right to pass and repass did not extend to parking.
By clause 6(iv) it was agreed that where the context so admitted, words in the lease importing the singular number only included the plural number, and vice versa.
As I have indicated, on the 1 st June 2000, the Council as reversioner on the lease entered into a Deed of Variation with the BBC in whom the term of the lease remained vested. In summary, the lease was varied so that the prohibition on underletting, parting with possession and assigning contained in clause 4(xv) was significantly relaxed. I will not set out the full terms of the new provision as it suffices to say that the new provision allowed underletting of the whole of the demised premises or any part of them with the consent of the lessor, which consent was not to be unreasonably withheld or delayed and, further, the new provision permitted assignment of the whole of the demised premises with the consent of the lessor, which consent was not to be unreasonably withheld or delayed. Clause 4 of the Deed of Variation stated that the agreed variation was in consideration of the payment of a premium of £10,000 by the lessee to the lessor.
The Council asked the Court to have regard to certain correspondence and other documents which came into existence prior to the grant of the lease and, further, certain documents which came into existence prior to the Deed of Variation. Without pausing to decide whether that material is admissible for any purpose, I will briefly refer to it not least because the existence of that material became known to the Council at some time in the past and the existence of that material was relied upon in correspondence and in witness statements to which it is necessary to refer.
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