Within the L&T sector, the position is relatively clear (and, indeed, statute has intervened). But, with freehold land, the position is much less straightforward, and there have been various cases over the years on whether it can be implied into a particular document that consent or approval will not be unreasonably withheld.

The latest case involved a 1972 covenant relating to a cottage. The owners of that cottage had covenanted that they would not erect any other building on the land without first submitting detailed plans to the defendants and obtaining their consent. However, nothing was said as to whether consent could be withheld arbitrarily or only on reasonable grounds. In due course, the owner of the cottage wanted to extend it and erect an additional storey. Plans were submitted, but rejected, with the defendants arguing that they had a complete discretion and did not have to behave 'reasonably'. However, the court disagreed, taking the view that the intention of the parties (as ascertained from the document) was that consent would not be unreasonably withheld. Given that consent only had to be obtained as to the 'size, nature, materials and colour' of the works (as opposed to all aspects of the works), the judge took the view that consent could only be withheld on grounds relating to those factors – and not on any other grounds. Accordingly, he interpreted the situation as being one in which alterations were prima facie permissible, but subject to regulatory control (eg approval of plans) by the defendants. It was not a situation in which a complete discretional bar existed. Indeed, as the court pointed out, if no 'reasonableness' provision was implied, then it would mean that, if the building was destroyed by fire, then it would not be possible for the claimant to rebuild it without the defendant's consent – and that was surely something that could not have been intended.

The end result would seem to be that if a covenant implies that something (eg the erection of an extension) will be permitted, but will be subject to regulatory controls (eg approval of plans) then the courts will intervene to protect the person who is bound by the covenant. For instance, if the person whose consent is to be obtained is no longer alive (or the company has been dissolved) then the courts will normally say that the covenant is discharged. Likewise, if there is someone able to give their approval (as in this case), then the court will say that such consent may not be unreasonably withheld. But, all will depend upon the wording of the particular covenant – and if the prohibition or restriction is sufficiently widely worded (so that it gives more than mere regulatory control) then the court may well conclude that the intention of the parties was that the covenant–holder should have a complete and arbitrary discretion. Rickman v Brudenell-Bruce (unreported, 27 June 2005 (Ch), but noted in [2005] 154 Property Law Journal 17. © Practical Lawyer