Marks & Spencer Loses Ground-Breaking Landlord and Tenant Case

Dec 8th, 2015

Marks and Spencer has lost a legal battle over a rent dispute with their former landlord BNP Paribas. In July 2011, the well-known retailer served a break notice on four floors of its then office building in Paddington. M&S then paid rent and service charges for 3 months from December 2011, despite the fact that the lease came to an end in January 2012. M&S sought to recover the £1.1m in rent paid for the period that they were no longer in occupation.

The Case Escalated to the Supreme Court

The store succeeded in its initial appeal to the High Court, who ruled that a term should be implied into the lease which allowed M&S to recover the money. BNP challenged this decision and the Court of Appeal judgment found in their favour. The case escalated all the way to the Supreme Court, who unanimously dismissed M&S’s second appeal on the basis of maintaining the status quo that if parties had intended rent to be apportioned it would have been expressly provided for in the lease.

Wider Implications

The judgment delivered greater certainty in relation to the liability to pay rents at the end of a lease, but the decision is not purely an unwelcome reminder of the established position for tenants. The Supreme Court’s approach reflects that, in a wider sense, the Court is unwilling to imply terms into a contract unless they satisfy the test of business necessity whereby the term is so obvious that it goes without explicit inclusion.

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