Bass Holdings Ltd v Morton Music Ltd

Bass Holdings Ltd v Morton Music Ltd [1988] Ch. 493

Property law – Landlord and tenant – Lease

Facts

The plaintiffs granted the defendants a fifteen-year lease, with the option to extend the lease for a period of 125 years, provided this was given within the three years of the original agreement and the covenants within the lease had been followed. Of these covenants, the defendants were not to apply for planning permission without written consent and to pay rent on time. Two years into the agreement, the defendants had fallen behind on rent and made two planning permission applications, both of which were unsuccessful and without the plaintiffs’ consent. The defendants gained court relief from forfeiture and repaid the debt owed to the landlord. They subsequently bought a claim to extend the lease for the extra 125 years. The plaintiffs claimed that the option was now invalid and could not be exercised. In the initial trial, the court held that the breach for payment had been remedied but applying for planning permission without the consent of the plaintiff could not be remedied. The defendants appealed this decision.

Issue

The court had a number of issues to decide in this case. The first was defining when the agreement had been struck and whether it could be relied upon. The second was whether the defendants could rely on the option on the basis that they had broken the covenant in their agreement. Lastly, the court had to understand whether that because they had remedied the breach, the agreement was broken.

Decision/Outcome

The court allowed the defendants’ appeal. This was on the basis that the plaintiffs required the covenants to be followed so strictly that it was unlikely any tenant would be in a position to do so.