M&S’ victory, for a £1.1m rents refund following exercise of a break clause, has been short lived following an appeal by their landlord, BNP Paribas Securities Services, which went in the landlord’s favour.
We reported in March on M&S’ success in arguing that, in the absence of an express refund provision, M&S should be entitled to a refund of rents and other charges for the period following a break date in their lease of premises at The Point, Paddington.
The landlord appealed that decision and the Court of Appeal has now overturned the previous decision meaning that M&S are not entitled to a refund.
The earlier case was considered to be contrary to previous case law and may have been an indication that the courts are willing to import some commercial interpretation into break clauses (which otherwise require strict compliance).
The latest case takes us back to the position that an express refund clause is required otherwise a landlord is entitled to retain monies paid for the period after the break date. A potentially harsh position if a break date falls shortly after a quarter day!