Corporate Spec Limited v Rachel Milton & Anor.

On an interim application for an injunction, the court must assess whether the applicant’s evidence materially misled the court, rather than impose an automatic sanction for every omission. A tenancy claim should proceed to trial where the alleged agreement has a realistic legal basis, including the possible implication of a periodic tenancy from possession and periodic payment where an intended fixed term is void for uncertainty. The balance of convenience may favour continued protection where removal would risk substantial, difficult-to-quantify harm to a business. The injunction may be continued subject to access for redevelopment investigations, continuing payments and fortification of the undertaking in damages.

Corporate Spec Limited occupied warehouse premises at Unit 3, Thames Road. After it was physically removed, Falk J ordered its reinstatement and restrained further interference pending the return hearing.

The claimant sought continuation of that injunction until an expedited trial. The principal issues were whether it had an arguable tenancy or only a licence, whether the landlord could oppose a new tenancy under sections 25 and 30(1)(f) of the Landlord and Tenant Act 1954, whether the earlier order should be discharged for material non-disclosure, and how the balance of convenience should be assessed.

1. Material non-disclosure. The injunction was not discharged. The principles summarised in Tugushev v Orlov required a proportionate assessment of whether the evidence materially misled the court. The unreliable accounts, discrepancy about employees and undisclosed solicitor’s letter did not materially influence the earlier order. The claimant’s financial evidence was relevant to the undertaking in damages, and the apparent accounting error was not shown to have operated to the defendants’ disadvantage.
2. Arguable tenancy. The claimant passed the first hurdle under the American Cyanamid approach. Although the alleged oral agreement left substantial matters disputed, it was not impossible or unrealistic that the claimant had agreed occupation of the warehouse, subject to existing licensees. The court should not determine that issue finally at the interim stage.
3. Uncertain term and periodic tenancy. Under Prudential Assurance Co v London Residuary Body [1992] 2 AC 386, a lease expressed to continue until an event which might never occur or might occur at any time is void for uncertainty. Nevertheless, possession and payment of a periodic sum may create a periodic tenancy by implication of law. The claimant could advance that conclusion in the alternative. Any restriction preventing termination until planning permission or redevelopment would itself be uncertain.
4. Balance of convenience. Damages would not adequately compensate the claimant if disorderly removal damaged the goodwill of its rapidly expanding business. The proposed redevelopment was not sufficiently imminent to justify pre-judging the claimant’s eventual loss of possession. Potential loss to the second defendant was principally monetary and compensable.
5. Fire safety and conditions. On the proper interpretation of Articles 3 and 5 of the Regulatory Reform (Fire Safety) Order 2005, the claimant, as the person occupying and controlling the premises for business purposes, was the responsible person. Fire risk therefore did not independently justify refusing the injunction. The defendants retained a right of reasonable access for surveys and tests, subject to avoiding unreasonable interference, and the claimant had to continue paying £10,000 monthly.
6. The injunction was continued until an expedited three-day trial of the tenancy and section 30(1)(f) issues. Its continuation was conditional on payment of £250,000 into court to fortify the undertaking in damages; otherwise it would cease.

First-instance interim decision. The injunction was continued pending an expedited trial of preliminary issues.