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Injunctions: a reassuring remedy?
There are several options available to a landlord whose tenant is in breach of the lease, with remedies including forfeiture and damages to protect the landlord and/or to ensure the landlord is compensated for any loss.
In what circumstances might a breach be serious enough to warrant the landlord obtaining an injunction?
The recent case of Unique Pub Properties Ltd v Roddy & Others [2019] provides some useful guidance.
The tenant entered into a lease of a public house with the landlord. The terms of the lease stated that the tenant was to purchase drinks exclusively from the landlord. This meant that drinks from other suppliers were not to be brought onto or sold from the premises.
The tenant accepted that they had breached these terms of the lease by purchasing drinks from other suppliers.
As a result of the breach, the landlord made an application for an injunction to require the tenant to comply with the terms of the lease.
In making its decision, the High Court considered the following:
- Was there a serious issue to be tried?
- Would a damages payment be an adequate remedy?
- Did the circumstances really justify the grant of an injunction (ie would the injunction cause the tenant disproportionate hardship)?
The High Court discovered that the tenant was struggling with a substantial VAT debt and so there was a risk that the landlord would be unable to enforce a damages award and to recover any money from the tenant if the tenant continued to purchase drinks from other suppliers. The risk of the landlord being left high and dry and out of pocket seemed to tip the Court in favour of an injunction.
Taking into account the considerable risk of the tenant’s continuing breach, and the tenant’s precarious financial position, the Court concluded that an injunction was a fair and just remedy.
This case confirms that an injunction can be a valuable addition to the armoury when it comes to enforcing covenants in leases, particularly where a tenant is not in a strong financial position and where there is evidence that casts doubt on a tenant’s ability to pay damages.
For any queries in relation to this blog, please contact the litigation department on 01242 586 841 or email Andrew Turner.
The information contained on this page has been prepared for the purpose of this blog/article only. The content should not be regarded at any time as a substitute for taking legal advice.
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