Marks and Spencer loses appeal against former landlord BNP Paribas

 
Kasmira Jefford
Follow Kasmira
Marks & Spencer Christmas Sales Expected To Be Disappointing
M&S hoped to claw back rent for the two months when it had already left the building (Source: Getty)

You know that times are tough for retailers when they are prepared to fight for every penny they could put back in the piggy-bank.

Marks and Spencer (M&S) has today lost a long-running battle against its former landlord BNP Paribas after the Supreme Court dismissed its appeal to claw back £1.1m of rent it claims it overpaid.

In July 2011, the high street retailer exercised a break in its leases and served notice on four floors of its former office building, The Point.

M&S was forced to pay an entire quarter's rent and service charges from 25 December despite its leases coming to an end on 25 January. The High Court initially allowed M&S to claw back £1.1m in rent for the period after it had moved out the building.

However BNP Paribas successfully appealed against this decision and M&S lost its appeal in turn today.

Justices at the Supreme Court unanimously rejected M&S's argument that there should be an obligation implied into their lease requiring the landlord to repay rent for the two months when it had left the building, despite the contract being silent on this point.

“Certainty has prevailed in the Supreme Court, and Santa has delivered M&S an early sack of coal rather than a Christmas cracker," Robin Biela, a senior associate in the property litigation team at law firm Nabarro, said.

"The dispute focused on well-established legal principles, and the Supreme Court has unanimously blown the dust off the case books and affirmed the law, rather than changed it. M&S will be disappointed, but the outcome was predictable and emphasises the importance of landlords and tenants clearly documenting their obligations. Otherwise they risk being out of pocket, and with an expensive legal bill,” she added.

Owen Talfan Davies, real estate litigation partner at law firm Fieldfisher, said the decision "has a much wider application as regards what terms the Court may imply into a contract as a matter of necessity", making it more than just a property case.

"This will, of course, be of scant consolation to M&S who, in addition to not receiving a repayment of the rent paid for the period following the termination of leases at their former Paddington Basin offices, will now face a very substantial legal bill".

Related articles