Landlord and tenant – Construction of lease – Implied term – Claimant tenant seeking injunctive relief restraining building works to change footprint of defendant landlord’s retail unit – Defendant applying for summary judgment – Whether claimant’s proposed restriction on increase in footprint to be construed out of or implied into lease – Application granted
On the outskirts of Cambridge two food stores, namely the defendant and the claimant, occupied adjoining buildings. The latter was the tenant of the former under a lease for a term of 25 years (less 3 days) from and including 29 April 1996. It was a full repairing and insurance lease. The buildings had car parks on two sides. The defendant decided that it wished to extend its building, and the works involved required partitioning off areas around its store with hoarding and erecting a form of safety scaffolding platform over the entrance to the claimant’s store. The claimant sought to stop the defendant from extending its building, and its chosen legal mechanism was to invoke what it said was a bar to that activity which existed on the true construction of its lease, or the implication of a term to that effect.
The claimant issued proceedings against the defendant claiming injunctive relief. The court granted interim relief restraining the carrying out of building works so as to change the current footprint of the defendant’s unit and restraining the erection of a hoarding other than along a specified line. The defendant applied for summary judgment. The court was asked to determine whether the claimant’s proposed restriction should be construed out of or implied into its lease.
Held: The application was granted.
(1) There was nothing in the claimant’s lease which amounted to an express prohibition on the defendant extending the footprint of its building. If the claimant had rights to parking which could not be infringed, one looked to see whether any given activities of the defendant in fact infringed those rights. If they did then one addressed the infringement directly. If the footprint of the building was increased so as to amount to an unwarrantable interference with car parking rights, then one restrained that particular infringement. Not every bit of building would infringe those rights. A combination of the rights given to the claimant to have its customers park in the car parks, and possibly the obligation not to derogate from grant, provided the real remedies that the claimant needed. A blanket prohibition on increasing the footprint of the building in order to achieve that end could not have been within the intention of the parties. The attempt to get to the claimant’s result by a process of construction was always doomed to failure: Legal and General Assurance Society Ltd v Expeditors International (UK) Ltd [2007] EWCA Civ 7; [2007] PLSCS 12 considered.
(2) The sort of obligation or restraint which the claimant sought to imply lent itself much more to the implication of a term than to a process of construction. For a term to be implied into a contract or a lease, it had to be reasonable and equitable, necessary to give business efficacy to the contract, so that no term would be implied if the contract was effective without it. It had to be so obvious that it went without saying. It had to be capable of clear expression and not contradict any express term of the contract. In the present case, looking at the matter in the round, the claimant’s proposed implication failed all the tests. One did not have to imply a term prohibiting the event itself from occurring in all situations. It was not necessary to do so; business efficacy does not require it; and if the officious bystander posed the relevant question he would not be suppressed by an “Of course”. Moreover, it was not even reasonable. Any incursions into the claimant’s car parking space and rights of way over the outside space had to be measured, and their lawfulness determined, by the scope of the rights which were conferred, to see if they were actionable. If they were then they were restrained because they had gone too far, not because they fell into a particular defined category of events which should be impliedly prohibited en masse. What limited the defendant’s activities was whether or not any particular activity amounted to an actionable interference, not the nature of the act itself. Looking at the matter in the round, there was nothing in the proposed implied term which satisfied the relevant tests. What limited the defendant’s activities was whether or not any particular activity amounted to an actionable interference, not the nature of the act itself. It followed that the claimant’s case that an extension of the footprint of the defendant’s unit was prohibited on the true construction of the lease or by an implied term failed: Marks & Spencer v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72; [2016] EGLR 8 applied.
Timothy Dutton QC (instructed by Hill Dickinson LLP) appeared for the claimant; David Holland QC (instructed by Freeths LLP) appeared for the defendant.
Eileen O’Grady, barrister
Read a transcript of Iceland Foods Ltd v Aldi Stores Ltd here
