The plaintiff was tenant of premises under a lease granted by the defendant’s predecessor in title. He vacated the premises in July 1996, and on 17 November 1997 wrote asking the defendant for a licence to sublet them to a pet shop business. The plaintiff enclosed the proposed subtenant’s accounts with the application. On 20 November 1997, the defendant, by telephone, indicated that consent would not be forthcoming because the pet shop use was inappropriate for the location and would diminish the value of the defendant’s interest in the premises, and that the accounts were not strong enough. There was further discussion between the plaintiff and the defendant before, on 15 January 1998, the defendant confirmed that it was not prepared to grant consent. The defendant relied on the two reasons that it had previously given. The plaintiff claimed declarations that the defendant had unreasonably withheld its consent to the subletting, and that in the circumstances the plaintiff was entitled to sublet the premises to the proposed subtenant.
Held: The landlord’s failure to state in writing why consent to the assignment applied for was being withheld, made his refusal of consent unreasonable, despite there being otherwise possible good grounds for such a refusal. He was not able later to put forward reasons not advanced at the time. ‘In other words, if the landlord does not within a reasonable time give his reasons for refusing consent in writing, then it is not open to him to rely on those reasons in court for justifying his withholding of consent. If Sir Richard Scott V-C. is correct, then a landlord, who has given reasons in writing for refusing his consent, cannot, when subsequently seeking to justify his refusal of consent, rely on reasons which he has not given. If that is right, then in a case where a landlord gives no reasons for refusing consent, it would seem very odd if he could subsequently rely on reasons which he had in his mind but had not specified. Therefore it seems to me to follow that the policy of the Act of 1988 is that a landlord who has not given his reasons for refusing consent within a reasonable time cannot thereafter justify his refusal of consent by putting forward any reasons even though he had them in his mind. Given that the Act specifically requires consent or refusal of consent in writing, I find it hard to see how one can resist the conclusion that, if I am right so far, reasons given orally are not sufficient. To put it more succinctly, the logic of Sir Richard Scott V-C’s observations and decision in the Norwich Union case is that, construing the covenant together with the Act of 1988, it is not now open to a landlord to put forward reasons justifying the withholding of consent if those are reasons which were not put forward in accordance with section 1(3)(b), that is they were not reasons which were put forward in writing within a reasonable time. Mr Jones says, with some force, in relation to the facts of this case, that that produces an unfair result. The defendant made it clear what his reasons were and the plaintiff was in no doubt about them. I accept that, in this case, my conclusion might be perceived as wreaking something of an injustice on the defendant. However, as the Vice-Chancellor emphasised, the purpose of the Act of 1988 was, among other things, to introduce a degree of certainly, ie to enable parties to know where they stood. What was said in oral conversations can be the subject of fundamental and genuine dispute. Even in this case, where there is a substantial measure of agreement between the parties so far as what was said, there are small disputes which could have been significant, namely whether consent was clearly and genuinely refused and whether reasons were given. The advantage of the conclusion of principle I have reached is that, once one requires any refusal with reasons to be in writing, the court can be in no real doubt as to whether and when refusal was given and the reasons on which the refusal was based. Landlords on the whole should be aware of their obligations under the Act of 1988. I appreciate that there are many small, individual landlords. However, Parliament has taken the view that if the landlord wishes to object to an assignment for underletting, he must make his position clear within a reasonable time, and, in my judgment, he must make it clear in writing.’
Judges:
Neuberger J
Citations:
Gazette 01-Apr-1998, [1999] 1 WLR 551
Statutes:
Landlord and Tenant Act 1988 1 2
Jurisdiction:
England and Wales
Citing:
Cited – Bromley Park Garden Estates Ltd v Moss CA 1982
When considering whether to give consent to an assignment of a lease, the landlord need consider only his own interests.
Slade LJ said: ‘I find it rather more surprising that, when the landlords came subsequently to question the validity of . .
Cited by:
Approved – Go West Ltd v Spigarolo and Another CA 31-Jan-2003
The tenant applied for a licence to assign the lease under section 1. The landlord refused consent, but the parties continued to negotiate. The tenant argued that the landlord’s continuation of negotiations showed the earlier counter-notice to have . .
Cited – Design Progression Limited v Thurloe Properties Limited ChD 25-Feb-2004
The tenant applied for a licence to assign. The landlord failed to reply, anticipating that delay would allow it to generate a better lease renewal.
Held: The delay was unreasonable and a breach of the landlord’s statutory duty, and was an act . .
Cited – Aubergine Enterprises Limited v Lakewood International Limited CA 26-Feb-2002
A sought confirmation that it had successfully rescinded a contract for the purchase of a leasehold property from L. Either party was to be able to rescind, if consent to the assignment had not obtained before three days before completion. There . .
Cited – NCR Ltd v Riverland Portfolio No.1 Ltd ChD 16-Jul-2004
The tenant complained that the landlord had unreasonably delayed approval of a proposed underletting.
Held: The court had to bear in mind that the consent was to an underlease, and that therefore there was no privity between the landlord and . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 24 August 2022; Ref: scu.80625