The High Court declared that Chupn Ltd unreasonably withheld consent to the transfer of the Café en Seine leases to Sequana Management Ltd. Justice Haughton found that the landlord’s objections were driven by a desire to regain possession of the premises. He declined to order that consent be dispensed with, leaving a renewed application possible.
Perfect Pies Ltd, which was in receivership, and its receiver, Pearse Farrell, sought consent to assign the leases to Sequana after a tender sale. The request was made on 15 September 2014. The proposed transfer was conditional on the landlord’s consent. The court assessed the reasonableness of the landlord’s conduct as at 18 November 2014, when the proceedings began.
Before proceedings, Chupn’s solicitors said they would not consider consent until alleged repair and licensing breaches were addressed. The judge found no significant repair breach: any outstanding work was minor, and Sequana and its parent, Ardan Advisory Ltd, had undertaken to address it. He also found the landlord knew about the occupants and licensing arrangements, and that raising the lack of formal consent as an obstacle was not bona fide.
The court found that Chupn was controlled by businessman Louis Fitzgerald and that his side had unsuccessfully bid for the premises through Starpin Ltd. Justice Haughton accepted evidence that Fitzgerald had indicated he would use the landlord’s position to prevent the assignment and seek possession. He also found that a later petition to wind up Perfect Pies was brought to secure forfeiture of the leases, rather than for a genuine commercial recovery of the debt. The petition had earlier been refused and adjourned with liberty to re-enter; the High Court’s findings in this case relied on evidence about the debt agreement that had not been put before the court hearing that petition.
The judge concluded the landlord had used the repair and licensing issues as spurious grounds to avoid considering consent. He ruled that Chupn could not retrospectively rely on concerns about the proposed financial security to justify its earlier conduct, because it had deliberately not considered those matters at the relevant time.
The court did not decide whether it had power to dispense with consent. It declined to do so, finding that the financial information and proposed sureties had shortcomings that could have made refusal reasonable if properly considered before proceedings. In comments intended to guide any renewed application, the judge said additional security could be reasonable, but the landlord could not demand personal guarantees or a deposit equivalent to 18 months’ rent and rates where sound corporate or banking security was offered. Those comments were obiter: they were not the order deciding the application.