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Understanding Alienation in Commercial Leases: Key Principles and Case Law

This presentation delves into the complex concept of alienation within commercial leases, exploring terminology such as assignation, sub-letting, and shared occupation. It examines the stages of consent, common law principles, and the landlord-tenant relationship, highlighting the importance of not unreasonably withholding consent for alienation. Key cases such as Muir v. Wilson and International Drilling Fluids Limited v. Louisville Investments signify critical legal precedents. The presentation outlines potential remedies, conditions for refusal, and the implications of unreasonable conditions in lease agreements.

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Understanding Alienation in Commercial Leases: Key Principles and Case Law

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Presentation Transcript

  1. BurnessEdinburgh \ Glasgow Alienation Presentation by Lionel Most 10 March 2011

  2. Alienation • Nomenclature • Alienation • Assignation • Sub-letting • Licence • Franchisee • Shared Occupation

  3. Alienation • Stages of Consent • Common Law • Contracting out • No Consent needed • Absolute Prohibition • Consent not to be unreasonably withheld

  4. Alienation • Historical Background • The capricious landlord • Muir v Wilson • English background

  5. Alienation • Meaning • Reasons for refusal • Differences with England

  6. Alienation • The Renfrew District Council Case • Conditions • Arrears • Additional review • Repairing clause • Review pattern • English Authorities

  7. Alienation • Commercial Benefit • Relationship of Landlord and Tenant • International Drilling Fluids Limited v Louisville Investments (Uxbridge) Limited • Bromley Park Gardens Estates Limited v Moss • Damages • Two basic things • The assignee can pay and perform • Unreasonable condition tantamount to a refusal

  8. Alienation • Lousanda & Co Limited v SE Lesser (Properties) Limited • Remedy available • Arising from the lease • Existing breach • Mutuality principle • Allied Dunbar Assurance plc v Superglass Sections Limited

  9. Alienation • Burden of Proof • Iqbal v Thakrar

  10. Alienation • Inadequate covenant • Continvest v Dean Property Partnership • Landlord Protect Limited v Dolman • NCR Limited v River and Portfolio No.1 Limited

  11. Alienation • Follow the rule book • Scottish Tourist Board v Deanpark Limited

  12. Alienation • Alternative Motive • Change of use • Ashworths Fraser Limited v Gloucester City Council • Competition with own business • Sport Offer Limited v Erewash Borough Council • Sergeant v Macepark (Whittlebury) Limited

  13. Alienation • Rental Levels • Clinton Cards (Essex) Limited v Sun Alliance & London Insurance

  14. Alienation • Alternative Remedies • Scotmore Development Limited v Anderton • Root of the contract • Recission • Standard Property Investment Limited v Scottish Provident Limited

  15. Alienation • Sublease consent • Sears Properties Netherlands BV v Coal Pension Properties Limited

  16. Alienation • Summing up • Unreasonable conditions equivalent to refusal • Unreasonable to refuse for commercial benefit • Reason must arise out of lease • Unreasonable where assignee can pay and perform • Normal remedy is damages but some times recission • Breach of use clause or prejudice of landlord’s business • Landlord’s prevention of assignation of sub-let

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