Jacobs -v- Chalcot Crescent (Management) Company Limited [2024] EWHC 259 (Ch)

Articles
27 Feb 2024

At a hearing in January 2024, Mr Justice Fancourt allowed an appeal from the decision of HHJ Hellman in which the Judge had determined that the Defendant landlord had reasonably withheld its consent to alterations.

In allowing the appeal, Fancourt J held that:

  1. The Judge had been wrong to find in the Defendant’s favour in respect of an un-pleaded issue [65].
  2. Moreover, even if that issue had been pleaded, the Defendant could not have reasonably refused on that ground in circumstances where:
    • It had failed to obtain a suitable expert opinion (unreasonably relying upon its surveyor’s view, without obtaining further advice as recommended) [76] & [80-82]; and
    • It had failed to give even conditional consent where it would clearly have been reasonable to do so [82].

Background

The Claimant, Mr Jacobs, was the long leasehold owner of Flat 4, 46 Chalcot Crescent, London NW1 (the “Flat”). The Flat was situated within a converted terraced house (the “Building”), which housed additional flats on the basement, ground and first floors. The Defendant company was the landlord of the Building.

It was common ground between the parties that the lease of the Flat contained a qualified covenant against alterations, such that the Defendant could not unreasonably withhold its consent to the same, both pursuant to the express terms of the lease and s.19(2) of the Landlord & Tenant Act 1927.

By a letter dated 23 August 2019, the Claimant requested the Defendant’s consent to ostensibly significant alterations to the Flat. Initially, correspondence between the parties progressed in a relatively timely fashion. However, by February 2020, the Claimant had asserted in correspondence that the Defendant had unreasonably delayed in dealing with the application and by May 2020, the Claimant commenced (and later completed) works in the absence of the Defendant’s consent to the same.

On 16 July 2020, by way of a letter from its surveyor, Mr Levy, the Defendant formally refused consent to the Claimant’s proposed alterations. The Defendant refused consent on the basis that the proposed interior layout to the Flat was, amongst other things, “…unsatisfactory in the context of fire safety and prejudices the fire safety of the block as a whole”. The rest of the letter was ambiguous in clarifying what was meant by this wording.

In or around August 2020, the Claimant filed a claim seeking a declaration that consent had been unreasonably withheld by the Defendant.

The decision at first instance

At trial, the Defendant’s case in respect of fire safety evolved such that it ultimately sought to rely upon two separate concerns as the basis of the refusal on fire safety grounds: (1) alleged non-compliance with Approved Document B of the Building Regulations 2010 (the “Building Regulations Issue”) and (2) the potential risk to the structural integrity of the Building (the “Structural Integrity Issue”).

HHJ Hellman concluded that on the basis of a reasonable concern about the Structural Integrity Issue, and only for that reason, consent had been reasonably withheld by the Defendant [29] & [30]. The Judge clearly rejected the Building Regulations Issue as a reasonable ground upon which to refuse consent.

He reached this conclusion notwithstanding the fact that the Structural Integrity Issue was (a) not set out clearly (or arguably at all) within the Defendant’s letter of refusal and (b) not part of the Defendant’s pleaded case.

The Appeal

Permission to appeal had been given in respect of four grounds and permission was also sought in respect of one additional ground.

The appeal succeeded on two grounds:

  1. Ground 1 – It was not open to the Judge to find for the Defendant on the basis that he had done, in circumstances where the Structural Integrity Issue was not part of the Defendant’s pleaded case.
  2. Ground 5 – The Judge was wrong, in any event, to find that it was reasonable for the Defendant to withhold consent on the basis of the Structural Integrity Issue.

Ground 1 – Not a triable issue

Notwithstanding the fact that the Defence & Counterclaim made no reference to the Structural Integrity Issue, the Judge considered that it was a “central issue” and that confronting it was “unavoidable”.

Mr Justice Fancourt disagreed. Citing Dyson LJ’s judgment in Al-Medeeni -v- Mars UK Limited [2005] EWCA Civ 1041, he emphasised the fundamental importance of statements of case in an adversarial system. Moreover, that it was essential that each party understood the case it had to answer and was able to test the strength of that case in oral evidence [59] & [64].

He reached his conclusion notwithstanding that the Claimant had not objected to the Defendant’s adoption of the Structural Integrity Issue in its closing submissions. He noted that “..the Court will not usually allow a procedural impropriety that should have been raised at the time and could then have been right to found the basis of a successful appeal, when it is too late to put the matter right” [55].

However, he also considered that not only was it not made clear at trial that the Structural Integrity Issue was being relied upon as a “self-contained” reason for refusal, but moreover, the onus lay just as much on the Defendant to raise the matter with the judge and specifically, to seek permission to amend [57].

Taking into account the relevant principles relating to very late amendments and, specifically, the requirement for a “very good reason” to permit the same, Mr Justice Fancourt did not consider that the Defendant would have met the relevant threshold. Accordingly, any application would have been contrary to the overriding objective and bound to fail [60] & [63].

Fancourt J therefore determined that it was not open to the Judge to decide the case in favour of the Defendant on the basis of an un-pleaded issue.

Ground 5 – Structural Integrity Issue not a reasonable ground of refusal

Although his decision in respect of Ground 1 was sufficient to dispose of the appeal, Mr Justice Fancourt went on to consider each of the other grounds in turn.

In respect of Ground 2, he found that the Judge was entitled, on the available evidence, to find that the Defendant had in fact refused permission due to the Structural Integrity Issue, (such that the appeal failed on that ground).

However, under Ground 5, he was required to consider whether refusal on that ground was reasonable. In his view, it was not. Specifically:

  1. It was not enough to say that the Defendant had received professional advice, it must be reasonable to rely upon that advice [76] & [80-82].
  2. The Defendant had relied upon the opinion of its surveyor. However, whilst expressing a view, the surveyor had also recommended seeking expert advice on the point, to which he would defer, and which the Defendant had not done. This was unreasonable. [80].
  3. The Defendant had declined to grant a conditional consent requiring certain mitigation measures to be put in place, notwithstanding the fact that the proposed mitigation measures were a “reasonable solution” to the Defendant’s concerns [81].

Comment

This well-reasoned judgment from Mr Justice Fancourt clearly emphasises the need for landlords, and civil litigants generally, to properly particularise their pleaded case and to be prepared to face the consequences if they fail to do so.

It also serves as a warning to landlords that a refusal which is based on expert advice will not be reasonable unless it was reasonable to rely upon that advice.

The judgment can be found here.


Article by Victoria Dacie-Lombardo

Author

Victoria Dacie-Lombardo

Call: 2022

Disclaimer

This content is provided free of charge for information purposes only. It does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.

Contact

Please note that we do not give legal advice on individual cases which may relate to this content other than by way of formal instruction of a member of Gatehouse Chambers. However, if you have any other queries about this content please contact: