St Marylebone Property Ltd v Tesco Stores Ltd: 1988

Complaints were made by tenants in a block as to the behaviour of other tenants. A covenant in a lease granted in the early 1950s, restricted the user of premises to that of ‘grocers provisions wine spirit and beer merchants’. The premises had been used as a supermarket, and then underlet to a lessee (Mr Patel) who extended the business to include sale of newspapers and magazines, and later a video hire business.
Held: Hoffmann J:- ‘Construing the covenant requires one to ask whether Mr Patel can be said to be carrying on only the trade of grocer and provision merchant or some other composite trade, or differing trades in addition. This must be a matter of degree. For example, a grocer’s shop which sells a few electrical plugs and batteries might well be said to be a shop which is a grocer but happens conveniently to sell some electrical goods rather than a shop which carries on both grocery and electrical trades. On the other hand, if non-grocery products are sold in sufficient quantity they will constitute the carrying on of a separate trade, and even if a wide variety of non-grocery items are sold in quantities each of which would not in themselves amount to a separate trade, the cumulative effect may be to make it inappropriate to describe the premises as a grocery and provision merchant rather than a general store or some other composite description.’
On Mr Patel’s evidence, one out of four units in the shop was used for newspapers and other non-grocery goods, and they accounted for about half the turnover of the shop. ‘On that evidence I do not think that it is possible to say that the premises are being used only for the purposes of a grocery and provision merchant. One might say that, in addition, Mr Patel was, at the very least, also carrying on the business of a newsagent and a hirer of video films, or one might say that the business was that of a general store. I do not think it matters which, because in either case it goes further than the covenant allows.’

Judges:

Hoffmann J

Citations:

[1988] 2 EGLR 40

Cited by:

CitedWilliams, Williams v Kiley T/A CK Supermarkets Limited CA 21-Nov-2002
Tenants in a shopping precinct sought to enforce restrictive covenants directly against other tenants.
Held: The leases were in the same form, and covenants had been imposed to restrict the uses to avoid conflict. The scheme had the . .
CitedMount Cook Land Ltd v Joint London Holdings Ltd and Another CA 7-Oct-2005
The head lease contained a covenant against use of the premises as ‘victuallers’. The tenant sublet the premises for use as a sandwich shop. The tenant argued that the word ‘victuallers’ was to be construed only to prevent the use as ‘licensed . .
Lists of cited by and citing cases may be incomplete.

Landlord and Tenant

Updated: 29 April 2022; Ref: scu.182949