K/S Victoria Street v House of Fraser (Stores Management) Ltd & Ors

K/S Victoria Street v House of Fraser (Stores Management) Ltd & Ors

The assignment restrictions in clause 3.15 of the lease operate cumulatively, and subclause F only exempts the need for landlord's consent, not the other requirements. Therefore, the threatened assignment would breach clause 3.15, as it would not comply with the financial standing requirements of E and possibly C(i). The commercial purpose of clause 3.5 of the sale agreement supports this interpretation, as it was intended to ensure the lease ended up with a financially sound company, not to allow free intra-group assignments regardless of covenant strength.

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
Civil / Determination of Preliminary Issues
Outcome
Preliminary issues determined in favour of the claimant
Legal Topics
Lease Assignment, Alienation Restrictions, Specific Performance, Interpretation of Contractual Clauses
Property Law Contract Law Lease Assignment Alienation Restrictions Specific Performance Interpretation of Contractual Clauses

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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

Civil / Determination of Preliminary Issues

Legal Issues

  1. 1 Whether the threatened assignment would breach clause 3.15 of the lease
  2. 2 Whether the assignment and immediate reassignment would breach clause 3.5 of the sale agreement
  3. 3 Proper construction of clause 3.15 (particularly subclauses C, D, E, F)

Ratio Decidendi

The assignment restrictions in clause 3.15 of the lease operate cumulatively, and subclause F only exempts the need for landlord's consent, not the other requirements. Therefore, the threatened assignment would breach clause 3.15, as it would not comply with the financial standing requirements of E and possibly C(i). The commercial purpose of clause 3.5 of the sale agreement supports this interpretation, as it was intended to ensure the lease ended up with a financially sound company, not to allow free intra-group assignments regardless of covenant strength.

Court Disposition

Preliminary issues determined in favour of the claimant

Orders

  • Threatened assignment restrained as it would breach clause 3.15 of the lease