K/S Victoria Street v House of Fraser (Stores Management) Ltd & Ors [2010] EWHC 3344 (Ch) (17 December 2010)

K/S Victoria Street v House of Fraser (Stores Management) Ltd & Ors [2010] EWHC 3344 (Ch) (17 December 2010)

Clause 3.15(F) of the lease only exempts intra-group assignments from the requirement for landlord's consent, not from compliance with the other restrictions in clause 3.15, including the financial and covenant strength requirements. The threatened assignment from Stores to Stores Management would breach these provisions, and the claimant is entitled to restrain such an assignment.

Citation
[2010] EWHC 3344 (Ch)
Parties
Claimant: K/S Victoria Street; First Defendant: House of Fraser (Stores Management) Limited; Second Defendant: House of Fraser (Stores) Limited; Third Defendant: House of Fraser Limited
Jurisdiction
England and Wales
Judgment Date
17 December 2010
Procedural Posture
Chancery Division Preliminary Issues / Judgment on Preliminary Issues Regarding Construction of Lease Provisions
Outcome
Preliminary issues determined in favour of the claimant; threatened assignment would be a breach of the lease.
Legal Topics
Construction of Lease Covenants, Restrictions on Assignment, Specific Performance, Sale and Leaseback Transactions, Guarantees and Sureties, Intra Group Assignments
Property Law Landlord and Tenant Law Contract Law Construction of Lease Covenants Restrictions on Assignment Specific Performance Sale and Leaseback Transactions Guarantees and Sureties +1 more

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Parties

K/S Victoria Street

Claimant

House of Fraser (Stores Management) Limited

First Defendant

House of Fraser (Stores) Limited

Second Defendant

House of Fraser Limited

Third Defendant

Procedural Posture

Chancery Division Preliminary Issues / Judgment on Preliminary Issues Regarding Construction of Lease Provisions

Legal Issues

  1. 1 Whether an assignment of the lease from Stores to Stores Management would breach clause 3.15 of the lease
  2. 2 Whether clause 3.15(F) exempts intra-group assignments from all other restrictions or only from the requirement for landlord's consent
  3. 3 Whether the proposed assignment and immediate reassignment would comply with clause 3.5 of the sale agreement

Ratio Decidendi

Clause 3.15(F) of the lease only exempts intra-group assignments from the requirement for landlord's consent, not from compliance with the other restrictions in clause 3.15, including the financial and covenant strength requirements. The threatened assignment from Stores to Stores Management would breach these provisions, and the claimant is entitled to restrain such an assignment.

Court Disposition

Preliminary issues determined in favour of the claimant; threatened assignment would be a breach of the lease.

Orders

  • Declaration that the threatened assignment would breach clause 3.15 of the lease
  • Claimant entitled to restrain the proposed assignment