Donald Lambert discusses not just any break clause, but an M&S break clause
In Marks & Spencer Plc v BNP Paribas [2014] EWCA Civ 603, [2014] All ER (D) 147 (May), Marks & Spencer Plc (M&S) held leases of four floors of offices in Paddington. The leases ran until 2 February 2018 but M&S had the benefit of break clauses in all of the leases operable as at 24 January 2012 or 24 January 2014.
The break clauses were subject to a number of conditions, the most important of which were:
- on the break date there were to be no arrears of the basic rent; and
- to exercise the 2012 break, the tenant was also to make a payment to the landlord of approximately £900,000 plus VAT “on or prior to” the break date (the break sum).
The break sum was approximately the basic yearly rent for one floor. Clearly the tenant would save substantial sums by correctly operating the break clauses.
M&S made all payments required to exercise the breaks including paying a full quarter’s rent due on the quarter
