England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		27 June 2005

The Deputy Judge

Introduction

1. This is the trial of a preliminary issue directed by Deputy Master Bartlett by Order dated 21 February 2005. A Conveyance dated 6 July 1972 contains a covenant prohibiting the carrying out of certain building works without the covenantee's consent "to the size nature materials and colour thereof". The issue is whether that consent is not to be withheld unreasonably: Is there an implied term to that effect in the Conveyance?
2. The facts may be stated shortly. In 1972 the Conveyance was made to give effect to a sale of a house, then known as Verger's Cottage and now it seems known as St Katharine's Lodge, with its surrounding plot of land ("the Property"). The Property lies in a small hamlet comprising an early nineteenth-century church and at most one or two other buildings. I have not been told the precise age of the house, although it was certainly in existence in its essentials before 1910. I was told, however, that at the time of the Conveyance there were proposals, to which the vendors had consented, for certain works to extend the house; and I assume that these were in due course carried out. I was not given any greater detail of those works.
3. Around the Property are woods and fields and, not far off, a mansion and park. Most of these form part of the Savernake Estate.
4. The vendors of the Property were the then trustees of the Savernake Estate. The Defendants are their successors in title. The Claimants are the present owners of the Property and are the successors in title of the purchasers.
5. The Conveyance is not elaborate. The description of the Property was of a piece of land identified on a plan, "together with the dwellinghouse and buildings erected thereon previously in the occupation of the Churchwardens of St Katharine's Church as a Verger's Cottage". The Conveyance reserved to the vendors extensive rights in relation to certain adjoining property, namely land comprised in a conveyance dated 29 September 1951, making it clear that development of that property would not be restricted by any claim for interference with access of light and air for the Property. The Conveyance then sets out, in sub-clauses (a) to (d) of clause 4, four covenants on the part of the purchasers. The covenants were expressed to bind the Property, with the benefit being expressed to be annexed to "the said adjoining land" of the vendors and each and every part. For the trial of the preliminary issue it is common ground that that land is the Savernake Estate.
6. The first two of the covenants, those in sub-clauses (a) and (b), are not to use the Property "for any purpose other than that of a private dwellinghouse in the occupation of one family only", and "not to do or suffer to be done" on the Property anything "which may be or grow to be a nuisance or annoyance or inconvenience" to the vendors or their successors in title to the "said adjoining property or any other owner or occupier of adjoining or neighbouring property". The fourth of the covenants is to maintain the boundary fences of the Property.
7. The third of the four covenants, that in clause 4(c) is the covenant identified in the order directing the trial of this preliminary issue. It is a covenant by the purchasers:

"not to build erect or place on the property hereby conveyed any building or other structure other than the cottage now erected thereon without first submitting detailed plans of the proposed building or structure to the Vendors and obtaining the Vendors written consent to the size nature materials and colour thereof and to allow the Vendors and their successors in title to demolish and remove the materials of any building or structure erected without obtaining such consent and to indemnify the Vendors against all costs incurred in doing so".

8. The Claimants now wish to carry out certain works to the house. These works will, broadly speaking, involve an enlargement of the building's footprint as well as adding a second storey over a part of the building which at present is only one storey. The Claimants have submitted to the Defendants detailed plans for the proposed works.
9. It is common ground between the parties that the proposed works fall within the scope of the covenant; that is to say, carrying out the works would involve the Claimants building etc a "building or other structure other than the cottage now erected thereon." From this it follows that, unless the Defendants have either given the written consent required by the covenant or have withheld it unreasonably (assuming, as the Claimants assert but the Defendants deny, only reasonable withholding of consent is permissible), carrying out the proposed works will involve a contravention of the covenant.
10. The Defendants have not given any written consent. At this stage I am not concerned with anything the Defendants have done or not done. The only question I have to decide is whether consent may not be withheld unreasonably. The Defendants' position on this is that the Defendants have complete freedom as to the giving or withholding of consent: it is for them, and for them alone, to decide whether or not a requested consent should be given, and they can make or refuse to make that decision on whatever ground they choose and without any possibility of review or challenge.
11. I should just add that the argument before me has proceeded on the basis only of the Conveyance, and in particular clause 4(c) of the Conveyance. In fact the Claimants are the owners of a further plot of land adjoining the Property. This further plot was conveyed by the Defendants' predecessors in title during 1973 and shortly after the Conveyance, and is subject to a restriction in the same terms as clause 4(c) of the Conveyance. The restriction in this second conveyance is referred to in the Order directing the trial of the preliminary issue. No separate argument has been addressed on this further restriction, and the parties appear to be agreed that my conclusion as to the Conveyance will lead to an identical conclusion in relation to the further restriction.

