Spotlight on conflicting lease clauses – tenant suffering business disruption from landlord’s repair works

Recent developments in Century Projects Ltd v Almacantar (Centre Point) Ltd & Ors (2014) cast the spotlight once again the approach adopted by the Court where rights and obligations under a lease conflict with one another. 

During the summer we reviewed the decision of the High Court in Century Projects Ltd v Almacantar (Centre Point) Ltd (2014) where the Court determined that a tenant would not be awarded an interim injunction against its landlord for carrying out works that would damage the tenant’s business interests.  A link to our previous article can be found here.

The case highlighted the need for landlords and their solicitors to consider possible conflicting obligations when agreeing a lease, because any ambiguity could prove costly and time consuming if disputed.  This is certainly true in Century Projects Ltd because the tenant has now been granted permission to appeal the decision made by the High Court.    The appeal judge concluded that the tenant had a reasonable prospect of success in showing that the original judge had failed to apply the correct test, namely that the relevant question was whether the landlord had taken all reasonable precautions to minimise disruption to the tenant’s business.   It was not sufficient that the landlord simply followed the advice of its experts without taking into account the tenant’s business.

It will be interesting to read the outcome of the full appeal hearing.  The judges in the Court of Appeal will be asked to consider conflicting clauses within the lease and how a landlord is expected to balance its duty to carry out repair with its obligation not to interfere with the tenant’s enjoyment of the leased premises.

 

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