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 submitted that the original lessee had two options. It could retain the benefit of the lease, and enjoy the special personal right conferred on it under the break clause, or it could realise the value of the lease by assigning it, but if it did so the special personal right would no longer be operable so that any price for the assignment would not reflect that right. It made little commercial sense that an arrangement should exist under which the original lessee could assign the lease but then hope or expect that it could still exercise the special right under the break clause if at some appropriate date in the future it re-acquired the lease.
Held: The wording of the clause as a whole, and in particular the exclusion of successors in title and assigns, had the effect of making it clear that it was only the original lessee, as original lessee, which could exercise the break clause. This conclusion was supported by other clauses and confirmed by commercial common sense. To hold otherwise would lead to uncertainty and be unattractive to the landlord, especially if it intended to transfer the reversion. The uncertainty would also affect the purchaser.
Mr Justice Lawrence Collins
[2003] EWHC 2 (Ch)
Bailii
England and Wales
Cited by:
Cited – BP Oil UK Ltd and others v Lloyds TSB Bank Plc CA 21-Dec-2004
An option was granted to three lessees for the purchase of the reversion. After one ceased to be a lessee, the remaining two purported to exercise the option. The landlord said that only the three could exercise the option together.
Held: 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 . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 06 December 2021; Ref: scu.178646