Conclusion

12. In my judgment clause 4(c) of the Conveyance is subject to the limit contended for by the Claimants.

Reasons

13. Contracts of all descriptions may be found which contain provisions prohibiting one party from doing something without the consent of another. If the contract does not deal with the point in clear language, the question can arise whether there is any restriction on the withholding of the consent. This is the issue in the present case. It is not an issue which is peculiar to contracts relating to land. However the argument before me has revolved around various passages in Lewison's "The Interpretation of Contracts", 3rd edn (2004), notably paragraph 13.10 (pages 419-421) entitled "Consents in Conveyancing Transactions", and the cases referred to in that paragraph; and I have taken it that there is no additional authority which will assist further in the resolution of the issue I have to decide.
14. Counsel for the Claimants, Mr Michael Heywood, accepts that there is no general principle of law that, whenever a contract requires the consent of one party to be obtained, there must be implied into the contract a term that such consent will not be withheld unreasonably. This point was made by Millett J (as he then was) in Price v Bouch (1987) 53 P & CR 257.
15. This disposes of a further argument. This is that, had the parties intended the consent to be capable of being withheld unreasonably, they need not have included in their contract any provision at all for the giving of consent in the context of the prohibition. In that case, leaving aside any point under the Contracts (Rights of Third Parties) Act 1999, it would be open to the parties to relax the prohibition by giving an appropriate consent. Therefore, so it could be reasoned, a term should be implied that consent is not to be withheld unreasonably, as otherwise that parties' stipulation for a consent to be obtained would be pointless.
16. However, in two cases referred to in Lewison's "The Interpretation of Contracts" this argument has been rejected. In Guardian Assurance Co Ltd v Gants Hill Holdings Ltd [1983] 2 EGLR 36 Mervyn Davies J reasoned that if parties choose to express in their contract what is not necessary, "one is not obliged to conclude that the expressed words bear not only the expressed meaning but also some additional implied meaning." Vinelott J in Pearl Assurance PLC v Shaw [1985] 1 EGLR 92 expressed his agreement with this reasoning.
17. Despite this Mr Heywood submits that a term will readily be implied, namely that consent is not to be withheld unreasonably, in any case where a contract is expressed to prohibit some act without the consent of the other party. And he submits that that implication is to be made in the case of clause 4(c) of the Conveyance.
18. Mr David Hodge QC, Counsel for the Defendants, submits that whether or not any term is to be implied will depend upon ordinary principles of contract law; that as Millett J put the point in Price v Bouch at 260, "it all depends upon the circumstances of the particular contract"; and that in the case of the Conveyance no term is to be implied.
19. In this context Mr Hodge relied upon a passage in para 6.03 of Lewison's "The Interpretation of Contacts". The passage in question is derived from the opinion of Lord Simon of Glaisdale in B.P. Refinery (Westernport) Pty Ltd v Shire of Hastings (1978) 52 A.L.J.R 20 , and is as follows:

"In order for a term to be implied the following conditions must be fulfilled:

(1) it must be reasonable and equitable;

(2) it must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it;

(3) it must be so obvious that it goes without saying;

(4) it must be capable of clear expression;

(5) it must not contradict any express term of the contract.

These conditions may overlap. It is not clear whether conditions (2) and (3) are alternative or cumulative."

