Re Teathers Limited (In Liquidation) also known as Baroque Investments Ltd v Heis [2012] EWHC 2886 (Ch)

Baroque let a property to Teathers. The lease contained the usual covenants requiring Teathers to keep the premises in repair and yield them up in repair at the end of the term. Baroque subsequently granted a licence permitting alterations to the property on condition that they be reinstated before the end of the term. Teathers went into liquidation and Mr Heis was appointed as liquidator. The parties then entered into a surrender of the lease releasing Teathers from its obligations and from all liability arising in relation to any breach on or after the date of surrender. Baroque subsequently brought a dilapidations claim, which the liquidator rejected.

The court found in favour of the liquidator. Insofar as reinstatement of alterations was concerned, the licence clearly gave Teathers the full remaining term in which to carry out the reinstatement works so they could only be in breach at the end of the contractual term not at the date of the surrender. In relation to disrepair, although Teathers remained liable for any failure to keep the premises in repair prior to the date of surrender, the liquidator had been entitled to reject the claim as Baroque had not followed the process required by section 18 of the Landlord and Tenant Act 1927.