Cerium Investments Ltd v Evans and Others
| Jurisdiction | England & Wales |
| Judgment Date | 18 January 1991 |
| Date | 18 January 1991 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Glidewell and Sir Denys Buckley
Landlord and tenant - sureties - benefit from wrongdoings
Sureties who gave a landlord guarantees that the tenant would perform the covenants in his lease could not take advantage of their own wrongdoings to avoid their contractual liability.
Their failure to ensure timely registration of an assignment of the lease did not prevent them from being liable to the landlord for the tenant's failure to pay rent.
The Court of Appeal so held in allowing an appeal by the plaintiffs, Cerium Investments Ltd, from the judgment of Sir Peter Pain, who, sitting as a High Court judge on July 25, 1990, had dismissed their summons for summary judgment and had given unconditional leave to defend to the defendants, Mr Ernest John Evans, Mr Richard George Ford and Mr Stephen Brian Stubbs.
Mr Kim Lewison for the plaintiffs; Mr Anthony Allston for Mr Evans; Mr Christopher Coney for Mr Ford; Mr Roderick Doggett for Mr Stubbs.
LORD JUSTICE GLIDEWELL said that the appeal raised a short, interesting but difficult point under Order 14 of the Rules of the Supreme Court. It was agreed that the court should decide the issue one way or the other in accordance with the principle laid down in European Asian Bank AG v Punjab & Sind Bank (No 2)WLR [1983] 1 WLR 642, 654C).
In 1987 the plaintiffs, as landlords, had granted licences to assign a lease and an underlease. By clause 3 the defendants, as sureties, covenanted that the assignees would pay the rents and perform the covenants in the leases.
Clause 4 provided that the licences "shall become null and void if" the assignments were not registered with the plaintiffs within one month of their taking place. The assignments were duly completed by not registered in time. The assignees got into financial difficulties and arrears of rent accured.
The judge, giving the defendants, as sureties for the obligations of the assignees, leave to defend the plaintiffs' action to recover in respect of the arrears, held that the assignees' failure to register the assignments gave them an arguable defence: namely that on the failure the licence became null and void so that the defendants either never were under any liability, or ceased after the expiry of one month to be under any liability, to the plaintiffs.
On their appeal, the plaintiffs submitted that there was an established principle that a...
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Abdulrahman Bin Abdullah Bin Ibrahim Al-Subaihi v Mishal Maan Al-Sanea
...Trust Corp plc v Elektrim SA [2009] EWHC 1801 (Ch) at (“ Law Debenture”) at [18(v)]; Cerium Investments Ltd v Evans and others [1991] 62 P & CR 203 (CA) at 209. Gyllenhammar is said to be of no relevance, being concerned with contractual terms of entirely different wording and with a diffe......
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Grandace Investments Ltd. And Another v Bold Champion Development Ltd. And Another
...Lep Air Services Ltd. [1973] AC 331 at p. 345A-C, and applied to the law of landlord and tenant in Cerium Investments Ltd. v. Evans (1991) 62 P. & C.R. 203. When the 1st Defendant failed to vacate the premises on 30th November 1996, it was in breach of the tenancy agreement. Since the 2nd D......