20. I accept Mr Hodge's first two points to which I have just referred; and I do not accept that Mr Heywood's submission that the Court will have some special readiness to find a restriction on the ability of one party to refuse consent, where the contract makes the giving of his consent a condition to some further act. Whether or not there is to be a restriction will depend upon the circumstances of the particular contract. Subject to this I approach the question which I have to decide with the following points in mind.

i) First, I do not regard the question whether or not a term is to be implied in a case such as the present as altogether divorced from the language of the Conveyance: while it may be that the implication of a term is to be regarded as involving interpolation, I do not see the exercise involved in deciding whether or not there should be interpolation as being wholly divorced from the exercise of deciding what parties must be taken to have meant by the language they have used. Many examples can be found in the cases where the Court has relied upon the language of the relevant instrument in reaching a conclusion about the implication or otherwise of a term. The exercise, after all, is to reach a conclusion as to the intention of the parties ascertained objectively from the language of the instrument as a whole, giving the words used their natural and ordinary meaning in the context, and from the circumstances in which the instrument was made.

ii) Second, there will doubtless be cases where the implication of a term is appropriate, both because the term is necessary to give business efficacy to a contract and because it represents the obvious but unexpressed intention of the parties. However, I do not regard these two conditions as cumulative: a term may in my judgment be implied where one only of those two conditions is met.

21. In the cases to which my attention was drawn in argument different conclusions were drawn as to the importing of limits to the giving or withholding of consent.

i) The cases in which there was held to be no restriction at all as to the requisite consent were two of the three cases which I have already mentioned (namely the Guardian Assurance and Pearl Assurance cases).

ii) The cases in which there was said to be some limit were Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798, Dallman v King (1837) 4 Bing NC 105, Price v Bouch referred to above and Cryer v Scott Brothers (Sunbury) Ltd (1988) 55 P & CR 183 .

22. After I had prepared and circulated a draft of this judgment my attention was drawn by Mr Hodge to the very recent case of Mahon v Sims (The Times, 16 June 2005). In that case Hart J referred to various of the cases to which I have already referred to in the previous paragraph and on which I had heard argument, as well as to a decision of the Lands Tribunal in Re Jilas' Application [2000] 2 EGLR 90. These cases concerned a restrictive covenant prohibiting development without the covenantee's consent. In each case there was held to be some limit to the withholding of consent. However it is unnecessary for me to say anything more about the judgments given in these two cases, as they do not seem to me to give any further insight into the applicable principles beyond that to be gained from the cases to which I have referred in the previous paragraph.
23. The starting point is the Wrotham Park case. In that case a concession made by counsel for the claimant (George Newsom QC and Richard Scott) was accepted by Brightman J as having been correctly made. This concession concerned a covenant on the part of a purchaser of certain land "Not to develop the said land for building purposes except in strict accordance with a lay-out plan to be first submitted to and approved in writing by the Vendor or his Surveyors such plan to indicate thereon the roads sewers and drains to be constructed." Long after the land had been substantially developed a small parcel was developed by the purchaser's successor in title without any layout plan having been submitted to the vendor's successor. The plaintiff succeeded in its claim that that development involved a breach of the restrictive covenant. The concession, as described by Brightman J, was that "the covenantee would have no right under such a stipulation to refuse approval unreasonably, and in particular, that the stipulation could not lawfully have been used as a bargaining counter in order to demand money ... as the price of allowing [the purchaser] to develop". Brightman J did not comment on the reasoning lying behind the concession; or, in other words, the process by which this limit to the covenantee's right was arrived at.
24. The concession did not have any bearing on the question whether there had been a breach of the restrictive covenant, as there was a clear breach in the absence of any layout plan having been submitted for approval. But it was of relevance to the question of remedy: on the facts of the case Brightman J refused a mandatory injunction requiring the removal of the unlawful development, but ordered damages in lieu. In considering the quantum of damages Brightman J weighed with care the expert evidence which had been led and held that the covenantee would have been reasonable in withholding consent, had consent been sought, so that more than nominal damages were appropriate.
25. The Wrotham Park case is, I think, an illustration of a situation in which a prohibition on building without first submitting building plans for approval and obtaining the requested approval was construed as imposing the prohibition only where the requested approval had not been withheld unreasonably. Although, the end result is that there is found to be implied into, or in other words interpolated into, the contract some additional unexpressed words, so that (as made clear in Cryer v Scott Brothers (Sunbury) Ltd discussed below) the implication, to be justified, has to meet the well- established requirements necessary for the implication of terms, the exercise nevertheless is one involving the interpretation of the parties' contract.
26. In the Dallman case a lessee covenanted to spend £200 in the first year of his term in carrying out various specified works. The lease contained two relevant provisions, (a) that "such erection and alterations or repairs [were] to be inspected and approved of by [the lessor], and to be done in a substantial manner"; and (b) that the lessee was to be allowed "£200 towards such erections and alterations and repairs" and to be at liberty to "retain the same out of the first year's rent." At the end of the year the lessor claimed that he had not approved of the work done and that in the circumstances the lessee was in arrear with his rent and was not entitled to deduct the full £200, and distrained for rent. It was found by the jury that the lessee had indeed laid out £200 on the specified works. The Court of Common Pleas held that the lessor's approval of the works done by the lessee was not a condition precedent to the right of the lessee to deduct and repay himself out of the rent. The basis for the decision was that the word "such" in part (b) of the clause, the part of the clause giving permission to deduct £200, referred to the specified works, not to the specified works as approved in accordance with part (a) of the clause.
27. Tindal CJ said, in relation to this point of construction, that it could never have been the intention of the parties that the refusal of approval would disentitle the lessee from making any deduction, where the lessee had done all but the minutest part of the works. Vaughan J in his judgment pointed out that as a matter of construction of the contract the stipulation for the lessor's approval was not necessarily a condition precedent and that the word "such" in part (b) of the clause could appropriately refer only to the specified works; and he held that to construe the clause to require the lessor's approval as a condition precedent might allow the lessor capriciously to deprive the lessee of the right to make any deduction. Bosanquet J said:

