References: [2010] EWCA Civ 395, [2010] L and TR 10, [2010] 17 EG 95, [2010] NPC 48
Links: Bailii
Coram: Sedley, Dyson, Etherton LJJ
Ratio: The tenant had applied to the landlord for consent to assign certain leases. The court had declared the right to exercise break clauses in certain leases as lost. The court had found the right to be lost after the assignment of the leases by the original tenant, that the exercise of a break clauses limited to the named original tenant, would not make sense if it could be exercised when it was no longer in possession.
Held: The tenant’s appeal failed. ‘the right of a landlord or a tenant to bring a tenancy to an end by notice is an incident of the relationship of landlord and tenant’ and ‘provision for a former tenant to bring a lease to an end at a time when the lease is not vested in them would be extraordinary, even if technically possible.’ This was consistent with established authority. The original tenant had lost its right to break on assigning the lease.
Statutes: Landlord and Tenant (Covenants) Act 1995
Jurisdiction: England and Wales
This case cites:
- Cited – Olympia and York Canary Wharf Ltd v Oil Property Investments Ltd CA ([1994] 2 EGLR 48)
A landlord could properly refuse to consent to the assignment of a lease back to an original tenant in circumstances where the parties accepted that, if there was a re-assignment, the original tenant could exercise a right conferred on it alone as . . - Cited – Equinox Industrial (GP2) Limited, Equinox Industrial (Nominee) Limited v Sketchley Limited ChD (Bailii, [2003] EWHC 2 (Ch))
The tenant sought to exercise a break clause following assignment and subsequent revesting of the original lease in it. In the relevant clause the tenant meant only Sketchley plc and not its successors in title or its assigns. The claimants . . - Cited – Max Factor Ltd v Wesleyan Assurance Society CA ([1996] 2 EGLR 210, (1996) 74 PandCR 8)
A break clause was mutual but contained a proviso making it clear ‘for the avoidance of doubt’ that the lessor’s right to determine the term ceased if the lessee assigned its interest in the lease prior to the expiration of the tenth year of the . . - Cited – Wordsley Brewery v Halford ((1903) 90 LT 89)
A notice to quit was invalid when it was served by the original lessor who had, prior to the service of the notice, granted a concurrent lease. . . - Cited – Stait v Fenner ([1912] 2 Ch 504)
The lease to Fenner contained a break clause. The lease was legally assigned to X and then to Y. Y then agreed to assign back to Fenner (but no formal assignment was entered). Fenner then ‘assigned’ to Z (the contract saying that he was not obliged . . - Cited – Centrovincial Estates plc v Bulk Storage Ltd ([1983] 2 EGLR 45)
In a lease, the term ‘original tenant’ was to refer to the person to whom the lease had originally been granted. . . - Cited – Harbour Estates Limited v HSBC Bank Plc ChD ([2004] EWHC 1714 (Ch), Bailii, [2005] 2 WLR 67, [2004] 3 All ER 1057, [2005] 1 EGLR 107, [2005] Ch 194)
The lease contained a break clause. The parties disputed whether the benefit of the clause was personal to the orginal lessee, or whether it touched and concerned the land, and therefore the benefit of it passed with the land.
Held: The . . - Cited – Selous Street Properties v Oronel ChD ([1984] 1 EGLR 50)
The tenant had made unauthorised alterations to the premises by the construction of some toilets, in breach of covenant. The position was later regularised with a licence from the landlord, reciting that the lessee had made alterations to the . . - Cited – City of London Corporation v Fell ([1993] QB 590)
The benefit and burden of a break clause in a lease will ordinarily pass with the reversion or the term, as ‘touching and concerning’ the respective estates of the landlord and the tenant and as conditions of the enjoyment of those estates. . . - Cited – Guys’n’Dolls v Sade Bros CA ([1984] 1 EGLR 103)
. . - Cited – Kumar v Dunning and Another CA (Bailii, [1987] EWCA Civ 1, [1989] 1 QB 193)
The court considered the effect of section 62. Sir Nicholas Browne-Wilkinson V-C said: ‘The main intention of Section 62 was to provide a form of statutory shorthand rendering it unnecessary to include such words expressly in every conveyance. It is . . - Cited – Bass Holdings Ltd v Morton Music Ltd CA ([1988] Ch 493)
The tenant had the option to take a further lease on giving written notice of their desire ‘if it shall have . . performed and observed the several stipulations on its part to be performed and observed up to the date of [the notice]’. The question . . - Cited – Allied London Investments Ltd v Hambro Life Assurance Ltd (No 2) ChD ([1984] 1 EGLR 16)
The lessors sued the original lessees for rent due under the lease after the term had been assigned to another. The lessors had given a licence to assign and the licence contained a guarantee from a third party to the lessors that the assignee would . . - Cited – Hua Chaio Commercial Bank v Chiaphua Industries PC ([1987] AC 99, [1987] 1 All ER 1110, [1987] 2 WLR 179, [1987] ANZ Conv R 158)
The landlord had granted a lease, under which the tenant paid a security deposit on the signing of the lease. The deposit was returnable on the expiration of the term provided that there was no breach of any of it terms and conditions on the part of . .
(This list may be incomplete)
Last Update: 15 October 2019
Ref: 408595
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