Lease — Termination — Breach of covenant – Defendant tenants purporting to terminate lease of premises owned by claimant company – Claimant refusing application on basis that breach of covenants by defendants prevented termination of lease – Claimant seeking damages for breach of covenant — Whether defendants using all reasonable endeavours to secure planning consent for permitted use under terms of lease – Whether defendants complying with covenants under terms of lease – Judgment for claimant
The claimant owned premises in Pontllanfraith, South Wales, which were leased to the defendants for the purposes of their secondhand car business. The land comprised in the lease included a workshop and an area of open ground surrounded for the most part by fencing. The lease allowed the defendants to terminate by notice if the local planning authority objected to the use permitted by the lease and the defendants failed to secure planning consent for that use but only if the defendants had used all reasonable endeavours to secure that consent.
The local authority had granted planning permission for the plot in question to be used for car sales subject to certain conditions. However, a dispute arose when the local authority objected to the defendants’ alleged misuse of the premises and issued a breach of conditions notice. The defendants sought to determine the lease. The claimant refused the defendants’ application and brought proceedings claiming damages for breach of covenant arguing that the lease had not been validly terminated. It contended that the defendants were in breach of the terms of the lease in that they had, among other things: (i) kept livestock on the premises; (ii) failed to use all reasonable endeavours to secure planning consent for permitted use; and (iii) failed to comply with the repairing covenants. The claimant argued that those breaches prevented the defendants from determining the lease as the trigger which allowed the tenant to give notice had not occurred.
Held: Judgment was given for the claimant.
On the evidence in the present case the claimant had failed to prove any of its claims against the defendants, except for the alleged breach of repairing conditions in respect of the fencing. However, whether or not the claimant had waived its right to forfeit the lease for breach of the repairing obligations, the evidence did not sustain the suggestion that the claimant had consented to the breach. In some respects the defendants could claim, not merely to have kept the leased premises in repair, but to have improved them. However, that fact did not operate to negate or lessen their duty to keep the fencing in repair. Accordingly, the defendants could not be considered to have “observed and performed” all their covenants when they served notice to determine the lease or when that notice would have expired three months later. It followed that the notice would not have taken effect, and that the lease will have continued. Therefore, judgment would be given for the claimant and the court would order the defendants to pay damages in the agreed sum of £70,000, with interest and costs.
Nick Thomas-Symonds (instructed by The Robert Davies Partnership LLP) appeared for the claimant; Carys Williams (instructed by Lewis & Lines) appeared for the defendants.
Eileen O’Grady, barrister
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