High Court Rules on Landlord's Reasonable Refusal of Consent for Alterations in Jacobs v Chalcot Crescent

Citation: [2024] EWHC 259 (Ch)
Judgment on

Introduction

In the case of Matthew Blake Jacobs v Chalcot Crescent (Management) Company Limited, the High Court analyzed the grounds upon which a landlord could reasonably withhold consent for alterations under a lease covenant. The case encompasses several important legal principles, particularly in the context of reasonable refusal of consent, the scope of issues to be determined at trial, and the implications of both delay and unpleaded points of defense.

Key Facts

The appellant, Jacobs, had made alterations to his leased property without the respondent company’s consent, which led to litigation concerning the reasonableness of withholding such consent. The primary dispute rested on whether the alterations jeopardized the building’s fire safety and, more specifically, whether the respondent had reasonably withheld consent based on structural integrity concerns despite them not being covered within the scope of the Building Regulations. The pertinent issues were whether the separate basis for refusal—risk to structural integrity—had been properly pleaded and if the judge could rule based on an unpleaded issue.

The central legal principles addressed in the case are:

  1. Adversarial System: Legal cases in England and Wales are based on an adversarial system, where the issues contested at trial must be identified ahead of time so that both parties have the chance to address them. This principle was highlighted by referencing the Court of Appeal’s decision in Al-Medenni v Mars UK Limited ([2005] EWCA Civ 1041), which emphasizes that a judge cannot find in favor of a party based on an unpleaded issue.

  2. Landlord’s Reasonableness in Withholding Consent: Section 19(2) of the Landlord and Tenant Act 1927 and related case law, particularly No.1 West India Quay (Residential) Ltd v East Tower Apartments Ltd ([2018] EWCA Civ 250), provide guidance on a landlord’s reasonableness when withholding consent. The case underscores that a landlord cannot rely solely on professional advice; the reasonableness must be justified based on adequate substantive evidence.

  3. Withholding Consent by Way of Unreasonable Delay: The case considers whether undue delay by the landlord in addressing the tenant’s application for alterations can amount to the unreasonable withholding of consent. This is distinct from refusal and must be inferred from circumstances and conduct during the application process.

Outcomes

The judgment found in favor of the appellant on two critical grounds:

  1. Unpleaded Issues (Ground 1): The decision hinged significantly on the judge’s reliance on an unpleaded issue – the risk to the structural integrity of the building – which was deemed inadmissible as it had not been identified as an issue to be determined at trial.

  2. Reasonableness of Withholding Consent on Structural Integrity Concerns (Ground 5): The court agreed that the landlord’s reliance on the risk of structural damage was not reasonable without supporting expert opinion or when a reasonable alternative, such as installation of a misting system, was available to address fire safety concerns.

The appeal was dismissed on Ground 4 as the argument was not pleaded or explored at trial. Permission to appeal on Ground 3 was refused as it was not considered a “pure point of law” and raised evidentiary concerns that could not be addressed post-trial.

Conclusion

The High Court’s judgment in this case reaffirms the imperativeness of pleading all issues prior to trial and that judges must adjudicate on those issues alone. It also establishes that landlords must reasonably substantiate their grounds for refusal of consent, considering both the need for expert opinions and the availability of alternative solutions. Additionally, the case illustrates that delays in addressing applications for alterations, without explicit refusal, do not necessarily equate to an unreasonable withholding of consent. This ruling provides clear guidance for both landlords and tenants regarding consent for alterations and the consequences of unpleaded defenses.