Conflicts between a tenant’s rights to use and enjoy premises and a landlord’s right to make alterations to areas that are not let to its tenant – and the ensuing disruption that such alterations can cause – can be avoided altogether if the tenant can show that its landlord has no right to make any such changes. Hence the litigation in Iceland Foods Ltd v Aldi Stores Ltd [2016] EWHC 1134 (Ch); [2016] PLSCS 140.
The parties occupied buildings that stood beside each other on the outskirts of Cambridge. Aldi wanted to extend its building and, in order to do so, needed to erect hoarding to partition off areas around its store and to erect a safety scaffolding platform over the entrance to the building occupied by its tenant, Iceland. The tenant sought to sidestep disputes about the extent to which its landlord could lawfully interfere with its access, signage and frontage by arguing that, on the true construction of the parties’ lease, or by the implication of a term to that effect, the landlord was prohibited from extending its building.
There was nothing in the tenant’s lease that expressly prohibited its landlord from adding to its unit. However, the unit was described as having been “edged blue on the plan” attached to the lease and the tenant argued that subsequent references to the blue land indicated that the parties had intended that the description would continue to apply at all times during the lease. They had identified a particular feature on the ground and the manner in which that was done suggested that that feature ought to remain permanent and ought not to be extended. Furthermore, the tenant was obliged to contribute 36% of certain repairing costs. The percentage had been calculated by reference to relative square footages, which also suggested that the parties had not intended the landlord to change the square footage of its building.
The judge rejected the tenant’s arguments. The words “the land edged blue” meant exactly what they said. They did not mean, and could not be construed to mean “the unit on the land edged blue which will never be extended beyond its current bounds”. Moreover, the reply to the tenant’s concerns about the increased burden that a bigger building would cause was not to say that the building could not increase in size. The answer was that any extra costs would be irrecoverable.
The tenant’s attempt to persuade the judge to imply a prohibition into the lease preventing the landlord from extending its building fared no better. Marks & Spencer plc v BNP Paribas Security Services Trust Co (Jersey) Ltd [2015] UKSC 72; [2015] PLSCS 341 was authority for the proposition that the court will not imply a term into a contract unless it is necessary to give business efficacy to the contract, and/or is so obvious that “it goes without saying”. The court will not imply a term if the contract is effective without it. The test suggested by Lord Sumption was whether, without the term, the contract would lack commercial or practical coherence.
The term suggested was not reasonable and the lease worked perfectly sensibly without it. Consequently, the lawfulness of the landlord’s actions must be determined solely by testing whether they would amount to an actionable interference with the rights granted to the tenant.
Allyson Colby, property law consultant
