The names of the protagonists in Peel Land and Property (Ports No 3) Ltd v TS Sheerness Steel Ltd [2014] EWHC 39 (Ch); [2014] PLSCS 21 will be familiar to practitioners in the field of landlord and tenant law. The parties went to court last year over whether the tenant was entitled to remove valuable items of plant and machinery from the Sheerness Steel Works in Kent, which it wanted to sell.
It transpires that the parties have also been been locked in litigation over slagheaps, which the tenant wanted to leave on site and was unable to sell. The slag began accumulating when environmental regulations were tightened, which prevented farmers from using it on farm tracks. As a result, there were approximately 30,000 tonnes of slag on the site when steel production ceased and the tenant’s predecessor went into administration. The tenant was a newly formed company with minimal share capital and no other business. It purchased the assets from the administrators and the landlord was concerned that the tenant would strip anything valuable from the site, and then abandon it, leaving the landlord to bear the cost of removing the slag.
The dispute turned on the meaning of the tenant’s covenant not to allow refuse dumps or rubbish heaps to form and “to remove …. all refuse and rubbish …. and all used tins cans boxes and containers whatsoever and generally to keep all vacant land forming part of the said premises clean and in good order”.
The landlord argued that the slag was refuse or rubbish. It also suggested that the court should construe the covenant by reference to modern jurisprudence on “waste” because the lease was a long-term contract for 125 years, which made it necessary to adopt a “mobile” meaning of the provisions of the lease. Alternatively, there had been a breach of the covenant that the tenant would keep the land clean and in good order due to possible environmental risks from the slagheaps.
The tenant argued that the court should construe the words “refuse and rubbish” by reference to their meaning when the lease was granted. It claimed that the covenant applied only to “bona fide rubbish”, as exemplified by the reference to “tin cans boxes and containers”, and that the covenant to keep the land clean and good order was concerned with the cleanliness, tidiness and appearance of the site.
The judge refused to attribute the parties with foresight of the complex regulatory regime that applies to “waste” today. However, he did not need to do so. The words “refuse and rubbish” were not restricted to tin cans, boxes and containers. They denoted items or substances that the owner intended to discard – and the unwanted slag fell squarely into this category. Consequently, subject to any arguments about waiver or acquiescence, the tenant was in breach of its obligations under the lease.
This made it unnecessary to consider the landlord’s alternative argument. However, the judge rejected the notion that the obligation to keep the land clean and in good order imposed far-reaching environmental obligations or dealt with environmental hazards. Furthermore, the landlord had failed to establish that the slagheaps actually presented such a hazard.
Allyson Colby is a property law consultant