"It is contended that [the erections and repairs] must mean [in the clause permitting deduction of the £200] such as have been approved of by the [lessor]: that construction, however, would set up a condition precedent repugnant to the main object of the agreement and therefore void."

And Coltman J said:

"If we adopt the [lessor's] construction, he might capriciously withhold his approval, and deprive the [lessee] of the money due. But the agreement is in effect a contract that the repairs should be substantially done; and that the [lessor] should have the means of ascertaining the fact."

28. This is the context in which Tindal CJ discussed in his judgment what the position would be if in fact the giving of the approval was a condition precedent to the making of any deduction. On this point his judgment contains the following (emphasis added):

"The gist of the agreement is, that the work should be done in a substantial manner; the approval of the lessor was added, for the purpose of enabling him to ascertain that the work had been done. It could never have been intended that he should be allowed capriciously to withhold his approval; that would have been a condition which would go to the destruction of the thing granted, and if so, according to the well known rule, the thing granted would pass discharged of the condition. .. .Under such circumstances, it would be giving greater effect to the clause for the lessor's approval, than could ever have been intended by the parties, if we held that no deduction should be made for the repairs till such approval had been formally signified."

29. So far as I can see, in this passage Tindal CJ was not dealing at all with the question whether there should be any terms implied into the contract, or with the conditions required for implication of terms generally. What he was doing was explaining his interpretation of the contract; in that context he was explaining why he could not accept that the contract contained the condition precedent contended for by the lessor. Either the condition was void for repugnancy, or there was no relevant condition precedent in relation to the lessee's right to make a deduction from the rent beyond a requirement that the lessee had to have substantially carried out the specified works. It will be noted that the repugnancy was not as to the whole lease, but only as to the provision relating to the deduction of the £200 from the first year's rent.
30. I have examined the Dallman case at a little length, as the passage in the judgment of Tindal CJ which I have emphasised was founded on by Mr Hodge as providing a touchstone in deciding whether or not there could be any restriction on the Defendants' withholding of requested consent pursuant to clause 4(c) of the Conveyance. His submission was that the implication of any term as to the withholding of consent should only be made if otherwise the provision in clause 4(c) "would go to the destruction of the thing granted"; and he submits that for the Defendants to be in a position to prevent unreasonably any works falling within the covenant (namely the building etc of any building or other structure) would not destroy the thing granted, namely a plot of land with a dwellinghouse which is required to be used as a private residence in the occupation of only one family.
31. I do not accept this submission for two reasons.

