The defendant tenant sought to exercise a break clause in the lease. The landlord said that the notice was deficient because the tenant had failed ‘materially to comply with’ its repairing obligations. The judge found the cost of repairs were andpound;20,000, and that the tenant had done sufficient to be in material compliance with its obligations and the notice was effective. The landlord appealed.
Held: The appeal succeeded. The judge had applied the wrong test. Sir Andrew Morritt C said: ‘Materiality must be assessed by reference to the ability of the landlord to relet or sell the property without delay or additional expenditure. Where the provision is absolute then any breach will preclude an exercise of the break clause. But I see no justification for attributing to the parties an intention that the insertion of the word ‘material’ was intended to permit only breaches which were trivial or trifling. Those words are of uncertain meaning also and are not the words used by the parties. ‘
Judges:
Lord Justice Moore-Bick, Lord Justice Jacob, Sir Andrew Morritt C
Citations:
[2006] EWCA Civ 329, Times 12-Apr-2006, [2006] 1 WLR 2207
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Commercial Union Life Assurance Co Ltd v Label Ink Ltd ChD 2001
An industrial warehouse was let for a term of 15 years. A clause contained an option for the tenant to break the lease on one year’s written notice on condition that: ‘There shall not be any material breach of the covenants on its part herein . .
Cited – Grey v Friar 1854
Coleridge J: ‘the covenants must have been strictly kept, or, if broken, must have been satisfied for. So understood, the words import a condition precedent neither impossible nor unreasonable; and where that is clearly the case, the mere difficulty . .
Cited – Bass Holdings Ltd v Morton Music Ltd CA 1987
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 – Simons v Associated Furnishers Ltd 1931
Buildings were let for a term of 17 years. The tenant had the right to terminate the lease after the first five or ten years of the term if it gave notice to that effect and if it ‘shall up to the time of determination . . perform and observe the . .
Cited – Finch v Underwood CA 1876
The landlord had covenanted with the tenant, on receipt of notice from the latter, to renew the lease ‘in case the covenants and agreements on the tenants’ part shall have been duly observed and performed’. Notice was duly given but the landlord . .
Cited – Bairstow Eves (Securities) Ltd v Ripley CA 1992
The lease conferred on the tenant a right to break the leases on notice ‘if the tenant shall perform and observe all the covenants and obligations herein on the tenant’s part contained’. It had failed to repaint the premises during the year before . .
Appeal from – Fitzroy House Epworth Street (No 1) Ltd and Another v The Financial Times Ltd TCC 4-Nov-2005
The tenant sought to exercise a break clause in the lease. The landlord replied that it had not complied with its obligations for repair. The tenant said its compliance was sufficient in the material respects necessary.
Held: The tenant had . .
Cited – Chapman v Honig CA 1963
A landlord’s notice to quit was held valid notwithstanding that the landlord seeking to uphold its validity had himself given it in contempt of court.
A contractual right may be exercised for any reason good, bad or indifferent and the motive . .
Cited – Brutus v Cozens HL 19-Jul-1972
The House was asked whether the conduct of the defendant at a tennis match at Wimbledon amounted to using ‘insulting words or behaviour’ whereby a breach of the peace was likely to be occasioned contrary to section 5. He went onto court 2, blew a . .
Cited – Fortman Holdings Ltd v Modem Holdings Ltd CA 30-Jul-2001
The issue of ‘material compliance’ in a lease whatever it involves must be determined on an objective basis. . .
Cited by:
Cited – Legal and General Assurance Society Ltd v Expeditors International (Uk) Ltd CA 24-Jan-2007
Leases contained break clauses which the tenant purported to exercise. The landlord replied that they were ineffective because the tenant had not complied with his repair covenants. The dispute appeared settled after negotiations, and the settlement . .
Cited – Quirkco Investments Ltd v Aspray Transport Ltd ChD 23-Nov-2011
The defendant tenant said that it had exercised a break clause in the lease held of the claimant. The claimant said the break notice was ineffective because the defendant was in breach of the lease, not having paid an iinsurance service charge, and . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 05 July 2022; Ref: scu.239801
