M&S loses Supreme Court appeal on break clause

I’m sure I’m not the only property lawyer who has been eagerly awaiting the Supreme Court decision in the M&S v. BNP Paribas case following M&S’s defeat at the Court of Appeal earlier in the year. And the judgement is finally in…

Unfortunately for M&S the Supreme Court has backed the Court of Appeal position that M&S are not entitled to a refund of rent for the period after their head office lease was determined pursuant to a break notice.

The court held that it was not necessary to imply a contract term in respect of rent apportionments as the contract still worked without such clause… it just didn’t work in the way M&S wanted it to! As such the long established position remains that rents are only subject to apportionment if they are payable in arrears rather than advance… which is course they never are.

Tenants must continue to ensure that their leases are specifically drafted to include a provision that the landlord will refund any rent attributable to the period after determination if a break right is exercised.

This morning, the Supreme Court — comprising Lords Neuberger, Clarke, Sumption, Carnwarth and Hodge — finally settled the score. And it’s M&S that lost out this time.