The case concerns a terraced mixed use building in Brewer Street, Soho let on a long lease. Rotrust are the landlord and Hautford are the tenant. The Lease contains a tenant’s covenant not to apply for planning permission without the prior written consent of the landlord, such consent not to be unreasonably withheld.
The previous owner of the freehold refused consent for Hautford to apply for planning permission to change the use of the first and second floors of the building to residential use where such use was already permitted under the Lease. Rotrust continued to refuse consent.
The principle grounds for refusing consent were that such change of use would increase the prospect of Hautford making a successful enfranchisement claim under the Leasehold Reform Act 1967 (“the LRA”) and, in addition, such enfranchisement would damage Rotrust’s management of the Soho Estate.
At first instance, the trial judge held that such a refusal was unreasonable. The Court of Appeal upheld the trial judge’s decision and found that Rotrust were attempting to re-write the terms of the Lease that permitted residential use. The Court of Appeal also concluded that estate management considerations arising on enfranchisement are sufficiently addressed in the relevant part of the LRA.
Speaking on behalf of Hautford, Jayu Shah of Pebworth Property Management, the Managing agent commented “Hautford were placed in a position where they had to issue proceedings to protect our property interests, which were being harmed by a landlord trying to gain an advantage at our expense. We welcome the Court of Appeal’s decision and we thank Thomson Snell & Passmore for their support and expertise. Their calm and confident approach put us at ease during this difficult process.”
Partner Mark Steggles commented “We are pleased to have worked with our Counsel, Tiffany Scott QC, to secure an excellent result for Hautford that enables them and their tenant to make full use of the property.”
Rotrust are seeking permission to appeal to the Supreme Court.