Apportionment of rent and break clauses: Court of Appeal reverses first-instance decision in BNP Paribas v M&S

The Court of Appeal has handed down its much anticipated decision in the case of BNP Paribas Securities Services Trust Company (Jersey) Ltd (and Another) v Marks and Spencer plc.

Allen & Overy’s real-estate litigation team, headed by Jane Fox-Edwards, acted for BNP Paribas, the landlord. The Court of Appeal has unanimously upheld the landlord’s appeal and reversed Morgan J’s first-instance decision. On the facts of the case and the wording of the lease in question, no term was to be implied entitling the tenant to be reimbursed for the portion of rent relating to the period following the break date.

M&S was the tenant of four floors of office premises in Paddington, on separate but similar leases. The court focused on one of them. Under that lease, basic rent was payable in advance on the usual quarter days ‘proportionately for any part of the year’ together with additional payments for insurance, service charge and a car-parking licence fee. The lease was due to expire on 2 February 2018 but was subject to a tenant’s right to break on 24 January 2012, such right being conditional on (1) there being no arrears of basic rent and VAT and (2) payment of a premium of £919,800…

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