Clarence House Ltd v National Westminster Bank Plc

By executing the Virtual Assignment, the Defendant parted with or shared possession of the Property with New Liberty, in breach of the alienation covenants in the Lease, as the arrangement transferred all economic benefits and burdens and the right to manage dealings with the landlord and undertenant, amounting to a sharing or parting with possession.

Parties: Claimant: Clarence House Limited; Defendant: National Westminster Bank PLC
Jurisdiction: England and Wales
Judgment Date: 23 January 2009
Procedural Posture: Civil / Trial of Preliminary Issue of Liability
Outcome: Liability established for breach of alienation covenants; inquiry into damages ordered.
Legal Topics: Alienation Covenants, Virtual Assignment, Leasehold, Breach of Covenant

Property Law Landlord and Tenant Law Alienation Covenants Virtual Assignment Leasehold Breach of Covenant

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Parties

Clarence House Limited

Claimant

National Westminster Bank PLC

Defendant

Procedural Posture

Civil / Trial of Preliminary Issue of Liability

Legal Issues

1 Whether entering into a virtual assignment of leasehold premises constitutes a breach of alienation covenants in the lease

Ratio Decidendi

Court Disposition

Liability established for breach of alienation covenants; inquiry into damages ordered.

Orders

Declaration that the Defendant acted in breach of the alienation covenants in the Lease by entering into the Virtual Assignment.
Inquiry into damages directed.