Aubergine Enterprises Ltd v Lakewood International Ltd (2002)
A tenant assignor sufficiently complied with Condition 8.3.4 of the Standard Conditions of Sale 3rd Edition if the landlord had in fact consented to the proposed assignment in correspondence, even though the tenant was unable to produce a licence to assign on completion.
Claimant's ('Aubergine') appeal from the decision of David Vaughan QC by which he dismissed its claim for a declaration that it had lawfully rescinded a contract for the assignment to it of the defendant's ('Lakewood') leasehold interest in certain premises and was consequently entitled to the return of the five per cent deposit paid by it upon exchange of contracts. The lease contained a prohibition on assignment save with the landlord's consent in writing, which was not to be unreasonably withheld. By Condition 8.3.4 Standard Conditions of Sale 3rd Edition, either party was entitled to rescind the contract "if three working days before completion date" such consent "has not been given". The contractual completion date was 30 September 1999. By 27 September 1999 the landlord had stated in correspondence that it consented to the assignment, subject to the execution of a formal licence to assign, but such a licence had not by then been completed or returned by it to its solicitors. On 30 September 1999 Aubergine purported to rescind the contract, citing Lakewood's breach of Condition 8.3.4 as its justification. The judge held that the contract did not require the landlord's consent to be in writing for the purposes of Condition 8.3.4, but the landlord's consent had in fact been sufficiently "given" in the correspondence, even though the formal licence to assign was not to hand. The principal issue on the appeal was as to the form that the landlord's consent had to take, and whether consent in the required form had been given.
(Ward LJ dissenting) (1) For the purposes of Condition 8.3.4, consent by correspondence, even if expressed to be subject to licence or to other conditions agreed but not necessarily fulfilled by the completion date, could amount to "consent" to the assignment. (2) This court agreed with the judge that such a consent was clearly contained in the correspondence from the landlord, and was a consent that had been given well outside the prescribed limit of three working days.
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25 Feb 2002
Court of Appeal
Auld LJ, Ward LJ, Robert Walker LJ
LTL 25/2/2001 :  1 WLR 2149 : (2002) 99(15) LSG 34 : (2002) 152 NLJ 364 : (2002) 146 SJLB 76 :  NPC 29 : Independent, March 7, 2002 :  EWCA Civ 177