Summary

Putting pressure on a tenant to sell a lease back was not a good ground for the landlord to withhold consent to alterations to leasehold property.

Facts

Applications by the tenant ('T') for a declaration that the defendant landlord ('D') had unreasonably withheld its consent to proposed alterations to a building on Oxford Street, London, that T held under a lease for 999 years from 11 October 1913 and which had been occupied by the C&A department store until January 2001. D was the owner of the building as well as several other properties in the area. The lease provided that D's consent was required for certain types of alteration to the building and the effect of s.19 Landlord and Tenant Act 1927 was to require D not to unreasonably withhold that consent. T had made unsuccessful attempts to find a retail tenant for the whole of the building but had located a tenant for the first two floors. T proposed the works to refurbish those two floors and obtained planning permission for the same on 9 May 2002. T planned a second phase of works to use the third and fourth floors as offices and the fifth floor as residential accommodation. D applied for permission to apply for judicial review of the planning permission as D believed that if it was allowed to stand the local authority would be more likely to grant T's application for change of use of the upper floors. D's application was refused, but was subject to appeal. In a letter of 14 June 2002 D indicated that it did not consent to the proposed works to the first and second floors on the grounds that: (i) in the interests of the general area and D's other properties the building should be let as a single retail unit; (ii) T's proposals took no account of the local initiative to increase shop frontage in the nearby area ('the Marketplace initiative'); and (iii) the judicial review proceedings should be concluded before any works were carried out.

Held

(1) The decision to withhold consent to alterations had been made by the person who was in control of D and whose reason for refusing consent to alterations was to put pressure on T, which he hoped would improve his prospects of negotiating a purchase from T of its lease of the premises. (2) Such a reason was not a good ground for withholding consent in a case such as the present. Therefore D had unreasonably withheld consent to the alterations proposed by T and T was now free to carry out those alterations without having the consent of D.

Applications granted.