Notice to break clause

Citation

(1999), "Notice to break clause", Property Management, Vol. 17 No. 2. https://doi.org/10.1108/pm.1999.11317bab.005

Notice to break clause

Notice to break clause

Lemmerbell Ltd v. Britannia LAS Direct Ltd [1998] 48 EG 188

In this case, the need for accuracy in the drafting and service of notices was emphasised. In brief, premises were let to a company referred to in the law report as ‘‘Direct’’. The leases provided that if the lessee wished to terminate the leases at the end of the fifth year of the term, then the lessee ‘‘... shall give to the Lessor not less than six months nor more than twelve months previous written notice of such desire [and] then the Lessee shall upon that date deliver to the Lessor vacant possession of the whole of the Demised premises and on such date the present demise shall cease and be void ...’’

In fact, although the lessee did wish to terminate the lease as part of a restructuring or rationalisation of its business, the requisite notices were served not by the lessee ‘‘Direct’’ but by solicitors acting for ‘‘Life’’, an associated company which had apparently shared the use of the premises with the lessee for some part of the time that the premises had been let, ‘‘Life’’ being referred to in the notices as being the successor in title of ‘‘Direct’’. In fact, no assignment of the leases from ‘‘Direct’’ to ‘‘Life’’ had ever taken place, and the landlords claimed that the notices purporting to exercise the break-clauses were therefore invalid. The Court of Appeal agreed: ‘‘Life’’ was not the lessee, nor were the circumstances such that ‘‘Life’’ could be regarded as the general agent of ‘‘Direct’’ with authority to serve the notice on its behalf. The lease therefore had not been validly terminated, and remained vested in the lessee.

As to the effect of the failure of the mesne tenant to respond by counter-notice to a notice to quit served by the head landlord, in a consensual scheme aimed at depriving the occupying sub-tenant of his agricultural holding, see Berrett v. Morgan [1998] 50 EG 87, where the Court of Appeal effectively treated the transaction as if it were a surrender of the mesne tenancy, which therefore did not have the effect of determining the sub-tenancy.