Avocet Industrial Estates LLP v Merol Ltd & Anor

Avocet Industrial Estates LLP v Merol Ltd & Anor

The tenant's tender of a cheque for the 6 months' rent was sufficient payment due to an implied agreement arising from the parties' course of dealing. However, the tenant failed to pay default interest due on late payments by the break date, and the landlord was not estopped from relying on this failure. Therefore, the tenant did not satisfy all pre-conditions for the break clause, and the break notice was invalid.

Parties
Claimant: Avocet Industrial Estates LLP; First Defendant: Merol Limited; Second Defendant: Tudor Rose International Limited
Jurisdiction
England and Wales
Judgment Date
19 December 2011
Procedural Posture
Commercial Landlord and Tenant Dispute / Judgment After Trial
Outcome
Break notice invalid; lease continues.
Legal Topics
Break Clause, Default Interest, Payment by Cheque, Estoppel, Lease Interpretation
Landlord and Tenant Contract Law Break Clause Default Interest Payment by Cheque Estoppel Lease Interpretation

Case Brief

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Parties

Avocet Industrial Estates LLP

Claimant

Merol Limited

First Defendant

Tudor Rose International Limited

Second Defendant

Procedural Posture

Commercial Landlord and Tenant Dispute / Judgment After Trial

Legal Issues

  1. 1 Whether the tenant validly exercised the break clause in the lease
  2. 2 Whether payment by cheque satisfied the requirement to pay a sum equivalent to 6 months' rent by the break date
  3. 3 Whether non-payment of default interest invalidated the break notice under the lease

Ratio Decidendi

The tenant's tender of a cheque for the 6 months' rent was sufficient payment due to an implied agreement arising from the parties' course of dealing. However, the tenant failed to pay default interest due on late payments by the break date, and the landlord was not estopped from relying on this failure. Therefore, the tenant did not satisfy all pre-conditions for the break clause, and the break notice was invalid.

Court Disposition

Break notice invalid; lease continues.