Heronslea (Mill Hill) Ltd v Kwik-Fit Properties Ltd
| Jurisdiction | England & Wales |
| Judge | MRS JUSTICE SHARP,Mrs Justice Sharp |
| Judgment Date | 20 February 2009 |
| Neutral Citation | [2009] EWHC 295 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: CC/2008/PTA/0656 |
| Date | 20 February 2009 |
[2009] EWHC 295 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Sharp
Case No: CC/2008/PTA/0656
Edward Denehan (instructed by CKFT Solicitors) for the Appellant
Timothy C Dutton (instructed by Halliwells LLP) for the Respondent
Hearing dates: 29 th January 2009
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic
Introduction
This is an appeal by Heronslea (Mill Hill) Limited (“the Landlord”) against an order made by His Honour Judge Copley on 13 September 2008 in the Willesden County Court. The question before the Judge concerned the construction of a commercial lease (“the Lease”) between Hallco 480 Limited as landlord, Kwik-Fit Properties Limited as tenant and Kwik-Fit Holdings plc as guarantor. Permission to appeal was given by Mr Justice Cranston on 8 December 2008.
Paragraph 13.1.2 of Schedule 4 of the Lease gives the Landlord the right to enter the premises (on reasonable notice) for the purpose of making surveys and drawings of the premises. The question for the Judge was whether the Landlord has a right under paragraph 13.1.2 of Schedule 4 of the Lease to enter the premises for the purpose of conducting what it calls an environmental survey which involves the drilling of boreholes and taking of samples.
Background
The Lease demised commercial premises at 137 Great North Road Way, Hendon, Barnet (“the Premises”) for a term of 30 years, beginning on 28 December 2000. The Premises had formerly been used as a petrol station. The rent reserved for the first five years of the term was £32,000 per annum and is subject to review every 5 years. The current passing rent is £37,096.77 per annum. The Landlord is the successor in title of Hallco 480 Limited and acquired the freehold of the Premises on 28 March 2008 for £1.04 million. The Lease remains vested in the Respondent. The premises are in fact occupied by a company in the same group as the Respondent (TPAS (UK) Limited) but for convenience I shall refer to both companies as the Tenant. The Tenant carries on business at the Premises as a fast fit motorist centre.
On 28 May 2008, solicitors acting on behalf of the Landlord sent an email to solicitors acting on behalf of the Tenant stating that the Landlord wished to carry out an environmental investigation survey on 2 June 2008. Attached to the email was a copy plan showing the proposed location of the various boreholes.
The Landlord wished to drill 13 boreholes to a depth below ground of 5 metres and one 20 metre borehole. The Tenant refused to consent. Accordingly, on 7 July 2008 the Landlord issued CPR Part 8 proceedings in the Willesden County Court. The question the Landlord asked the Court below to decide was:
“whether it is entitled to enter upon [the Premises] …for the purpose of carrying out an environmental survey, which survey involves the drilling of 14 boreholes pursuant to the provisions contained in paragraph 13 of schedule 4 to the lease”
It sought a declaration that it was, and an order that it be permitted to enter the Premises for the purpose described.
It appears from the evidence the Landlord adduced in support of its application that it intended to obtain samples for geo-environmental assessments. Reference was also made to the possibility that there had been leaks into the soil over the years, and that there was significant potential for contamination of the underlying soil and ground water as a result of the current and historic use of the site. The deep borehole would be drilled using a cable percussion rig over a 5 metre square working area. The shallower holes would be drilled using a smaller rig. Each of the smaller holes would require a 4 metre square rig. It was said that the survey would take two days to complete and that the boreholes could be located in an area convenient to the Tenant.
On 9 September (in a reserved judgment) His Honour Judge Copley dismissed the Landlord's claim and made a declaration that it was not permitted to enter upon the Premises for the purpose sought.
