Factual and Procedural Background
The Plaintiff is the owner and estate manager of a significant land holding known as the Gilbert Estate in East Sussex, including land within the village of East Dean, located in the South Downs National Park. The land is owned under multiple titles, some of which are burdened by restrictive covenants granted in favor of the Plaintiff's retained land. The Defendants each own a parcel of land, previously part of the Plaintiff's estate, subject to restrictive covenants, and seek to construct detached residential properties on their respective parcels.
The Plaintiff refused consent to the Defendants' proposed construction scheme under the restrictive covenant, citing concerns over amenity impact and potential threat to the commercial value of neighboring land. The Defendants commenced some works despite refusal, including erecting retaining walls, which they admitted breached the covenant. Proceedings were initiated by the Plaintiff seeking an injunction and declarations regarding the reasonableness of consent refusal.
The trial involved detailed factual and expert evidence, including a site visit by the Judge, and focused on the reasonableness of the Plaintiff’s refusal of consent, the scope of the covenant, and the nature of works undertaken by the Defendants.
Legal Issues Presented
- What were the Plaintiff’s reasons for refusing consent to the Defendants’ proposed scheme?
- On those reasons, was the Plaintiff’s refusal of consent unreasonable?
- Did the Defendants believe that the works undertaken between June and August 2020, particularly the erection of retaining walls, fell outside the scope of the restrictive covenant, and was that belief reasonable?
Arguments of the Parties
Plaintiff's Arguments
- The Plaintiff contends that the refusal of consent was reasonable, based on two principal reasons: detrimental impact on the amenity value of the Estate, and potential threat to the future use and commercial value of neighboring land.
- The Plaintiff argues that the refusal was adequately reasoned and that the works undertaken by the Defendants, particularly the retaining walls, were not within the scope of the covenant and were undertaken without reasonable belief they were permitted.
- The Plaintiff accepts taking into account some land beyond the benefited land was an error but denies that this vitiated the entire decision.
- The Plaintiff maintains that consent refusal was not a mechanism to extract a premium from the Defendants.
Defendants' Arguments
- The Defendants assert that the Plaintiff’s refusal of consent was unreasonable and lacked a reasonable basis.
- They contend that the Plaintiff took into account irrelevant matters, including land not benefited by the covenant and views of third parties, thus invalidating the decision-making process.
- The Defendants seek declarations that the Plaintiff unreasonably withheld consent and that they were lawfully entitled to implement their scheme.
- The Defendants argue that some works undertaken were believed to be within the scope of the covenant, including the erection of retaining walls, and that such belief was reasonable.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| RM Cole v Russell (Tulse Hill) Ltd (1955) 165 EG 389 |
Onus of proof shifts if a prima facie case is established in conditional consent cases. |
Distinguished as not applicable; no conditionality applied to withholding consent in this case. |
| Hicks v 89 Holland Park (Management) Ltd [2021] EWHC 930 (Comm) |
Reasonableness of refusal linked to possibility of neutralizing factors by conditions. |
Rejected the proposition that refusal is unreasonable if a condition could neutralize concerns without direct authority. |
| Sargeant v Macepark (Whittlebury) Limited [2004] EWHC 1333 (Ch) |
Reasonableness of conditions; conditions that neutralize concerns are generally reasonable. |
Supported the view that refusal can be reasonable even if conditions might mitigate concerns. |
| Iqbal v Thakrar [2004] EWCA Civ 592 |
No duty arises to grant conditional consent if refusal is justified. |
Bound the Court to reject the Defendants’ argument that conditional consent should have been granted. |
| 89 Holland Park Management Ltd v Hicks [2020] EWCA Civ 758 |
Aesthetic grounds can justify consent refusal if not purely subjective and relevant to amenities. |
Confirmed that aesthetic objections must be grounded in objective impact, not taste alone. |
| Braganza v BP Shipping Ltd [2015] 1 WLR 1661 |
Decision-makers must exclude irrelevant considerations and act reasonably in decision-making processes. |
Applied to assess whether Plaintiff took into account irrelevant matters affecting reasonableness. |
| Bromley Park Garden Estates Ltd v Moss [1982] 1 WLR 1019 |
Court must find the actual reason(s) for refusal of consent. |
Guided the Court to ascertain the Plaintiff’s genuine reasons for refusal. |
| Minerva (Wandsworth) Ltd v Greenland Ram (London) Ltd [2017] EWHC 1457 |
Reasons must reflect the decision-maker’s state of mind at the relevant time. |
Used to assess Plaintiff’s contemporaneous reasons versus later rationalizations. |
| Cryer v Scott Bros (Sunbury) Ltd 55 P&CR 183 |
