A break clause was mutual but contained a proviso making it clear ‘for the avoidance of doubt’ that the lessor’s right to determine the term ceased if the lessee assigned its interest in the lease prior to the expiration of the tenth year of the term: ‘5.09 If either the Lessor or the Lessee (here meaning Max Factor Limited only) shall be desirous of determining this present Lease at the end of the tenth year of the term hereby granted and of such desire deliver to the other not less than twelve months’ previous notice in writing and in the case of Max Factor Limited pays all rent and six months’ further additional rent at the rate then applicable (such additional rent being payable in full on the expiry of such notice) then and in such case immediately after the expiration of the tenth year of the term this Lease shall cease and be void but without prejudice to any claim by either party against the other in respect of any antecedent breach of any covenant or condition herein contained provided that for the avoidance of doubt in the event of the Lessee (here meaning Max Factor Limited only) assigning the interest in the demised premises prior to the expiration of the tenth year of the term then the Lessor’s right to determine the term contained in this Clause shall forthwith cease.’ The court was asked whether the clause was exercisable by an original lessee following assignment by it of the lease and re-assignment by the assignee back to the original tenant.
Held: The break clause was not exercisable following assignment of the lease, even though it had been re-assigned back to the original tenant. It determined on the assignment. The right to exercise the break clause was mutual, and the proviso to the break clause expressly provided for cesser of the landlord’s rights on assignment by the landlord and was expressed to be ‘for the avoidance of doubt’, and the landlord had a right to refuse re-assignment back to the original tenant, thus rendering any exercise of the break clause nugatory.
Judges:
Auld and Aldous LJJ, Staughton LJ dissenting
Citations:
[1996] 2 EGLR 210, (1996) 74 PandCR 8
Jurisdiction:
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: 27 October 2022; Ref: scu.222563
