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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Legal & General Assurance Society Ltd v Expeditors International (UK) Ltd  EWCA Civ 7 (24 January 2007)
Cite as:  EWCA Civ 7
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
MR JUSTICE LEWISON
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE SEDLEY
LORD JUSTICE LLOYD
| LEGAL AND GENERAL ASSURANCE SOCIETY LTD
|- and -
|EXPEDITORS INTERNATIONAL (UK) LTD
WordWave International Ltd
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7421 4040 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Timothy Dutton (instructed by Druces & Attlee) for the Respondent
Crown Copyright ©
Lord Justice Lloyd:
"6.10 Tenant's option to determine
6.10.1 The Tenant may determine this Lease on 30 December 2004 by giving to the Landlord not less than six months' prior written notice to that effect, if:
18.104.22.168 the Tenant has paid the yearly rent reserved by this Lease and substantially performed and observed the Tenant's material covenants up to the date of expiry of the notice; and
22.214.171.124 on the expiry of the notice the Tenant delivers up to the Landlord the whole of the Premises with vacant possession.
6.10.2 On the expiry of the notice and subject to the observance and performance of the conditions in clause 6.10.1, the Term will cease and terminate, but without prejudice to the rights and remedies of one party against the other in respect of any antecedent breach of covenant.
6.10.3 Time is of the essence as to all the dates and periods referred to in this clause 6.10."
The lease was excluded from the protection of Part II of the Landlord and Tenant Act 1954. It is not necessary to refer to any other provision in the lease.
"1.1 Our instructions were to prepare a Photographic Schedule of Condition on Unit 15, Units 16 and 17 Heathrow International Trading Estate, Green Lane, Hounslow. The schedule has been prepared as part of the full and final settlement of the Dilapidations Claims and Lease Breaks under the terms of the Leases for the respective Units as agreed under correspondence between the Landlord Legal and General Assurance Society Limited and the Tenant Expeditors International (UK) Limited."
A. This deed is supplemental to the Lease.
B. The Landlord has inspected the Premises.
C. The inspection has revealed that the Tenant is in breach of the covenants in the Lease relating to repair.
D. The parties have agreed to resolve this dispute on the terms set out in this Deed."
"2. In consideration of £172,000 (exclusive of value added tax) paid by the Tenant to the Landlord and the Tenant's covenant in clause 4 the Landlord releases the Tenant absolutely from its liabilities, covenants and obligations past and present under the Lease so far as the same relate to the state and condition of the Premises."
"4. The Tenant covenants with the Landlord that it will keep the Premises in no worse a state and condition than they were in as at 24 August 2004 as evidenced by the schedule of condition prepared by Telling Associates and annexed to this Deed."
As indicated in clause 4, the agreed schedule of condition dated 24 August 2004 was annexed to the deed. The other clauses dealt with confidentiality, and what one might call lawyers' points about jurisdiction, choice of law and third parties.
"I accept therefore Mr Dutton's primary submission that it was an implied term of the Settlement Agreement that the landlord waived the right to rely on the remaining conditions of the break clause in order to defeat the notices already served."
"The landlord's stance is, I infer, based simply on a desire to defeat the exercise of a break and to continue to receive a rent of £344,000 a year in a weak market."
Lord Justice Sedley
Sir Anthony Clarke, MR
"The works of reinstatement and repair now need to be actioned by you as tenant of the Property. If these works are not actioned our client reserves the right to make a claim for damages or (under clause 3.24 of the Lease) to execute such works and reclaim the costs of these works."
It is right to say, as Mr Fetherstonhaugh observed in his reply, that clause 3.24 does not give the landlord a right of entry in respect of works of reinstatement. The Schedule was entitled "Schedule of Dilapidations Reinstatement".
"Should a financial settlement be reached then the works will need to be undertaken by [the landlord] and they will be unable to market the property during this period. I have, therefore, included as part of the claim a contribution towards the rent during this period."
He concluded by saying that he was therefore willing to recommend the landlords to accept a total sum of £178,502.18 in lieu of the tenant undertaking the works.
"2. In consideration of £172,000 paid by the Tenant to the Landlord and the Tenant's covenant in clause 4 the Landlord hereby releases the Tenant absolutely from its liabilities, covenants and obligations past and present under the Lease so far as the same relate to state and condition of the premises.
4. The Tenant covenants with the Landlord that it will keep the premises in no worse a state and condition than they were in as at 24 August 2004 as evidenced by the schedule of condition prepared by Telling Associates and annexed to this Deed."
"The Schedule has been prepared as part of the full and final settlement of the Dilapidations Claims and Lease Breaks under the terms of the Leases for the respective Units as agreed under correspondence between the Landlord and the Tenant "
This Schedule forms part of the Agreement and is thus a relevant and admissible document in any exercise of construction of the Agreement or in a determination of the question whether any and, if so what, term should be implied into the Agreement.