Factual and Procedural Background
This appeal concerns an interlocutory order made by His Honour Judge Hodge QC of the Chancery Division on 10 November 2011. The order declared that the Plaintiff ("FLH") had the right to remove a quantity of amusement and gaming machines from premises at the Trocadero, Piccadilly Circus, London, and ordered the Defendant ("LTL") to pay FLH's costs of the application for relief, except for costs of a previous hearing on 23 September 2011. The case was allocated to the multitrack with directions for its future progress and a stay granted pending a possible application for permission to appeal.
The dispute arose between two commercial entities regarding the removal of gaming machines from leased premises. The premises were subject to a detailed Lease between LTL's predecessors and West End Amusement Parks Limited ("WEAP"), the Tenant. WEAP was a subsidiary of FLH, and its subsidiary West End Amusements Limited ("WEA") operated from the premises and hired the machines from FLH under a Hire Agreement. Ownership of the machines remained with FLH.
WEAP and WEA entered administration in June 2011, after which FLH sought to repossess the machines. Difficulties arose concerning access and removal, leading to litigation initiated by FLH seeking delivery up of the machines and damages for wrongful interference. The judge made an interlocutory order granting FLH the right to remove the machines under the terms of the Lease and made costs orders accordingly.
Legal Issues Presented
- Whether FLH had the right under the Lease or otherwise to access the premises and remove the machines.
- Whether FLH had standing to bring the claim for wrongful interference with goods.
- Whether the judge erred in his discretion in granting the relief ordered.
- Whether the judge erred in his order concerning costs.
Arguments of the Parties
Appellant's Arguments
- The Tenant, as defined in the Lease, does not extend to FLH, and therefore FLH had no rights under the Lease to access or remove the machines.
- The rights under Schedule 1 and Schedule 3 of the Lease did not confer relevant rights of access or removal on FLH.
- FLH lacked standing to enforce the Lease or to sue for wrongful interference, as rights could only be enforced by the Tenant.
- The judge erred in his discretion in granting the relief and in his orders on costs, particularly as FLH's case was not sufficiently identified early on and the method of removal was only detailed later.
Respondent's Arguments
- FLH was authorised by WEAP (the Tenant) to exercise rights under the Lease, including access and removal of the machines.
- FLH's claim was based on wrongful interference with its goods, giving it standing independent of the Lease rights.
- The judge's interpretation of the Lease was commercially sensible and correctly allowed for those authorised by the Tenant to exercise the rights.
- The judge's costs order was a proper exercise of discretion given the conduct of the parties and the litigation history.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Hunter v Canary Wharf Limited [1997] AC 655 |
General principle that a licensee cannot sue for nuisance |
Referenced in discussion on standing; court noted it did not preclude FLH's claim for wrongful interference with goods. |
| Kuwait Airways Corporation v Iraqi Airways Co [2002] 2 AC 883 |
Owner is deprived of possession when excluded or possession is withheld by wrong-doer |
Supported FLH's claim for wrongful interference with goods despite not being the Tenant under the Lease. |
| Oakley v Lyster [1931] 1 KB 148 |
Prevention of true owner from exercising rights constitutes a cause of action |
Applied to confirm FLH's entitlement to sue for wrongful interference with its machines. |
| Howard Perry & Co Limited v Bristol Railways Board [1980] 1 WLR 1376 |
Denial of possession remains wrongful even if accompanied by assertion of entitlement |
Used to reject LTL's argument that denial of access was not wrongful because FLH was entitled to possession. |
| England v Cowley (1873) LR Exch. 126 |
Limitations on claim for trover where landlord denies access but proposes lawful distress |
Distinguished on facts; court found LTL's denial of access was sustained and unjustified. |
| Club Cruise Entertainment v The Department of Transport [2008] EWHC 2794 (Comm) |
Access denial and interference with goods in unusual circumstances |
Distinguished as access was not denied to owners; not applicable to the present case. |
Court's Reasoning and Analysis
The court first considered the interpretation of the Lease. While agreeing that "the Tenant" as defined did not extend to FLH, the court held that the rights under Schedule 1 and Schedule 3 extended to those authorised by the Tenant, including FLH. This construction was preferred as commercially sensible and consistent with the practical realities of estate management and the parties' intentions.
Regarding standing, the court acknowledged that FLH was not the Tenant and that the Lease excluded third-party rights under the Contracts (Rights of Third Parties) Act 1999. However, FLH's claim was for wrongful interference with its goods, which the court accepted gave it standing independent of the Lease. The court relied on established tort principles and relevant case law to support FLH's entitlement to sue for interference with possession of its property.
The court found no error in the judge's discretion in granting the relief for delivery up of the machines, noting that the judge was entitled to make the order on an interim basis and set directions for trial.
On costs, the court acknowledged the appellant's argument that FLH's case had not been fully articulated early on and that the detailed method of removal was only provided later. However, the judge had considered these factors and made a considered costs order, including no order as to costs for the earlier hearing. The court found this to be a reasonable exercise of discretion, especially given LTL's continued denial of FLH's entitlement and the aggressive litigation posture.
Holding and Implications
The appeal was dismissed on all points.
The court upheld the interlocutory order allowing FLH to remove the amusement machines from the premises and confirmed the costs order made by the judge. The decision clarifies that, in the context of a commercial lease, rights granted to a Tenant may be exercised by persons authorised by the Tenant, particularly where such authorisation is evident and commercially sensible. Furthermore, the ruling affirms that a party owning goods on leased premises may have standing to sue for wrongful interference with those goods, even if not a party to the lease.
No new precedent was established beyond the application of existing principles to the facts of this case. The immediate effect is to confirm FLH's rights and costs entitlement in this litigation.