Our client, Mayfair restaurant Hush, has won a High Court battle with its landlord over an option to extend its lease.
The case centred on whether the option to extend the lease by five-and-a-half years can be reinstated by the court after it was terminated by the freeholder during the pandemic. Under the terms of the option deed, the option can be forfeited in the event of non-payment. During the pandemic, the restaurant fell into rent arrears. The landlord forfeited the option deed but did not forfeit the lease. Instead, the landlord waived some of the rent and allowed it to be paid off in instalments.
At a hearing last month, Mishcon de Reya, lawyers for Lancashire Court-based Hush asked High Court judge Jonathan Klein to reinstate the option, arguing that, like the lease, in this situation a court can grant ‘relief from forfeiture’. In a ruling handed down on 1 December, the judge agreed. In his ruling, the judge found that the option “is capable of giving the option holder an interest in the land”, which both sides agreed was necessary for the claim to succeed.
Property Litigation Partner Mark Reading commented: "This important decision has confirmed that the court does have jurisdiction to consider whether relief from forfeiture should be granted in relation to an option to take a new lease. The court agreed with the claimant that the option conferred proprietary rights and that these came into effect when the option was granted, rather than the commencement of the period when the option could be exercised. We at Mishcon are thrilled at the court's decision, which will allow Hush to continue trading successfully from the premises into the next decade."
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