System Floors Ltd v Ruralpride Ltd and Another: CA 31 Oct 1994

A break clause was contained in an agreement not in the lease but in a side letter which made the benefit of the break clause personal to the original lessee but said nothing express as to whether the burden of the break clause passed to an assignee of the reversion.
Held: The burden of a lease side letter went with the assignment of the Landlord’s interest. Referring to P and A Swift, Morritt LJ said about what is required of a covenant in order for it to touch and concern the land: ‘Any dictum of Lord Oliver of Aylmerton commands the greatest respect even when, as here, he does not purport to lay down an exhaustive test and, indeed, recognizes the dangers of attempting to do so. Nevertheless, I do not think that the burden of a covenant will fail to satisfy the conditions of section 142 merely because the benefit of it is personal to the present tenant.’
Morritt LJ
Ind Summary 31-Oct-1994, [1995] 1 EGLR 48
Law of Property Act 1925 142
England and Wales
CitedP and A Swift Investments v Combined English Stores Group Plc HL 7-Jul-1988
The House was asked as to whether a covenant touched and concerned the land.
Held: Lord Oliver of Aylmerton said: ‘Formulations of definitive tests are always dangerous, but it seems to me that, without claiming to expound an exhaustive guide, . .

Cited by:
CitedHarbour Estates Limited v HSBC Bank Plc ChD 15-Jul-2004
The lease contained a break clause. The parties disputed whether the benefit of the clause was personal to the orginal lessee, or whether it touched and concerned the land, and therefore the benefit of it passed with the land.
Held: The . .

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Updated: 09 April 2021; Ref: scu.89669