Cases - Zinc Cobham 1 Ltd v Adda Hotels

Record details

Name

Zinc Cobham 1 Ltd v Adda Hotels

Date

[2018]

Citation

EWHC 1025 (Ch)

Keywords

Dilapidations

Summary

Zinc held the freehold of a number of hotels occupied by tenants under the Hilton Hotels brand. The leases contained covenants to maintain the hotels in accordance with the Hilton Group’s brand standards.

Identifying breaches, Zinc served schedules requiring the tenants to undertake over £100m of remedial work. Zinc claimed that the value of its interest had been reduced because of the hotels’ condition, but that the loss would be very difficult to quantify. Zinc therefore sought an injunction for specific performance on the basis that damages would be inadequate compensation.

Zinc’s claim for specific performance was struck out, limiting its remedy to damages. This is because it would be inequitable to require a tenant to carry out works at a cost substantially higher than any loss to the landlord. In addition, an order for specific performance would require constant supervision to monitor compliance with the brand’s standards.

The court held that Zinc was only concerned with financial compensation, it did not have a legitimate interest in enforcing the obligations. Damages are likely to be limited as the breaches are not expected to impact on rental levels because of the terms of the rent review provisions.