R v Kensington and Chelsea Royal London Borough Council
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE ELIAS |
| Judgment Date | 29 October 2001 |
| Neutral Citation | [2001] EWHC 896 (Admin) |
| Docket Number | NO: C0/1431/01 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 29 October 2001 |
[2001] EWHC 896 (Admin)
Mr Justice Elias
NO: C0/1431/01
IN THE HIGH COURT OF JUSTICE
THE ADMINISTRATIVE COURT
QUEEN'S BENCH DIVISION
MR Z BREDEMEAR (instructed by Messrs Woodfords) appeared on behalf of the Claimant
MR S A BIRKS (instructed by Royal Borough of Kensington and Chelsea) appeared on behalf of the Defendant
Monday, 29th October 2001
In this application for judicial review the claimant challenges a decision of the local authority made pursuant to a lease, to which both the claimant and the local authority are parties, in which the authority refused the claimant's application for consent to change the purpose for which the demised premises could be used. Currently, the claimant is entitled to use them for retail purposes and he wishes to use them in order to run a restaurant.
THE BACKGROUND
The claimant is the lessee of certain premises at 359—361 Fulham Road. The defendant Council is the landlord and freehold owner of the premises. The lease was granted on 5th March 1990 for a term of 25 years from 25th December 1989. The lease was assigned to the claimant and a Mr Pankaj Amin by deed of assignment dated 14th August 1990. By a trust deed dated 14 August 1990, the claimant and Mr Amin declared that they held the lease as trustees for the claimant as the sole beneficial owner.
I should briefly review certain of the terms of the lease. The rent was fixed initially at £52,000. The lease contains a provision for rent reviews every five years. On any rent review it is assumed that the premises:
"…may be used for any of the purposes permitted by this lease as varied or extended by any licence granted pursuant thereto."
There is a tenant's covenant to use the property for the permitted use only. There is also an obligation on the tenant to carry out certain development works to the property which had to be completed by the end of the term of ten years. The lease provided for a six month rent free period whilst the tenant carried out the development works.
The most important provision in the lease for the purposes of this application, is the provision which identifies the permitted use. This is defined in Clause 1 of the lease as follows:
"'the permitted use'
The trade or business of a retail delicatessen which expression shall include the sale of fresh meat and fresh fish and wine but shall expressly exclude the sale of other liquors containing alcohol PROVIDED THAT the forecourt shall be used solely in connection with the said business but no food or alcohol shall be consumed thereon or such other trade or business approved by the Landlord such approval or consent not to be unreasonably withheld in the case of uses falling within the Landlord's Neighbourhood Use Policy (as herein after defined) and also falling within the Use Class A1 of the Town and Country Planning (Use Classes) Order 1987."
The Neighbourhood Use Policy itself is then defined as follows:
"The Landlord's policy from time to time in force to ensure that the local community's needs are adequately catered for but without an excess of any particular trade or business."
I pause simply to note two matters in relation to those provisions. First, I accept the argument of Mr Bredemear for the claimant that any change of use would only occur after a request from the tenants. This is supported by the use of language which requires the landlord to approve or consent to the change of use. In other words, it would not be legitimate for the local authority to approve a change of use which the tenant did not seek to obtain and thereby try to increase the value of the rent on any rent review.
Second, although the power to withhold consent is restricted in circumstances where the change of use proposed falls within the Neighbourhood Use Policy and Class A1 uses, it is unrestricted in circumstances where the change of use falls outside those boundaries.
When the claimant first obtained the premises, he traded from the premises in accordance with the permitted use as a retail delicatessen. However, from about 1992 the claimant gradually began to sell food and drink for consumption on or in the premises. On 29th June 1995 the defendant served on the claimant an enforcement notice under section 172 of the Town and Country Planning Act requiring him to stop using the premises in this way. They held that by, in effect, operating the premises as a cafe he was in breach of planning permission.
The claimant appealed against the enforcement notice and at the same time he pursued an application, which was made on 24th May 1995, for planning permission to permit the premises to be used for Class A3 use, namely to permit a restaurant/takeaway. The application for planning permission was refused by the local authority. The claimant appealed against that refusal and this appeal was heard at the same time as his appeal against the imposition of the enforcement notice.
The Secretary of State appointed an Inspector for the purpose of hearing the appeal. By a decision dated 25th June 1996 the claimant's appeals were both upheld. He was granted the planning permission to use the premises as a restaurant, and the enforcement notice was quashed. In the course of giving his decision the Inspector rejected the Council's claims that the change to A3 use would damage the vitality and viability of the area in which the premises are situated.
There was a subsequent application by the defendant for judicial review of the Secretary of State's decision, but that was unsuccessful. The claimant thereafter continued to operate the premises as a restaurant pursuant to the planning permission. But, of course, this was in breach of the terms of the lease because he had obtained no consent to that change of use. The claimant, therefore, requested that he be granted a licence pursuant to the lease to permit the change to restaurant use in accordance with the planning permission which had now been given.
The first request was made by his surveyor, Mr K R Snellings on 7th February 1997. The defendant's Valuer's Department set its face against permitting this change of use and, indeed, on 28th April 1997 it refused to put the request before the relevant committee. Thereafter there were continuing negotiations on behalf of the claimant with the defendant's Valuer's Department on the basis that the change of use would be permitted.
These discussions led to certain terms which were agreed between the parties as being appropriate for a lease which included the change of use, provided the relevant committee granted the change of use. It is perhaps pertinent to note that the rent of the premises would increase by some £40,000 or so per year.
Correspondence continued between Mr Snellings and the Council through the Valuer's Department and a further request to permit the change of use was made on 11th June 1999. That correspondence was also concerned with the building works that had to be carried out by the claimant, and to which I have already made reference, I will have to return in more detail to some of that correspondence later in this judgment. Suffice it to say for the moment that the question of whether or not to grant a change of use finally came before the Corporate Management Committee of the Council on 29th November 2000.
That Committee had before it a report from Mr Doolan, the Borough Valuer, which set out in some detail the background to the application. It drew attention to the fact that the applicant had succeeded in his appeal to the change of use and it referred to the fact that if the Committee was willing to agree a change of use, then there could be a surrender of a lease and a fresh lease on certain terms and conditions which were set out in the report. These included a reference to the increase in the rent that would be forthcoming if the extension of use were to be granted.
The Committee was given a number of recommendations to consider. They were asked either to approve the surrender and renewal of the lease on the terms set out in the report, or to refuse as landlord the change of use to A3 and, in the latter event, either to instruct officers to seek to enforce the terms of the existing lease or to enter into negotiations to agree terms for the surrender of the existing lease. At one point Mr Bredemear submitted that they were not given the option simply of agreeing modifications within the terms of the existing lease, but he accepted realistically that there was, in substance, no difference here between that and the proposal to surrender the existing lease and enter into a new one.
The Committee decided to refuse the change of use and instructed officers either to enforce the terms or to seek a surrender. Subsequent to that decision, the claimant received considerable support from local residents, apparently in favour of the change of use. He submitted a petition, signed by some 2,500 people, supporting the change. Accordingly, the officers perfectly properly brought the matter back to the Committee. The Committee reconsidered the matter on 11th January 2001. They were not, however, persuaded by the petition and they confirmed their original decision. It is that decision which is now challenged in these proceedings.
THE ARGUMENTS
The claimants have advanced three arguments why they submit the decision is unlawful. First, they say that the permitted user clause was invalid because the effect was to restrict the rent that could be obtained for...
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