Kingston Upon Hull City Council v Superstadium Management Company Ltd

Factual and Procedural Background

This case concerns a landlord and tenant dispute between Company A (landlord) and Company B (tenant) regarding the terms of a lease dated 1 September 2004 for a Sports Park comprising a Stadium and a Sports Hall complex. The Sports Hall contains an indoor hall ("the Hall"). The dispute arose after Company B installed a 3G artificial turf surface ("the 3G Surface") on the Hall's floor, replacing the original sprung wooden floor. The installation affected the use of the Hall for certain sports, while allowing others to continue and enabling new activities previously unsuitable on the hard floor.

Company A contends that the installation breaches the lease covenants and seeks mandatory injunctions requiring removal of the 3G Surface and reinstatement of the original floor. Company B denies breach and argues that the relief sought is imprecise and would improperly interfere with its business management.

The claim form was issued on 24 June 2015, with expedited proceedings culminating in a trial held in August 2015. Both parties filed detailed pleadings and witness statements. Judgment was reserved with an initial focus on whether a breach occurred, leaving injunction issues for later submissions.

Legal Issues Presented

1. Whether the installation of the 3G Surface constituted a breach of the tenant's covenants under the lease, specifically regarding permitted use and community facility obligations.
2. Whether Company B was permitted to make such an alteration under the lease terms without landlord consent.
3. If a breach was found, whether a mandatory injunction requiring removal of the 3G Surface was appropriate.

Arguments of the Parties

Company A's Arguments

• The installation of the 3G Surface breaches covenants requiring use of the Hall as an indoor sports hall with a sprung wooden floor.
• The change materially detracts from the Hall's use as a community facility by excluding certain sports requiring a hard floor.
• The lease does not permit such a change of use or alteration without consent.
• Company B's justification based on assisting an associated sports academy and commercial considerations does not override lease obligations.

Company B's Arguments

• The lease permits non-structural alterations such as the installation of the 3G Surface without landlord consent.
• The permitted use is broad, including "an indoor sports hall," "all weather sports pitches," and "other recreational and sporting facilities," which encompasses the 3G Surface.
• The facilities remain available to the community on comparable terms, satisfying community use covenants.
• The installation was necessary to support an associated football academy's ambitions and to maintain commercial viability.
• The relief sought by Company A is imprecise and would unduly interfere with Company B's business operations.

Table of Precedents Cited

Court's Reasoning and Analysis

The court commenced with established principles of contractual construction, emphasizing interpretation from the perspective of a reasonable person with all relevant background knowledge, excluding prior negotiations or subjective intent. The lease is a long-term (50 years) arrangement with community-oriented provisions and a peppercorn rent, indicating non-commercial characteristics.

The court noted that the installation of the 3G Surface was not a structural alteration under the lease and therefore did not require landlord consent. The permitted use of the Sports Hall was broadly defined to include "an indoor sports hall," "all weather sports pitches," and "other recreational and sporting facilities." The court rejected the argument that "indoor sports hall" was a term of art requiring a sprung wooden floor, holding instead that the phrase should be given its ordinary English meaning in context, encompassing the 3G Surface installation.

The court considered the community use covenants, concluding that the facilities remain available to the public on reasonable terms comparable to those charged by the landlord, without membership requirements. The availability of a removable hard surface for major events further supported that the change did not materially detract from community use.

The court rejected the landlord's submission that the installation materially detracted from the premises as a community facility, finding that while some sports could no longer be accommodated in the same way, others could now use the Hall, and the lease did not require maintaining the precise nature of the original floor surface.

Overall, the court held that the installation of the 3G Surface fell within the permitted uses and alterations under the lease and did not breach any covenants.

Holding and Implications

The court's final decision is that there is NO BREACH OF COVENANT by Company B in installing the 3G Surface.

The claim for a mandatory injunction requiring removal of the 3G Surface and reinstatement of the original floor is dismissed. The decision means Company B may continue to operate the Hall with the 3G Surface. No new precedent was established beyond the application of established principles of lease construction and contractual interpretation to the facts of this case. The ruling clarifies that non-structural alterations consistent with broad permitted uses in a community-oriented lease will not necessarily constitute a breach, even if some traditional uses are affected.