Iqbal and Others v Thakrar

The appellants, the defendants, Mr Rishi Thakrar and his sister Ms Rupa Thakrar, appeal with the permission of this court (Clarke LJ) from the order made by Mrs Recorder Plumptre in the Canterbury County Court on 12th December 2003. By that order the Recorder granted certain declarations relating to structural alterations and additions which the respondents, the claimants, Mohammed Iqbal, Omar Farook Khan, Mohammed Suleman Khan, Mohammed Abdul Koriem Khan, as tenants under a long lease of ground floor premises at 4 Risborough Lane, Cheriton, Folkestone, were proposing to make and for which they had sought the consent of the appellants.

The appellants are the holders of the freehold of 4 Risborough Lane ("the Property") subject to that lease. Under the terms of the lease the appellants cannot refuse consent unreasonably. The appellants did refuse consent to the alterations proposed by the respondents. The primary question on this appeal, as it was before the Recorder, is whether the Recorder was right to declare that the appellants unreasonably withheld consent and that the respondents were entitled to proceed with the proposed alterations and additions in accordance with their plans.

I summarise the relevant facts in this way. Prior to March 1998 the property had been occupied for several decades by a branch of the British Legion. The freehold of the Property was, in 1998, vested in Southern Breweries Ltd. On 20th May 1998 the respondents purchased from the freeholder a 999-year lease of premises which were defined in the lease as "the Demised Premises". They were defined in this way:

"ALL THAT ground floor shop premises forming part of the Building known as 4 Risborough Lane Cheriton Folkestone Kent ALL OF which premises are shown for the purpose of identification only edged red on the plan attached hereto and are hereinafter called 'the Demised Premises' and for the purpose of obligation as well as grant include:

(a) …

(b) any of the walls or partitions lying within the Premises which are not loadbearing or which do not form part of the main structure of the Building.

…

(e) the windows and window frames and doors and door frames in the walls bounding the Premises or otherwise in the Premises.

(f) the shop front of the Premises but not including

(i) …

(ii) the foundations exterior main walls party walls and roof or any of the main timbers and joists of the Building or any of the load bearing walls or any of the partitions therein (whether internal or external) except such as are expressly included in this demise …"

Clause 3 of the lease contains the tenant's covenant with the landlord and included:

"(h) Not to make any structural alterations or additions to the Demised Premises either internally or externally without the approval in writing of the landlord (such approval not to be unreasonably withheld) to the plans and specifications."

The lease surprisingly contained no covenant restrictive of user.

The purchase by the respondents had been effected pursuant to an advertisement by the freeholder advertising, for sale by auction, the premises as comprising "a ground-floor lock-up shop unit having A3 takeaway use". A3 use is the planning category for the sale of hot food on or off the premises.

The appellants, at the time the respondents purchased their long lease, were the tenants of the upper storeys of the property. They purchased the freehold, including the reversion to the respondents' lease, on 4th June 2001 for a sum of under £300. They have been developing the upper storeys of the property into what they call ten luxury flats.

Even before the appellants purchased the freehold, they had become aware that the respondents wanted to convert the ground floor into an Indian restaurant. Thus on 11th May 2001 the appellants' father, Mr Subhash Kanji Thakrar, who is a chartered accountant and has throughout acted on behalf of his son and daughter, wrote to the first respondent to say that he was aware that the respondents had applied to the District Council for the conversion of the ground floor premises. Mr Thakrar said:

"There are load bearing walls, which you wish to take off and this could have an impact on the flats above."

The respondents' architect, Mr Rahman, wrote to Mr Thakrar on 10th June 2001 to say that the respondents proposed to have a restaurant with a new entrance door and window, and said that planning and building regulation approval had been obtained. That provoked a strong protest from Mr Thakrar, who said that the appellants would oppose the conversion. He added:

"You may have A3 permission, but that does not entitle you to do works, which are not acceptable to the freeholder."

On 3rd May 2002 solicitors for the respondents wrote on their behalf to the appellants. They referred to clause 3(h) of the lease and enclosed a copy of their architect's proposed restaurant plan dated April 2001, approved by the District Council on 8th May. They thereby applied to the appellants for approval to the structural alterations and additions shown on the plan.

The plan shows the existing front elevation and the proposed front elevation. The most material change is that in place of a wide window below which is part of the exterior wall, it was proposed that a narrower window would be installed and that a little to the side of the new window a new door would be inserted. It is apparent that the new door would be built where part of the existing window stands and that this would also involve cutting into the exterior wall below the window to remove the bricks (or whatever material was there constituting the front wall) .

In the centre of the plan is what is called "existing ground floor plan". That shows the existing layout of the ground floor. In the middle of that plan one finds this legend:

"Existing partition and load bearing wall to be checked on site before work commence".

That legend is also to be found again in certain notes which are included on the plan. It is plain that these notes are directions intended to be read by the contractor who is to do the building work.

Also on the plan is what is called "proposed restaurant plan". Comparing the existing ground floor plan with the proposed restaurant plan, one sees the door leading to the street that is to be newly constructed in place of part of the existing window. One sees that an internal partition, referred to at the trial as partition E, is to be removed, as is a brick pier which at the trial was referred to as pier D and lies at the end of partition E. Also one notes that opposite pier D, another pier, called pier F, has been reduced in size on the proposed restaurant plan.

There are no directions as to what is to be happen when the contractor checks the existing partition and load bearing wall. It is not stated that if the contractor finds that the wall is load bearing, he is to stop work. Nor is it stated in any other way what is then to happen. The architect's plan was the only the document supplied to the appellants. No specification, such as may have been contemplated by the lease in clause 3(h), was provided.

Mr Thakrar responded to that request for consent. He expressed himself in strong language over four typed pages, in a somewhat idiosyncratic style. The general tone was extremely hostile to what was proposed. The most relevant part of the letter was in these terms:

"There is also a structure problem that will arise from the rearranging of any walls to make changes that are structural or load bearing, and your client has misrepresented that situation to the Local Council. There are no other door openings, as shown on your new plans and our clients' will not give access or any permission for your client to formulate or have new openings or put doors. This will result in a loss of parking spaces as well as it will create difficulties with the Health, Safety and stable structure of the building. The clients' building works have been completed to the upper part and flats of the property and our clients', as freeholder are now entitled to reject your clients' application, because they did not see fit to consult them nor take their permission in good time or at all until now. They were put on notice about consulting Solicitors or somebody like Architects. Your letter of 3 May 2002 is too late, and furthermore, our clients' are entitled to withhold any approval of the works, where impinge upon their amenities and/or the fabric of the building, the amenities of the ten flats, because it is now a substantial residential property and planning permission has not been previously properly sought for 'the Restaurant', as you also call it a shop."

After further correspondence, proceedings were commenced on 20th January 2003 by the respondents against the appellants. The respondents claimed that by the letter of 13th May 2002 the appellants unreasonably refused to give their consent to the proposed alterations...