The great escape: guarantor released from liability by grant of licence for alterations

In Topland Portfolio No 1 Ltd v Smiths News Trading Ltd [2013] EWHC 1445 (Ch), the High Court has held that a guarantor to a lease was discharged from its obligations when the landlord and tenant agreed a licence for alterations without joining the guarantor as a party or seeking its consent. The licence allowed the tenant to carry out significant works to the premises, which had the effect of increasing the potential liability for repairs. As this was more onerous and thus prejudicial to the guarantor, it operated as a release from the guarantee.

The premises were let to the tenant pursuant to a lease granted in 1981. The tenant’s obligations under the lease were guaranteed by the defendant (then known as WH Smith & Son Ltd).

In 1987, the landlord and the tenant entered into a licence for alterations. This licence provided for extensive works to be undertaken at the premises and contained the right for the landlord to require reinstatement at the end of the term. The defendant was not asked to consent to this, nor was it a party to the licence…

If you are registered and logged in to the site, click on the link below to read the Taylor Wessing briefing. If not, please register or sign in with your details below.

Briefings from Taylor Wessing

View more briefings from Taylor Wessing

Analysis from The Lawyer

  • singapore orchid

    Singapore: Cash course

    The city-state is working hard to become a global wealth management hub, and law firms are gearing up for a prosperous new world

  • Money 317

    Crunch boom

    Financial disputes are starting to dominate the English courts as the long-awaited fallout from the downturn finally comes to town

View more analysis from The Lawyer

Overview

5 New Street Square
London
EC4A 3TW
UK
http://www.taylorwessing.com

Turnover (£m): 228.00
No. of Lawyers: 860
No. of Lawyers (Asia Pacific): 79
Offices (Asia Pacific): 3

Jobs