Court Of Appeal Overturns Judgment

The Court of Appeal has allowed an appeal by a landlord against a High Court judgment to allow a tenant to remove its fixtures.

The High Court judgment meant that the tenant of a steelworks was permitted to remove “bulky and complex” items of plant and machinery, despite the lease requiring the tenant to yield up the steelworks (which a previous tenant under the same lease had built) “together with any additions and improvements” at the end of the lease.

The Court of Appeal has overturned this judgment. The normal rule that the tenant can remove its own fixtures and fittings is subject to the terms of the lease. The judge accepted the landlord’s argument that no specific words were required in order to modify the tenant’s right to remove fixtures and fittings. As long as the Court can arrive at a ‘confident conclusion’ that the intention of the parties was that the tenant’s right to remove tenant’s fixtures had been ousted, that will be the effect of the lease.

In this case, the lease contained the following clause:

“Not at any time during the said term to erect, make or maintain, or suffer to be erected made or maintained any building erection alterations or improvements, nor to make or suffer to be made any change or addition whatsoever in or to the said premises save in connection with the use of the premises for the purpose of steel making, steel rolling and operations ancillary thereto.”

The appeal judge found that the words “said premises” included the new building and plants which formed part of the demised premises. The appeal judge therefore said “it follows that during the currency of the term, the tenant is precluded from removing any tenant’s fixtures, save as permitted by the proviso to [the clause]”.

The judges stressed that if the clause in question had been in any way ambiguous, the process of construction would take into account the fact that generally tenants should be able to remove their fixtures and fittings.

There was no dispute on appeal as to whether the fixtures belonged to the tenant.

Lisa Stratford, solicitor in the Property Litigation team at Irwin Mitchell, commented: “The case serves as a reminder to both tenants and landlords that the normal rules can be modified by the terms of the lease even if clear and express wording is not included in the lease.

“Careful consideration must be given to the whole of the lease when drafting or interpreting rights and obligations in relation to the removal of tenant fixtures.”

Peel Land and Property (Ports No. 3) Ltd v TS Sheerness Ltd Court of Appeal 14 February 2014.