Posted: Wednesday, 5 November 2014 @ 11:53
The recent case of Century Projects Ltd v Almacantar dealt with the competing interests of the landlord and tenant. The landlord wished to carry out repairs and renovation which it was entitled to do, but the tenant was concerned with the potential catastrophic impact on its business by the method proposed by the landlord.
The case involved Centre Point Tower in London. The tenant had a lease of 2 of the top floors and a viewing platform. It operated a high class bar and restaurant, and the view was a big selling point for its business. The tenant had the benefit of the usual right to quiet enjoyment of it's lease. The landlord wished to carry out works to the whole site, and proposed to use traditional scaffolding covered in plastic sheet. The duration of the work was estimated between 4 and 6 months.
The tenant maintained that the work could be carried out by suspended cradles from the roof. The tenant asked the court for an interim injunction to stop the landlord carrying out the work until the issues were fully argued at trial. At least this would have meant a minimum of 3 months delay to the start of the work with significant cost to the landlord.
The tenant argued that the landlord would be in breach of its covenant to give the tenant quite enjoyment under the lease and breach of its obligation not to derogate from their grant.
The court refused to grant the interim injunction. There was no dispute over the fact that the actual work itself was reasonable and necessary. The landlords were under a duty to carry out the work and had a right to do them. The court essentially decided that only the landlord had a right to decide how to go about the work and who to employ. But where a tenant was in occupation the landlord does not have free reign regardless of the impact on the tenant's business.
The landlord is under a duty to act reasonably in the choices he makes since they can have a serious impact on the tenant's business. The judge accepted that there was a significant risk of serious damage to the tenant's business which may even lead to its closure. Nevertheless, the judge decided that the landlord had acted reasonably. No one, not even the court, could force the landlord to do the work in a particular way. Provided the landlord could show it had acted reasonably he was safe to proceed.
In this case the landlord had first of all employed the original engineers responsible for the construction in the 1960s, who in turn obtained a report from their principal contactor. The conclusion was, that after examining all the alternative methods of doing the work, that the use of traditional scaffolding and plastic sheeting was the only viable option. This was also supported by an independent expert's report.
The judge had serious doubts whether the tenant could succeed at trial, and also decided that if the court granted an injunction and the tenant lost at trial, the tenant was unlikely to be in a position to pay the costs and damages caused by the delay to the commencement of work.
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