How do the rules relating to mitigation of loss apply to leases? Sebastian Kokelaar explains
In Reichman and another v Beveridge and another [2006] EWCA Civ 1659, [2006] All ER (D) 186 (Dec) a landlord let office premises to two solicitors on a five-year lease. Three years into the term the tenants ceased to practise as solicitors and stopped paying the rent.
The landlord decided not to forfeit the lease, but brought a money claim against the defendants for the accrued arrears of rent. In their defence the tenants argued, among other things, that the landlord should have mitigated his losses by forfeiting the lease and re-letting the premises. The district judge at first instance rejected this argument, as did the circuit judge on the first appeal. The Court of Appeal gave leave for a second appeal on the ground that the case raised an important point of law.
PRINCIPLE IN WHITE
The difficulty faced by the tenants was that the claim against them was not, strictly speaking, a claim for damages, but
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