i) First, it seems to me that a term may be implied into a contract, not only where in the absence of the term the whole of the consideration was destroyed, or even substantially destroyed, but also where some particular provision of the contract would be rendered nugatory. If, in other words, the test for the implication of the term is "business efficacy", the implication may be made where it is only some material provision of the contract which would lack business efficacy and not the contract as a whole. If the Dallman case were truly a case on the implication of terms, the point would be precisely illustrated by that case.

ii) Second, the "business efficacy" test is well established as requiring the implication to be "necessary" and not merely "reasonable". But in my judgment there may be cases where an implication is found to be "necessary" but without it also being found that the absence of the implication would go to the destruction of the thing granted by the contract. That, it seems to me, is to impose a more stringent test than is in fact required.

32. Mr Hodge relied on the judgment of Waite J in Cryer, discussed below, as being contrary to the two points made in the previous paragraph. However, as I explain, I do not think that Waite J was, by his observations in the context of the case before him, seeking to do more than say why there was a relevant term to be implied: he did not need to lay down what would be the minimum conditions necessary for the implication of a term.
33. Price v Bouch was referred to by Mr Hodge for the passage in the judgment of Millett J quoted earlier in this judgment. In fact, however, it is a case in which there was held to be some implied limit on the refusal of a requested consent. The case concerned a developed building estate. By mutual covenants the owners of the plots on the estate were prevented from putting up buildings without plans for the buildings being first approved by an elected committee of the owners. Although there was nothing in the instruments imposing the mutual covenants which expressly so stated, it was conceded (a concession accepted by Millett J) that the committee had a duty to inspect and consider any application, to reach a decision themselves and without delegating the decision, and to act honestly and in good faith and not for some improper or ulterior purpose. In view of this restriction on the decision making process of the committee, Millett J held that there was no room for any further restriction, to the effect that the withholding of consent must not be unreasonable (if, that is, that concept went further than simply encompassing the accepted restrictions). But for present purposes it is important to observe that the concession provided the foundation for the actual decision; that concession was one which involved the imposition of a restriction which was not expressly stated in the relevant contracts.
34. The Guardian Assurance and Pearl Assurance cases referred to above were unremarkable on their facts: the cases are but examples, with the decisions reached following naturally from the language of the relevant instruments in the context in which they were made. For example in the Guardian Assurance case the relevant clause could be contrasted with a different clause in the same instrument in which the parties had in terms provided for consent not to be unreasonably withheld. The same was true in the Pearl Assurance case, as Vinelott J pointed out, saying that in his judgment in the instrument before him "the omission of those words", namely the words "such consent not to be unreasonably withheld" used elsewhere, "must ... be taken to be deliberate".
35. Cryer v Scott Brothers (Sunhury) Ltd (1988) 55 P & CR 183 was a decision of the Court of Appeal (Slade LJ and Waite J). In that case land had been sold for development with a covenant by the purchaser, covenant 4, that all building or other plans would be submitted to the vendor for approval before building work was commenced. Many years later the owner of one of the plots bound by the covenant wished to extend the house built on his plot and applied to the covenantee for consent. This having been refused the owner sought a declaration, among other matters, that there was an implied proviso that consent would not be refused unreasonably and that the consent had been refused unreasonably. On these claims the owner succeeded.
36. In relation to the Guardian Assurance and Pearl Assurance cases Slade LJ said (at page 193) "the two decisions ... do not come near to establishing ... that wherever a contract requires the consent of one party to be obtained by the other, it is never possible to imply a term that such consent is not to be unreasonably withheld"; and he agreed with Millett J's observation that "it all depends on the circumstances of the particular contract." Slade LJ also (at page 192) referred to the implication of a proviso "in order to give business efficacy to covenant no 4"; and (at page 195) he expressed his conclusion that "the implication is, in my opinion, necessary to give business efficacy to covenant no 4."
37. Waite J, in his judgment in the Cryer case, distinguished the Guardian Assurance and Pearl Assurance cases, and continued (at 202):

"I agree with Slade LJ that the question to be asked in all cases is whether the implication of a proviso of reasonable grounds of refusal is necessary to give business efficacy to the transaction of which the covenant to obtain approval forms part. The question, in other words, is whether a capricious or unreasonable withholding of consent would amount to 'a destruction of the thing granted' - Dellman v King (sic) per Tindal CJ. It would seem to me to be pointless to impose the requirement to submit plans in the first place if the covenantee had the right to reject them arbitrarily - whether or not on reasonable grounds and regardless of the quality of the proposed extension on its merits. That is particularly true (as Sir Robert Megarry, Vice-Chancellor observed in Clerical Medical and General Life Assurance Society v Fanfare Properties Ltd) of cases like the present where the court is dealing with a regulatory covenant requiring some specific action on the part of the covenantor. An advance submission of plans is action of the most specific kind."

