Iceland Foods Ltd v Aldi Stores Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mann |
| Judgment Date | 06 May 2016 |
| Neutral Citation | [2016] EWHC 1134 (Ch) |
| Docket Number | Case No: HC-2016-001254 |
| Court | Chancery Division |
| Date | 06 May 2016 |
[2016] EWHC 1134 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Mann
Case No: HC-2016-001254
Mr Timothy Dutton QC (instructed by Hill Dickinson LLP) for the Claimant
Mr David Holland QC (instructed by Freeths LLP) for the Defendant
Hearing dates: 5 th May 2016
Introduction
This judgment gives my reasons for the decision which I pronounced yesterday in which I ruled against the claimant in its attempt to demonstrate that the defendant was not entitled to increase the footprint of one of its retail units.
On the outskirts of Cambridge two food stores, namely Aldi and Iceland, occupy adjoining buildings. The latter is the tenant of the former. The buildings have car parks on two sides. Aldi has decided that it wishes to extend its building, and the works involved require partitioning off areas around its store with hoarding and erecting a form of safety scaffolding platform over the entrance to Iceland. Iceland seeks to stop Aldi from extending its building, and its chosen legal mechanism is to invoke what it says is a bar to that activity which exists on the true construction of its lease, or the implication of a term to that effect. On 21 April 2016 Iceland issued proceedings against Aldi claiming injunctive relief. An application for interim relief came before Warren J on 25 April 2016 and he adjourned the application to be heard as an interim application by order with a time estimate of one day. He granted interim relief restraining the carrying out of building works so as to change the current footprint of Aldi's unit and restraining the erection of hoarding other than along a specified line.
The hearing before me was originally intended to be the hearing of the application by order, but the parties have agreed that in the circumstances I have all the evidence and law that is required in order to determine whether Iceland's proposed restriction should be construed out of or implied into its lease and I have been invited by both parties to decide that point in final form. To provide a vehicle for that Aldi has issued an application for summary judgment. That, therefore, is the principal question that I have to decide. Iceland also has a subsidiary case seeking to restrain certain activities in any event and Aldi has a summary judgment application intended to bring an end to that part of the case as well, but those points have not yet been fully argued before me. This judgment, therefore, does not deal with that aspect.
Mr Timothy Dutton QC appeared for the claimant; Mr David Holland QC appeared for the defendant.
Geography and the leases
The position of the two stores on the overall site is shown on the plan which is annexed to this judgment. It is in fact the lease plan in Iceland's lease. The overall site, which includes car parking areas and part of an access road is shown edged in green. Aldi's building is shown edged in blue and Iceland's is shown edged in red. The blue land is the actual footprint of Aldi's building at the time; the red land is Iceland's actual building together, at the rear, with a small outside loading area. The land edged green is in fact the totality of Aldi's superior demise. The car parking areas are clearly shown on that plan. A roadway (described as the Accessway in the leases) leads from the highway to the car park and is shown coloured red/brown on the plan.
A few years ago Aldi added some structures to part of its building abutting Iceland; this was done by agreement with Iceland, because the air cooling and refrigeration plant had to be moved, and because a small part of Iceland's land was surrendered.
The lease under which Aldi holds its land is dated 24 May 1996 and is made between Chainlone Ltd as landlord and the defendant company as tenant. It is for a term of 25 years from 29 April 1996. Not many of its terms are relevant but the following are said to have a relevance to the dispute in this case.
"The Building" is defined as meaning "the building erected on part of the Premises". The "Premises" is the land which I have already described as being shown edged in green on the plan annexed to this judgment. Within the definitions clause there are two other potentially relevant definitions – "Unit 1" is defined in such a way as to describe the building currently occupied by Aldi (minus the small extension erected a few years ago) and "Unit 2" is defined so as to mean the premises currently occupied by Iceland. The lease goes on to extend the meaning of the expression "the Premises" to include the Building and "all additions and improvements to the Premises".
