Skip to main content

Cookies

We use cookies to help provide a better website experience for you, as well as to understand how people use our website and to provide relevant advertising.

By clicking "I agree", you'll be letting us use cookies to improve your website experience. To find out more or to change your cookie preferences, click "Manage Cookies".

We value your privacy

Like many other websites, our website uses cookies. Cookies are small files placed on your computer when you visit our site. They serve a number of purposes, including ensuring that certain parts of the website work properly, allowing us to understand which areas of our website are the most popular and allowing us to provide more relevant advertising messages. They don't allow us to identify you specifically and no personal data is gathered about you.

If you'd prefer that cookies weren't placed on your computer when you visit our site, you can use the controls below to allow or disallow different types of cookie. Some cookies are essential for the website to work, so they can't be disallowed.

  • These cookies give us anonymised information on how people use our website. We use these cookies to help us tailor our site to meet the needs of our visitors, for example by making sure our most popular pages are easy to find.

  • These cookies serve a number of purposes, such as allowing you to share our content with your friends and social networks. We also use these cookies to provide targeted advertising, so you may see relevant adverts based on the pages you look at on our website.

  • About
  • News & Insights
  • Careers
  • International
  • ESG
0370 1500 100
Dialog that contains search functionality
Irwin Mitchell Logo
  • Personal
    • Personal
    • Personal Home
    • Personal Injury Claims
      • Personal Injury Claims
      • Personal Injury Claims Home
      • Abuse & Criminal Injury Claims
      • Accidents In Public Places Claims
      • Accident At Work Claims
      • Air, Rail & Maritime Claims
      • Asbestos & Mesothelioma Claims
      • Changing Solicitors During a Personal Injury Claim
      • Group Claims
      • Holiday Accidents & Illness Claims
      • Illness Compensation Claims
      • Industrial Disease Claims
      • Injury Types
      • Military Injury Compensation Claims
      • No Win No Fee Personal Injury Claims
      • Personal Injury Claims In Scotland
      • Personal Injury Information
      • How To Claim Compensation For Personal Injury
      • Product Liability Claims
      • Rehabilitation & Medical Care
      • Road Traffic Accident Claims
      • Serious Injury Claims
      • Who Can Help?
      • Support Services
    • Medical Negligence Claims
      • Medical Negligence Claims
      • Medical Negligence Claims Home
      • Cancer Misdiagnosis Claims
      • Birth Injury Claims
      • Cauda Equina Syndrome Claims
      • Cosmetic Surgery Claims
      • Cerebral Palsy Claims
      • Defective Medical Device Claims
      • Dental Negligence Claims
      • Diabetes Claims
      • Fatal Medical Negligence Claims & Inquests
      • GP Negligence Claims
      • Hospital Negligence Claims
      • What Is Medical Negligence?
      • Meningitis Misdiagnosis Claims
      • Failure To Prevent Suicide Claims
      • Misdiagnosis Claims
      • Ophthalmic Negligence Claims
      • Pregnancy & Gynaecology Injury Claims
      • Sepsis Negligence Claims
      • Shrewsbury & Telford Hospital NHS Trust Maternity Care Claims
      • Stroke Misdiagnosis Claims
      • Surgery Compensation Claims
    • Family Law
      • Family Law
      • Family Law Home
      • Divorce Solicitors
      • Prenuptial & Postnuptial Agreement Solicitors
      • Child Abduction Solicitors
      • Civil Partnership Solicitors
      • LGBT+ Family Law Solicitors
      • Unmarried Couples' Rights
      • Divorce Financial Settlement Solicitors
      • Child Arrangement Orders
      • Family Mediation Lawyers
      • Out Of Court Divorce Solicitors
      • Separation Agreement Solicitors
      • Adoption & Surrogacy Solicitors
      • Counselling
    • Wills, Trusts & Estates
      • Wills, Trusts & Estates
      • Wills, Trusts & Estates Home
      • Estate Planning Solicitors
      • Powers Of Attorney
      • Trusts
      • Will Writing Services
      • Will Disputes & Contentious Probate
    • Conveyancing & Property Solicitors
      • Conveyancing & Property Solicitors
      • Conveyancing & Property Solicitors Home
      • Conveyancing Fees Calculator
      • Buying A Property
      • Selling A Property
      • Remortgage
      • Transfer Of Equity
      • Buy To Let
      • Absentee Landlord & Freeholder Tracing Service
      • Freehold Purchase (Leasehold Enfranchisement) Solicitors
      • Lease Extension Solicitors
      • Conveyancing Guide
