Victory Place Management Company Ltd v Kuehn & Anor

Where a lease covenant requires the management company’s written consent before a pet may be kept, an implied obligation may require a reasonable decision-making process. That obligation is satisfied where the company considers relevant matters, remains open to exceptional circumstances, and treats a majority policy as an important consideration rather than an immutable rule. A policy refusing consent save in special circumstances is not necessarily unlawful predetermination. The contractual context is critical, and public law concepts must not be applied mechanically to a private covenant.

The defendants appealed against an injunction requiring them to remove their dog from a flat in a managed residential development. Their lease prohibited keeping a dog or other animal without the written consent of the management company.

The management company operated a longstanding policy against pets, but stated that it would consider special circumstances. It refused consent after the defendants gave no supporting medical evidence for their asserted therapeutic need. The County Court held that the company had complied with the implied obligation to act reasonably. The central issue on appeal was whether the policy was an illegitimate predetermination or a legitimate predisposition towards a particular view.

1. Appeal dismissed. The injunction requiring removal of the dog was upheld.
2. The parties accepted that an obligation was implied into the covenant requiring the management company to take account of relevant considerations and disregard irrelevant ones. The court treated this as the process limb of the Wednesbury principle, while emphasising that the extent of any implied obligation depends on the contract and its context.
3. Public law and private law concepts must be kept distinct. The reasoning in Braganza v BP Shipping Ltd showed that the contractual context determines the content of any implied term. A lease covenant benefiting the other lessees could require both a reasonable process and a rational outcome, but the thresholds were not high in this context. The negative form of the covenant created a presumption that pets were not permitted unless written consent was given.
4. The distinction in Bovis Homes Limited v New Forest District Council between an inflexible policy that predetermines an outcome and a legitimate predisposition was applied. The management company had not reached an immutable decision before the defendants’ application. Its policy allowed special circumstances to be considered, including a genuine medical need.
5. The majority preference for a no-pets policy was a relevant and important consideration in a company managed by and accountable to the lessees. It did not authorise unreasonable or irrational conduct, but it did not amount to predetermination. The defendants had not established the asserted special circumstances. The challenge to the decision-making process therefore failed.

• High Court (Chancery Division): appeal from the order of HHJ Cryan dated 27 February 2017. The appeal was dismissed and the injunction upheld.
• County Court at Central London: judgment for the management company and an injunction requiring removal of the dog. Permission to appeal was later granted by Carr J.