London Trocadero (2015) LLP v Picturehouse Cinemas Ltd & Ors [2021] EWHC 2591 (Ch) (28 September 2021)

London Trocadero (2015) LLP v Picturehouse Cinemas Ltd & Ors [2021] EWHC 2591 (Ch) (28 September 2021)

The leases do not permit the implication of terms suspending rent during periods of Covid-19 restrictions, as such terms are neither necessary for business efficacy nor so obvious as to go without saying, and would be inconsistent with express terms. There has been no failure of basis because the grant of a term of years and possession, not the ability to use as a cinema, is fundamental to the leases. The tenant's inability to use the premises for the intended purpose due to external restrictions does not excuse payment of rent. The set-off claim relating to insurance is not suitable for summary judgment and should proceed to trial.

Citation
[2021] EWHC 2591 (Ch)
Parties
Claimant: London Trocadero (2015) LLP; First Defendant: Picturehouse Cinemas Limited; Second Defendant: Gallery Cinemas Limited; Third Defendant: Cineworld Cinemas Limited
Jurisdiction
England and Wales
Judgment Date
28 September 2021
Procedural Posture
Commercial Landlord and Tenant Dispute (summary Judgment) / High Court Summary Judgment Application
Outcome
Summary judgment granted for the claimant for arrears of rent and service charges, subject to set-off for insurance counterclaim to be determined at trial.
Legal Topics
Implied Terms, Failure of Consideration, Covid 19 Commercial Lease Disputes, Set Off, Summary Judgment
Landlord and Tenant Contract Law Unjust Enrichment Implied Terms Failure of Consideration Covid 19 Commercial Lease Disputes Set Off Summary Judgment

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Parties

London Trocadero (2015) LLP

Claimant

Picturehouse Cinemas Limited

First Defendant

Gallery Cinemas Limited

Second Defendant

Cineworld Cinemas Limited

Third Defendant

Procedural Posture

Commercial Landlord and Tenant Dispute (summary Judgment) / High Court Summary Judgment Application

Legal Issues

  1. 1 Whether rent and service charges are payable under commercial leases during periods when Covid-19 regulations prevented use as a cinema
  2. 2 Whether terms should be implied into the leases suspending rent during periods of illegality or reduced attendance
  3. 3 Whether there has been a failure of basis/consideration justifying non-payment of rent

Ratio Decidendi

The leases do not permit the implication of terms suspending rent during periods of Covid-19 restrictions, as such terms are neither necessary for business efficacy nor so obvious as to go without saying, and would be inconsistent with express terms. There has been no failure of basis because the grant of a term of years and possession, not the ability to use as a cinema, is fundamental to the leases. The tenant's inability to use the premises for the intended purpose due to external restrictions does not excuse payment of rent. The set-off claim relating to insurance is not suitable for summary judgment and should proceed to trial.

Court Disposition

Summary judgment granted for the claimant for arrears of rent and service charges, subject to set-off for insurance counterclaim to be determined at trial.

Orders

  • Defendants to pay arrears of rent and service charges as claimed, less any amount to be determined at trial in respect of the insurance counterclaim.
  • Counterclaim relating to insurance overcharging to proceed to trial.