    • Tax
      • Tax
      • Tax Home
      • Business Tax
      • Inheritance Tax
      • International Tax
      • Professional Negligence
      • HMRC Tax Investigations
      • Tax Disputes & Litigation
      • Tax Residence
      • Tax Returns & Compliance
      • Wealth Structuring
    • Probate
      • Probate
      • Probate Home
      • International Probate
      • Probate Sale Conveyancing
      • What Is Probate & How Does It Work?
    • Will, Trust & Estate Disputes
      • Will, Trust & Estate Disputes
      • Will, Trust & Estate Disputes Home
      • Trust Disputes
      • Inheritance Act Claims
      • Contesting A Will
      • Contentious Probate
      • Pre-Death Agreements
      • Professional Negligence
      • Challenging A Lifetime Gift
      • Financial Abuse
      • Statutory Will Disputes
      • Defending A Contested Will
    • Employment Solicitors
      • Employment Solicitors
      • Employment Solicitors Home
      • Employment Contract Solicitors
      • Employment Disputes
      • Dismissal & Redundancy Solicitors
      • Employment Discrimination Solicitors
      • Employment Lawyers for Legal Expenses Insurance
      • Harassment & Bullying At Work Solicitors
      • Parental & Family Friendly Employment Rights
      • Professional Discipline Solicitors
      • Recruitment & Promotion
      • Senior Executive Employment Lawyers
      • Settlement Agreements
      • Whistleblowing Solicitors
    • Elderly Legal Services
    • Protecting Your Rights
      • Protecting Your Rights
      • Protecting Your Rights Home
      • Actions Against The Police
      • Environmental & Planning Law
      • Assessment & Treatment Unit Solicitors
      • Data Protection Breach Claims
      • Education Law
      • Healthcare & Social Services
      • Human Rights
      • Judicial Review
      • Mental Capacity
      • Motoring Offences Legal Advice
      • Professional Regulation & Discipline
      • Dispute Resolution
      • Legal Aid
    • Immigration Solicitors
      • Immigration Solicitors
      • Immigration Solicitors Home
      • British Citizenship & Naturalisation Solicitors
      • EU & EEA Immigration Solicitors
      • Indefinite Leave To Remain Solicitors
      • Spouse Visa Solicitors
      • Innovator Visa
      • Tier 1 Entrepreneur Visa
      • Permanent Residence Solicitors
      • Tier 1 Investor Visa
      • Business Immigration Solicitors
    • Crime & Investigations
      • Crime & Investigations
      • Crime & Investigations Home
      • Crime
      • Fraud & Financial Crime
      • Court Martial Solicitors
      • Motoring Offences Legal Advice
      • Regulatory Investigations & Enforcement
    • Insolvency
      • Insolvency
      • Insolvency Home
      • Business Restructuring & Insolvency
      • Debt Consultancy
      • Insolvency Disputes & Litigation
    • Court Of Protection
      • Court Of Protection
      • Court Of Protection Home
      • Court Of Protection Deputyship
      • Personal Injury Trusts
      • Court Of Protection Problems & Disputes
      • Healthcare and Social Services
      • Frequently Asked Questions
      • Powers Of Attorney
      • Powers Of Attorney Disputes
      • Statutory Wills And Trusts
    • Agriculture & Rural Business
    • Landed Estates
  • Wealth Management
    • Wealth Management
    • Wealth Management Home
    • Asset Management For Personal Injury
    • Charity & Philanthropy
    • Estate Planning
    • Ethical & Sustainable Investing
    • Financial Planning
    • Intergenerational Wealth Management
    • Investment Management
    • Retirement Financial Planning
    • Succession Planning
    • Tax Planning
  • Business
    • Business
    • Business Home
    • Sectors
      • Sectors
      • Sectors Home
      • Agriculture & Rural Business
      • Consumer & Retail
      • Education
      • Financial & Professional Services
      • Landed Estates
      • Manufacturing
      • Media & Entertainment
      • Real Estate
      • Sport
      • Technology & Communications
    • Banking & Finance
      • Banking & Finance
      • Banking & Finance Home
      • Corporate Banking
      • Funds
      • Leveraged & Acquisition Finance
      • Real Estate Finance
      • Receivables Finance & Asset Based Lending
    • Business Crime
      • Business Crime
      • Business Crime Home
      • Anti-Bribery & Corruption
      • Asset Tracing & Recovery
      • Cartels & Illegal Price Fixing
      • Cybercrime
      • Dawn Raids
      • Deferred Prosecution Agreements
      • Extradition
      • INTERPOL Red Notices
      • Mutual Legal Assistance
      • Private Prosecution
      • Proceeds Of Crime Act
      • Unexplained Wealth Orders
      • Fraud Lawyers
      • Insider Trading & Market Abuse
      • Corporate Internal Investigations
