The Supreme Court has recently had to consider whether to grant leave to appeal in two of 2014’s most significant cases.

Break clauses

In Marks & Spencer plc -v- BNP Paribas Securities Services Trust Company (Jersey) Limited, discussed in the summer 2014 edition of this newsletter, the Court of Appeal overturned the High Court’s decision and ruled that Marks & Spencer were not entitled to a refund of rent paid in advance where the lease had been terminated mid-quarter pursuant to a tenant’s break clause. The Supreme Court has given Marks & Spencer leave to appeal, meaning that we should receive  welcome clarity from the highest court in the land as to how rent paid in advance should be treated in such circumstances. In the meantime, however, landlords and tenants are back in limbo.

Insolvent tenants

In the Game Station case, discussed in the spring 2014 edition of this newsletter, the Court of Appeal departed from the approach previously taken by the courts and ruled that rent is payable as an expense of the administration for any period that the administrator makes use of the property, regardless of whether the rent fell due before or after the commencement of the administration. The Supreme Court has refused leave to appeal in this case, leaving the Court of Appeal’s decision as the approach to follow when a tenant enters administration.