Summary

It is not a breach of good estate management practice, nor a derogation from grant, for a landlord to let other properties adjacent to the demised premises for the same or similar purposes or for the same or similar trades.

Facts

Application by the claimant for damages for breach of covenant, and/or derogation from grant, against a landlord of commercial properties who, having let premises to the claimant for certain commercial purposes, then let adjacent properties to other tenants for the same or similar purposes. The claimant asserted that such action was in breach of an express covenant to manage the properties in the block in accordance with good estate management practice, and was a derogation from grant. The defendants denied that the matters pleaded by the claimant constitute a breach of covenant or other obligation and counterclaimed for arrears of rent.

Held

(1) In the interests of contractual certainty, what amounts to good estate management practice must be interpreted in the light of the expectations of the parties at the time of the grant of the lease. In this case that did not encompass the proposition that good practice would prevent the letting of similar properties for similar purposes, whatever the commercial implications may be for the tenants in question. (2) It is not a derogation from grant to act in such a way as to put the demised property at a commercial or economic disadvantage. Only if the demised property is rendered unfit, or materially less fit, for the purpose for which it was let could a landlord be held to have derogated from his grant (Port v Griffith [1938] 1 All ER 295).

Applications dismissed.