Prasad v Fairfield City Council

[2001] NSWADT 28

CITATION:	Prasad & Anor -v- Fairfield City Council [2001] NSWADT 28
DIVISION:	Retail Leases Division
PARTIES:	APPLICANTS Daniel Prasad Stephen Walker RESPONDENT Fairfield City Council
FILE NUMBER:	005020
HEARING DATES:	28/08/2000 29/08/2000 30/08/2000 01/09/2000
SUBMISSIONS CLOSED:	12/19/2000
DATE OF DECISION:	02/21/2001
BEFORE:	Fox R - Judicial Member
APPLICATION:	Claim for declaration of rights, obligations and liabilities under a lease - Claim for payment of money - Claim for relief against forfeiture
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Retail Leases Act 1994
CASES CITED:	Aussie Traveller Pty Ltd v Marklea Pty Limited (1997) QCA 2 O’Keefe v Williams (1910) 11 CLR 171 High Trees House case [1947] KB 130 Waltons v Maher (1988) 164 CLR 386 Gordon v Lidcombe Investment Pty Limited [1966] 2 NSWR 9 Bocchina v Gorn Management 515A. 2D 1197(MD). 1986
REPRESENTATION:	APPLICANT A Macpherson, solicitor RESPONDENT M Jenkins, barrister
ORDERS:	1. Occupancy by Applicants of the Respondent’s premises known as shop 4 the Abbotsbury Community Shopping Centre is governed by Lease for a term to end in April 2002, on the conditions and covenants contained in the Lease entered into between the Respondent and the Youssef brothers in 1994, as varied by Deed executed between the Applicants and the Respondent in November 1997. ; 2. Application by Applicant for relief against forfeiture granted.; 3. Pursuant to Section 72(1)(c)(iv) Respondent ordered to submit Lease document to the Applicants no later than 23 March 2001, all parties to execute it no later than 27th April 2001.; 4. Respondent to: ; (i) Prevent owner of shop 1 in the Centre from selling hot barbecued chickens or prepared coffee, by 23 March 2001, and if that is not done by that date, then the Applicants are relieved from the obligation to pay rent under their Lease from 23 March 2001 until such time as the Respondent effects such compliance by the occupier of shop 1.; (ii) Take all other action necessary to ensure that occupant of shop 1 trades within the authorised use in the Lease as presently registered on title.; 5. Respondent not to enter into any Lease for any part of the Abbotsbury Community Shopping Centre which would allow such premises to be used for the preparation or sale of take-away foods of any kind, or for a restaurant of any kind selling foods similar to those sold by the Applicants pursuant to the authorised use in the Applicants Lease.

1 The Applicants Messrs Prasad and Walker conduct a hot food take-away shop in a small suburban shopping centre entirely owned and conducted by the Respondent Council. The shopping centre is known as the Abbotsbury Community Shopping Centre and consists of a community hall facility, flanked by one very large shop (the supermarket), two very small shops, and two medium-sized shops, being shops numbered 4 and 5. Shop number 4 is the space occupied by the Applicant, and shop number 5 is the shop previously occupied as a video store, but, having been vacant for some 2 years or more, is now proposed by the Council to be let for the purpose of a wood-fired pizza shop.

2 The Centre seems to have been conceived as, in effect, a very large local convenience store, and has had a troubled economic history. It was built in 1993/1994, and since its opening in mid-1994 has never been fully tenanted. The supermarket stood vacant for about 5 years, and has only been occupied since early 1999, and I have already referred to the fact that shop number 5, originally the video shop, has now been vacant for some years. One of the small shops has always been a hairdresser, and the other was a sub-newsagency, but is now occupied by a tailor.

3 The Lease of shop 4 now in dispute before me was originally granted to the Youssef brothers in June of 1994 as a hot food takeaway and restaurant, for a four year term with a further 4 year option. It was, pursuant to a contract for sale of business, sold by the Youssefs to the Applicants in 1997, and the Lease was assigned with the Respondent Council’s consent by a Memorandum of Variation of Lease and Deed of Assignment dated sometime in November of 1997. Although the initial Lease was registered on the title, the Memorandum of Variation was not.