38. There are two comments which I should make about this passage in Waite J's judgment.

i) First, I have not been able to find in Slade LJ's judgment any statement laying down any such general proposition as to the minimum necessary requirements for the implication of a term as set out in the first sentence. What Slade LJ did say, and what I take Waite J to be agreeing with, is that

"I see no reason why, in accordance with the ordinary principles of the law of contract, it should not be possible to imply a term of this nature [that is, as to the withholding of consent] in a restrictive covenant where this is necessary in order to give the contract business efficacy."

In short, as I see it, the focus of the judgments of the Court of Appeal was on the facts of the instant case and whether on those facts there was (as was found to be the case) sufficient for the implication of a term; beyond that the Court of Appeal did not lay down what was the minimum necessary.

ii) Second, Waite J's reference to the comments of Sir Robert Megarry in the Clerical Medical case is instructive. I was not shown any copy of that case, which is unreported. However it is described in Slade LJ's judgment (at 194). In that case there was, it seems, a taxonomy of restrictive covenants made by Sir Robert Megarry. As to those covenants in qualified terms, requiring the giving of some consent, he drew a distinction between those where the requirement was for "a general and unrestricted consent" and covenants which require "the approval of a specific matter, as when the title has to be approved, or plans of a building have to be submitted for approval". In relation to this last class he said "the Courts will not permit the party whose approval is required to misuse the requirement by refusing to approve a title or plans which are free from any tenable objection." So far as I can judge, Waite J would consider, with Sir Robert Megarry, that a term as to the withholding of consent will be more readily implied where the relevant consent or approval is in the context of a regulatory covenant requiring the submission of plans for approval.

39. It is to be noted that clause 4(c) of the Conveyance is squarely within Waite J's class of regulatory covenant requiring the submission of plans for approval. What is more, the covenantee's consent is to be directed, not in general to the proposed works, but in particular to the "size nature materials and colour" of the proposed works. In my judgment the limiting of the required consent in this way by the express language of clause 4(c) is an indication that the parties did not expect the covenantee's consent to be withheld by reference to considerations not directed at the merits of the particular proposal, for example because the covenantee may simply have been too idle to give any consideration to any plans submitted to him once the owner of the Property had gone to the trouble and expense of producing detailed plans, within the covenant, for what could be perfectly unobjectionable work.
40. There are other features in the language of the Conveyance to which attention may be drawn. First, the qualified covenant, clause 4(c), follows the two unqualified prohibitions. It is the only qualified covenant in the Conveyance. The Conveyance does not therefore give any grounds, as a matter of language, for saying that in clause 4(c) the parties must have intended the convenantee's consent to be capable of being withheld unreasonably.
41. Second, it seems to me that the construction of clause 4(c) contended for by the Defendants could lead to extraordinary results. It is to be remembered that the restriction in clause 4(c) is in theory perpetual. Suppose then that the dwellinghouse on the Property was destroyed. In that case, I have no doubt, the Defendants would expect to be consulted about any plans to rebuild. On their case, however, it would be open to them to refuse arbitrarily to permit any rebuilding. In that situation, as a consequence of clause 4(a), the owners of the Property could not use it for any purpose whatsoever. In my judgment that result cannot possibly have been within the parties' contemplation.
42. In argument Mr Hodge suggested two ways of meeting the point in the previous paragraph. First, he submitted that in the event of the destruction of the dwellinghouse there might be some term implied into clause 4(c) concerning rebuilding. To my mind that submission in effect concedes that clause 4(c) requires the implication of a term; and if, as I find, a term is to be implied, for reasons I explain I am sure that it is a term that the convenantee's consent must not be withheld unreasonably.
43. Second, he submitted that the words in the clause "other than the cottage now erected thereon" would make an exception to the general prohibition and would permit the reinstatement of the dwellinghouse without any plans being first submitted to the covenantee or the convenantee's written consent being obtained for the relevant matters.
44. This submission I cannot accept. There are three reasons.

