Tindall Cobham 1 Ltd & Ors v Adda Hotels (An Unlimited Company) & Ors

Tindall Cobham 1 Ltd & Ors v Adda Hotels (An Unlimited Company) & Ors

Clause 3.14.6(b) of the leases, which required the tenant to procure a continuing guarantee from the existing guarantor on assignment to an associated company, is void under section 25 of the Landlord and Tenant (Covenants) Act 1995. The entire proviso to clause 3.14.6 is invalidated, leaving a simple qualified covenant against assignment. The landlords cannot require a new guarantor as a condition of consent to assignment to an associated company.

Parties
Appellants: Tindall Cobham 1 Limited & Others; Respondents: Adda Hotels (An Unlimited Company) and Others
Jurisdiction
England and Wales
Judgment Date
05 September 2014
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal
Outcome
Appeal dismissed in part; judge's order varied
Legal Topics
Assignment of Leases, Guarantees, Anti Avoidance Provisions, Interpretation of Lease Covenants
Landlord and Tenant Law Contract Law Assignment of Leases Guarantees Anti Avoidance Provisions Interpretation of Lease Covenants

Case Brief

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Parties

Tindall Cobham 1 Limited & Others

Appellants

Adda Hotels (An Unlimited Company) and Others

Respondents

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal

Legal Issues

  1. 1 Whether clause 3.14.6(b) of the hotel leases is invalidated by section 25 of the Landlord and Tenant (Covenants) Act 1995
  2. 2 Whether the landlord can require a new guarantor on assignment to an associated company
  3. 3 Proper construction of clause 3.14.6 in light of the 1995 Act

Ratio Decidendi

Clause 3.14.6(b) of the leases, which required the tenant to procure a continuing guarantee from the existing guarantor on assignment to an associated company, is void under section 25 of the Landlord and Tenant (Covenants) Act 1995. The entire proviso to clause 3.14.6 is invalidated, leaving a simple qualified covenant against assignment. The landlords cannot require a new guarantor as a condition of consent to assignment to an associated company.

Court Disposition

Appeal dismissed in part; judge's order varied

Orders

  • Sub-paragraphs 1(b)-(e) of the judge's order deleted
  • Otherwise, the appeal is dismissed