The High Court has made it clear that common sense should prevail in cases where an obviously mistaken and meaningless clause is included within a lease.
The pointer from Pumfrey J came in a case in which a landlord successfully blocked moves by a tenant to implement a break clause to terminate a lease. The landlord argued that the tenant had failed to comply with the terms of the lease, which formed a condition precedent to the operation of the break clause.
The lease stipulated that the tenant could terminate the lease by giving nine months’ notice, provided that all obligations had been complied with up to the date of the break clause.
However, the lease went on to include a clause that read, “in either case the term shall cease on that date”.
Pumfrey J has ruled that the term was “meaningless” as far as the break clause was concerned, that it had been erroneously included in the lease, and that it could be safely disregarded.
He ruled that, upon a true construction of the lease, it was a condition precedent to the break clause that the tenant complied with all its obligations and that, in this case, the tenant had not done so. The landlord claimed that the tenant had failed to comply with repairing obligations.
The judge said that the tenant had substantially breached its obligations, and that its purported exercise of the break was therefore ineffective.
Grainger Trust plc v Micros-Fidelio UK Ltd Chancery Division (Pumfrey J) 19 March 2003.
References: PLS News 20/03/03
