Marks & Spencer Refunds .

In the recent case of Marks & Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and another [2013] EWHC 1279 (Ch) the tenant, Marks & Spencer Plc (M&S), established that they should not be short changed when they exercised a break clause part-way through a quarter. However, will this apply to all cases? The High Court was on this occasion prepared to imply a term into the lease entitling the tenant to a repayment of the rent from the break date to the end of the quarter. This decision is the first departure from the previously widely accepted view that in the absence of an express provision, a tenant will not be entitled to a refund of any rent or other sums paid that relates to the period after a break date.

Background

A tenant's right to break is often conditional on the payment of all sums due under the lease up to the break date. This condition is surprisingly something which a number of tenants will nevertheless fail to comply with.

The correct advice to a tenant has always been (and still remains) to pay all payments due under the lease in full and then face any difficulties recovering any amount overpaid from the landlord attributable to the period after the break date. However, in the recent M&S case, the Court found in favour of the tenant who, having successfully operated a break, requested a refund of the rent and other payments it had made for the period after the break date.

Facts

M&S was the tenant at The Point building in Paddington under four materially identical leases. Each lease contained the right to break by giving a certain period of notice, subject to there being no arrears of the basic rent on the break date (and payment of a penalty premium equivalent to a years rent on or before that date). Rent under the leases was payable quarterly in advance, in the usual way. Break notices were duly served at the appropriate time, and subsequently, payments of the full quarter's rent, service charge and penalty payments were made.

M&S requested a refund of the sums paid for the period after the break date. The landlords refused this stating that there was no express term in the leases that required this.

The Court rejected M&S's...