The Supreme Court has dismissed M&S's claim for repayment of rent paid in advance which related to a period after the termination of its lease.
M&S's claim arose out of its operation of a break clause in a number of leases under which it had paid a full quarter's rent, on top of a break premium of nearly £1m (as discussed in our previous tip in April). M&S argued that the Court should imply a term into the leases that would enable it to recover an apportioned sum for the period from the break date up until the next quarter day (rent the landlord argued was payable although the lease had been ended by the break).
The Supreme Court rejected this because the law remained clear:
- None of the rules for apportionment of rent applies to rent payable in advance; and
- The courts will only imply a term when it satisfies the test of business necessity or is "so obvious it goes without saying".
The Court was emphatic that it would be wrong to imply such a term into a "full and professionally drafted lease" which had been "negotiated and drafted by expert solicitors".
The judgement reinforces the point that a professionally drafted and negotiated lease must attempt to cover every contingency that might arise during its lifetime, and where there is dispute over its meaning the courts will be likely to apply the words actually used, not the words the parties might like to imply with the benefit of hindsight.