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

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

Clause 3.5(iii) of the Agreement is void as it frustrates the operation of section 24(2) of the 1995 Act by requiring a guarantor to guarantee the liability of an assignee, contrary to the Act's purpose. Clause 3.15(F) of the Lease does not operate as a stand-alone provision and does not exclude the requirements of...

Source-derived case information.

Parties
Claimant: K/S Victoria Street; Defendant: House of Fraser (Stores Management) Limited; Defendant: House of Fraser (Stores) Limited; Defendant: House of Fraser Limited
Jurisdiction
England and Wales
Judgment Date
27 July 2011
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Assignment of Leases, Guarantees, Anti Avoidance Provisions, Authorised Guarantee Agreements (agas), Interpretation of Lease Covenants
Landlord and Tenant Law Contract Law Assignment of Leases Guarantees Anti Avoidance Provisions Authorised Guarantee Agreements (agas) Interpretation of Lease Covenants

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Parties

K/S Victoria Street

Claimant

House of Fraser (Stores Management) Limited

Defendant

House of Fraser (Stores) Limited

Defendant

House of Fraser Limited

Defendant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether clause 3.5(iii) of the Agreement is void under section 25(1) of the Landlord and Tenant (Covenants) Act 1995
  2. 2 Whether clause 3.15(F) of the Lease allows free assignment back to the tenant without compliance with other provisions

Ratio Decidendi

Clause 3.5(iii) of the Agreement is void as it frustrates the operation of section 24(2) of the 1995 Act by requiring a guarantor to guarantee the liability of an assignee, contrary to the Act's purpose. Clause 3.15(F) of the Lease does not operate as a stand-alone provision and does not exclude the requirements of clause 3.15(E); thus, an assignment back to Management would still be subject to the financial standing requirements in clause 3.15(E).

Court Disposition

Appeal dismissed

Orders

  • Clause 3.5(iii) of the Agreement is void and unenforceable.
  • Clause 3.15(F) of the Lease does not exclude the application of clause 3.15(E); assignments must comply with both.