Victory Place Management Company Ltd v Kuehn and another

Landlord and tenant – Restrictive covenant – Consent – Defendants acquiring lease of flat – Lease containing covenant against keeping pets without consent – Defendants applying to claimant management company for permission to keep dog at property – Claimant refusing consent – County court granting injunction requiring defendants to remove dog from premises – Defendants appealing — Whether judge wrongly deciding that claimant complied with implied obligation to deal reasonably with request to keep dog in property – Appeal dismissed The claimant was the management company for Victory Place which was a gated residential development in Limehouse comprising 146 flats or maisonettes held on long leases, one of which the defendants held. The defendants entered into a covenant which was expressed to be enforceable by parties including the freeholder, the claimant and the lessees of the other properties, and provided that no dog, bird, cat or other animal or reptile should be kept in the property without the written consent of the claimant. The lessor granted the defendants permission to keep their dog at the property. The defendants then applied to the claimant for consent. The claimant refused consent and drew the defendants’ attention to the “no dogs” policy that was being enforced. In correspondence, the claimant indicated that it would consider special circumstances, such as the need for a guide dog. The defendants said that their pet was required for therapeutic reasons but provided no medical evidence to support that claim. The claimant issued proceedings in the county court which granted an injunction requiring the defendants to remove the dog from the premises. The defendants appealed contending that the judge had been wrong to decide that the claimant had complied with its implied obligation to deal reasonably with the request by the defendants to be allowed to keep the dog in the property, notwithstanding the covenant. Held: The appeal was dismissed. (1) The covenant was expressed to be for the benefit of the other lessees as well as the claimant. The implication was that the claimant should behave reasonably in considering whether or not to grant consent. Reasonableness in that context involved both a reasonable process and a rational outcome. In the context of a lease such as this, these were not high thresholds to meet. The negative formulation of the covenant created a presumption that pets were not allowed without written consent. Although the claimant had expressed its policy in different ways in the many years since it was introduced, it would be unfair to make an arbitrary choice between one or other of the many documents to identify the policy. The events leading up to the claimant’s final decision to refuse the defendants the right to keep their dog at the property gave the claimant an opportunity to consider precisely what policy it was applying. It did so, and made clear to the defendants that its policy was not to allow any pets save in special circumstances: Associated Provincial Picture Houses Ltd v Wednesbury Corpn [1947] 2 All ER 680 and Braganza v. BP Shipping Ltd [2015] UKSC 17 considered. Nor had the claimant in fact made the adverse decision before the formal request was made. Before the meeting, the board had discussed informally the fact that it appeared that the defendants wanted to move a dog into the property, but they could not be said to have reached a final immutable conclusion at that stage. If the promised medical evidence had emerged, there was every prospect that the board would have taken a different approach. They said so, and their integrity was not challenged. The events could not be viewed with the formality that one might approach a council decision in a planning matter. Context was crucial. Here, the board was carrying out the wishes of the majority of the lessees in enforcing a “no pets” rule, to the possibility of which prospective tenants were alerted by the covenant in the lessees’ leases. (2) It was unrealistic to say that the “no pets” rule itself amounted to a predetermination to make a particular decision, and that there was either no place in the decision-making process or only a very limited place for taking into account the views of the majority. The reality was that, in a management company like the claimant, the views of the lessees who were its members were important. The claimant’s board had been elected by, and could be removed by, the lessees as members of the company. The fact that there was a majority in favour of a “no pets” policy did not entitle the board to behave unreasonably or irrationally, but it justified it in telling prospective residents and anyone else who was interested about the covenant and the policy that it applied in relation to the covenant: Bovis Homes Ltd v New Forest District Council [2002] EWHC 483 (Admin) and Lymington Marina Ltd v Macnamara [2007] EWCA Civ 151 considered. (3) The policy that requests would be refused save in special or exceptional circumstances was neither unreasonable or irrational. A different, more liberal, policy might be equally consistent with a covenant framed in that negative way but that was not really the point. The implied term was only to operate a reasonable process in considering requests. It was reasonable to take into account the policy set by a majority of lessees as members of the claimant that dogs would not be permitted save in special circumstances. That did not amount to an illegitimate predetermination to reach a particular decision. It simply represented one important consideration that the board would take into account in every case where a lessee sought permission to keep a pet. It was not the only consideration and if the defendants had been able to show a real medical reason for keeping a dog the decision might have been different, but they did not avail themselves of that opportunity. The board had not had a closed mind or adopted an unfair process: Price v Bouch [1986] 2 EGLR 179, Paragon Finance plc v Nash [2002] 1 WLR 685, Socimer International Bank Ltd v Standard Bank London Ltd [2008] EWCA Civ 116 and Hayes v Willoughby [2013] UKSC 17 considered. Christopher Heather QC and Tim Hammond (instructed by Longmores Solicitors, of Hertford) appeared for the claimant. David Phillips QC and Simon Butler (instructed by J Garrard & Allen, of Olney) appeared for the defendants. Read the full transcript: Victory Place Management Company Ltd v Kuehn and another Eileen O’Grady, barrister