    • Business Immigration
      • Business Immigration
      • Business Immigration Home
      • Business Visitor Visa
      • Innovator Visa
      • Prevention Of Illegal Working
      • Sole Representative Of An Overseas Business
      • Tier 1 Entrepreneur Visa
      • Tier 1 Investor Visa
      • Tier 2 & 5 Sponsor Licence
      • Tier 2 Visa
      • Tier 4 Sponsor Licence
    • Commercial
      • Commercial
      • Commercial Home
      • Commercial Contracts
      • Competition Law
      • GDPR & Data Protection
      • Information Technology
      • Media & Entertainment
      • Sourcing
      • Licensing
      • Notary Public Solicitors
    • Commercial Litigation & Dispute Resolution
      • Commercial Litigation & Dispute Resolution
      • Commercial Litigation & Dispute Resolution Home
      • Banking & Finance Litigation
      • Business Interruption Insurance Lawyers
      • Contract Disputes
      • Commercial Judicial Review
      • Defamation & Reputation Management
      • International & Cross-Border Disputes
      • Litigation Funding
      • Professional Negligence
    • Corporate
      • Corporate
      • Corporate Home
      • Corporate Advisory
      • Equity Capital Markets
      • Mergers & Acquisitions (M&A)
      • Private Equity
    • Costs Team
    • Environmental, Social & Governance
      • Environmental, Social & Governance
      • Environmental, Social & Governance Home
      • Environment
      • Social
      • Governance
      • International
      • ESG Legal Advisory Services
      • Cyber Security
      • Diversity & Inclusion
      • Legislation Library
      • ESG Media Library
      • Sports Sector
      • Manufacturing Sector
      • Real Estate Sector
      • Consumer & Retail Sector
    • Employment Law
      • Employment Law
      • Employment Law Home
      • Business Immigration
      • Employment Contracts, Policies & Procedures
      • Disciplinary & Grievance
      • Employee & Industrial Relations
      • Employment Lawyers for Legal Expenses Insurance
      • Employment Litigation & Dispute Resolution
      • Equality, Diversity & Discrimination
      • Flexible Working Arrangements
      • Health & Safety
      • HR Advice Service - IMhrplus
      • Managing Sickness Absence
      • Pensions
      • Recruitment
      • Restrictive Covenants
      • Restructuring & Redundancy
      • Self Employment, Contractors & Agency Workers
      • Employment Seminars, Training & Updates
      • TUPE
    • In-House Counsel
    • Intellectual Property
      • Intellectual Property
      • Intellectual Property Home
      • Defamation & Reputation Management
      • Copyright Lawyers
      • Design Rights Lawyers
      • Image Rights Lawyers
      • IP Audits
      • Online Marketplace Seller Account Or Listing Suspensions
      • Stopping IP Infringement By Sellers On Online Marketplaces
      • Patent Lawyers
      • Trade Mark Lawyers
      • Trade Secrets Lawyers
    • Legal Helpline
    • Pensions
      • Pensions
      • Pensions Home
      • Employment
      • Managing Death Benefit Trusts
    • Regulatory & Compliance
      • Regulatory & Compliance
      • Regulatory & Compliance Home
      • Road Transport & Operator Compliance
      • GDPR & Data Protection
      • Regulatory Investigations
      • Environment & Safety Regulatory Compliance
      • Financial Services Regulation
    • Real Estate
      • Real Estate
      • Real Estate Home
      • Corporate Occupiers
      • Real Estate Development and Regeneration
      • Construction & Engineering
      • Environmental
      • Real Estate Finance
      • Real Estate Investment
      • Later Living & Care
      • Planning
      • Property Litigation & Real Estate Disputes
      • Real Estate Tax
      • Residential Development
      • Strategic Land
      • Structured Real Estate
    • Restructuring & Insolvency
      • Restructuring & Insolvency
      • Restructuring & Insolvency Home
      • Corporate Insolvency
      • Partnership Insolvency
      • Directors' Duties
      • Restructuring Plans
      • Restructuring
    • Tax
      • Tax
      • Tax Home
      • Corporate Tax
      • Real Estate Tax
      • Tax Investigations
  • People
    • People
    • People Home
    • Search By Name
    • Search By Location
    • Search By Expertise
    • Business Management
  • Offices
    • Offices
    • Offices Home
    • Birmingham
    • Bristol
    • Cambridge
    • Cardiff
    • Chichester
    • Gatwick
    • Glasgow
    • Leeds
    • Liverpool
    • London
    • Manchester
    • Middlesbrough
    • Newbury
    • Newcastle
    • Reading
    • Sheffield
    • Southampton
  • Contact
  • About
  • News & Insights
  • Careers
  • International
  • ESG
Irwin Mitchell Logo
Dialog with Irwin Mitchell phone number
Call us on 0370 1500 100