i) I cannot see that on any natural use of language the rebuilding of a destroyed cottage could be said to be the building "of the cottage now erected." What would be built would be a new cottage, however much one might try to replicate the size, nature, materials and colour of the original.

ii) The purpose of the words of exception in the clause is, it seems to me, to cover the part of the clause concerned with the removal of buildings and structures built or placed on the Property without the requisite written consent having been sought. In the absence of the words of exception it would be appear that the old dwellinghouse standing at the time of the Conveyance, having been built or placed on the Property without detailed plans having been first submitted, would be liable to be demolished and removed.

iii) The third point follows from these two. The words of the exception apply to the dwellinghouse as it existed at the time of the Conveyance. They do not cover any extensions to that building, and a fortiori would not apply to any additional buildings (such as greenhouses, garages etc) built with all requisite consents after the time of the Conveyance. Hence the words of exception could not cover any replacement of those extensions or buildings in the event or their destruction.

45. So far I have tested the position on the hypothesis of a catastrophic event occuring at the Property. But it is also relevant that comparatively trivial works at the Property will fall within the ambit of the restriction. This could be for example the building of a garden shed, greenhouse or even cold frames, or the addition of a chimney stack or porch to the existing building. The works might have become necessary to allow the purchaser in changed circumstances to continue to use the building as his dwelling, for example because he required access suitable for a disabled family member. On the Defendants' case it would open to the Defendants to prevent without any reason any of these works from being carried out. But, as the point was put by Mr Heywood, the parties cannot have expected the covenantee to have the unfettered right to require the Property to be preserved in aspic for all time.
46. For these reasons the parties to the Conveyance must in my judgment be taken to have intended that there was to be a limit to the covenantee's withholding of a requested consent under clause 4(c). Such a limit is necessary to give effect to the reasonable expectations of the parties. As I see it, it is necessary to given the contract business efficacy.
47. Mr Hodge submitted that such a conclusion as set out in the previous paragraph would not be sufficient to support a conclusion that the relevant limit was that the withholding must be not be reasonable. In his written argument he set out several possible alternative limits, such as that the consent should not be withheld (1) arbitrarily, or (2) in bad faith, or (3) for some improper or ulterior purpose, or (4) unreasonably, or (5) otherwise than on grounds believed (sc. by the covenantee) to be reasonable. From this he submitted that as there are several possible formulations and it cannot be shown which would without doubt have been preferred, no term can properly be implied.
48. In fact, as it seems to me, Mr Hodge's final formulation of the limit to the withholding of consent does not offer any limit at all. Assuming that the covenantee is to be the sole judge of what is reasonable, it would be practically speaking impossible for the owner of the Property to demonstrate that a withholding of consent had fallen outside the permissible limit.
49. On the other hand the first three of Mr Hodge's formulations are all encompassed within his fourth formulation, that the consent is not to be withheld unreasonably. I cannot suppose that any one of those first three formulations could, to the exclusion of the other two, be taken to have been contemplated by the parties as appropriate for testing whether a particular withholding of consent was outside the bounds of what was acceptable. Why should a dishonest refusal be impermissible, but not one which was irrational or capricious or made for a reason altogether unconnected with the Property?
50. In my judgment the fourth formulation is necessary in view of the fact that clause 4(c) specifically directs the required written consent to matters specific to the detail of the proposed works as indicated in the plans required to be submitted to the covenantee. Further, in the Cryer case the Court of Appeal did not have any difficulty in concluding that the relevant limit to the permissible withholding of consent, once it was concluded that there should be some limit, was that the withholding should not be unreasonable.
51. For these reasons, therefore, I will answer the preliminary issue by making a declaration that a duly requested consent under clause 4(c) of the Conveyance, and a similar consent under the second conveyance, may not be unreasonably withheld by the Defendants.