Clause for Thought

A claim by The Earl of Cadogan and Cadogan Estates for a lease rectification was thrown out by the High Court last month ( see link below *)

As part of a lease in Sloane Street SW1, Escada a prestige international fashion house were to carry out substantial fitting out and improvement converting two shops into one, this included removing an old staircase and inserting a new one.

A dispute arose over the rent review clause in the lease. This stated that the basis was that the premises included the new staircase but that all the tenants fitting out works were to be disregarded.

David Mackie QC threw out the claimant’s contention that this would produce a nonsensical result in assuming that both staircases and the two original shops still existed. The effect of this they stated would seriously reduce the overall rent –  It was ruled that the lease wording was clear and as a result Cadogan lost out at each of the 2001 and 2006 reviews.

Once again a dispute over interpretation of the lease has lead to substantial litigation!

This is an opportunity for solicitors to refer back to instructing valuation Surveyors to confirm heads of terms before leases are finally drafted. Also for Valuation Surveyors to make sure that agreed terms are clear and unambiguous.

* Click to view the Judgement      http://www.bailii.org/ew/cases/EWHC/Ch/2006/78.html

This is part of a regular series of articles intended to be of topical interest. If you would like further information or add your own comments please reply to this e mail or contact Roger Nelson on 0800 902 0466