Home Information Cases Sportoffer Ltd v Erewash Borough Council (1999)

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Sportoffer Ltd v Erewash Borough Council (1999)

Summary

A council could reasonably refuse to consent to a change of use in relation to a squash club where that change of use might result in competition with other leisure facilities owned and operated by the council from adjoining or nearby properties, and whether or not the council had had those interests at the date of the lease.

Facts

Action by the plaintiff for, inter alia, declaratory relief, to the effect that the proposed use by a proposed assignee of premises currently let by the defendant council to the plaintiff for use as a squash club did not constitute a change of use under the lease; or, in the alternative, that the council's consent to such a change of use had been unreasonably withheld. The premises, as originally constructed in 1979 under a 99-year building lease, contained ten squash courts, a gymnasium changing and shower facilities with saunas, jacuzzis and sunbeds, a bar, a lounge, games facilities and a small shop. The user clause in the lease provided that the premises were to be used "as and for a squash club, but not for any other purpose, except with the previous consent in writing of the (council), such consent not to be unreasonably withheld." Over the years, and with the declining popularity of squash, four of the courts had been converted to provide additional space for existing or new facilities within the club. The proposed assignee operated a chain of health and fitness clubs. The current proposal was for three of the remaining six squash courts to be closed, with the creation of a swimming pool on the ground floor and the construction of a new first floor, to which the gymnasium would be moved. The squash club was next door to the council's swimming pool complex (with which it shared a carpark), and less than half a mile from the council's sports centre, the latter of which was opened in 1987. The council refused to grant consent for the proposal, insofar as it effected a change of use, on the grounds that: (a) the change of use would result in the tenant of the squash club carrying on a business in direct competition with the council's own business of operating leisure facilities; and (b) implementation of the proposal would place unacceptable additional pressure on parking such as to discourage potential customers of the council's swimming pool complex. By this action the plaintiff contended that: (1) the proposal did not involve a change of use; and (2) if it did, the council had unreasonably withheld its consent.

Held

(1) Although the nature of a squash club was not fixed once and for all, the essential element was that such additional facilities as there were had to be ancillary to the playing and the promotion of squash. The proposed facilities were not those normally offered by a squash club such that they could be regarded as being within the user clause. It followed that there was a proposed change of use. (2) The council had not unreasonably withheld its consent. A landlord could legitimately take into account considerations relating to adjoining property of his own, whether let or not. Whiteminster Estates Ltd v Hodges (1974) 234 EG 324 followed. In this respect, it did not matter that the sports centre had only begun to operate after the date of the lease. It was unrealistic, in the context of a 99-year lease, to say that a landlord was only entitled to take into account other property, and other uses of property, which were in existence at the date of the lease. On the evidence, the plaintiff had not established that the premises would be sterilised for the remainder of the lease if the proposed assignment did not occur (International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd (1986) 2 WLR 581). The refusal would not have been upheld if based on parking considerations alone.

Action dismissed.

Chancery Division
Lloyd J
Judgment date
5 March 1999
References

LTL 29/3/2000 : [1999] L & TR 433 : [1999] 3 EGLR 136 : [1999] EG 37 (CS) : (1999) 96(11) LSG 71

Practice areas