4 It is relevant to observe that the Respondent Council, by letter dated 4 March 1998, drew the Applicants’ attention to the fact that timely notice of exercise of the option had not been received, but, not withstanding, offered the Applicants a lease pursuant to such option. The conduct of all parties was such that they are all estopped from denying that there is a lease in effect, in terms of the April 1994 document, as varied in November of 1997, to run to April of the year 2002, and I do find, as a matter of law, that such a lease is in effect to govern and entitle the Applicant’s occupation of the premises known as shop 4, the Abbotsbury Community Shopping Centre.

5 The Applicants seek orders:-

1. For relief against forfeiture of the Lease,
2. Directing the supermarket to cease the sale of food items which the Council is alleged to have represented to the Applicants as being exclusively theirs to sell within the Centre, and damages for loss flowing from the supermarket’s (allegedly improper) competition, and,
3. Prohibiting the Council entering into a Lease of shop 5 for the purposes of a wood fired pizza shop.

6 It is apposite to state that the matter comes before this Tribunal as a result of the Applicants’ laxity in the payment of rent. In March 2000 the Respondent Council purported, pursuant to its powers in the Lease, to give notices which were preliminary to the termination of the then tenancy by way of re-entry.

7 It is common ground that, almost from the moment of taking over possession of the business late in 1997, the Applicants were in arrears of rent. The rent, initially, was $2,421.87 per month, but by mid-February of 1998 that had been almost halved by the Council as a concession in response to complaints by all of the occupants within the Centre, and thereafter the rental for the Applicants’ shop was $1,440.93 per month, and late in 1998 it became $1,461.93 per month. The rental was in arrears for the 22 months between April 1998 and March 2000, a period during which the Applicants made only 4 payments of rent. I am satisfied that these were made in response to a perhaps informal “extra” demand made by telephone to Mr or Mrs Walker by Mr Hao Dang, the Council’s property management officer charged with the responsibility of managing this particular centre. I use the word “extra” to emphasise the fact that the Council forwarded (and the Applicants received) monthly statements showing the mounting arrears. I find that a pattern had developed whereby a payment was actually made in response to a telephone demand by Mr Dang.

8 Mr Dang was not called in evidence and the evidence of George Veness, the Council’s current property management officer, did not contradict the evidence of both Mr and Mrs Walker, that all rent payments which they did make were made in response to demands from Mr Dang.

9 By October of 1999 the rental arrears had climbed to more than $13,000.00, and that is when the fourth of the rental payments, in excess of $10,000.00, was made. This then brought the arrears down to $4,300.00, but these had again grown to $8,000.00 by end February of last year. Apparently due to a management change, early in the year 2000, Mr Dang ceased having responsibility for the Centre, and the Applicants then came under the direct control of Mr Veness who, in his Affidavit of 16 June deposed that “the Respondent tolerated (the rental arrears) for two years and then sought legal advice about evicting the Applicants because of their hopeless failure to comply with the basic obligations of paying rent”.

10 The Respondent led no evidence to indicate that, prior to the notices of 24th March, 2000 the Applicants had been given any kind of warning of the change in the Council’s approach. And so, from the Applicants’ viewpoint, at a time when they might well have been expecting their next phone call to generate a substantial cheque, they instead received notices purporting, in virtually one stroke, to convert their Lease to a tenancy at will which was then, immediately thereafter, terminated. Whilst it is clear that the words of the Lease specifically enable the actions which the Council took, in my view fairness and equity, because of the previous pattern of tolerance of very substantial arrears, required the Council to give full and proper notice of its change in attitude.

