Where there are triable issues and the judge’s decision on the balance of convenience is not challenged the appeal court will not intervene to discharge an injunction.
The Court of Appeal has dismissed an appeal against an order continuing an interim injunction preventing the appellant from interfering with the respondent’s occupation of property in Avondale Park Ltd v Miss Delaney’s Nursery Schools Ltd [2023] EWHC 2738 (Ch).
The case concerned a headlease of Avondale Park Lodge from the local authority and a sublease of the whole to the respondent. The headlease, which was protected by the Landlord and Tenant Act 1954, expired on 13 September 2022. The sub-lease, which was contracted out, expired on 29 August 2022. The headlease was subsequently assigned to the appellant.
The headlease required the property to be used for residential purposes only and subletting was prohibited save by assured shorthold tenancy. The sub-lease provided that the landlord would procure a deed of variation permitting use of the property as a nursery and if this was not produced by 14 December 2014 the sublease “will be terminated”. No such deed of variation was provided but the respondent went into possession and operated the property as a nursery, having obtained planning permission to do so.
In July 2022 the appellant issued a commercial rent arrears recovery notice for arrears of rent due from the respondent but shortly afterwards purported to forfeit by peaceable re-entry. The respondent argued that the appellant had waived its right to forfeit by the CRAR notice but that since no deed of variation had been provided the underlease automatically terminated on 14 December 2014. Its subsequent occupation of the property coupled with payment and acceptance of rent had created a periodic tenancy which was protected by the 1954 Act. It sought a declaration to that effect and succeeded in obtaining an injunction preventing the appellant from excluding it from the property pending trial.
The Court of Appeal upheld the judge’s decision. There was no challenge to his decision that the balance of convenience lay with the respondent. The sublease was clear. Failure to provide the deed of variation meant the sublease terminated on 14 December 2014. Both parties believed the respondent to be a tenant and so there were triable issues as to whether the respondent was a periodic tenant and the appellant had waived its right to forfeit. The appellant’s reliance upon estoppel by convention whereby parties share a common assumption which is relied upon by one party to its detriment could not be determined without a trial.
Louise Clark is a property law consultant and mediator
