Clarence House Ltd v National Westminster Bank Plc: ChD 23 Jan 2009

The claimant landlord alleged that the defendant tenant had transferred the lease under a ‘virtual assignment’ and that this was in breach of its lease.
Held: The Abbey National case was not helpful. However, the arrangement was not a breach of the qualified covenant against underletting since it reserved no reversionary interest. Nor was it a breach of the qualified covenant against assignment. This lease included prohibitions of several forms of assignment. That suggested that only those listed forms were prohibited. Nor could it be said, applying Street v Mountford, that as a trust in all but name, it was such and a breach of the lease as such. Here the management of the premises remained with the defendants. However the virtual assignment was a breach of the covenant against assignment since ‘by executing the Virtual Assignment, the Defendant has either parted with possession of the Property to New Liberty or, at least, is sharing, or permitting the sharing of, possession of the Property with New Liberty. ‘

Hodge QC J
[2009] EWHC 77 (Ch)
England and Wales
CitedAbbey National Plc v Customs and Excise ChD 6-May-2005
. .
CitedRevenue and Customs v Abbey National Plc CA 29-Jun-2006
The court considered the effect in VAT on a ‘virtual assignment’ of a lease. . .
CitedGentle v Faulkner CA 1900
A declaration of trust of a lease had been executed by the tenant. The landlord complained that this was a breach of the covenant against assignment.
Held: In the absence of any context showing that the covenant is to have an extended meaning, . .
CitedStreet v Mountford HL 6-Mar-1985
When a licence is really a tenancy
The document signed by the occupier stated that she understood that she had been given a licence, and that she understood that she had not been granted a tenancy protected under the Rent Acts. Exclusive occupation was in fact granted.
Held: . .
CitedSaunders v Vautier 7-May-1841
A direction in a will stated that the income from certain shares was to be accumulated and invested until the beneficiary attained the age of 25. On attaining his majority at 21 years, the beneficiary sought termination of the trust, and transfer of . .
CitedAkici v LR Butlin Ltd CA 2-Nov-2005
The tenant appealed against forfeiture of his lease for breach of a qualified covenant against assignment. It was said that the tenant had attempted to hide from the landlord the assignment of the premises to his company or its shared occupation. . .
CitedBrown and Root Technology Ltd and Another v Sun Alliance and London Assurance Comp Ltd CA 19-Dec-1996
The claimant had a personal right to exercise a break clause in a lease of which it was the registered proprietor, that right coming to an end when it assigned the lease. The lease was assigned to another company within the group which took over . .

Cited by:
Appeal FromClarence House Ltd v National Westminster Bank Plc CA 8-Dec-2009
The defendant tenants, anticipating that the landlord might delay or refuse consent to a subletting entered into a ‘virtual assignment’ of the lease, an assignment in everything but the deed and with no registration. The lease contained a standard . .

Lists of cited by and citing cases may be incomplete.

Landlord and Tenant

Updated: 01 November 2021; Ref: scu.280146