11 Had the Council brought in evidence some correspondence or other indications, notifying the Applicants that the Council was no longer prepared to tolerate the arrears, and the irregularity in payment of rents, and given the Applicants a reasonable amount of time to get their house in order, resolve the arrears, and commence making regular on-time monthly payments, and had there been evidence that the Applicants had apparently completely ignored it, then the Applicants might well have had no answer to the notices served. In the absence of such warning, it would be quite unfair to the Applicants for me to accede to the Respondent’s request for forfeiture of the Lease, and I am satisfied that the Lease should continue.

12 I note that in response to the notice, the arrears were paid and since then the rent has been kept correctly paid and up to date.

13 So, my orders in this regard will be that the Respondent not re-enter the premises and I order pursuant to Section 72(1) (c) (iv) the Respondent to submit the lease document to the Applicants evidencing the term of the lease to April 2002, within one month, and I direct both parties to execute it within two months of the date hereof.

14 The Lease provides for an authorised use as follows:- “take-away food outlet and restaurant” and I accept Mr Walker’s evidence in this regard to establish that these wide words meant the sale of “roasted chickens, hamburgers, fish and chips, pizzas, pastas, salads, sandwiches, cool drinks and cappuccinos”. I further accept that the restaurant part was achieved by 6 tables and chairs inside the shop and 2 tables and chairs outside. The evidence did not ever distinguish between the take-away side of the business on the one hand, and the restaurant side on the other, but I am left with the impression that the restaurant side occupied a minor role.

15 The second complaint of the Applicants is, in essence, that, having purchased a business with a turnover of $10,000.00 per week, they suffered a reduction in that turnover as a direct result of the Respondent Council allowing the supermarket to sell goods (hot barbecued chickens) in specific competition with the Applicant, and contrary to the authorised use established by the supermarket’s Lease with the Council.

16 There was no formal expert accountant’s evidence admitted, but initially Mr Walker’s claim was that the takings fell from $10,000.00 per week to $7,000.00 per week over an 18 month period. Only part of that loss is attributed to the supermarket operation, some being attributable to the opening of the Cecil Hills Shopping Centre in September of 1999 but according to Mr Walker about $2,000.00 per week which occurred in about 4 weeks over June and July of 1999 was clearly attributable to the opening of the supermarket. When pressed, Mr Walker’s evidence on this point became somewhat confused, but I am satisfied that in the period between June of 1999 and December of 1999 the takings dropped by a figure of some $3,000.00. Mr Walker attributed about $1,500.00 to the opening of the nearby Cecil Hills Centre, and he further apportioned some small loss (perhaps $200.00 or $300.00 per week) to the fact that when the supermarket opened he had immediately stopped selling goods (such as biscuits, coffee, milk and bread) which he had previously sold because of customer demand, but were clearly outside the ambit of his authorised use, and well within the ambit of the supermarket’s authorised use. His main complaint was that by December of 1999 the supermarket had started to sell hot barbecued chickens, and that had cost him (by implication) the remaining $1,200.00 or $1,300.00 per week.

17 Mr Jenkins SC, in what can only be described as an exhaustive cross-examination, I am satisfied, established that the reduction in trade could be demonstrated by the number of raw chickens bought in. There was a drop-off of about 40 chickens per month between November of 1998 and November of 1999, but between November of 1999 and November of 2000 the change in the number of raw chickens bought in was probably a reduction of less than 10 chickens per month and that cannot explain the weekly claimed reduction in takings. I am satisfied that the Applicants’ only proper complaint is the fact that there has been either a slight reduction or no growth in their take-away chicken business as a result of the supermarkets’ selling hot barbecued chickens.

18 A major part of the Applicants’ claim turned on an attempt at establishing that the Council had represented to the Youssefs that there would be no other hot food outlet in the Centre and that the Applicants in turn had, and were entitled to rely on that representation.

19 Evidence was called from the 2 Youssef brothers as well as their solicitor Mr Wehbe. This evidence satisfied me that the Council had been asked by Mr Wehbe for such a restriction in the initial lease, the Council had ignored that request, and the matter had proceeded without it ever being addressed, but the Youssef brothers genuinely believed that there was such a restriction in effect, and held that out to the Applicants as a major advantage of the business.

