Carty & Ors v Carroll

Where a contractual licence may be assigned with consent not to be unreasonably withheld, the refusal must rest on a reasonable evidential basis. Rejected allegations of deliberate, malicious or dangerous conduct cannot justify refusal. A single incident, without evidence of regular similar behaviour, may not reasonably support a belief that an assignee will behave irresponsibly. A party cannot rely on its own unreasonable belief to create an insurance-disclosure obligation or a reasonable fear that cover will be affected, particularly without evidence from an insurer or broker. The refusal was therefore unreasonable, and the renewed application for permission to appeal had no real prospect of success.

Purchasers of a property sought assignment of their predecessor’s contractual licence to use a swimming pool. The licence required the trustees’ consent, which was not to be unreasonably withheld. The trustees refused consent, relying on alleged incidents involving one purchaser and concerns about insurance. Mr Recorder Lindblom QC granted a declaration that consent had been unreasonably withheld. The trustees renewed an application for permission to appeal, challenging findings concerning a driving incident, a pony and dog incident, and the alleged insurance consequences.

The Court of Appeal refused permission to appeal and made no order for costs.

1. The Recorder’s findings were factual findings based on his assessment of the witnesses and evidence. There was no realistic prospect that the court would interfere with them.
2. The appellants accepted that the driving incident had not been deliberate. In any event, a single incident, without evidence of regular comparable behaviour, could not reasonably establish that the purchaser was likely to act irresponsibly when using the pool.
3. In relation to the pony and dog incident, the Recorder had found that the purchaser had not acted deliberately or maliciously and had not intended injury. The Court of Appeal held that he was entitled to conclude that the trustees had taken an unreasonably negative view of the incident and had unreasonably withheld consent.
4. The appellants’ insurance argument was untenable. The trustees could not rely on their own unreasonable belief to establish either an obligation to disclose inaccurate facts to insurers or a reasonable fear that insurers would decline cover. The alleged insurance risk was also unsupported by evidence from an insurer or broker. The court noted the citation of The Elena G [2001] 1 Lloyds Rep 378, but considered it unnecessary to restate the principles referred to.
5. Later correspondence with insurers did not justify overturning the judgment, being post-judgment material and potentially influenced by the trustees’ original account.

• Court of Appeal (Civil Division): renewed application for permission to appeal refused; the proposed appeal had no real prospect of success.
• Bristol County Court: Mr Recorder Lindblom QC granted a declaration that the defendants had unreasonably withheld consent to assignment of the swimming-pool licence.