Constance Long Term Holdings Ltd v Cavendish (Duke Of Westminster)

Where consent to works is required under an estate management scheme, the court reviews whether consent was unreasonably withheld. It does not decide afresh whether consent should have been given. The decision stands if it falls within the range of decisions which a reasonable estate manager could reach.

The decision-maker must identify the actual reason for refusal and assess objectively whether that reason was reasonable. A refusal may be reasonable where proposed works are unnecessary for the approved scheme and would cause significant additional disruption. A bad reason will not invalidate a refusal supported by a sufficient good reason unless it is central to, or vitiates, the decision.

The claimant owned a property subject to the Grosvenor Belgravia Estate Management Scheme. It proposed alterations including an enlarged basement and piling around the property. The defendants conditionally approved the architectural scheme but required structural drawings and justification to be approved under condition precedent 5(a).

The defendants declined to approve the piling. They considered it unnecessary for the approved works and inherently disruptive, and regarded it as intended to facilitate a different basement scheme for which consent had been refused. The claimant sought declarations that consent had been unreasonably withheld and that it could proceed without further consent. The central issues were the effect of the conditional approval letter and the reasonableness of the refusal.

1. The conditional approval letter, construed against its factual background, approved the architectural scheme identified in the letter. It did not approve piling in principle. Piling was a structural matter left for consideration under condition precedent 5(a), including justification by the claimant’s structural engineers and approval by HPM on behalf of the defendants.

2. The court applied to the Scheme the principles governing consent provisions in leases, as stated in Estates Governors of Alleyns’s College of God’s Gift at Dulwich v Williams [1994] 1 EGLR 112. The question was whether the defendants’ refusal fell within the band of possible decisions open to a reasonable body of estate governors. The court was not to substitute its own decision.

3. Following Iqbal v Thakrar [2004] 3 EGLR 21 and Tollbench Ltd v Plymouth City Council [1988] 1 EGLR 79, the court identified the actual reasons in the decision-makers’ minds and then assessed objectively whether those reasons were reasonable. The proposals also had to be sufficiently clear for the decision-maker to evaluate them.

4. The defendants’ central reason was good. Piling was unnecessary for the approved Option B works and would cause additional disruption, including lorry movements, road closures, increased noise and dust, and a longer programme. A reasonable estate manager could refuse consent to such inherently disruptive work, particularly where consent had already been refused for the deeper basement scheme which the piling was intended to facilitate.

5. The claimant’s interests and the possible future benefits of installing piling were insufficient to create a disproportion between the estate’s interests and the claimant’s detriment. The defendants were entitled to consider the position as it stood, rather than a possible future scheme.

6. The defendants had also considered the claimant’s late clarification of its purpose in proposing piling. That was not itself a good reason, but it did not vitiate the otherwise sufficient reason for refusal. Applying BRS Northern Ltd v Templeheights Ltd [1998] 2 EGLR 182 and British Bakeries (Midlands) Ltd v Michael Testler & Co Ltd [1986] 1 EGLR 64, the presence of a bad reason did not make the refusal unreasonable where the good reason was sufficient and unaffected.

7. The claim failed. The court declared that consent had not been unreasonably refused, withheld or delayed, and that the claimant was not entitled to carry out the piling as part of the Option B works. The court did not decide whether consent to Option A had been reasonably withheld.