Davies-Gilbert v Goacher [2022] EWHC 969 (Ch)
Summary
On the question of whether the Claimant had unreasonably withheld consent to an application by the Defendants for consent to build two residential dwellings on land burdened by a restrictive covenant, it was held that it was reasonable for the Claimant to withhold consent but based on only one of the two reasons originally relied upon.
The facts
Mr Davies-Gilbert (the Claimant) owns a large parcel of land known as the Gilbert Estate in East Sussex (the Estate). Mr Goacher and Mr Chester (the Defendants) own a parcel of land adjoining the Estate which is burdened by a restrictive covenant (the Burdened Land). The covenant benefits part of the Estate (the Benefiting Land) and provides that the Defendants must not build on the land without the consent of the Claimant and such consent not to be unreasonably withheld (otherwise known as a qualified covenant) (the Covenant).
The Defendants applied to the Claimant for consent to build two residential dwellings on the Burdened Land. The Claimant refused to provide consent to the development for two key reasons:
- It would have a detrimental impact on the amenity value of the Estate.
- It could threaten the future use and commercial value of the neighbouring land.
The Claimant had the following considerations in mind regarding the proposed development when he settled on the above reasons:
- The positive/negative impact on the Claimant's neighbouring land.
- The impact of the development on the future anticipated use and value of that land.
- The impact on the amenity value of the Estate in the locality as a whole.
- The effect on boundary treatment and long-term maintenance.
The Defendants sought a declaration that the Claimant had unreasonably withheld consent. The Claimant sought a declaration that he had not unreasonably withheld consent.
The relevant principles
The Judge very helpfully clarified the principles of law that apply when considering the matter of whether consent has been unreasonably withheld:
- The Court must identify the reasons that resulted in the refusal of permission by finding the reasons that influenced the mind of the consenting party at the time the consent was refused.
- Both the process by which the reason was settled on and the reason itself must be reasonable. This process involves the consenting party taking into account relevant considerations and excluding irrelevant considerations.
- Not all considerations that the consenting party has in mind will influence the party's mind ie a consideration does not necessarily carry actual weight in the decision-making process.
- If consent is refused for various reasons, some which are "good" (reasonable) and some which are "bad" (unreasonable). The bad reasons do not cancel out the good, ie if consent would still have been refused without the bad reasons then the refusal will be reasonable.
Notably, the Judge drew a distinction between considerations and reasons. The considerations inform the mind of the consenting party when settling on the specific reason for refusing consent. Importantly, the fact an irrelevant consideration is taken into account does not mean that the decision to refuse consent is automatically unreasonable. This will only be the case if the irrelevant consideration can be shown to have influenced the reason or decision of the consenting party.
The decision
Reason 1: Detrimental impact on amenity value of the Estate
The Judge found that Claimant had considered the detrimental impact on the amenity of the whole Estate not just the Benefitting Land. In doing so, the Claimant had actively considered irrelevant land in reaching the first reason. Accordingly, it was unreasonable to withhold consent for this reason.
The Claimant had otherwise employed an unreasonable decision-making process because he took into account irrelevant considerations that directly influenced his mind. Specifically, the Claimant considered the impact of the development on the view from land that was not Benefiting Land. It was therefore not reasonable to withhold consent on the basis of that reason.
The Judge noted that there were other considerations which also influenced the mind of the Claimant in formulating his reason but made clear that the Court will not assume the role of decision-maker by revisiting the decision of the Claimant by reference to the considerations that were relevant.
Reason 2: Threat to future use and commercial value of neighbouring land
The Judge found that the Claimant had three considerations in mind for the Benefiting Land when he settled on his second reason:
- Boundary ownership/access difficulties related to an access track.
- Overlooking onto the Claimant's land.
- Boundary treatment and maintenance in relation to the width of the access track.
The Judge rejected the suggestion that boundary demarcation and access issues were genuinely taken into account by the Claimant at the time he came to his reason.
The Judge was, however, satisfied that there was a risk of overlooking and that this could impact the value of the Claimant's land and any development of it in future. Overlooking was, therefore, a relevant consideration and it was reasonable for the Claimant to withhold consent on the basis of the reason reached.
Concerning the boundary treatment and maintenance, a hedge was proposed to be planted to screen the access track. For the hedge to be effective in this regard, it would have to encroach onto the Claimant's land resulting in maintenance issues for the Claimant. The absence of the hedge altogether would result in the access track overlooking the Claimant's land. The hedge screening was otherwise important because it was the
Defendants who first proposed it. These matters were all relevant considerations and the reason reached and thus refusal of consent was reasonable.
Accordingly, the Claimant had followed a reasonable decision-making process and reached a reasonable decision when he withheld consent for the above reason.
Ultimately, this meant that the Claimant's overall decision to withhold consent was reasonable and he was entitled to a declaration that he had not unreasonably withheld consent.
Our comment
This judgment is a helpful summary of the applicable law relating to qualified covenants.
It identifies an important distinction between considerations and reasons, the former being a selection of facts, matters or issues that inform the latter. Further, it highlights that reliance on irrelevant considerations will compromise the reasonable decision-making process that must be undertaken to reach a good reason and thus reasonable outcome in refusing consent.
It serves as a reminder to the beneficiaries of qualified covenants to always take legal advice on the extent of benefiting land and any proposed considerations & reasons for refusing consent before communicating any refusal of consent to the applicant.
