The court considered the operation of a break clause within a lease, and in particular ‘ Can the court imply a term which enables the lessee to get back that part of the advance payment of rent which relates to a period (‘the broken period’) after the break date, by when the lease will have terminated?’
Held: The appeal succeeded. The lease, read as a whole against the relevant background, would not reasonably be understood to include such a term, and thus the test for an implied term was not met.
Arden LJ said: ‘ the court will not imply a term as a matter of interpretation following the Belize approach unless it is necessary that the agreement should contain such a term to achieve the parties’ express agreement, purposively construed against the admissible background.’
Arden, Jackson, Fulford LJJ
[2014] EWCA Civ 603
Bailii
England and Wales
Citing:
Cited – Attorney General of Belize and others v Belize Telecom Ltd and Another PC 18-Mar-2009
(Belize) A company had been formed to manage telecommunications in Belize. The parties disputed the interpretation of its articles. Shares had been sold, but the company was structured so as to leave a degree of control with the government. It was . .
Cited – Mediterranean Salvage and Towage Ltd v Seamar Trading and Commerce Inc (‘The Reborn’) CA 10-Jun-2009
The court confirmed that the necessity to give business efficacy to a contract was still required for the implication of a term into a contract. . .
Cited – Liverpool City Council v Irwin HL 31-Mar-1976
The House found it to be an implied term of a tenancy agreement that the lessor was to be responsible for repairing and lighting the common parts of the building of which the premises formed part. In analysing the different types of contract case in . .
Cited – Equitable Life Assurance Society v Hyman HL 20-Jul-2000
The directors of the Society had calculated the final bonuses to be allocated to policyholders in a manner which was found to be contrary to the terms of the policy. The language of the article conferring the power to declare such bonuses contained . .
At ChD – Marks and Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd and Another ChD 16-May-2013
The lease contains a tenant’s break clause which allows the tenant, subject to its compliance with certain conditions, to terminate the lease on a specified date. Rent is payable by instalments quarterly in advance on the usual quarter days. The . .
Cited by:
Cited – Mr H TV Ltd v ITV2 Ltd ComC 8-Oct-2015
The claimant had contracted with the defendant for the production of a series of reality TV shows featuring celebrities. After severe personal clashes between the people involved on the claimants side, the contract was terminated. The claim was that . .
At CA – Marks and Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd and Another SC 2-Dec-2015
The Court considered whether, on exercising a break clause in a lease, the tenant was entitled to recover rent paid in advance.
Held: The appeal failed. The Court of Appeal had imposed what was established law. The test for whether a clause . .
Lists of cited by and citing cases may be incomplete.
Contract, Landlord and Tenant
Updated: 03 December 2021; Ref: scu.525635