Connaught Restaurants Ltd v Indoor Leisure Ltd
Connaught Restaurants Ltd v Indoor Leisure Ltd
- 1993
- New Law Journal 143(6613) 13 August 1993, 1188-1189(2) .
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.
BUSINESS TENANCIES
COVENANTS
SET OFF
WITHHOLDING OF RENT
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.
BUSINESS TENANCIES
COVENANTS
SET OFF
WITHHOLDING OF RENT