In what will come as good news to landlords, the Supreme Court has upheld the reasonableness of a landlord's refusal of consent to a tenant's proposed planning application to change use of a property from offices to residential on grounds that there would be an increased risk of enfranchisement by the grant of consent.
Judgment was handed down in case of Sequent Nominees Limited (formerly Rotrust Nominees Limited) v. Hautford Limited  UKC 47 . The tenant had won on all previous outings in the Courts until it reached the Supreme Court where the landlord came out on top by a majority of 3 to 2.
The fact that the lease was granted after 1967 (when the Leasehold Reform Act 1967 was introduced giving a statutory right to tenants of "houses" to purchase the freehold), did not, in the majority of the Supreme Court's view prevent the landlord from relying on the risk of enfranchisement as a reasonable ground to refuse consent.
Whether the risk of enfranchisement is a reasonable ground for refusing consent will be a question of fact and degree, said the Supreme Court, and each case will be viewed at the date of the tenant's application for landlord's consent.
The Supreme Court said that it is necessary to look at the clause in the lease which requires the tenant to seek the landlord's consent:-
1. To determine what the clause permits the landlord to do; and
2. To decide whether the refusal is reasonable by asking the question: "Does the landlord's refusal serve a purpose sufficiently connected wih the landlord and tenant relationship at the time the landlord's consent was requested?"
The Supreme Court held that at the time the tenant sought the landlord's consent to apply for planning permission it was reasonable for the landlord to refuse consent on grounds that there was an increased risk of enfranchisement.
For the result of this case, in the words of Lord Briggs, see below.
The result is that, looking at the matter as a question of fact as at the time when the respondent sought consent, the landlord’s ability to refuse that consent continued to afford a real measure of protection against enfranchisement of the freehold.