Holland Park and the village of East Dean in the South Downs National Park might not appear at first blush to have much in common, but both areas are now subject to Court decisions about when consent under a qualified restrictive covenant can be reasonably withheld, particularly when taking issues of amenity and heritage into account.
Gowling WLG previously represented the successful party in the Court of Appeal in 89 Holland Park Management Limited v Sophie Hicks [2020] EWCA Civ 758, which found that aesthetic considerations can be taken into account when a party with the benefit of a restrictive covenant is asked to consent to development of the land subject to that covenant. The Court of Appeal made the important finding in that case that "a neighbour has a legitimate interest in the appearance of what is built next door to him".
That however does not give a benefitting party under a restrictive covenant carte blanche to refuse consent to any development merely because it is not to their taste; that would be entirely subjective. Taste must be measured according to something more objective.
This case was considered and applied in a recent High Court decision in Davies-Gilbert v Goacher & others [2022] EWHC 969 (Ch) in which the Court was also asked to consider whether a refusal under a qualified restrictive covenant had on the facts, been unreasonable.
Background
The Claimant was the owner of a large area of land in and around the village of East Dean, East Sussex known as the Gilbert Estate. The Defendants, who each owned a parcel of land in the village proposed the construction of two detached residential properties on land that adjoined the Claimant's property. The Defendants' land was burdened by a restrictive covenant, which stated that they were:
"NOT to erect upon any part of the property hereby conveyed any other messuage erection building or wall whatsoever without such previous written licence as aforesaid such licence not to be unreasonably withheld."
The Claimant refused consent to the Defendants' proposed construction stating that the development:
- would have a detrimental impact on the amenity value of the Estate; and
- could threaten the future use and commercial value of the neighbouring land.
Was the decision unreasonable?
Each of the two given reasons were considered in turn.
- Detrimental impact on the amenity value of the Estate
The Judge commented on and applied the decision in 89 Holland Park (Management) Limited v Sophie Hicks in finding that the objection on aesthetic grounds is in principle capable of being reasonable.
However on the particular facts in this case, Mr Davies-Gilbert had operated on the mistaken belief that he could take into account the impact on the Gilbert Estate as a whole, rather than a smaller area of land that actually had the benefit of the covenant. Because he had taken irrelevant factors into consideration, he was unreasonable in relying on this ground to refuse consent.
- Future use and commercial value of the neighbouring land
The benefitting land was capable of development and although Mr Davies-Gilbert did not intend to develop it at the time the decision was made, he had not shut his mind to the possibility of development in the future. The Defendants' proposals meant a risk over overlooking onto his land which would have had a detrimental impact on its value. This decision was therefore reasonable.
Overall therefore Mr Davies-Gilbert succeeded in demonstrating that consent had been reasonably withheld because, applying No. 1 West India Quay (Residential) Ltd v East Tower Apartments Ltd [2018] 1 WLR 5682 a bad reason does not vitiate a good one provided that the reasons are freestanding and that the good reason is not merely a makeweight. So it did not matter that the first reason was bad if the second was good and on the facts, the second objection was reasonable.
Conclusion
The question of whether aesthetic considerations can be taken into account in refusing consent under a restrictive covenant is likely to come up time and again.
Building on the existing law in this field, this case has shown firstly the importance for decision makers of being clear on the extent to the benefitting land before coming to a decision, and secondly it reaffirms the point that, provided a preference for a particular aesthetic can be measured against some objective criteria, it can potentially be relied upon in refusing consent to development works that are constrained by restrictive covenants.