Specific Performance, Obligations to Build and Assignee’s Rights to Enforce
Specific Performance, Obligations to Build and Assignee’s Rights to Enforce
In Airport Industrial GP Ltd v Heathrow Airport Ltd and AP16 Ltd [2015] EWHC 3753 (Ch), Mr Justice Morgan held that Heathrow Airport Ltd (HAL) was entitled to an order for specific performance compelling AP16 Ltd, a company in the Arora group, to build a car park on AP16’s land for use by the claimants and their tenant of a catering base at the airport. AP16 was liable to provide 280 car parking spaces as from 23 October 2016 but had denied liability to do so. It wished to construct a 2000 space multi-storey car park but had no planning permission for that development, which would take up to 3 years to design and construct. A simple surface car park for 280 spaces could have been built within a year but would have provided no financial return for AP16.
The judge held that AP16 should be ordered to build a car park within an extended period expiring on 22 October 2018, giving it the opportunity to carry out a more profitable development, but on condition that it deposited funds to cover losses likely to be caused to HAL by the delay and on condition that it achieved planning and construction milestones over the extended period of time, failing which it would have to build the surface car park instead. The Judge held that, notwithstanding that AP16 would not be in breach of its obligation to provide parking spaces until 23 October 2016, the court could order it to take steps before that date arrived with a view to achieving compliance with its obligations at a later date.
Among other factual and legal issues decided, Morgan J held that, notwithstanding section 23(1) of the Landlord and Tenant (Covenants) Act 1995, an assignee of the term of a lease can in principle obtain an order for specific performance of a landlord obligation to build a car park where the breach of covenant had occurred 3 years before the assignment of the reversion. Section 23(1) provides that the assignee shall not by virtue of the Act have any liability or rights under the covenants in relation to any time falling before the assignment.
Jonathan Gaunt QC and Nathaniel Duckworth represented the claimants; Timothy Fancourt QC represented Heathrow Airport Ltd, and Kirk Reynolds QC and Adam Rosenthal represented AP16 Ltd.
The judgment here
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