20 I am further satisfied that Mr Walker, as the major voice of the Applicants, initially accepted that representation as being true, but, on discussing the Assignment, etc with his solicitor was clearly informed that there was no such restriction in the Lease, and further that such a restriction was not negotiated into the Memorandum of Variation which effected the assignment of the Lease. I am also satisfied that Mr Walker relied on the advice of his solicitor which indicated that, despite the absence of a specific restriction, it was normal business practice for a lessor of such a centre to regulate the uses, and so to behave as if there was in effect a restriction such as the Youssefs believed to operate. It follows that I am not satisfied that the Applicants relied on the “hot food” restriction representation which the Youseffs made.

21 It was acknowledged in the evidence of the Council’s officers, the Youseffs, and Mr Walker that shop 1 was always proposed to be a supermarket which would form the “anchor tenancy” of the centre. That, I am satisfied, was a representation which was made with the authority of the Council, and with the intent that it be relied on by the Youseffs, the other tenants, and the Applicants. That being so, on the principle enunciated by Lord Denning in the High Trees House case 1947 KB 130, and applying in our law as Waltons v Maher 1988 164 CLR 387, the Council is bound by it. Had the earlier proposal to let shop 1 as a Chinese restaurant (as some of the evidence suggested) become a reality, the Council would have been obliged to seek the consent of the rest of the existing Centre tenants, so releasing the Council from its previous representation.

22 I am also satisfied that the representation is relevantly re-stated by the Lease for shop 1, a document which, by registration, becomes a matter of public record, establishing to the whole world the authorised use of the supermarket premises

23 The initial general previous representation made, and the specific representation made later by the registered Lease, in my view initially, and to this day, placed the Applicants in the position of being fully entitled to assume that shop 1 would be used (and continue to be used) as a supermarket and only as a supermarket. Had the Applicants led more specific evidence in this regard- to establish the fine detail of the “supermarket” representations then I might have been persuaded, for instance, to direct that the use of shop 1 be limited to the supermarket, as opposed to “supermarket and delicatessen” (if that distinction be shown to be a real one).

24 The Applicants have a proper complaint when they establish that the Respondent Council allowed the supermarket to trade beyond its authorised parameters (or at least did not prohibit the supermarket from trading beyond those parameters) in that the sale of hot chickens and the sale of coffee prepared as a beverage are both outside the authorised use set out in the Lease between the Council and Mr Gewargis’ company.

25 The Australian edition of the Concise Oxford (1997 edition) defines supermarket as “a large self service shop selling foods, household goods etc”, and defines delicatessen as “a shop or part of a supermarket selling cooked meats, cheeses and unusual or foreign prepared foods”. The 1997 Macquarie dictionary defines the two respectively as “a large usually self service retail store or market selling foods and other domestic goods” and “a shop selling cooked or prepared goods ready for serving, usually having a noticeable proportion of continental or exotic items”.

26 Despite the evidence of Mr Veness to the effect that other delicatessens in the area sold hot barbecued chickens, all things considered, I am satisfied that in the general context of this particular shopping centre, the sale of hot barbequed chickens, and prepared coffee are outside both the approved use, and the “supermarket” representation made generally over the preceding years by the Council.

27 Because the representation was at all times made with the intent that it be relied on by parties such as the Applicants, the Council is liable for losses which flow from the Council’s failure to force adherence to that representation.

28 The difficulty which the Applicants face is that they have not been able to offer any proof of actual damage suffered as a result of the Council’s failure to keep the supermarket within its proper limits, other than, as I have previously indicated, to have clearly enough established that their business has not grown. I note that the Applicants offered, at the hearing, an Affidavit of an accountant to establish a loss of value of good will, but that was too late to be admitted in evidence, the Respondent having had absolutely no opportunity to consider it, let alone have appropriate evidence in response available. In the absence of any acceptable quantification, the Applicants’ claim for damages must fail.

