Citation
Waterson, G. and Lee, R. (1999), "Licence to assign", Property Management, Vol. 17 No. 3. https://doi.org/10.1108/pm.1999.11317cab.005
Publisher
:Emerald Group Publishing Limited
Copyright © 1999, MCB UP Limited
Licence to assign
Ashworth Frazer Ltd v. Gloucester City Council [1999] The Times 1 April [1999]
In this case the court had to consider whether the landlord had acted reasonably in refusing consent to a proposed assignment where the proposed user after assignment would have been in breach of the user clause contained in the lease.
The lease of the premises contained the usual qualified covenant against assignment, stating that the lease was not to be assigned without the landlord's consent, such consent not to be unreasonably refused, and the user clause provided that the use of the premises was to be restricted to the uses set out in classes III, IV or X of the Town and Country Planning (Use Classes) Order 1963, SI 1963/708, i.e. light industrial, general industrial and wholesale warehousing. The assignee proposed to use the premises for the purpose of metal recycling, and the landlord refused consent to the proposed assignment. It would appear that even though the landlord, acting in its capacity as planning authority, had earlier granted planning permission it was nonetheless unhappy that this activity should take place on the particular site in question and was therefore seeking to rely on the covenants contained in the lease to prevent it.
Counsel for the tenant put forward the proposition that the landlord was not entitled to rely upon an anticipated breach of the terms of the lease by the proposed assignee as reasonable grounds for refusing consent to the proposed assignment, relying upon the earlier case of Killick v. Second Covent Garden Property Co Ltd [1973] 1 WLR 658.
The court did not agree: the fact that if there were to be such a breach of the user clause in the future the landlord would be able to rely on other remedies to deal with the situation was relevant to the question of whether or not any refusal of consent to assign was reasonable, but it was not conclusive. Applying the reasoning set out in the leading case International Drilling Fluids Ltd v. Louisville Investments (Uxbridge) Ltd [1986] Ch 513 at p. 520 the court held that refusal based upon an apprehension of the assignee using the premises for an undesirable purpose could indeed be reasonable.