The Court Stands Firm On Implied Terms.

In the recent case of Co-operative Bank Plc v Hayes Freehold Ltd (In Liquidation) [2017] EWHC 1820 (Ch), the High Court refused to imply into a deed of surrender a condition precedent that the landlord had obtained its lender's consent. Accordingly, it held that a purported surrender of a lease without the lender's consent was, on the facts, deemed ineffective.

The Facts

In June 2001, Deutsche Bank AG (Deutsche) was granted a 20 year lease (the lease) over a data centre (the Property) in Hayes, Middlesex. In February 2010, Deutsche granted an underlease of the property to Sentrum Hayes Ltd (Sentrum Hayes). Sentrum Holdings Ltd (Sentrum Holdings) acted as a guarantor of the underlease.

In December 2012, the freehold interest in the property was transferred to Hayes Freehold Ltd (Hayes Freehold). Hayes Freehold thereafter charged the freehold interest in the property and the lease to Co-operative Bank Plc (Co-op) and Sentrum Hayes charged its interest as tenant under the underlease to Co-op (the two companies being part of the same group at that stage). The terms of the charges provided that Co-op's prior written consent was required to any surrender of the...