Paragraph 5.6 deals with "Alterations and Additions". The tenant (Aldi) covenanted:
"Not to:
5.6.1.1 commit or permit waste on or at the Premises
5.6.1.2 build erect or construct or place any new or additional building or structure on the Premises
5.6.1.3 make any alterations additions or improvements to the Premises without the prior approval of the Landlord such approval not to be unreasonably withheld or delayed…"
The First Schedule gives a right of way over the Accessway subject to the tenant paying a proportion of the cost of repair and maintenance of the access way "calculated according to user".
Two months later, on 24 July 1996, Aldi granted a lease of Unit 2 (the red property) to the claimant. The grant was for a term of 25 years (less 3 days) from and including 29 April 1996. It is a full repairing and insurance lease. It makes periodic reference to Aldi's lease as "the Head Lease" and from time to time it also refers to the Superior Landlord (i.e. Aldi's landlord).
The rights that were granted, along with the building itself, included the following (in the First Schedule):
(i) Paragraph 1 gives a right of way over the Accessway (which was not actually within Aldi's own demise):
"1. … over and along the Accessway for the purpose of gaining access to and egress from the Premises subject to the tenant paying to the Landlord on demand 36% of the cost of repair and maintenance of the Access way…"
(ii) Paragraph 2 confers a right of way:
"2. The right of way at all times for pedestrians and for private motor cars motorcycles cycles to pass and repass over and along those areas within the area shown edged green on the plan so laid out from time to time for the purpose of gaining access to and egress from the Premises subject to complying with all regulations notified to it by the Landlord in relation to such user."
(iii) Under paragraph 3 there is a right to manoeuvre vehicles over the area in accordance with notified regulations which shall:
"3.1 prohibit servicing the premises after 10 am except that servicing following one hour after close of business of the unit edged blue on the Plan shall be permitted
…
3.3 prohibit interference by service vehicles with the customer access to the unit edged blue on the Plan…"
The significance of those provisions lies in the reference to the land edged blue (the Aldi store).
(iv) Paragraph 4 of that schedule confers:
"4. The right at all times to park private motor cars and motorcycles and cycles in the areas so laid out for such purpose from time to time within the area edged green on the Plan subject to complying with all regulations notified to it by the landlord in relation to such user."
(v) Paragraphs 5 and 6 contain further references to the blue land in further conferred rights:
"5. The right of escape in cases of emergency over all parts of the area edged green on the Plan except the unit edged blue on the Plan unless no other escape route as possible.
6. The right to access on foot only and with or without workmen and equipment to the rear of the Premises from the rear of the unit edged blue on the Plan for the purpose of carrying out all necessary works and/or inspecting the Premises."
Turning back to the body of the lease, clause 5.24 contains a covenant by the tenant to perform and observe the covenants on the part of the tenant contained in the Head Lease so far as they relate to the Premises (other than the payment of rent).
In clause 6 Aldi as landlord gave the usual covenant for quiet enjoyment and the clause then adds the following covenants:
"6.2 Accessway
To take all necessary action against the Superior Landlord to ensure that it keeps the Accessway in good and substantial repair and condition and to keep the same clear at all times.
6.3 Works of repair, maintenance et cetera
To carry out all necessary works in compliance with its repairing covenant in the Head Lease (save where such obligation is the responsibility of the Tenant pursuant to the terms of this Underlease) subject to the Tenant making payment within 14 days of demand of 36% in respect of the cost of all such works."
Aldi went on to give a further covenant about the provisions of the Head Lease:
"7.6 To Observe Head Lease
To pay the rent reserved by the Head Lease and to observe and perform the covenants on the part of the tenant contained in the Head Lease (insofar as the Tenant is not liable for such observance and performance under the covenants on its part contained in this Lease)
7.7 The Landlord covenants with the Tenant that the entrances and exits of the unit shown marked by arrows within the area edged blue on the plan shall not be moved during the first 5 years of the Term.
7.8 Following an assignment or under-letting of the unit shown edged blue on the Plan by the Landlord such property will not be used as a retail unit predominantly for the sale of frozen and chilled food for so long as Iceland Frozen Foods plc or any Group Company remains the Tenant and in occupation of the Premises."
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