Good Harvest Partnership Llp v Centaur Services Ltd [2010] EWHC 330 (Ch) (23 February 2010)

Good Harvest Partnership Llp v Centaur Services Ltd [2010] EWHC 330 (Ch) (23 February 2010)

Section 25 of the Landlord and Tenant (Covenants) Act 1995 invalidates any agreement requiring a guarantor of a tenant to guarantee the obligations of an assignee upon assignment, as this would frustrate the Act's operation by continuing the guarantor's liability contrary to the statutory release provided by section 24. The Guarantee Agreement is therefore void and unenforceable against Centaur.

Citation
[2010] EWHC 330 (Ch)
Parties
Claimant: Good Harvest Partnership LLP; Defendant: Centaur Services Limited
Jurisdiction
England and Wales
Judgment Date
23 February 2010
Procedural Posture
Civil / Summary Judgment Application in the High Court, Chancery Division
Outcome
Claim dismissed
Legal Topics
Guarantees, Assignment of Leases, Landlord and Tenant (covenants) Act 1995, Authorised Guarantee Agreements (aga), Release of Guarantors
Landlord and Tenant Law Contract Law Guarantees Assignment of Leases Landlord and Tenant (covenants) Act 1995 Authorised Guarantee Agreements (aga) Release of Guarantors

Case Brief

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Parties

Good Harvest Partnership LLP

Claimant

Centaur Services Limited

Defendant

Procedural Posture

Civil / Summary Judgment Application in the High Court, Chancery Division

Legal Issues

  1. 1 Whether the Landlord and Tenant (Covenants) Act 1995 precludes a guarantor of a tenant from being required to give a further guarantee in respect of an assignee of the lease
  2. 2 Whether the Guarantee Agreement is void and unenforceable against the guarantor by reason of section 25 of the Act
  3. 3 Whether there is a triable issue as to whether the Underlease was surrendered or further assigned

Ratio Decidendi

Section 25 of the Landlord and Tenant (Covenants) Act 1995 invalidates any agreement requiring a guarantor of a tenant to guarantee the obligations of an assignee upon assignment, as this would frustrate the Act's operation by continuing the guarantor's liability contrary to the statutory release provided by section 24. The Guarantee Agreement is therefore void and unenforceable against Centaur.

Court Disposition

Claim dismissed

Orders

  • Proceedings dismissed; summary judgment refused to Good Harvest