West End Commercial Ltd v London Trocadero (2015) LLP

Licence – Proprietary estoppel – Injunction – Defendant granting claimant licence to occupy retail unit – Defendant purporting to terminate licence one week later – Claimant obtaining interim injunction without notice restraining defendant from seeking to terminate licence on basis of proprietary estoppel – Claimant applying to continue injunction – Whether claimant’s reliance on assurances regarding notice giving rise to estoppel so that serious issue to be tried – Application dismissed By a licence dated 11 July 2016, the defendant company granted the claimant’s predecessor (G7) a licence to occupy a retail unit within The Trocadero, Piccadilly Circus, London, W1. The defendant was entitled to terminate the licence on 30 days’ notice. In January 2017, the sole director of G7 incorporated the claimant. In May 2017, the claimant commenced negotiations with the defendant’s agent for a new licence. The agent purportedly said that the defendant would not seek to terminate the licence before the end of the term provided that the claimant complied with its terms. In July 2017, a new licence was granted to the claimant on very similar terms to the G7 licence. One week later, the defendant served notice on the claimant to terminate the licence and entered into a new arrangement with H for a short licence to run from August to November 2017. The licence fee was stated to be “one peppercorn per annum”. However, by a side letter H agreed to pay £15,000 per week more than the claimant. The claimant applied for an injunction, claiming that the defendant was estopped from exercising its legal right to terminate the licence because the claimant had relied to its detriment on the representation by the defendant’s agent that notice would only be given on breach of undertakings. The defendant refuted the estoppel argument on the ground that the claimant was a mere licensee and it had no legal interest in the unit. The court granted an interim injunction accepting that the estoppel argument raised a serious issue to be tried and rejecting the defendant’s argument that the pre-contractual representation alleged by the claimant could not found an estoppel. The claimant applied for the continuation of the interim injunction. Held: The application was dismissed. (1) The doctrine of proprietary estoppel was based on three main elements: a representation or assurance made to the claimant; reliance on it by the claimant; and detriment to the claimant in consequence of his reasonable reliance. It gave a claimant an interest in property owned by the defendant and not just a right in relation to a contract with the defendant. In the present case, the claimant had not suffered relevant detriment by entering into the licence itself because, before the execution of the licence, it had no right to occupy or use the unit at all. After execution, it had the right to trade from the unit as a valuable commercial right. Its only objection was that it should not be able to be deprived of that valuable right without cause on 30 days’ notice. Until the G7 licence expired by effluxion of time, it had been making healthy profits from its occupation of the unit on precisely the same terms and without any suggestion that it had received any assurances of the type alleged by the claimant. Accordingly, the essential requirements of a proprietary estoppel had not been made out and there was no serious issue to be tried. Therefore, the court would decline to continue the injunction preventing the defendant from terminating the claimant’s licence: Thorner v Major [2009] UKHL 19; [2009] 2 EGLR 111 followed. (2) Even if the defendant had unlawfully terminated the licence, the court would have refused the injunction on the basis that the claimant could have been adequately compensated in damages for its loss of profits for the remaining eleven months of the licence period: Alstom Transport UK Ltd v London Underground Ltd [2017] EWHC 1521 (TCC) considered. (3) If there had been a serious issue to be tried and damages would not have been an adequate remedy, the balance of convenience would have favoured the continuation of the interim injunction for a short period until trial, which the court would have ordered to take place on an expedited basis. That would have preserved the status quo and the defendant would not have suffered any material loss over that relatively short period. Furthermore, the evidence did not suggest that H would not still have been willing to take the unit in early October if the defendant was successful at trial. Andrew McGuinness (instructed by Consilium Legal Ltd, of Birmingham) appeared for the claimant; Nicholas Trompeter (instructed by Jury O’Shea LLP) appeared for the defendant. Eileen O’Grady, barrister Click here to read a transcript of West End Commercial Ltd v London Trocadero (2015) LLP