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…

Click on the link below to read the rest of the Dentons briefing.

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