29 That is not to say that the Applicants do not have a genuine complaint about the Council’s failure to take action to stop the supermarket’s illegitimate expansion of its trade. I note the evidence of Mrs Walker’s letter to the Council in mid February 2000, addressed to the Mayor personally, specifically complaining of the sale of “cooked chickens and salads”. The Council’s response of 3rd March was, in my view, totally inappropriate in so far as it said “Unfortunately, Council is unable and unwilling to dictate or control the type of land uses in commercial areas. If a particular land use is permitted within the zone and it can comply with all relevant environmental and amenity controls, it must be permitted by Council…... Bearing in mind Council is also the Leasor of this complex I have forwarded a copy of your letter and this response to Mr Leckey for investigation and will contact you shortly in regard to your concern”. The Council brought no evidence to suggest that Mr Leckey had in fact responded. The next correspondence to the Applicants, from the Council, appears to have been later on during the month of March 2000, and that was the flurry of Notices designed to terminate the tenancy.

30 The Applicants proposed evidence aimed at establishing a conspiracy or other improper motive by the Council’s officers to specifically favour the supermarket to the detriment of the Applicants. I accept Mr and Mrs Walker’s evidence in this regard as being truthfully given and can understand how they might have drawn the conclusion that the Council was “out to get them”. However I am not at all satisfied that such a conspiracy was proven, even on the balance of probabilities, let alone the requisite level of comfort.

31 The only other factual aspect of the matter which I must consider is the evidence of Mr Wilson Gewargis, the operator of the supermarket.

32 Mr Jenkins SC helpfully observed to me that where evidence was not otherwise contradicted, I was bound to accept it unless it was inherently improbable. That nicely describes the evidence of Mr Gewargis; I accept that he may have spoken the truth when he indicated that he made a mere $25.00 per week from the sale of barbecued chickens and might justify the capital cost of installing the rotisserie machine and operating it “I do it because my customers, they are very valuable for my supermarket and my business, I am there to provide service for them, this is what I am doing, I am selling other items that I don’t make money but I still do that but by selling these items to my customers I bring them in, they are happy, they shop and I make money on other items that I sell”. However I cannot accept that he would purchase an espresso/cappuccino machine for $5,000.00, commence its operation at 7:00am and turn it off at 10:00pm and only sell two cups of coffee a day. When one considers the size of the shopping centre, and the fact that there would be very little sold by the three other operating shops which is also sold by Mr Gewargis, it becomes very clear that his motivation for the sale of chickens and sale of espresso coffee cannot have been simply to draw customers into his store.

33 Although the absence of proof of damage is fatal to the Applicants’ claim for damages, they are entitled to ask that the Council force the supermarket to comply with its trading restrictions and so hold the Council to its “supermarket” representation. It should be borne in mind that the Council, as landlord, is the sole arbiter of the various authorised uses, and apart from any considerations which flow from the estoppel effected by the Council’s previous representations, as a matter of general principle, it seems to me to be quite inappropriate that the Council, as Lessor, be allowed to in effect condone activities by one tenant, which are outside the terms of authorised use, especially when it is more than probable that such excesses intrude into the area of authorised use of another tenant within the same centre. These general considerations apart, I am satisfied that the estoppel effected by the general “supermarket” representation above referred to make it entirely appropriate that I make what is in effect a self limiting order.

34 The Respondent is directed to prevent to owner of shop 1 from selling hot barbecued chickens or prepared coffee and to take all other action necessary to ensure that the occupant of shop 1 trades within the authorised use set forth in its Lease, and if the Respondent has not in fact prevented the owner of that shop from selling hot barbecued chickens or prepared coffee within one month from the date hereof, the Applicants are relieved from the obligation to pay rent under their Lease until such time as the Respondent effects such compliance by the occupier of shop 1.

