Unique Pub Properties Ltd v Broard Green Tavern Ltd & Anor

A contractual reservation permitting entry to install flow-regulating or monitoring systems is construed according to the function of the equipment, not the landlord’s motive. The reservation may extend to monitoring equipment developed after the lease was granted, provided it falls within the contractual description or is ancillary to dispensing equipment.

A contractual discretion to select equipment must be exercised honestly and in good faith, and not arbitrarily, capriciously or unreasonably. A tenant’s disagreement about accuracy does not itself establish an implied restriction. Equipment is not used “for trade” under the Weights and Measures Act 1985 merely because it monitors liquid passing through dispensing lines for the purpose of policing a beer tie.

The claimant owned the reversion of a public-house lease containing a beer tie and a reservation permitting entry to install and maintain dispensing, flow-regulating and monitoring equipment. It sought summary judgment requiring the tenant and its guarantor to permit access to install the i-draught flow-monitoring system.

The defendants argued that the reservation did not cover the equipment, or that implied terms restricted entry where the equipment was inaccurate, unlawful or substantially interfered with the tenant’s business. They also relied on sections 7 and 17 of the Weights and Measures Act 1985. The judgment in Unique Pub Properties v Onifas Limited [2011] EWHC 3071 (Ch) was considered in relation to the same statutory issue.

1. Construction of the reservation. The i-draught system was a flow-monitoring system within the reservation. The expression was not confined to equipment existing in 1999. The lease contemplated the landlord selecting equipment from time to time, including newly developed equipment. The system’s function was decisive; the landlord’s motive of policing the beer tie was irrelevant. Monitoring equipment was part of, or at least ancillary to, the dispensing system.
2. Implied terms. It was not possible to imply terms limiting the reservation to equipment whose sole or predominant purpose was safe dispensing of beer and cider. Nor was there a reasonable prospect of implying terms requiring proof of a specified accuracy or preventing installation which might interfere with the tenant’s business. The contractual discretion had to be exercised honestly and in good faith, without arbitrariness, caprice or unreasonableness. The evidence did not show conduct meeting that standard. The existing covenant for quiet enjoyment did not justify an additional term protecting the tenant’s commercial interests.
3. Weights and measures. The use of the i-draught system was not “use for trade” under section 7 of the Weights and Measures Act 1985. It was not used for determining or stating the quantity in a transaction for the supply of beer to the tenant or its sale to customers. Nor did the alleged contractual penalty constitute a toll within section 7(2)(b). Section 17 was therefore not engaged. The court nevertheless indicated that a term preventing unlawful installation might, in an appropriate case, be implied.
4. Summary judgment. The defendants had no arguable defence. They were not entitled to put the claimant to proof of general electrical, food-hygiene or business-interference compliance without particularising a relevant breach and producing evidence. The claimant’s application for summary judgment succeeded, and access was ordered on reasonable notice for installation of the system.

First-instance decision. The judgment states that proceedings were commenced in 2010 and that an earlier summary-judgment application was withdrawn. A renewed application was listed for hearing following an order of Morgan J. The present court granted summary judgment.