Iqbal& Ors v Thakrar & Anor

When a lease requires consent to structural alterations, the tenant must describe the proposed works sufficiently clearly for the landlord to make an informed decision. A landlord may reasonably refuse consent where plans leave uncertain how load-bearing features will be preserved or replaced. The landlord need not devise conditions to cure an inadequate proposal.

Reasonableness depends on the landlord’s actual reasons and whether a reasonable landlord could have reached them. Grounds must relate to the landlord’s property interests. A permitted use may remain relevant, but refusal may be unreasonable where that use and the tenant’s intention were known when the freehold was acquired. A covenant regulating alterations does not restrict works to property outside the demise.

The tenants held a 999-year lease of ground-floor commercial premises and wished to convert them into an Indian restaurant. Their lease required the landlord’s written approval, not to be unreasonably withheld, for structural alterations or additions. The landlords refused approval after receiving an architect’s plan which proposed removing or reducing structural features but did not explain what would happen if they proved load bearing.

The Canterbury County Court declared that consent had been withheld unreasonably and that the tenants could proceed with the works. The landlords appealed. The central issues were whether structural concerns reasonably justified refusal, whether objections to restaurant use and loss of parking were reasonable, and whether the demised “shop front” included the exterior main wall through which a new entrance was proposed.

1. Appeal allowed unanimously. The tenants’ plans did not state how the works would proceed if the affected partition, piers or walls proved load bearing. Their own engineer’s evidence confirmed that removal or reduction of three structural features would or might create structural problems. A landlord was entitled to know whether load-bearing items would remain or what compensating support would be installed. Refusal on structural grounds was therefore reasonable.

2. The tenant bears the burden of showing that consent was withheld unreasonably. That requires the tenant to make the proposal sufficiently clear for the landlord to decide whether to approve it. The court rejected the submission that the landlords should have granted conditional consent. It was not their responsibility to devise a solution for an inadequately specified proposal.

3. The court must identify the landlord’s actual reason for refusal as a subjective question and then assess objectively whether that reason was reasonable. A landlord need not prove that the conclusions underlying refusal were correct. It is enough that a reasonable landlord could have reached them in the circumstances.

4. An objection based on the proposed restaurant use was unreasonable. The lease did not prohibit that use, the premises had been sold with A3 use, and the landlords knew of the intended use when they acquired the freehold. The Recorder was nevertheless wrong to suggest that compensation necessarily answered the loss of a property amenity. An owner cannot be compelled to sell an amenity merely because its value can be measured in money, although the evidence did not establish the claimed prescriptive parking right.

5. On the proper construction of the lease, the demised “shop front” meant the facade and did not include the exterior main wall, which formed part of the building’s excluded basic structure. The covenant against unreasonable refusal therefore did not govern the proposed doorway through that wall. The landlords could refuse that alteration without satisfying a reasonableness requirement.

6. The declarations granted by the Recorder were discharged. The tenants remained free to submit a new application addressing the load-bearing features, but the court’s construction concerning the exterior wall would bind the parties.

1. Court of Appeal (Civil Division): The landlords’ appeal was allowed in Iqbal & Ors v Thakrar & Anor [2004] EWCA Civ 592. The declarations were discharged.

2. Canterbury County Court: Mrs Recorder Plumptre declared that the landlords had unreasonably withheld consent and that the tenants could undertake the proposed alterations and additions.