35 Lastly, there is the proposal to let shop 5 (the presently empty shop which was previously used as a video hire store) as a wood fired pizza shop. That matter is currently “on hold” because the Council has undertaken not to allow that to progress to a signed Lease until the order of this Tribunal in this matter is known.

36 In view of the representations made by the Respondent Council in relation to the proposed use of shop 1, it is not necessary in that regard to seek to explore the Council’s obligation to ensure that its various tenants have a “fair go” in their competition with one another. However that is the very point raised by the Applicants’ request that I prevent the Council from allowing shop 5 to be used as a wood fired pizzeria.

37 In the circumstances of a small shopping centre, the relationship between the lessor, and the various tenants can only be properly assessed by considering the community of interest which the parties have. I suppose that relationship is given relatively little attention in the circumstances of a successful small shopping centre, where the various traders trade profitably and in harmony with one another, and so allowing the lessor to succeed in its business of profitably renting out the premises. The stress only becomes obvious when a centre starts to fail, or fails to be successful at all, as in the present instance.

38 There was no evidence before me as to how the Applicant’s business might be affected, other than for it to be put to me that a major portion of the business was the sale of pizzas, and that the operation of a pizza shop next door would greatly affect the business. That, as a matter of common sense, must be true.

39 Although each matter must turn on its particular facts, it is difficult to conceive of a clearer circumstance where it is likely that one trader’s activities would impact very, very severely on the other. It is not as if the Applicants were conducting, say, an Italian restaurant, and complained of the prospect of a Chinese restaurant being opened next door. The effect of those businesses one against the other might well be open to marketing analysis by reference to the drawing area, etc, etc, and it might well be shown to not have any adverse effect one against the other. However, in the present circumstances the analogy seems more appropriately to be to compare the prospects of a “northern” Italian restaurant being opened immediately beside a “southern” Italian restaurant. They must be in the same market.

40 Perhaps by way of some justification of its approach, the Council tendered in evidence an expert report on the viability and future prospects of the Centre. This was the report dated March 1998, which stated the desirability of a small grocery supermarket operating within the Centre, based on its general observations, and in particular based on a market survey effected by interviewing more than 150 local residents. The report acknowledges, in its introduction, “At present only a female hairdresser and a take-away food business exists”. It went on to recommend, as well as the supermarket, that other appropriate tenants might be “hot bread shop, delicatessen, fruit and vegetable operator, wood fired pizza shop, bottle shop”. The report observes that these businesses appear to be “both desired by the residents and feasible in this location”. It is disturbing to observe that these general recommendations were made based on a telephone survey question:- “Are there any particular types of shops or services you would like to see at Abbotsbury that would make you do more shopping there” with the instruction (“do not read out, try and code responses according to the list below”):-

Small supermarket 1
Fruit and vegetables 2
Hot bread 3
Delicatessen 4
Patisserie/ cake shop 5
Charcoal chicken 6
Bottle shop/ cellar 7
Video hire 8
Medical Centre 9.

41 The tabulated results appear to have been quite accurate, because both the Charcoal Chicken and take-away food alternatives received a nil response (as would be appropriate because they were already within the Centre) and consequently these were not outlets which would be more likely to make persons go to the Centre. What is disturbing is the fact that the table gives absolutely no foundation for the proposal that a wood fired pizzeria was desired.

42 It seems to me to be clear that if one shop sells pizzas made in a normal electric pizza oven, as well as other hot takeaway foods, and the second shop proposes to sell pizzas (but presumably no other takeaway foods) prepared in a gas fired or wood fired oven, they both would be selling essentially the same product in much the same market place, thereby bringing into question the viability of both operations.

43 It is established in law that a landlord may not derogate from the grant to his tenant by taking action which renders unviable the authorised business conducted from the premises. A comprehensive recent review of the law in this area is found in the Queensland Court of Appeal decision- Aussie Traveller Pty Limited v Marklea Pty Limited (1997) QCA 2, 11th February 1997. McPherson JA, having made the comment “The law governing the relevant obligations of a landlord to a tenant is less certain than might perhaps be hoped” goes on to fully consider the Australian law following from O’Keefe v Williams (1910) 11 CLR 171, a case which might well in our jurisdiction indicate that there is very little difference between the obligations flowing from the covenant for quiet enjoyment, and the obligation not to derogate from the grant.

