Business tenancies - injunctions - leases - positive covenants - underleases
Capita Trust Co Ltd v Chatham Maritime J3 Developments: ChD (Mr Justice Pumfrey): 25 August 2006



The applicant company (C) applied for an injunction to compel the respondent company (D) to grant an underlease of units in a retail development to a major retail company (M).



C had granted D a lease in respect of the retail development. As the retail centre was performing poorly, C sought to improve the performance by obtaining a magnet tenant who would bring in business. C effectively agreed in substance with M that it would take on an underlease as a magnet or anchor tenant. However, D declined to execute an agreement for the lease. C contended that, by declining to take M as a tenant, D had breached the covenant to use all reasonable endeavours to market properties and keep the units continually underlet, and to manage the units in a good and effective manner.



Held, in the circumstances, it was appropriate to grant the injunction sought. The failure to grant the lease amounted to a breach of D's management obligations under the lease, and would lead to a substantial and unquantifiable loss to C. Compelling D to grant the lease would not put D in breach of any other obligations.



Application granted.