We're here 24/7, 365 days a year.

  • Home
  • News & Insights
  • Newsletters
  • Property Law Update
  • Tenant laughing all the way to the bank

Tenant laughing all the way to the bank

Goldman Sachs International v Procession House Trustee Ltd [2018]

The case of Goldman Sachs International v Procession House Trustee Ltd [2018] is the latest in a long line of court decisions which show the difficulties that parties can have in correctly interpreting and exercising a break option in a lease.

Background

The tenant, Goldman Sachs International, occupied office premises under a 25-year lease at a rent of over £4 million a year. The lease contained a break option exercisable by the tenant after 20 years, subject to there being no arrears, and “subject to the tenant being able to yield up the premises with vacant possession as provided in clause 23.2.”

Clause 23.2 stated that, “on the expiration of such notice the term shall cease and determine (and the tenant shall yield up the premises in accordance with clause 11 and with full vacant possession).”

Clause 11 was the yielding-up provision which stated that, “unless not required by the landlord, the tenant shall at the end of the term, remove any alterations or additions made to the premises (and make good any damage caused by that removal to the reasonable satisfaction of the landlord) and shall reinstate the premises to their original layout and to no less a condition than as described in the Works Specification.”

The facts

The tenant wanted to exercise the break option. It accepted the obligation to give vacant possession as a condition of the break option but applied to the High Court for a declaration that there was not an additional condition to comply with the requirements of clause 11. The tenant argued that clause 23.2 merely acted as a reminder of what would happen when the break right was exercised and that clause 11 contained a separate contractual obligation that was not related to the break option.

The landlord argued that the tenant must comply with the yielding-up provisions in clause 11, which meant reinstating the premises to their original layout as a condition of exercising the break right. The landlord argued that the tenant’s construction made the words “as provided in clause 23.2” in clause 23.1 and all the words in clause 23.2 redundant. 

The decision

The High Court held that the reference in clause 23 to the requirements in clause 11 did not make the break right conditional upon the reinstatement of the premises. As long as there were no arrears and vacant possession was given, the break option would be validly exercised. The Court agreed with the tenant’s position that the reference to clause 11 in clause 23.2 confirmed the tenant’s obligations if the lease ended under the break option. The court was influenced by the clause 11 reference being in brackets. 

Practical points

This tenant-friendly decision was far from clear cut, and is a useful reminder that the parties to a lease must ensure that any conditions to a break option are clearly drafted. It is essential that both parties know what must be done for the break option to be successfully exercised without the delay and expense of having to ask a Judge to decide what was meant. 

In this case, if clause 11 had been part of the break conditions, it would be have been very hard for the tenant to satisfy the condition, given the requirement for work to be done “to the reasonable satisfaction of the landlord”.

The landlord was granted permission to appeal to the Court of Appeal so it remains to be seen whether the Court of Appeal will take a more landlord-friendly approach, if any appeal proceeds. 


Quarter Day

Sign up for this newsletter

Summer 2018

  • A tale of two sides – an insurance warning
  • If it looks like a duck, and quacks like a duck...
  • Tenant laughing all the way to the bank
  • The right way to registration – a discussion of rights of way and priorities 
  • To Airbnb or not to Airbnb? 
  • Unlawful use is not an automatic barrier to registering an asset of community value
  • Your word may no longer be your bond 

For general enquiries

0370 1500 100

Or we can call you back at a time of your choice

Phone lines are open 24/7, 365 days a year


Contact us today

For a free initial consultation

Freephone

0370 1500 100

Prefer not to call?

Use our form

This data will only be used by Irwin Mitchell for processing your query and for no other purpose.

Danny Revitt Partner Meet the team

About Irwin Mitchell

Founded in Sheffield in 1912, Irwin Mitchell has always been a bit different. Our advisers really get to know the people and business that we help.

It's what we call 'expert hand, human touch'.

We have offices around the UK so wherever you are, our experts can help.

Contact Us

Give us a ring to speak to a member of our team in the strictest confidence. Or you can fill out our contact form and we'll ring you back.

0370 1500 100

Our phone lines are open 24/7, 365 days a year

Get a call back

Fill in your details below and we'll be in touch as soon as possible

This data will only be used by Irwin Mitchell for processing your query and for no other purpose.

  • Contact
  • 0370 1500 100
  • Contact Irwin Mitchell
  • Social Media
  • Twitter
  • Facebook
  • YouTube
  • LinkedIn
  • Instagram
  • About Irwin Mitchell
  • About Us
  • Social Responsibility
  • Careers
  • Business Management
  • Alumni Programme
  • SRA Regulated
  • Terms & Conditions
  • Accessibility
  • Privacy & Security
  • Hoaxes
  • Modern Slavery Act Statement 2021
  • Manage Cookie Settings

© 2023  Irwin Mitchell LLP

Irwin Mitchell LLP is authorised & regulated by the Solicitors Regulation Authority. Our Regulatory Information

Dialog that contains a form to request a callback.

Request A Callback

Enter you details below and we'll call you back, at a time of your choice

Preferred date*
Today
Tomorrow

This data will only be used by Irwin Mitchell for processing your query and for no other purpose.