Leases contain rafts of obligations which regulate how a lessee behaves in and uses their flat.
One issue that is often the subject of regulation by a lease is the keeping of pets. Some leases prohibit the keeping of any pet in a flat, whereas other leases allow pets to be kept but only with the written consent of some other party, usually the landlord or management company.
An issue that often comes up is the question of consent, and when (and if) it is unreasonable to withhold consent.
And it was this scenario which the High Court were presented with in Victory Place Management Company Limited v Kuehn and anr  EWHC 132 (Ch).
The proceedings concerned a gated residential development of flats in London, each held on long leases. Victory Place Management Company Limited is the management company responsible for the development, with each lessee being a member of the management company.
Terms of the lease
The lease contained the following covenant:
“No dog bird cat or other animal or reptile shall be kept in the [property] without the written consent of [the management company]”.
The management company operated a strict “no pets” policy.
The lessees approached the management company asking for consent to keep their dog at the flat. The management company refused to give consent, highlighting that it was their policy to not allow pets, but that they would always consider special circumstances as exceptions to the blanket ban on dogs.
Despite being asked to provide evidence of special circumstances, the lessees failed to produce any evidence. The lessees argued that their dog was “part of the family unit”.
The management company confirmed again that they did not give consent for the dog to be kept in the flat.
Injunctive proceedings in the County Court then followed because the dog wasn’t removed.
What happened in the County Court?
Following a three day hearing, the management company was successful in obtaining an injunction against the lessee.
The Court considered the way in which the management company had approached the exercise of its discretion, i.e. whether or not to give permission for the dog to be kept in the flat.
Accordingly, the management company was obliged to take into account relevant considerations whilst ignoring irrelevant ones, and was precluded from reaching an irrational conclusion.
The Court felt that the “no dogs” policy was not an inflexible one predetermining the outcome of all applications, but rather a legitimate predisposition to a particular point of view.
Appeal to the High Court
The appeal was based on the approach of the County Court about how the management company had exercised its discretion in deciding whether or not to give permission to the lessees to keep their dog at the flat.
Essentially, the lessees argued that the management company had already decided to reject the application before they’d even considered the merits of it. The lessees argued that the “no pets” policy was not a legitimate predisposition to a particular point of view, but instead was an inflexible rule predetermining the outcome of all applications.
The management company argued that an approach where no dogs are allowed except in special circumstances was a reasonable one.
The High Court considered a number of authorities, and considered how this exercise of discretion on the part of the management company should be approached.
In particular, the Court looked at “process” and “outcome”.
The Court looked at the wording of the covenant itself, which was expressed to be for the benefit of other lessees as well as the management company. The implication of this must be that the management company should behave reasonably in considering whether or not to grant consent. Reasonableness in that context involves both a reasonable process and rational outcome. It was also relevant in the view of the Court that the covenant itself had a negative formulation, i.e. that there was a presumption that pets were not allowed unless written consent is given.
In deciding whether or not the management company had breached its implied obligation to deal reasonably with the request to keep the dog, the Court firstly considered how the management company had handled the request to keep the dog. It was relevant that on at least two occasions it had been made clear to the leaseholders that it was the policy of the management company not to allow pets, save in special circumstances.
The lessees argued that the “no pets” rule itself amounted to a predetermination to make a particular decision. The Court did not agree. The board of the management company are elected by (and can be removed by) the other lessees as members of the company. There was a majority in favour of a “no pets” policy. And whilst this does not entitle the board to behave unreasonably (or indeed irrationally), it does justify the board in telling anyone about the policy it applied in relation to the covenant on pets.
The Court found that the policy itself that request would be refused save in special or exceptional circumstances was neither unreasonable nor irrational.
The management company is only required to operate a reasonable process in considering requests. It is quite reasonable, in considering requests, to take into account the policy set by the majority of leaseholders as members of the management company that dogs should not be permitted save in special circumstances.
Accordingly, the lessees’ appeal was dismissed.
Personal views on the subject matter of the injunction and costs involved aside, this case does at least provide some clarity to management companies (and landlords) as to how the Courts will approach the decisions those management companies make on requests they receive for consent.
A management company must behave reasonably in considering whether or not to grant consent.
Unreasonableness in this context involves both a reasonable process and a rational outcome. But, as the Court made clear these are “not high thresholds to meet”.