Landlord & tenant

The Chancery Division ruled on the effect of a side letter, which provided for a lower yearly rent than that provided in a lease, and which had been made between the claimant tenant, Vivienne Westwood Ltd, and the then landlord at the same time as the grant of the lease. The court held that a termination provision in the side letter was penal in nature. Accordingly, the purported termination of the benefit of the side letter was unenforceable and the claimant remained liable and entitled to pay rent at the capped rate of £125,000 for so long as it satisfied the conditions in the side letter. The court also held that the demand, payment and acceptance of rent had not resulted in a binding compromise of a rent review, as the claimant had alleged. The rent review had been subsequently determined by agreement, following the appointment of an expert surveyor, at the rate of £232,500 per annum.