Littman and Youngv Aspen Oil (Broking) Ltd
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR. JUSTICE HART,Mr. Justice Hart |
| Judgment Date | 01 July 2005 |
| Neutral Citation | [2005] EWHC 1369 (Ch) |
| Docket Number | Case No: HC04C02929 |
| Court | Chancery Division |
| Date | 01 July 2005 |
[2005] EWHC 1369 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr. Justice Hart
Case No: HC04C02929
Mr Andrew Ayres (instructed by DLA Piper Rudnick Gray Cary LLP) for the Claimants.
Mr Kelvin Rutledge (instructed by Nicholas & Co.) for the Defendant.
Hearing date: 17 th June 2005
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr. Justice Hart
This is the trial of a preliminary issue in relation to a landlord and tenant matter pursuant to an order of Master Moncaster dated 2 nd December 2004. The claimants are the landlords of premises at Colette House, Piccadilly, London. By a lease dated 12 th April 2001 the premises known as the Second Floor, Colette House were let to the defendant for a term of 5 years commencing on 24 th June 2001 at an annual rent of £66,024 (excluding VAT).
The lease contained a clause ("clause 10") in the following terms:
"Either party shall be entitled by giving not less than six months' notice in writing to the other to terminate this lease at the end of the third year of the Term ( "Termination Date") and provided that up to the Termination Date in the case of a notice given by the Landlord the Tenant shall have paid the rents hereby reserved and shall have duly observed and performed the covenants on the part of the Tenant and the conditions herein contained this lease shall absolutely cease and determine on the Termination Date but without prejudice to any right or remedy of either party in respect of any antecedent breach by the other of the provisions of this lease"
By a notice given by a letter dated 10 th December 2003 the defendant purported to bring the lease to an end pursuant to that clause. In the action the claimants have disputed the effectiveness of that notice on the grounds that the defendant was in breach of its obligations under the lease as at the termination date. The defendant's primary case is that it is irrelevant whether or not it was in breach of the terms of the lease as at the termination date because its right to break was unconditional. Its alternative case is that any breach had been cured by the termination date as the result of a tender of a sum of money in respect of dilapidations. This preliminary issue is not concerned with that secondary question.
The question with which I am concerned is whether the defendant's right to terminate the lease was conditional on it having duly observed and performed its covenants at the termination date. It is common ground that such conditionality exists, if it exists at all, solely because of the express wording contained in clause 10. The difficulty for the claimants is that the express wording in clause 10 applies only "in the case of a notice given by the landlord". The claimants contend that on their true construction these words should be read as if they said "in the case of a notice given by the tenant" or, which amounts to the same thing, "in the case of a notice given to the landlord". Alternatively, the claimants contend that clause 10 should be rectified so to provide.
The history of the parties' relationship is set out in the witness statement of Brian John Levan dated 17 th February 2005. Mr Levan had acted for the defendant throughout its occupation of the premises as its solicitor. The defendant had originally occupied pursuant to an underlease dated 7 th February 1983 expiring on 21 st June 1988. Following service by the defendant of a section 26 notice dated 24 th November 1987 a new lease dated 3 rd December 1990 was granted, for a period of 10 years from 15 th February 1991 but with a break clause giving either party an option to determine the lease at the end of the fifth year on 6 months' prior written notice. That break clause contained no provisions making its exercise conditional on the defendant complying with the terms of the lease. The defendant exercised its option under that break clause and a new lease was negotiated dated 7 th March 1996 for a term of 5 years from 15 th February 1996. That lease contained no break clause.
On 1 st June 2000 the defendant served a section 26 notice in respect of the 1996 lease. The validity of that notice was challenged and, following the issue of proceedings in the county court by the defendant seeking the grant of a new tenancy, the question of the validity of the section 26 notice was directed to be tried as a preliminary issue. However, before that hearing took place, negotiations between the parties' respective agents (Mr Reiff for the defendant and Goodman Mann for the claimants) resulted in terms for a new lease being agreed, the terms being set out in a letter dated 11 th December 2000 from Mr Robert Littman on behalf of the claimants to Miss Alison Jane Gowman, a partner in the firm of DLA Piper Rudnick Gray Cary UK LLP, the claimants' solicitors. Those terms were as follows:
| "Term | 5 years with mutual break after 3 years |
| Term Commencement | 24 th June 2001 |
| Rent | £36 per sq ft. The exact area will be agreed by both parties' surveyors early in the New Year. |
| Service Charge | Capped at £7 per sq ft. |
| Rent Deposit | The existing rent deposit will remain in place." |
Miss Gowman prepared for Mr Littman's consideration a draft lease which followed the form of the 1996 lease but included, by way of rider, a new clause 10 in the following terms:
"The Tenant shall be entitled by giving not less than six month[']s['] notice in writing to the Landlord to terminate this lease at the end of the third year of the Term (" Termination Date") and provided that up to the Termination Date the Tenant shall have paid the rents hereby reserved [and shall have duly observed and performed the covenants on the part of the Tenant and the conditions herein contained]:
1. this lease shall absolutely cease and determine on the Termination Date but without prejudice to any right or remedy of the Landlord in respect of any antecedent breach by the Tenant of the provisions of this lease…"
That rider consisted of a page from what appears to have been a precedent used by her firm which she had adapted. The precedent contained the following note:
"The following amendment should be inserted in clause 7 where the Tenant is to have the right to determine. In the light of the Trane decision, no well advised tenant is likely to make performance of covenants a pre condition; many will resist payment of rent as well. Provision is made for the Tenant to hand over its registered title documents if the break is exercised to...
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Littman and Youngv Aspen Oil (Broking) Ltd
...the invitation of Lord Justice May) : 1 This is an appeal from a determination of a preliminary issue by Hart J on 1 st July 2005 ( [2005] EWHC 1369 (Ch)) . He described what he had to decide succinctly as follows: "1. This is the trial of a preliminary issue in relation to a landlord and t......