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Colvia Management Company Limited was responsible for the management of an industrial estate comprising 87 units let on 999 year leases on standard terms and a number of car parking areas providing space for between 350 and 370 vehicles.

The leases contained a right to use the car parks for the purposes allocated by the Management Company, subject to reasonable rules and regulations.

The leases contained a tenant's obligation to comply with the regulations, which, it was clearly stated, could be restrictive and might be detrimental to the rights of owners or occupiers of units on the estate.

The demands of the tenants carrying on car repair businesses increased the number of car visits: some vehicles were left for repair and other courtesy vehicles had to be made available for customers.  All available car parking spaces tended to be taken up early each morning, leading to congestion during the day time.

Various solutions were suggested between 2000 and 2007 and came to a head after the local authority levied rates on the estate, which the Management Company sought to recover from tenants.  In 2007, the Management Company proposed a car parking scheme, which was approved by a majority, the car repair businesses forming most of the minority.

The scheme provided for 70 spaces to be available for overnight parking, which could be rented annually or quarterly.  6 spaces were available for the dropping off of cars for overnight repair but would need to be vacated by 10am.  15 bays were available for HGVs at a charge of £1 for each 24 hours and 10 short term car parking spaces would be provided.

The tenants of the car repair businesses claimed this would affect their businesses disproportionately. It would impose an unreasonable restriction on vehicles left overnight and produce significant income for the Management Company at the expense of the businesses.

The Court of Appeal overturned the earlier decision of the High Court.  The reasonableness of the regulations depended on the terms of the scheme proposed and not how those terms had been arrived at.  There was no evidence that the car parking charges were unreasonable.

Taking guidance from earlier Court decisions on reasonableness when considering applications under leases for licences to assign and for alterations, the Court drew the conclusion that the burden of establishing that the scheme was unreasonable was on the car repair businesses and not on the Management Company to prove it was reasonable.

A ban on overnight parking under the scheme was intended to alleviate parking problems during the day and, particularly, in early morning hours.  It was not unreasonable for those who would benefit from the exception to overnight parking to pay a fee for this in order to ration demand.

Shah v Colvia Management Company Limited [2008] Court of Appeal