ON APPEAL FROM THE HIGH COURT OF JUSTICE
MR JUSTICE WYN WILLIAMS
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LLOYD
LORD JUSTICE RIMER
| EATON MANSIONS (WESTMINSTER) LTD
|- and -
|STINGER COMPANIA DE INVERSION S.A.
Jonathan Arkush (instructed by Stockler Brunton) for the Respondent
Hearing date: 2 March 2011
Crown Copyright ©
Lord Justice Lloyd:
The substantive appeal – the background
"No alteration shall … be made in the construction height elevation external or internal architectural appearance or internal arrangements of the demised premises or any part thereof or in the chimney stacks or chimney pots thereof …"
The parties' positions
"With regard to the proposed AC plant I would advise not to assume approval will be automatically given as the plant of this nature often has to be located outside the demise of the property it serves and it can cause annoyance to neighbours by way of vibration, noise and heat. I would advise information on this aspect of the proposal be sent as soon as possible for consideration."
"5. Grosvenor's approval to these works does not give consent for the use of any external roof surface as a roof terrace, sitting out space, roof garden or for any purpose not specifically agreed in writing. Access to such roofs is restricted to maintenance and repair purposes only.
16. Please note the following:
(ii) This approval does not include for the installation of comfort cooling / air conditioning."
"A/C units of roof: I have provided Murray Birrell with the details of 2 No A/C condenser units which we would like to install on the roof, same location as former condenser units. Do we also need your approval of this matter?"
"Thanks for the note following our brief meeting. The over-riding factor here is the fact that you need to follow the correct procedure. That is to apply up the chain via Smith Waters. I am unable to consider the matter formally until they approach Grosvenor having initially agreed matters with you.
In the meantime I have the following additional comments to make having read your numbered points below:
1. You need planning consent.
2. Any approval will be subject to a revocable licence.
3. I do not have a copy of the drawing so I have nothing to review on paper.
4. I recall a lot of condensers, somewhere in the region of 6No for the two flats. I have asked you to review this because I feel this is excessive."
"We have had sight of earlier correspondence regarding your suggestion to charge Stinger for the right to place new a/c condensers on the roof and would request you to clarify whether this was approved by the board or was merely a discussion. For the avoidance of doubt there have been 6 no. air conditioning units on the roof servicing flats 8 and 10 for over 30 years which they clearly have rights to enjoy and therefore we insist that the proposed demand for payments is withdrawn.
We confirm that the full technical details of the new condensers, including the independent structural engineers report and acoustic reports, were supplied by [Mr Jan] to [one of the directors of EMW], and that a further pack of information including drawings and technical details of the proposed condensers including the night time quiet mode of operation and the big foot support system was forwarded to Smith Waters on 16 November 2008 for onwards transmission to the [EMW] board, kindly acknowledge receipt of these details and reports.
In view of the dispute that has arisen and in anticipation of a document being prepared to formalise the installation of the new condensers for Flats 8 and 10, we request that your solicitors prepare an initial draft of the necessary document(s) and forward it to our solicitors.
Please note that there are several holes that were drilled in to the existing chimney breast which can only be sealed once the new condensers are installed, therefore your early approval would be appreciated."
"37. In the light of all this evidence what emerges? First, in my judgment, neither Grosvenor nor the Claimant has ever given consent to the erection or retention of the apparatus which exists on the roof of the building. Second, Grosvenor has provided reasons which cannot be categorised as unreasonable for its view that consent to retention should not be given. Third, in my judgment, it would be very difficult for a refusal of consent on the part of the Claimant to be regarded as unreasonable in the face of Grosvenor's opposition but, in any event, it is unarguable to suggest that the refusal of consent in the face of Grosvenor's opposition and in the light of terms of the covenant which exists in the head lease is unreasonable. I have no doubt that the existence of the apparatus on the roof is a breach of the covenant, at least potentially. A breach is conceded insofar as it relates to the breaking into the chimney but the point is made with some force that the breaking into the chimney is not, apparently, a particular concern of Grosvenor. However, I am also clear in my mind that the erection of the apparatus as a whole and its retention on the roof constitutes at least a potential breach of that part of the covenant which prohibits alterations to the external architectural appearance of the building. In my judgment the Claimant is certainly entitled to conclude that that is so and, consequently, it cannot be said that it is acting unreasonably in withholding consent for the retention of the apparatus."
i) A cautious approach to the placing of air conditioning plant is shown by the letter dated 23 May 2006 (see paragraph  above) and also by Murray Birrell's letter and attached conditions dated 8 September 2006 (see paragraph  above).
ii) The letter from Omniway dated 7 March 2007 shows a constructive approach on the part of Murray Birrell to the specific issue of routing the connections for the condensers, and agreement in principle as to the location of units: see paragraph  above.
iii) Exchanges in June 2007 about the need for planning permission confirmed Stinger's acceptance that the consent of the Grosvenor Estate was needed: see paragraph  above.
iv) As a result of a meeting between Omniway and Murray Birrell in April 2008, Murray Birrell's position was careful and non-committal, without drawings for the sake of the detail, suggesting that there might be too many units, stating that approval would be by way of a revocable licence, as well as raising issues including visibility and space for units for other flats: see paragraph  above.
v) According to the evidence, that is where the matter rested as regards the involvement of the Grosvenor Estate, until later in 2009.
vi) By the autumn of 2009, even though planning permission had been given (as Murray Birrell knew) the indicated attitude was still that the larger units were too large and too visible, and that they presented a problem as regards leaving space for other flats to have their own air conditioning units if desired: see paragraph  above.
The appeal against the award of costs on the indemnity basis
i) First, there was Stinger's conduct before the proceedings, showing that Stinger was intent on the course of conduct it undertook regardless of the views expressed by EMW and by the Grosvenor Estate. I have mentioned at paragraph  what he said in his main judgment about this.
ii) Stinger warded off the first application for summary judgment by amending its Defence and Counterclaim, and then relied on the amended pleading in seeking to resist the second application for summary judgment.
iii) He had the strong impression that Stinger had been behaving unreasonably, and unusually so, in the conduct of the litigation. He had referred in paragraph 40 of his main judgment to the costs generated by the claim being already very substantially disproportionate to what was at stake.
Lord Justice Rimer
Lord Justice Thomas
Appeal Court Ref: A3/2010/1866
Claim No. HC09C01375
IN THE COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
B E T W E E N :
UPON THE APPEAL coming on for hearing on 2 March 2011
AND UPON hearing Counsel for the Appellant and for the Respondent
IT IS ORDERED THAT: