The recent case of West End Commercial Limited v London Trocadero (2015) LLP  covered various interesting legal issues ranging from the correct service of notices to tax evasion.
It concerned a letting at the famous shopping centre where the owner granted a licence to occupy a retail unit at an annual licence fee of £1.5m plus VAT per annum. The licence contained a provision permitting the owner to terminate it at any time on 30 days' notice. When the owner terminated the licence, shortly after entering into it, the licensee sought an injunction on the basis that the owner's agent had assured the licensee that the break right would not be exercised while it continued to pay the licence fee, something which was not stated in the Licence document itself (an estoppel argument based on reliance on the agent's representations). At the time of the grant, neither party had instructed solicitors, so it was very difficult to prove what had or had not been discussed between the agent and licensee.
Whilst the licensee did manage to get a short term injunction to keep trading, on a more detailed hearing, it was held that an estoppel argument had not been made out by the licensee and the injunction was discontinued.
The case serves as a reminder that:
- Although licences to occupy are often treated as less formal documents than leases, they are contracts and should be treated with the same caution as a lease, particularly when large sums are at stake. Both parties should have legal advice and have the terms carefully explained to them;
- Where there is no tangible evidence to the contrary, a claim that representations were made which have been replied upon to a tenant's detriment may be sufficient to cause delay and frustration to a landlord. To avoid the risk of litigation, contemporaneous notes of meetings between parties should be made and confirmation emails sent to set out what has been discussed/agreed;
- It is always worth including a total agreement/non-reliance clause in any document which makes it clear that the document incorporates all of the terms, and there have been no representations made by either party which are to be relied upon.