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 to get in the bare legal estate outstanding in Y). Z then exercised the break clause.
Held: The beneficiary under a bare trust is not thereby constituted the agent of the trustee. A break clause was operable by the tenant if he gave notice and if he should pay all the rent and perform all the covenants up to the determination of the lease. The question for the court was whether that condition for payment and performance was a condition precedent to be performed before the expiration of the term: ‘it must have been intended, in construing a covenant of this kind, that the question whether the lease does or does not exist after the expiration of the seven or fourteen years should be capable of being decided there and then and not left to future contingency leaving both the lessor and the lessee in uncertainty as to whether they are bound by the lease or whether they are not.’ In this case the condition was a condition precedent.
Neville J held: ‘In my opinion, the legal estate in the term being outstanding, it was not competent for the lessee or any assignee of the lessee who had not the legal estate vested in him to give a notice.’
Judges:
Neville J
Citations:
[1912] 2 Ch 504
Jurisdiction:
England and Wales
Cited by:
Cited – Dun and Bradstreet Software Services (England) Ltd; Dun and Bradstreet Software Services Ltd v Provident Mutual Life Assurance Association and General Accident Linked Life Assurance CA 9-Jun-1997
Break clauses had been exercised on behalf of the plaintiffs. The defendant landlords appealed a decision upholding the notices. A penalty rent had been sought.
Held: There had been no sufficient agency established to validate the notice. The . .
Cited – JBW Group Ltd v Westminster City Council CA 12-Mar-2010
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 . .
Cited – Stodday Land Ltd and Another v Pye ChD 7-Oct-2016
The agricultural landlord sold part of his land subject to the respondent’s tenancy to the appellant. Before the transfer was registered, notices to quit were served by both the landlord and his buyer. The tenant challenged both notices in the . .
Lists of cited by and citing cases may be incomplete.
Trusts, Agency, Landlord and Tenant
Updated: 12 April 2022; Ref: scu.188165