Edlington Properties Ltd v J H Fenner & Co Ltd

Edlington Properties Ltd v J H Fenner & Co Ltd

A tenant cannot set off, against rent falling due after the transfer of the reversion, a claim for damages arising out of a breach by the original landlord of the lease or the agreement pursuant to which the lease was granted, unless the lease specifically provides for such a right. The lease and building agreement in this case did not contain sufficiently clear words to exclude set-off, but since no right of set-off exists in principle after assignment, the exclusion issue is moot. For insurance rent, the tenant must demonstrate a lower quotation before the relevant insurance period commences.

Parties
Claimant/respondent: Edlington Properties Limited; Defendant/applicant: J H Fenner & Co Limited
Jurisdiction
England and Wales
Judgment Date
22 March 2006
Procedural Posture
Civil Appeal / Judgment on Appeal From Preliminary Issues
Outcome
Appeal dismissed
Legal Topics
Set Off Rights, Assignment of Reversion, Equitable Set Off, Lease Construction, Insurance Rent
Landlord and Tenant Law Property Law Contract Law Set Off Rights Assignment of Reversion Equitable Set Off Lease Construction Insurance Rent

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Parties

Edlington Properties Limited

Claimant/respondent

J H Fenner & Co Limited

Defendant/applicant

Procedural Posture

Civil Appeal / Judgment on Appeal From Preliminary Issues

Legal Issues

  1. 1 Whether a tenant can set off a claim for damages against the original landlord under a building agreement against rent due to a successor landlord after assignment of the reversion
  2. 2 Whether the lease or building agreement excludes the right of set-off
  3. 3 Proper construction of the insurance rent clause and timing for tenant's demonstration of alternative insurance quotation

Ratio Decidendi

A tenant cannot set off, against rent falling due after the transfer of the reversion, a claim for damages arising out of a breach by the original landlord of the lease or the agreement pursuant to which the lease was granted, unless the lease specifically provides for such a right. The lease and building agreement in this case did not contain sufficiently clear words to exclude set-off, but since no right of set-off exists in principle after assignment, the exclusion issue is moot. For insurance rent, the tenant must demonstrate a lower quotation before the relevant insurance period commences.

Court Disposition

Appeal dismissed

Orders

  • Appeal and cross-appeal dismissed
  • No right of set-off against rent due to successor landlord