The Supreme Court has today unanimously rejected a legal appeal by Marks & Spencer following a long-running dispute with its former landlord BNP Paribas.
The Court has judged that M&S was not entitled to claim back rent it paid to BNP Paribas for two months after it had vacated its head office at The Point in Paddington, London.
M&S had paid rent in advance for the full first quarter of the year, ending March 23 2012, but vacated the property in January. In July the previous year it had served a full break notice on BNP, and honoured the break premium payment when it left the store.
In May 2013 the High Court found in favour of M&S, a ruling that was later overturned prompting the retailer to go to the Supreme Court for today’s final decision.
Writing in Retail Week in 2013, commercial property solicitor Chris Alexander said the ruling had “opened the door” for former tenants to make similar claims over payments made after shops had been vacated.
The subsequent appeals have been keenly followed by commercial property observers, with today’s ruling likely to stand as a landmark moment in providing clarity over a long-disputed area of lease law.
Retailers have argued that landlords should be forced to reimburse tenants in circumstances where they have paid in advance on property they have since vacated.
However Jane Fox-Edwards of Allen & Overy, which represented BNP, said today’s decision had “firmly shut that door”.
Commenting on the case, Helen Wheddon, partner at Stevens & Bolton, said: “The Supreme Court has given a clear re-statement of the current law. Although the decision may appear harsh on tenants, landlords will be pleased that the courts will think long and hard before re-writing leases freely negotiated between the parties.”
A Marks & Spencer spokeswoman said: “We are naturally disappointed with the outcome but accept the decision. It wouldn’t be appropriate for us to comment further”.