In Ansa Logistics Limited v Towerbeg Limited (2012), Ansa granted Ford a right to occupy Ansa’s site. Ford appeared to occupy the whole of the site as Ansa had no presence there. Ford controlled access and undertook significant improvements. Ansa’s landlord argued that the tenant had breached the lease covenant prohibiting parting with possession. The court said that possession and occupation are separate legal issues and the relevant question is whether or not the tenant has relinquished control to the occupant. Here, the court decided that Ansa had not given up exclusive possession. Practically, it is going to be difficult for the landlord to know this without asking questions. The landlord did not ask these questions and therefore failed when it went to court. If the lease had prohibited sharing possession, this would have helped the landlord.
The landlord also refused consent to an underletting to Ford. One of the grounds was the financial standing of Ford. The court decided that this was not a reasonable ground for refusing consent. The landlord can look to the tenant for payment of the rent under the lease and therefore needs not be so concerned about the covenant strength of the undertenant and its ability to pay rent under the underlease.