Q&A: Breach of covenant for quiet enjoyment?

Would disconnecting the electricity supply to business premises constitute a breach of the covenant for quiet enjoyment?

There is an express or implied term in a lease of business premises that a tenant has the right to quietly enjoy the premises. Quiet enjoyment is the right to peaceably and quietly enjoy the premises without interruption of possession. The landlord can only interfere with the use and benefit of the premises by the tenant if it has a lawful excuse. 

References: Sanderson v Berwick-on-Tweed (Mayor) [1884] 13 QBD 547 at para [551]

The Court of Appeal in Sanderson v Berwick-on-Tweed (Mayor), stated: 'it appears to us to be in every case a question of fact whether the quiet enjoyment of the land has or has not been interrupted…'. Therefore, the answer is likely to turn on the factual circumstances behind the disconnection of the electricity supply and the terms of any express quiet enjoyment covenant in the lease. What was the reason for the disconnection? Was it disconnection at the request of the electricity supplier or was it required by the landlord in order to enable them to carry out works at the premises? 

References: King v Liverpool City Council [1986] 1 EGLR 181

If it was the electricity supplier that disconnected the supply, this may not amount to a breach of the quiet enjoyment covenant as the electricity supplier is a third party who does not have title to the property (see King v Liverpool City Council (about unlawful acts of third party vandals)). However, it will depend on the precise wording of any express covenant against quiet enjoyment in the lease.

Commentators suggest that 'the covenant extends to any conduct of the landlord or his agents which interferes with the tenant's freedom of action as a tenant, and to any conduct calculated to interfere with the peace or comfort of the tenant or his family, or his business' (see Commentary: 10 Acts involving interference: Hill and Redman's Law of Landlord and Tenant [2968]). 

References: Perera v Vandiyar [1953] 1WLR 672

In the case of Perera v Vandiyar, a landlord was found to have committed a breach of the covenant for quiet enjoyment where they cut off the supply of gas and electricity to a flat, thereby forcing the tenant out. There is no suggestion here that the landlord’s intention is to obtain possession of the business premises, but there will be a breach of the quiet enjoyment covenant if they had such an intention.

Other considerations would include whether the landlord was under any obligation to provide electricity in the lease and whether it was the landlord or the tenant which was responsible for payment in respect of the supply. If the disconnection had resulted from a failure by the tenant to pay electricity charges for which it was responsible under the terms of the lease, there may be no breach of the quiet enjoyment covenant by the landlord. If it was the landlord’s responsibility to pay the electricity charges under the terms of the lease and they failed to do so, a breach of the lease is likely to have occurred.

If the disconnection of the electricity supply amounts to a breach of the quiet enjoyment covenant, the level of damages will depend on the losses suffered by the tenant. In this regard, the duration of the disconnection and the amount of notice given is likely to be relevant, as well as whether the tenant was able to trade from the premises. If the tenant was unable to operate from the business premises, this may constitute both a breach of the quiet enjoyment covenant and amount to a derogation from grant and the tenant’s losses may extend to lost turnover.

For more information, see Practice Note: Derogation from grant and the covenant for quiet enjoyment.

This content was first published on the Lexis Nexis Ask Forum on 25 November 2020. For more information, please contact Laura Bushaway on +44 (0)20 7438 2261 or at laura.bushaway@crsblaw.com.