Although a number of complaints are made about the Judge's approach, the essence of the Landlord's case is that the Judge took into account irrelevant matters in construing the meaning of the word survey in the Lease (for example the motive of the Landlord, and the impact of the environmental survey on the Tenant); and in particular, that he took into account various dictionary definitions of the word survey to ascertain the normal meaning of that word, which was a wrong approach as a matter of law. In the result, and in any event, it is said that his conclusion that the word survey in paragraph 13.1.2 did not include the activities which the Landlord wanted to carry out was plainly wrong.
Mr Dutton who appears on behalf of the Tenant, does not accept the criticisms made of the Judgment below. In particular, he takes issue with the submission that the Judge was in error in taking into account the dictionary definitions in the way that he did. Both sides accept however that although this appeal is by way of review, rather than a rehearing, since the question at its heart is one of construction, the real question for me to decide is whether the Judge's conclusions were plainly wrong, as the Landlord contends; indeed oral submissions were almost exclusively confined to that question.
The Lease
It is convenient at this stage to refer to the principal parts of the Lease, including those relied on by the parties as the context in which paragraph 13.1.2 must be construed.
The Premises demised by the Lease is said to be “part of Northways Service Station, Great Northway, Hendon”.
In the definition and interpretation section of the Lease (paragraph 1) “Buildings” are defined as “any building from time to time on the Premises”. “Environment”,“Environmental Law”and “Environmental Liability” are also defined.
“Environment”
All or any of the media of air water and land (wherever occurring) an in relation to the media of air and water includes without limitation the air and water within buildings and the air and water within other nature (sic) or man-made structures above or below ground.
“Environmental Law”
all or any binding and enforceable EU national or local law or regulation arising through statute subordinate legislation or common law or any relevant code of practice guidance note standard or other material issued by any Competent Authority relating to Environmental Matters.
“Environmental Liability”
all costs expenses liabilities claims damages penalties or fines including in each case all reasonable legal consulting monitoring labourity (sic) and other professional fees arising from the failure by the Tenant to comply with any legal requirement direction notice order or obligation served or imposed by any Competent Authority under Environmental Law.
“Environmental Matters”
the pollution of the Environment the protection of the Environment and human health (other than the health and safety of employees in the workplace) the protection of natural amenity or the production disposal release use storage spillage deposit escape discharge leak emission recovery transport of or radiation from any Hazardous Material or Waste.
The “Plant” which the Tenant is permitted to install, includes “Free-Standing oil tanks”.
The Tenant's Covenants
Schedule 4 of the Lease contains the Tenant's covenants. Those include
i) In paragraph 3, a covenant to repair and decorate the premises and the buildings on it during the term of the tenancy. Specifically,
“3.1 To keep the premises and any building in good and substantial repair and condition and whenever necessary throughout the term to reinstate renew replace and rebuild them…
3.2 To correct any inherent or latent defects in the design or construction of the Premises or any Building and effect any rebuilding necessary for this purpose…
“3.5 If the Tenant is in breach of paragraph 3 then in addition to any other rights which the Landlord may have:”
3.5.1 the Landlord may serve on the Tenant written notice specifying the breach in question and
3.5.2 the Tenant shall as soon as practicable after receipt of that notice and in any event within two months (or such longer period as may be reasonable in all the circumstances) (or sooner in an emergency) commence and proceed with all due speed to remedy the breach and
3.5.3 if the Tenant fails to comply with Paragraph 3.5.2 the Landlord may enter the Premises and carry out the relevant work and the Tenant shall pay to the Landlord on demand all costs incurred by the Landlord in do doing with interest on them at the Interest Rate from the date of demand to the date of payment.
ii) In paragraph 4, the Tenant's obligations on the yielding up of the Premises on the determination of the Lease. Paragraph 4.1 provides that:
“On determination the Tenant shall yield up the Premises to the Landlord with vacant possession in a state of repair condition and decoration which is consistent with the proper performance of the Tenant's covenants in this Lease having first carried out to the reasonable satisfaction of the Landlord such investigation and /or remedial works as a prudent owner or operator of the Premises would carry out to avoid the issue service or imposition of any notice order requirement or obligation by any competent authority or court of competent jurisdiction under Environmental Law or to secure compliance with any such notice order requirement or obligation served or made prior to Determination.”
iii) In paragraph...
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