You are here
Home > Property > No implied right to apportionment on a break (even with a break premium)

No implied right to apportionment on a break (even with a break premium)

Supreme Court dismisses Marks and Spencer’s appeal for repayment of overpaid rent following lease break

The appeal before the Supreme Court concerned a tenant’s break clause in a commercial lease that had been granted for a term expiring on 2 February 2018.

The lease required rent to be paid in advance on the usual quarter days. It also contained a break clause to determine the lease on 24 January 2012. The break would only have effect if on a break date there were no arrears of basic rent or VAT on basic rent and if the tenant had made an additional payment of £919,800 plus VAT to the landlord.

The tenant exercised his break under the break clause to determine the lease on 24 January 2012, paying the reserve premium and after paying the full quarter’s rent on 25 December 2011. The issue before the court was whether the tenant could recover from the landlords the apportioned rent in respect of the period after the break date – i.e. the two months from 24 January to 24 March 2012.

The Supreme Court unanimously (5-0) rejected the claimant’s claim for implied term for reimbursement on the ground that such a term was unnecessary to make the contract workable or internally coherent.

Top