This case looks likely to become the leading authority on implied terms, break clauses and the apportionment of rent paid in advance.
Shoppers often seek refunds from Marks & Spencer. In this case, the retail chain attempted to recover an overpayment of rent from their landlord. In 2012, M&S exercised a break clause to bring a business lease in Paddington Basin to an end. The break date was on 24 January 2012 in the middle of a rent quarter. M&S paid the rent for the whole of the December 2011 quarter to 24 March 2012. They then sought the repayment of the rental sum from 25 January 2012 to 24 March 2012 when they did not use the property. M&S maintained that a term providing for the return of this sum could be implied into the lease.
The Supreme Court disagreed though. In its judgment, the Supreme Court considered the law on implying terms into contracts and reiterated that a term would not be implied into a commercial contract just because it appeared fair to do so. This means that where a tenant breaks a lease in the midst of a quarter, the landlord can keep the whole quarter’s rent. In addition, the court upheld that the Apportionment Act 1870 only applies to rent paid in arrears, and not in advance.
Benchmark Solicitors LLP can advise you on bringing commercial leases to an end through exercising break clauses.