The UK Supreme Court in Marks and Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd & Anor (Rev 1) [2015] UKSC 72 was asked to consider an appeal concerning a break clause within a commercial lease.

A commercial lease between the parties required that rent be pre-paid by the tenant to the landlord. Before the conclusion of the rent period, the tenant validly cancelled the lease by ensuring rent was settled and by giving six months' notice to the landlord.  The tenant then sought a refund of its rent for the period between 24 January 2012 (when their lease determined) and March 2012 (the date up to which they had paid rent).  The lower Courts first found in favour of the tenant, then on appeal, in favour of the landlord.  In the Supreme Court, the appeal was unanimously dismissed, holding that neither the common law nor statute apportion rent payable in advance on a time basis, save in a clear case where the lease agreement provides for apportionment.  The terms of the lease must show that the landlord and tenant intended that the tenant should be refunded an apportioned part of the rent payable and paid in advance, especially in professionally drafted commercial leases.

This case highlights the significance of careful drafting in commercial agreements, as the Courts will usually hold parties to the express words of their agreement.

See Court decision here.