KPMG Llp v Network Rail Infrastructure Ltd, Court of Appeal - Chancery Division, January 31, 2006, [2006] EWHC 67 (Ch)
Linked as:
Extract
KPMG Llp v Network Rail Infrastructure Ltd, Court of Appeal - Chancery Division, January 31, 2006, [2006] EWHC 67 (Ch)
Case No: HC04C02193
Neutral Citation Number: [2006] EWHC 67 (Ch)IN THE HIGH COURT OF JUSTICECHANCERY DIVISIONRoyal Courts of JusticeStrand, London, WC2A 2LLDate: 31 January 2006Before :MR JUSTICE BLACKBURNE- - - - - - - - - - - - - - - - - - - - -Between :- - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -Hazel Williamson QC and Richard Fowler (instructed by Linklaters) for the claimant Michael Driscoll QC and Tom Leech (instructed by Thomas Eggar) for the defendant Hearing dates: 29th & 30th November, 2nd, 5th, 6th, 7th and 8th December 2005- - - - - - - - - - - - - - - - - - - - -JudgmentMr Justice Blackburne: Introduction1. These proceedings raise two main issues, the construction of a tenant's break clause and (depending upon how that issue is resolved) a claim to rectification of that clause. They arise out of the terms on which the claimant, KPMG LLP, occupies office premises at 1 Puddle Dock, London EC4. KPMG currently holds the property as sub-undertenant of the defendant, Network Rail Infrastructure Ltd, pursuant to a reversionary sub-underlease which is dated 11 July 1985 and was granted for a term of 31 years from 25 July 1998. The sub-underlease was made between British Railways Board (``BRB'') as landlord and Messrs P J Butler, R V J Chadder, T F L Webber and G Acher acting on behalf of themselves and the other partners in the accountancy firm then known as Peat Marwick Mitchell & Co (``PMM'') as tenant. The landlord's reversionary interest has come to be held by the defendant, Network Rail, and the tenant's interest by KPMG.2. So far as it is necessary to state at this stage, the site at 1 Puddle Dock, which adjoins Blackfriars Bridge, was redeveloped in 1970s by the construction on it of office premises. This occurred as a result of a co-operative venture between the freehold owners who were BRB (as to a part) and King's College, Cambridge (as to the remainder). The development was complicated by various third party interests, including those of the (then) London Transport Executive and the City of London Corporation. A particular problem was the presence at and under the site of Blackfriars Station of an underground line. The details of this do not matter.3. The ultimate legal structure which was adopted was that on completion of the development by BRB and King's College, a lease and underleases would be contemporaneously granted so as to result in BRB holding the premises as undertenant for a term of 99 years less 3 days on the footing that it would grant a 52 year sub-underlease of the premises to PMM. So far as PMM was concerned, the structure was reflected in an agreement for lease (the Agreement for Lease) dated 13 December 1974 and made between (1) BRB (2) King's College and (3) partners representing PMM. The Agreement for Lease provided, among other matters, for the construction of offices (to be carried out in two stages) in accordance with certain plans and specifications, a provision for the calculation of the annual rent for the premises to be payable by PMM and the grant by BRB to PMM of a sub-underlease for a 52 year term commencing from the date of practical completion of stage two of the development and at the rent calculated in accordance with the earlier provision. By clause 10 the sub-underlease was to be in the terms set out in the form of the document annexed to the Agreement for Lease:``... but with such modifications only as shall be agreed in writing by the parties hereto (a) in respect of any matter or thing they consider necessary following the completion of the Building to protect their mutual rights and interests hereunder or (b) relating to any further requirement of the [London Transport] Executive for the protection of their railway which extends beneath or adjoins the Site or some part thereof (c) relating to any further requirement of the City of London Corporation contained in [a] Lease of or relating to the said land and/or air space intended to be demised [to] King's College by the said Corporation or (d) provisions relating to the City walkways either as agreed by the Developers with or as required by the City of London Corporation...''The Agreement for Lease went on to set out when the sub-underlease should be granted. Clause 15 contained an agreement that the Agreement for Lease should not merge in the sub-underlease on its grant to PMM ``in respect of any terms and conditions herein contained which are not fully complied with and shall after completion of such grant continue to have full force and effect''.4. Practical completion of stage 2 of the development occurred in 1977. There was a considerable delay, however, in the formal grant of the various leasehold interests. A further eight years were to pass before they were granted. 5. In the meantime, King's College and BRB agreed between them a large number of amendments that they wished to make to the f...See the full content of this document
Sponsored links
