Avocet Industrial Estates LLP
Avocet instructed Clarke Willmott in relation to industrial units on its trading estate in Gloucester where a tenant and guarantor had exercised an option to terminate their lease early. There were complications because of pre-conditions which needed to be satisfied to validate the break notice.
- The tenant tried to terminate its lease early pursuant to a break clause and served notice. For the notice to be effective, the tenant needed to have paid ‘all sums’ due by the break date. There were no rent arrears owing.
- Some rent had however been paid late in the past, on which default interest was due even though that interest had not been demanded. The tenant did not pay it by the break date.
- The High Court decided that the break was ineffective as the tenant had failed to pay a small amount of default interest. The landlord had not waived that interest by not demanding it.
- Avocet was therefore entitled to substantial rent arrears, continuing until the end of the lease, interest and legal costs.
- The tenant and its guarantor tried to overturn the High Court decision in the Court of Appeal but their appeal was disposed of (on confidential terms). The High Court decision still stands.
- The tenant and guarantor’s claim for rectification of the lease was abandoned.
- Avocet achieved everything it had claimed in the High Court, and the lease continued in force, with the tenant and guarantor remaining liable.
- This included immunity from business rates for Avocet.
- The confidentiality clause agreed in the Court of Appeal precludes us from disclosing details of the settlement reached to conclude matters.