Standard Life Investments Property Holdings Ltd v W & J Linney Ltd
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Lewison |
| Judgment Date | 25 February 2010 |
| Neutral Citation | [2010] EWHC 480 (Ch) |
| Date | 25 February 2010 |
| Court | Chancery Division |
[2010] EWHC 480 (Ch)
Mr. Justice Lewison
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
MR. M. WARWICK (instructed by Addleshaw Goddard) appeared on behalf of the Claimant
MR. J. SEITLER QC (instructed by Freeth Cartwright LLP) appeared on behalf of the Defendant.
HTML VERSION OF JUDGMENT
(N.B. Documents and authorities not available at the time of transcription)
The service of notices exercising options still causes trouble. The question in this case is whether W&J Linney Limited ("Linney") have successfully operated a break clause in a lease. The basic facts are not in dispute and the question is one of law.
On 4th April 1996 Mansfield District Council demised Plot 3 Crown Farm Way, Crown Farm Industrial Park in Mansfield to Sun Alliance Trust Company Limited for a term beginning on 4th April 1997 and expiring on 29th September 2116. On 6th June 1997 that lease was assigned to Capita Trust Company Limited. On 4th February 2004 Capita granted a sub-lease of part of Plot 3 to Linney. That sublease demised the premises for a term of 10 years beginning on 4th February 2004 at an initial rent of £139,000-odd per annum.
In the lease the parties were described as follows: Capita Trust Company Limited, company number 239726; its principal offices at Field Hall House, 81/87 Gresham Street, London EC2V 7QE as trustee of the Laser 12 East Midlands Trust (the landlord). W&J Linney Limited was described as the tenant. Clause 1.1 of the lease contained a number of definitions. It starts with the words:
"In this Lease and in the Schedules the following words and expressions shall have the following meaning unless the context requires otherwise…":
The definitions included:
"'Landlord' means the party so described at the head of this Lease and where the context so admits the person for the time being entitled to the reversion immediately expectant on the determination of the term."
Clause 1.8 of the lease provided:
"Unless the context requires otherwise, references to 'the Landlord' shall be construed as including any person who the Landlord authorises to exercise its powers and functions under this Lease "
Clause 3 of the lease provided that rents were "… reserved and payable by the tenant to the landlord throughout the term". The lease continued with a number of covenants on the part of the tenant, including covenants against assignment without consent, the making of non-structural alterations without consent, the making of applications for planning permission without consent and so on.
Clause 7.13 of the lease was headed "Limitation of Landlord's liability", and started, in clause 7.13.1, with the following:
"The Landlord is entering into this Lease as trustee of the Trust and as such any liability on the part of the Landlord (which in this clause 7.13 shall include only its successors in title as trustee of the Trust) under or pursuant to this Lease is limited to the assets held on the Trust for the time being by the Landlord as trustee of the Trust and which are in the Landlord's possession or under its control at the date of any claims ("The Trust Assets") and the Landlord shall not incur any further liability after it shall have parted with its reversion of the Lease."
Clause 9 of the lease, headed "Break Clause", stated:
"If the Tenant wishes to determine this Lease on the 5th anniversary of the date of this Lease and shall give to the Landlord not less than six months' prior notice in writing to such effect, then upon the fifth anniversary of the date of this Lease, and subject to the rents having been paid up until expiry of the notice, and vacant possession being given upon that date, then this Lease shall come to an end but without prejudice to the respective rights of either party in respect of any antecedent claim for breach of covenant."
Accordingly in order to exercise the break clause the tenant had to give notice not later than 3rd August 2009 and had to give that notice to the landlord.
On 26th November 2004 Capita demised Plot 3 to Standard Life for a term beginning on 4th April 1997 and expiring on 26th September 2116. Standard Life paid Capita a premium of £4 million. The reserved rent is a peppercorn. Accordingly Capita's remaining interest in the premises is therefore limited to three days in 2116. The lease granted by Capita to Standard Life is called a concurrent or overriding lease, or a lease of the reversion. Standard Life's title to the overriding lease is registered and the official copy of the registered title records that Standard Life's interest is subject to the lease.
Since 2004 Standard Life has demanded rent from Linney, and Linney has paid the rent to Standard Life. When consent to alterations was required under the lease, the draft licence named Standard Life as the landlord. The evidence in this case includes documents recording demands for rent sent by Standard Life direct to Linney which demands were paid and the draft licence to which I have referred.
In the summer of 2008 Linney decided that it wanted to exercise the break clause. That meant, as I have said, that notice had to be given to the landlord by the 3rd August 2008. On 23rd July 2008 Linney's solicitors, Brown Jacobson LLP, wrote to Capita at its registered office in Beckenham. The letter was sent by recorded delivery. The letter said:
"Dear Sirs,
"Our client: W&J Linney Limited, re Units 1, 2 and 3 Windsor Court.
"We act on behalf of W&J Linney Limited and enclose by way of service our client's break notice in respect of the above property to terminate its lease on 4th February 2009. We should be grateful if you would acknowledge receipt of this notice by signing and returning the copy enclosed to us."
The notice enclosed with the letter is headed "Notice" and states as follows:
"This notice is given this 23rd Day of July 2008 to Capita Trust Company Limited on the Registry 34 Beckenham Road, Beckenham Kent BR3 4TU. Premises: Units 1, 2 and 3 Windsor Court, Crown Farm Industrial Estates, Mansfield Nottinghamshire, as more particularly described in the Lease. Lease, dated 4th February 2004 and made between (1) Capita Trust Company Limited and (2) W&J Linney Limited. Term, 10 years from 4th February 2004."
Clause 9 of the lease states that:
"If the tenant wishes to determine this Lease on the fifth anniversary of the date of this Lease and shall give to the Landlord not less than six months prior notice in writing to such effect, then upon the fifth anniversary of the date of this Lease and subject to the rents having been paid until expiry of the notice and vacant possession being given upon that date, then this Lease shall come to an end but without prejudice to the respective rights of either party in respect of any antecedent claim for breach of covenant. In accordance with these provisions we, Brown Jacobson LLP of Victoria Square House, Victoria Square Birmingham, B2 4BU, on behalf of W&J Linney Limited, hereby give you not less than six months prior notice in writing of their desire to determine the Lease on 4th February 2009 and they will on that date deliver up possession of the premises and will, prior to this date, comply with the conditions set out above."
The notice was signed by Grant Jacobson on behalf of W&J Linney Limited and contained the rubric at the bottom of the notice, "Received, a note of which this a true copy signed …"—and then there was a blank space—"Capita Trust Company Limited".
On the same day Brown Jacobson wrote to Jones Lang LaSalle at St. Paul's House, Park Square in Leeds. The letter stated:
"Our client, W&J Linney Limited, your...
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O G Thomas Amaethyddiaeth CYF v Turner and Ors
...term was vested. 23 Mr Jourdan also relied on a decision of mine in Standard Life Investments Property Holdings Ltd v W&J Linney Ltd [2010] EWHC 480 (Ch), [2011] L & TR 9. In that case Capita granted a sub-lease of business property on terms that contained a break clause. The break clause......