Summary

A leaseholder's proposed development on demised land was permitted by the terms of the lease and the freeholder had unreasonably withheld its consent to the proposals.

Facts

The claimant lessee (G) sought declarations that the respondent local authority freeholder had unreasonably withheld its consent to G's proposed development and that, under the lease, G was entitled to carry out that development. G wanted to erect a building, or part thereof, on the demised land, and partly on freehold premises it had acquired, and use the remainder of the demised land for car parking use. The proposed building was to be either for residential use or student accommodation. The local authority stated that G was not entitled under the existing terms of the lease to carry out the proposed development on the land, but that it would permit the development if G paid it proper consideration. The pertinent clause in the lease provided that the land was to be used for parking and for the erection and use of a building in accordance with planning permission and for no other purpose whatsoever. The local authority argued that the pertinent clause permitted the erection and use of any building on the land provided it was not a residential building.

Held

(1) The proposed development was within the terms of the lease. There was no way that the relevant clause could be construed so that the words "a building" excluded a building that was intended to be used for residential purposes. There were no words of limitation in the clause as argued for by the local authority. G was entitled to a declaration that the erection and use of the building was a development that it was entitled to carry out under the lease, subject to obtaining the local authority's approval, which was not to be unreasonably withheld. (2) The reasons submitted by the local authority to explain why it would not consent to the development were not reasons for refusal in its mind at the time of responding to G's application for consent. Therefore the withholding of consent was unreasonable and a declaration would be granted.

Judgment for claimant.