Court of Appeal commends consistency in construction of break clauses
The Court of Appeal has dismissed the appeal of a tenant against the decision of Lewison J that it lost the right to exercise break clauses in three commercial leases when it assigned the leases to a third party. In doing so the Court of Appeal assented to the proposition that it was undesirable for courts to adopt radically different interpretations of break clauses in commercial leases based on only slight differences in language which were not obviously intended to achieve different objectives. Martin Rodger QC and Elizabeth Fitzgerald represented Aviva, the landlord of an industrial estate in Southend let on leases for terms of 99 years from 1972 terminable by break clauses exercisable in 2010. The break clauses were personal to Linpac, a former lessee, which sought consent to take an assignment back of the leases to enable it to give notice of termination. The trial judge held that Aviva had been reasonable in refusing consent and that the right to break had been lost in any event when the leases were assigned. The Court of Appeal rejected the former tenant’s contention that, on the language of the break clauses, it had been entitled to give notice of termination even without taking back an assignment of the leases.
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