Messenex Property Investments Ltd v Lanark Square Ltd

Hearing dates: 23 and 24 November 2023

APPROVED JUDGMENT

This judgment was handed down remotely by circulation to the parties' representatives by email and release to the National Archives. The date and time for hand-down is deemed to be 10.30am on Tuesday, 23 January 2024.

Ashley Greenbank(sitting as a judge of the High Court):

Introduction

In this case the Claimant, Messenex Property Investments Limited (“Messenex”), seeks a declaration that its obligations as the tenant under a lease of a formerly mixed-use building to seek consent from the landlord to alterations to the demised premises do not preclude it from carrying out two sets of works. Those two sets of works are: works to add three floors to the building (which I shall refer to as the “Rooftop Works”); and works to the ground floor of the premises to convert it from business to residential use (which I shall refer to as the “Ground Floor Works”).

Messenex's case is that the Defendant, Lanark Square Limited (“Lanark”), Messenex's landlord, unreasonably withheld consent to the works, and so Messenex is discharged from the covenant requiring the tenant to seek approval.

The hearing and the evidence

This claim is brought under Part 8 of the Civil Procedure Rules (“CPR”).

The hearing bundle contained four witness statements:

i) a witness statement of Mr Grant Meyrick, a solicitor and a partner in William Sturges LLP, who gave evidence on behalf of the Claimant;

ii) two witness statements of Mr James Hannon, a solicitor and a partner in William Sturges LLP, who also gave evidence on behalf of the Claimant;

iii) a witness statement of Mr George Georgiou, a director of the Defendant, who gave evidence on behalf of the Defendant.

The witnesses were not cross-examined on their statements. I will address aspects of the witness evidence at appropriate points in this judgment.

Facts

My findings of fact are set out in this section.

The title structure

Messenex is the tenant under a lease (the “Lease”) dated 24 September 1996 granting a term of 200 years less ten days from 14 July 1986 of Marina Point, 14 Lanark Square, London E14 9QD, a four-storey mixed-use building on the Isle of Dogs.

There are three interests superior to the Lease.

i) Lanark is the freehold owner of an estate known as Lanark Square in London E14 (the “Estate”). The Estate comprises three blocks of flats – Balmoral House, Aegon House and Marina Point – as well as other surrounding land, buildings, roads and parking.

ii) A head lease of the three blocks of flats was granted on 5 December 1986 for a term of 200 years less one day from 14 July 1986. The head lease is currently vested in Melrose Apartments Property Limited, an associated company of Lanark.

iii) An intermediate lease of the three blocks of flats was granted on 30 June 1988 for a term of 200 years less three days from 14 July 1986. The intermediate lease is currently vested in Lanark.

Relevant provisions of the Lease

The Lease contains the following provisions:

i) The premises demised by the Lease are the whole of the building at Marina Point excluding “the basement areas beneath [the building] save any footings foundations and columns aforesaid which run through such basement areas”. In particular, Lanark retains the right to possession of the basement parking area beneath Marina Point, Balmoral House and Aegon House. The demise is of the building itself; it does not include any part of the building's curtilage.

ii) Clause 3(f) contains a covenant on behalf of the tenant concerning alterations which is in the following form:

“(i) That no additional or new building or structure of any kind shall at any time hereafter be erected upon the Demised Premises or any part thereof without the prior consent in writing of the Lessor which shall not be unreasonably withheld or delayed

(ii) Not at any time during the Term to make or permit or suffer to be made any alterations or addition to the main structure or any alterations in the external appearance or layout of the Demised Premises or any part thereof without in any of the foregoing cases the prior written consent of the Lessor (such consent not to be unreasonably withheld or delayed)”

The other provisions of the Lease that are relevant to the question of consent to alterations are as follows:

i) Clause 3(g)(i) contains an anti-nuisance covenant. It is in the following terms:

“Not to do or permit or suffer to be done or remain upon the Demised Premises or any part thereof anything which may be or become a nuisance annoyance or disturbance inconvenience injury or damage to the Lessor or its tenants or the owners or occupiers of any property in the neighbourhood”.

ii) Clause 3(g)(iv) contains a covenant against overloading. It is in the following terms:

“Not to overload or permit or suffer to be overloaded the floors roofs or structure of the Demised Premises or permit or suffer the same to be used in any manner which will cause undue strain or interfere therewith or with the Car Park and not to install or permit or suffer to be installed any machinery on the Demised Premises which shall be unduly noisy or cause dangerous vibrations not to use or permit or suffer to be used the Demised Premises or any part thereof in such manner as to subject the same to any strain beyond that which it is designed to bear”.

