The power to approve building plans on an estate had been passed to a committee of all estate owners. The plaintiff said that a term should be implied to say that approval should not be unreasonably withheld.
Held: A term that consent would not unreasonably be withheld should be implied when necessary to uphold the purpose (or efficacy) of the contract under which a requirement for consent arose according to the circumstances. The court court not review the reasonableness of the committee’s decision. However: ‘It was conceded that the committee had a duty to inspect and consider any application submitted to them, to reach a decision themselves and not to delegate it to others, and to act honestly and in good faith and not for some improper or ulterior purpose. It was also accepted that, if the committee took into account irrelevant considerations or failed to take into account relevant considerations, or reached a perverse decision such that no reasonable committee could possibly reach, then their decision could be impugned, for it would be ultra vires. This, however, was not enough for the plaintiffs. They insisted that the committee must act reasonably and that they must give reasons for their decision, so that it could, if necessary, be challenged, when the court would adjudicate and decide, in the light of the evidence, whether those reasons were justified.
. . . In my judgment, the mutual covenantors are equally bound by the decision of the committee, whether it be a decision to grant or refuse approval, and they are so bound, provided only that it is given honestly and in good faith and not for some improper purposes. Where the required consent is that of an individual who is free to consult his own interests exclusively, a provision that such consent must not be unreasonably refused is often included in order to prevent consent being withheld arbitrarily, or capriciously, or from improper motives. If that is the only effect of including such a provision, its implication in the present case is unnecessary . . .’
Judges:
Millett J
Citations:
(1986) 53 P and CR 257, [1986] 2 EGLR 179
Jurisdiction:
England and Wales
Cited by:
Cited – Mahon and Another v Sims QBD 8-Jun-2005
A land transfer had contained a clause requiring a restrictive covenant agreeing not to erect any building without the approval by the neighbours of plans.
Held: The term ‘transferors’ was to be read to include the transferors’ successors in . .
Cited – Lymington Marina Ltd v MacNamara and others ChD 4-Apr-2006
The claimant marina had been constructed with financial assistance from debenture holders who in return were given low cost licences. The claimant sought to refuse to the defendant debenture holders the right to sub-licence their rights to berth . .
Lists of cited by and citing cases may be incomplete.
Land, Contract
Updated: 30 April 2022; Ref: scu.228506
