Included in almost every commercial lease is a covenant which confers on the tenant a right to peacefully enjoy the premises. One such provision, reviewed by litigation expert David Watson, came under close High Court analysis in the case of a dentist whose practice was encased in scaffolding whilst building works went on around it.
The dentist’s 20-year lease on part of an office block contained a peaceful enjoyment covenant in fairly standard form. After his landlord decided to convert the block into a 134-bedroom hotel, scaffolding and a hoarding were erected around his practice, remaining in place for almost two years.
After completion of the works, the dentist launched proceedings against the landlord, seeking over £450,000 in damages for alleged wrongful interference with his peaceful enjoyment of the premises. He claimed that his practice’s profitability had gone down as the scaffolding went up and that, whilst his premises resembled a building site, they had become an attraction for rough sleepers.
In ruling on his claim, a judge noted that the dentist’s rent had been waived whilst the works were ongoing. He found that the landlord had, by the design of the scaffolding and the avoidance of noisy works at certain times of day, taken reasonable steps to minimise the disturbance. The dentist’s loss of profit claim was also rejected.
He was awarded £77,984 in compensation, mainly to cover the costs of repairing damage to his premises arising from the works. However, that was wiped out by an award of £79,279 to the landlord in respect of arrears of rent and service charges. The dentist was ordered to pay 80 per cent of the legal costs of the proceedings.
Challenging that outcome, the dentist submitted that the waiver of his rent whilst the works were in progress was irrelevant to the question of whether the peaceful enjoyment covenant had been breached. However, in dismissing the appeal, the Court found that that argument, even if successful, would not lead to any increase in the dentist’s damages. Other grounds of appeal were also rejected on the basis that the judge’s factual findings were open to him on the evidence.
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