Ashworth Frazer Limited v. Gloucester City Council, (2001)
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Ashworth Frazer Limited v. Gloucester City Council, (2001)
HOUSE OF LORDSLord Bingham of Cornhill Lord Browne-Wilkinson Lord Hoffmann Lord Scott of Foscote Lord Rodger of Earlsferry OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENTIN THE CAUSEASHWORTH FRAZER LIMITED(ORIGINAL RESPONDENTS AND CROSS-APPELLANTS)v.GLOUCESTER CITY COUNCIL(ORIGINAL APPELLANTS AND CROSS RESPONDENTS)ON 8 NOVEMBER 2001[2001] UKHL 59LORD BINGHAM OF CORNHILLMy Lords,1. There are before the House an appeal by the Gloucester City Council ("the landlord") and a cross-appeal by Ashworth Frazer Limited ("the tenant"). On the issues arising in both the appeal and the cross-appeal I am in complete agreement with the opinion of my noble and learned friend Lord Rodger of Earlsferry, whose account of the facts and background I gratefully adopt.The landlord's appeal2. The combined effect of clause 2(viii) of the lease and section 1 of the Landlord and Tenant Act 1988 is in my opinion clear. The tenant covenants not to assign the demised land or any part thereof (other than to a subsidiary of the tenant). But the covenant is not absolute. The tenant may assign with the previous consent in writing of the landlord. The landlord's consent is not to be unreasonably withheld in the case of a respectable and responsible assignee being proposed. Where the tenant makes written application for consent the landlord owes the tenant a duty within a reasonable time to give consent, or give consent subject to notified conditions, or refuse consent for notified reasons. If the reasonableness of any condition imposed by the landlord or the reasonableness of the landlord's withholding of consent is questioned, the landlord must show that the condition or the withholding was reasonable.3. When a difference is to be resolved between landlord and tenant following the imposition of a condition (an event which need not be separately considered) or a withholding of consent, effect must be given to three overriding principles. The first, as expressed by Balcombe LJ in International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513 at 520 is that"a landlord is not entitled to refuse his consent to an assignment on grounds which have nothing whatever to do with the relationship of landlord and tenant in regard to the subject matter of the lease."The same principle was earlier expressed by Sargant LJ in Houlder Brothers & Co Ltd v Gibbs [1925] Ch 575 at 587: "in a case of this kind the reason must be something affecting the subject matter of the contract which forms the relationship between the landlord and the tenant, and . . . it must not be something wholly extraneous and completely dissociated from the subject matter of the contract."While difficult borderline questions are bound to arise, the principle to be applied is clear.4. Secondly, in any case where the requirements of the first principle are met, the question whether the landlord's conduct was reasonable or unreasonable will be one of fact to be decided by the tribunal of fact. There are many reported cases. In some the landlord's withholding of consent has been held to be reasonable (as, for example, in Pimms Ltd v Tallow Chandlers Company [1964] 2 QB 547 and Bickel v Duke of Westminster [1977] QB 517), in others unreasonable (as, for example, in Bates v Donaldson [1896] 2 QB 241, Houlder Brothers, above, and International Drilling, above). These cases are of illustrative value. But in each the decision rested on the facts of the particular case and care must be taken not to elevate a decision made on the facts of a particular case into a principle of law. The correct approach was very clearly laid down by Lord Denning MR in Bickel v Duke of Westminster, above, at p 524.5. Thirdly, the landlord's obligation is to show that his conduct was reasonable, not that it was right or justifiable. As Danckwerts LJ held in Pimms Ltd v Tallow Chandlers Company, above, at p 564:"it is not necessary for the landlords to ...See the full content of this document
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