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High Court Judgment Handed Down in Hicks v 89 Holland Park Management Limited [2021] EWHC 930 (Comm)

Judgments, Real Estate

29 April 2021

John McGhee QC and James Hanham acted for the successful Covenantee and were instructed by Clive Chalkley and Charlotte Weeks of Gowling WLG.

Hicks v 89 Holland Park (Management) Limited [2021] EWHC 930 (judgment to be found here) is an important decision on matters relevant to the withholding of consent in the context of the law of covenants.

In Hicks, the facts were that an unusual development site (described as being unique in Kensington & Chelsea) (“Site”) was acquired by Ms Hicks in 2012. The Site was unusual because of the narrowness of its frontage and unique because there were no empty sites for development in the area. The design of the house that Ms Hicks proposed to construct on the Site was mostly subterranean and modernist and was to some degree (as the judge found) driven by the exigencies of developing an “exceptionally difficult site.” The most striking feature of the design was a glazed entrance pavilion, its potential appearance after-dark being described as a “gently glowing cube.”

The Site was subject to restrictive covenants, the Covenantee owning the immediately adjacent property to the North, being the last in a row of buildings developed in 1800s as the Radford Estate, lying to the West of Holland Park. One of those covenants required the owner of the Site to obtain the Covenantee’s approval, prior to applying for planning consent, for the plans, drawings and specifications to be submitted as part of that application for planning consent. The subject-matter of the proceedings was the Covenantee’s objection in 2017 to such plans. 

The restrictive covenants were contained in a deed of 1968, the overall purpose of which was to facilitate development. Although the covenants were, on the face of it, not subject to a proviso as to reasonableness, in an earlier decision, Robert Miles QC had been determined that the covenant was impliedly subject to a proviso that consent was not unreasonably to be withheld.

Following a successful appeal to the Court of Appeal (see here), it was open to the Covenantee to argue at the further hearing that it was entitled, as a matter law and in principle, to rely upon the following grounds of objection to Ms Hicks’ plans, which had been included in the Covenantee’s decision letter: (1) aesthetic objections to the design (2) damage to trees consequent upon construction (3) loss of amenity during the works and (4) the potential effects of construction. The question for the Judge, at the remitted hearing, was whether or not, in the circumstances, it was reasonable for the Covenantee to have done so.

An important issue in the case was the tension between the Covenantee’s right to object to the plans, drawings and specifications (on reasonable grounds) and the Covenantor’s right to build – the covenants had been taken with the development of the Site specifically in contemplation. This tension was referred to as the “sterilisation issue.” If the plans put forward by the Covenantor were the only plans that would result in development of the Site, then the Covenantee’s objections to them would be unreasonable because the consequence would be that the Site could not be developed at all, resulting in a disproportionate detriment to the Covenantee when compared to the benefit to the Covenantor.

In relation to the aesthetic considerations, the Covenantee had two principal objections: (i) the design of the glazed entrance pavilion and (ii) development beyond the rear building line of the Victorian houses, so that the new house would not have the benefit of a garden, unlike its immediate neighbours.

Ms Hicks made two important concessions. Firstly, she had indicated (after the Covenantee’s refusal of consent) that there were potentially alternative designs for the entrance pavilion that were likely to obtain planning permission.  Secondly, she had conceded (in cross-examination) that, notwithstanding her plans for construction over the whole of the Site, development would be possible, even if it respected the rear building line of the Victorian houses. Consequently, the Covenantee’s objection would not have the effect of sterilising the Site.

In that context, the Judge accepted that the Covenantee’s objections to the design and construction behind the rear building line were reasonable. The Judge took the view that the potential damage to the trees was at best an incidental consideration (in that some trees that did not provide some amenity value, would be not be affected, if construction was limited to that forward of the rear building line).

Although in principle open to the Covenantee, the evidence did not support the contention that the loss of amenity and disruption (save that caused by construction behind the rear building line) were, in the circumstances, reasonable grounds for objection. However, given the Judge’s finding on the aesthetic issues, the Covenantor had failed to show that the Covenantee had been unreasonable in its objection to the plans and her claim was dismissed.

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