The ancillary rights granted in Schedule 1 of the Lease include rights of way over the Estate's roads for access purposes (paragraph 1), services easements (paragraph 2) and a right of entry onto retained parts of the Estate for the purposes of carrying out repairs to Marina Point (paragraph 3). The Schedule 1 rights do not include a right to use, or erect scaffolding on, the retained parts of the Estate.

Deed of Variation

By a deed of variation entered into on 30 January 1997 (the “Deed of Variation”), the Lease was varied so as to add a right to park up to 16 cars in the parking area in the basement and the ground floor parking area “in such locations as shall be allocated by the Lessor from time to time”.

Planning applications and decisions

Rooftop Works

There are two planning decisions relevant to the Rooftop Works:

i) a decision dated 28 April 2020 granting planning permission in relation to an application submitted on 7 October 2019 (numbered PA/19/02162) for a proposed rooftop extension to provide 3 additional floors to consist of 9 residential flats (the “Original Rooftop Planning Decision”);

ii) a decision dated 29 July 2021 approving an application submitted on 11 June 2021 (numbered PA/21/01324) for variation of conditions in the Original Rooftop Planning Decision relating to approved plans and bicycle storage, permitting the relocation of bicycle storage envisaged in that decision from the basement to the ground floor (the “Variation Decision”).

Ground Floor Works

There are two planning decisions relating to the Ground Floor Works:

i) a decision dated 23 June 2020 to grant prior approval for an application submitted on 28 April 2020 (numbered PA/20/00852) for a change of use from offices to five residential units (the “First Ground Floor Planning Decision”);

ii) a decision dated 17 May 2021 to grant prior approval for an application submitted on 24 March 2021 (numbered PA/21/00641/A1) to vary the First Ground Floor Planning Decision to permit the relocation of bicycle storage envisaged in the First Ground Floor Planning Decision from the basement to the ground floor (the “Second Ground Floor Planning Decision”).

The exchanges between the parties

In a letter dated 26 May 2020, following the grant of permission for the Rooftop Works, Messenex's solicitors, William Sturges LLP (“WS”), wrote to Lanark applying for consent for the Rooftop Works. Lanark now accepts that this letter constituted a formal application for consent under clause 3(f) of the Lease notwithstanding the lack of supporting documentation.

On 8 June 2020, WS sent a further letter to Lanark noting that it had not received a response to its letter of 26 May 2020 and informing Lanark that it would “have no option but to advise [its] client to issue proceedings” if it had not received a response by 12 June 2020.

On 12 June 2020, Howard Kennedy LLP (“HK”), Lanark's solicitors, responded to that letter by email noting that no formal application for consent had yet been made and that Lanark would require “details of the proposals, including all plans and documentation”.

In that email, HK also requested that WS respond with their client's proposals for a premium to be paid by Messenex to Lanark for its consent. It subsequently became apparent that this suggestion was made on a mistaken assumption as to the terms of the Lease. I have not referred to it further in this judgment.

On 19 June 2020, WS sent to HK by email a copy of the Original Rooftop Planning Decision and a copy of a planning brochure.

On 24 June 2020, following the First Ground Floor Planning Decision, WS sent an email to HK attaching a copy of the decision seeking consent from Lanark for the change of use. Lanark accepts that this email was and should be treated also as an application for consent for the Ground Floor Works as set out in the First Ground Floor Planning Decision.

On 10 July 2020, HK sent an email to WS...