44 The law in this field in New South Wales is probably set by Gordon v Lidcombe Investment Pty Limited, a decision of Street J in 1966 (2 NSWR 9), a case which is used to “justify the proposition that the landlord’s interference must be so great as to almost frustrate the purpose for which the Lease was granted”. However, McPherson JA goes on to say “For my part I do not consider that, in order to establish a breach of the Lessor’s implied obligation recognised in O’Keefe v Williams, the law insists on ‘practical frustration’ of the purpose of the Lease”, in circumstances where the relief sought is damages, and not an injunction to restrain the alleged disturbance. It was further observed that the “Browne v Flower requirement” (1911) 1 Chancery 219 that there must be physical interference with the enjoyment of the premises, is a test which has fallen into disregard, and quotes a number of cases where there was held to be a derogation from the grant in circumstances where there was no direct physical impact on the affected premises.

45 The issue in the Aussie Traveller case was the effect on a tenant by the noise and dust created by the manufacturing operations of an adjacent tenant.

46 The dust and noise having been proven to be substantial interference with the adjoining premises, McPherson JA observed “It is another matter whether the Defendant [landlord] can in law be held liable for that interference or disturbance”. The Judge’s analysis goes on to note that in older decisions, in order for there to be a remedy against a landlord, the landlord must be seen to have authorised the interfering use by the other tenant, or alternatively there must have been active participation by the landlord. The law has moved on, so, despite the fact that “A Lessor generally loses control over the premises once they are let to a tenant, he may nevertheless remain legally responsible for tortious acts done on the land by a tenant if at the time he agreed to part with possession and control, it was reasonably foreseeable that the tenant was likely to do those acts”. Several recent American cases are quoted with approval especially the matter of Bocchina v Gorn Management 515A. 2D 1197(MD). 1986 where that Judge said “The more recent cases dwell not so much on whether the landlord has approved the conduct of the tenant as whether he is in a position to correct or terminate it. Where, through Lease provisions or otherwise, he has that ability, the thought is that he would not be able to escape his obligation under a covenant of quiet enjoyment by steadfastly refusing to exercise his authority. We adopt that view. It is fair and it is reasonable”.

47 Clear it is that a Lessor will have to keep order amongst his tenants to avoid physical or what might best be termed practical interference (such as loud noise), I can see no reason why the principle should not apply equally to economic interference in a shopping centre owned or conducted by a single Lessor in circumstances where the Lessor has in the Leases limited the activities which may be carried out by the various tenants, and the alleged economic interference arises from a tenant exceeding the authorised use. A further corollary of that proposition is that, where a Lessor has limited a tenant to a certain use, in a small shopping centre such as the one under consideration, it is a derogation from the grant for the Lessor to propose a use for nearby premises which is substantially similar to a major part of the adjacent authorised use. I note with concern that this proposition is directly contrary to the decision in Port & Griffiths 1938 1AER 295, but in my view the law has moved on, as perhaps illustrated by the headnote “held it was not within the reasonable contemplation of the parties that the Defendant (landlords) were putting themselves and others in obligation not to let their adjoining property to a trade rival of the Plaintiffs”. It seems to me that this, in a modern shopping centre, is exactly what is in contemplation of the parties in the interests of generating a level of trade in which all tenants of the Centre can survive.

48 It is on that basis that I am satisfied that the principle as expounded in Aussie Traveller applies just as appropriately to economic interference a small single owner shopping centre as it does to physical interference. The Council’s proposal to allow shop 5 to be let for the purposes of a wood fired pizza would, in the economic sense, be a derogation of the grant made to the Applicants, and it is on that basis that I am prepared to order the Council not to do so.