Allied Dunbar has succeeded in blocking plans by Homebase to underlet a DIY store in Wolverhampton to Lairdale Ltd.
Homebase decided in 1998 to close down its operation and dispose of the unexpired residue of the lease of the premises in Bilston Road, Wolverhampton. However, it claimed that Allied Dunbar, the freehold owner, unreasonably withheld consent for it to underlet.
Allied Dunbar, on the other hand, claimed that it was entitled to withhold its consent to the underlease, as Homebase, in granting it, had not complied with certain provisos in the lease. Those provisos included a requirement that the rent should be reviewed to the full market rent in 2005.
Backing Allied Dunbar, Deputy Judge Bernard Livesey QC said he considered that the rent review provisions in the proposed underlease did not show the necessary intention that the rent should be reviewed in the way required by the proviso.
He said the review provision was “clearly intended so far as the parties to it were concerned to be fictional and nominal”.
Allied Dunbar Assurance plc v Homebase and another Chancery Division (Mr Bernard Livesey QC, sitting as a deputy judge of the division) 11 April 2001
Michael Barnes QC and Tiffany Scott (Instructed by Nabarrow Nathanson) appeared for the claimant; John McDonnell QC and Gerard van Tonder (instructed by Russell Jones & Walker) appeared for the defendant.
PLS News 17/4/01
