Level Properties Ltd v Balls Brothers Ltd & Anor

Level Properties Ltd v Balls Brothers Ltd & Anor

Clause 3.13.3 and its sub-clauses set out the agreement of the parties as to what alienations are not absolutely prohibited and restrict the circumstances in which a tenant can properly apply for consent to an assignment; they do not set out conditions for giving consent or circumstances in which refusal is deemed reasonable. The rent review clause is to be interpreted such that the open market yearly rent may be determined on the basis of two lettings if that produces a higher figure. The parties are not bound by the expert's determination if it is based on an erroneous interpretation of the lease.

Parties
Claimant: Level Properties Limited; First Defendant: Balls Brothers Limited; Second Defendant: Malcolm Donald Dalgleish
Jurisdiction
England and Wales
Judgment Date
30 March 2007
Procedural Posture
Civil (commercial Lease Dispute) / Judgment on Preliminary Issues
Outcome
Preliminary issues determined in favour of the Claimant on Issues 1 and 2; parties not bound by erroneous expert determination (Issue 3).
Legal Topics
Lease Interpretation, Rent Review, Assignment of Lease, Requirement for Surety, Binding Effect of Expert Determination
Landlord and Tenant Contract Law Property Law Lease Interpretation Rent Review Assignment of Lease Requirement for Surety Binding Effect of Expert Determination

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Parties

Level Properties Limited

Claimant

Balls Brothers Limited

First Defendant

Malcolm Donald Dalgleish

Second Defendant

Procedural Posture

Civil (commercial Lease Dispute) / Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether the landlord can insist on provision of a surety on assignment even if unreasonable to do so under the lease and statute
  2. 2 Proper construction of the rent review clause—whether open market yearly rent is to be determined on the basis of a single letting or two lettings
  3. 3 Whether the parties are bound by the determination of the independent expert (Second Defendant) in whole or in part

Ratio Decidendi

Clause 3.13.3 and its sub-clauses set out the agreement of the parties as to what alienations are not absolutely prohibited and restrict the circumstances in which a tenant can properly apply for consent to an assignment; they do not set out conditions for giving consent or circumstances in which refusal is deemed reasonable. The rent review clause is to be interpreted such that the open market yearly rent may be determined on the basis of two lettings if that produces a higher figure. The parties are not bound by the expert's determination if it is based on an erroneous interpretation of the lease.

Court Disposition

Preliminary issues determined in favour of the Claimant on Issues 1 and 2; parties not bound by erroneous expert determination (Issue 3).

Orders

  • Declaration that the landlord may insist on provision of a surety on assignment as a condition precedent, not as a condition for consent, and only within the limits of the lease.
  • Declaration that the open market yearly rent may be determined on the basis of two lettings if that produces a higher figure.