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Make or break

29 January 2016 / Donald Lambert , Elisabeth Mason
Issue: 7684 / Categories: Features , Property
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Donald Lambert & Elisabeth Mason examine the implication of contract terms & apportionment of rent

The Supreme Court has unanimously dismissed Marks & Spencer plc’s (M&S) appeal in Marks & Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and another [2015] UKSC 72, [2015] All ER (D) 24 (Dec). This decision confirms the approach that courts must take to imply contract terms and has significant implications for commercial landlords and tenants (see futher “Back on the buses”, J Sutherland & J Petrenko, NLJ , 1 & 8 January 2016, p 11).

Facts of the case

BNP granted M&S four sub-leases of different floors in an office building in Paddington. M&S had the benefit of break clauses enabling it to determine the leases on two possible break dates. Two conditions applied:

  1. that there be no arrears of rent on the break date; and
  2. that M&S pay the sum of £919,800 plus VAT (applicable only on the first break date).

M&S exercised the first break and, following determination of the leases,

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