CA 19 July 1993. By an underlease the landlords (L) demised premises to the tenants (C) on terms which included a covenant by C to pay the rent `without any deduction`. The premises were severely flooded which caused major disruption to C`s business. Most of the damage was as a result of breaches by L of their covenants in the underlease. C withheld the rent. The amount of damage for which they were liable for breach of their covenants exceeded the amount of any rent accruing. L brought an action to recover the outstanding rent. The ORC gave judgement in L`s favour in the action for unpaid rent amounting to £247,500 but also held in favour of C for their counterclaim for damages for breach of covenant amounting to £488,000. L appealed. It was held that a covenant in a lease that rent is to be paid without deduction is not sufficiently clear to exclude the tenants equitable right of set-off for damage caused by breach of covenant by the landlord.