Important High Court judgment regarding COVID-19 rent arrears

The High Court (Master Dagnall) handed down judgment yesterday in an important case regarding the obligation of commercial tenants to pay rent for periods in which their premises were forced to closed by coronavirus regulations. The Master considered three applications for summary judgment made by the claimant landlords (AEW UK REIT PLC & BNY Mellon) against the defendant commercial tenants (Sports Direct, Cine UK Ltd, Mecca Bingo Ltd) for rents that had fallen due under their respective leases during the pandemic. The Master granted summary judgment in favour of the claimant landlords, finding that there was no real prospect of successfully arguing that the rents were not due as a result of the pandemic or the ensuing regulations. The tenants had sought to defend the claims on the grounds of: (1) the rent cesser clauses in the leases; (2) an implied term in the leases; (3) frustration; (4) supervening illegality; and/or (5) temporary failure of consideration.

Katharine Holland QC, Admas Habteslasie and Kimberley Ziya acted for Sports Direct.