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It's not just a break clause — it’s a non-implied apportionment term break clause

The much anticipated Court of Appeal decision in Marks & Spencer plc (M&S) v BNP Paribas Securities Services Trust Company (Jersey) Ltd [2014] EWCA Civ 603 has been handed down. The controversial High Court judgment has been overturned.

M&S had exercised a break right in its lease. The break contained conditions as to payment, but did not contain an express apportionment provision (i.e. rent to be payable on a proportionate basis between a payment date and the break date).

A rent payment date occurred prior to the break and M&S paid a full quarter’s rent, despite the landlord invoicing M&S on an apportioned basis from the quarter day to the break date. M&S was wise to do this to ensure that it complied with the conditions of the break to enable the break to be effective — better to have an argument about apportionment after the break than an argument about whether the lease itself has been broken. All in all, the apportioned amount was around £1.1m. The landlord claimed that its invoice was sent in error and retained the full quarter’s rent. M&S applied to the High Court on the basis that the words ‘proportionately for any part of a year’ amounted to an express apportionment term. M&S also submitted that a term should be implied whereby rent was to be apportioned and repaid for the period from the break date to the end of the quarter…

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