Clarifies terminology of reasons, factors, and considerations in decision-making. |
Supported the distinction between considerations and reasons in the Plaintiff’s decision. |
| Victory Place Management Company Limited v Kuehn [2018] EWHC 132 (Ch) |
Reasonableness involves both procedural and substantive limbs (Wednesbury principle). |
Informed the Court’s evaluation of Plaintiff’s decision-making process. |
| International Drilling Fluids Limited v Investments (Uxbridge) Limited [1985] EWCA Civ 11 |
Refusal of consent for collateral or uncovenanted advantage is unreasonable. |
Considered in assessing whether Plaintiff’s refusal was motivated by improper purposes. |
| Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 |
Defines standards of reasonableness in public law decision-making. |
Applied analogously to the reasonableness of Plaintiff’s refusal. |
| JML Direct Ltd v Freesat UK Ltd [2009] EWHC 616 (Ch) |
Considerations taken into account may have zero weighting and not influence reasons. |
Supported the distinction between considerations and reasons in the Plaintiff’s decision. |
| No. 1 West India Quay (Residential) Ltd v East Tower Apartments Ltd [2018] 1 WLR 5682 |
Where mixed reasons exist, good reasons can uphold refusal if independent of bad reasons. |
Applied to assess whether Plaintiff’s second reason stands despite flaws in the first. |
Court's Reasoning and Analysis
The Court undertook a thorough examination of the facts, evidence, and legal principles applicable to the case, including an in-depth review of the Plaintiff’s decision-making process and the Defendants’ conduct.
The Court found that the Plaintiff’s refusal of consent was based on two primary reasons: (1) detrimental impact on the amenity value of the Estate and (2) potential threat to the future use and commercial value of neighboring land. The Plaintiff’s evidence, however, revealed a conflation between the “Estate” and the “Benefited Land” under the covenant, with the Plaintiff improperly considering land not benefited by the covenant (including the Dipperays) in reaching his first reason. This constituted an unreasonable decision-making process and rendered the first reason a bad reason on its face.
Despite this, the Court held that the second reason relating to neighboring land was freestanding, based on relevant considerations such as boundary ownership, overlooking, and boundary treatment. The Court found this reason was supported by evidence, including the risk of overlooking and the practical issues concerning the access track and boundary screening. The Plaintiff’s refusal on this ground was therefore reasonable.
The Court also rejected the Defendants’ argument that the Plaintiff’s refusal was motivated by an improper attempt to extract a premium, finding no evidence that this was the reason for the refusal at the time it was made.
Regarding the works undertaken by the Defendants, the Court distinguished between “groundworks” (works below ground level) and above-ground works. It found that groundworks up to 30 July 2020 did not breach the covenant and were reasonably agreed as permissible by the parties’ solicitors. However, the erection of retaining walls above ground level from 31 July 2020 onwards was admitted by the Defendants as a breach of the covenant and was undertaken without a reasonable belief of permissibility. The Defendants’ evidence on their belief was found to be self-serving and not credible.
The Court criticized both expert witnesses for partiality and failure to fully comply with their duties to the Court, requiring their evidence to be treated with caution.
Overall, the Court applied established legal principles on reasonableness, burden of proof, and the distinction between considerations and reasons. It emphasized that a covenantee must exclude irrelevant considerations and act reasonably in its decision-making process. The Court found the Plaintiff’s refusal was reasonable on the substantive second reason, despite flaws in the first reason.
Holding and Implications
The Court held that the Plaintiff did not unreasonably withhold consent to the Defendants’ application for permission under the restrictive covenant.
The Defendants are not entitled to the declaratory relief they sought that the Plaintiff’s refusal was unreasonable or that they were lawfully entitled to implement their scheme without consent. The Court found that the Defendants breached the covenant by erecting retaining walls without permission and without a reasonable belief that such works were permitted.
The Court granted an injunction in favor of the Plaintiff restraining the Defendants from undertaking further construction works without the Plaintiff’s consent, subject to any agreed undertakings. The Court noted that even absent the Defendants’ concession, it would have granted the injunction.
No broader precedent was set beyond the direct effect on the parties. The decision clarifies the application of reasonableness in withholding consent under restrictive covenants, the distinction between considerations and reasons, and confirms that covenantees must not take into account irrelevant land or factors when refusing consent.