QFS Scaffolding v Sable [2010] EWCA 682  

Mr Sable granted a lease of a building yard to L Limited, who carried on two businesses at the yard. L Limited was placed into administration and QFS was then formed, with a view to it acquiring one of the businesses from L Limited. Sable and QFS entered into negotiations for the grant of a new lease but no agreement was reached. The administrators of L Limited then executed a deed of assignment, purporting to assign L Limited’s lease to QFS. Mr Sable sought possession of the yard, arguing that the original lease to L Limited had been surrendered by operation of law as a result of the negotiations for the new lease and that QFS occupied as a tenant at will only.  

The Court of Appeal held that there had been no surrender by operation of law. Although a surrender would have occurred on the grant of a new lease to QFS, mere negotiations for a new lease would not have this effect. In the absence of unequivocal conduct by L Limited evidencing an intention to surrender, there would be no implied surrender and the lease to L Limited remained in existence. It was accordingly L Limited and not Mr Sable who was entitled to possession of the premises.