Court Declines to Imply Additional Terms Into Lease

August 1, 2016

Court Declines to Imply Additional Terms Into Lease

There is a general rule in law, which applies to leases as well as contracts generally, that a legal agreement will normally be taken by the court to mean what it says, not what one of the parties to it thinks (or hopes) it should mean. That point was emphatically made in a case in which a supermarket tenant attempted to block the expansion of adjoining premises occupied by its landlord.

One common area of dispute is when one party to a lease thinks that it should include rights or obligations about which it is silent but, as a general rule, judges will only imply additional terms where to do so is necessary to achieve sense or business efficacy.

The case in question illustrates the approach the courts will generally take in such circumstances. The landlord's plan to extend its retail and office space would temporarily render the retail park where both premises were located less visually attractive and would have an impact on customer parking arrangements. A crash deck and scaffolding would also have to be erected as a safety measure at the entrance to the tenant's store, potentially obscuring the latter's signage.

The tenant's lease did not contain an express prohibition on the landlord's extension of the footprint of its building. However, in an attempt to stop the planned works, the former argued before the High Court that, read as a whole, the terms of the lease amounted to, or at least implied, such a prohibition.

In rejecting those arguments and enabling the works to proceed, the Court found that the tenant's arguments were completely unsustainable and doomed to failure. The terms of the lease were clear and there was no basis upon which a ban on expansion of the landlord's premises could be implied.