Hicks v 89 Holland Park (Management) Ltd

Where a covenant requires consent that is not to be unreasonably withheld, the covenantor bears the burden of proving unreasonableness. The question is one of fact and degree, assessed when consent is sought, by asking whether a hypothetical reasonable covenantee could have refused consent. Relevant property interests include amenity, not merely capital or rental value. Consent may not be refused to obtain a collateral advantage or where the detriment caused by refusal is disproportionate to the benefit protected. A refusal may be reasonable on some grounds but unreasonable overall where the unreasonable ground was the principal reason. An outright refusal is generally unreasonable where the concern could be addressed by a condition. These principles applied particularly where refusal would prevent any practical development of land which the covenant contemplated would be developed.

The claimant owned a development site adjoining the defendant’s freehold property at 89 Holland Park. Under a 1968 deed, the claimant required the defendant’s approval for plans and specifications, and the defendant could not unreasonably withhold approval.

In an earlier judgment, the court held that the defendant had unreasonably refused approval under clause 2(b) on several grounds, although the claim under clause 3 failed. On appeal, the Court of Appeal held that the interests of the long leaseholders could be considered and remitted the matter for determination of whether refusal was reasonable on aesthetics, trees and temporary loss of amenity. The issue was whether the defendant’s refusal of the proposed largely subterranean development was reasonable in the circumstances.

1. Applicable principles. The claimant bore the legal burden of establishing unreasonableness. Reasonableness was a question of fact and degree, assessed at the date of the request, by asking whether a hypothetical reasonable person in the defendant’s position could have refused consent. The protected interests included amenity value, as well as capital and rental value.
2. The defendant could protect its own relevant property interests, but could not refuse consent for a collateral purpose or to obtain an uncovenanted advantage. A refusal could be unreasonable where the detriment to the claimant was disproportionate to the benefit to the defendant. Where a concern could be addressed by a condition, outright refusal would generally be unreasonable.
3. The defendant was entitled to object to development beyond the rear building line of 89 Holland Park. Such a limitation would preserve garden space, trees 11–13 and reduce temporary disturbance. The claimant accepted that a less extensive development could be achieved by under-implementing the planning permission or by a further application supported by the occupiers.
4. The defendant was not entitled to insist on an above-ground Victorian pastiche for which there was no realistic prospect of planning permission. Nor could it reject every form of entrance pavilion, since some pavilion was necessary for the only practicable subterranean design. It could, however, reasonably object to the fully glazed pavilion where alternative designs with a reasonable prospect of planning consent would address the stated concerns.
5. Risk to trees 4, 6 and 8 did not justify refusing permission because the site’s practical development required construction across its frontage and refusal on that basis would sterilise the site. The evidence did not establish that construction would cause disruption sufficient to justify refusal, and the issue could not be resolved by assertion or common sense alone.
6. The defendant’s refusal was therefore unreasonable except to the limited extent identified: objection to the fully glazed pavilion pending a viable alternative, and objection to construction beyond the rear building line. The judgment determined the remitted issues accordingly.

1. Court of Appeal: The defendant appealed the 2019 judgment on the permissible interests relevant to consent and on structural issues. The appeal succeeded on the first ground, failed on the second, and the matter was remitted.
2. High Court (Commercial Court): The remitted issues concerning aesthetics, trees and temporary loss of amenity were determined by Hicks v 89 Holland Park (Management) Ltd [2021] EWHC 930 (Comm).