Ger

One case you could look at is Brimex v Begum [2007] EWHC 3498 (Ch), [2009] L&TR 21 Paul Morgan J.  Basically, a head-lease between LL and HT included a covenant against sub-letting without consent.  Head lessee HT made an agreement with the defendant D which had the effect of creating a sub-tenancy. HT's head-lease later expired, and D claimed that his sub-lease was directly binding on the freeholder LL (relying on statutory provisions).  On the point in which you are interested, the judge found that those acting on D's behalf had not known the terms of the head-lease, and that there was no evidence on which to base a finding that they had ‘blind-eye knowledge’.  Accordingly the claim against the statutory sub-tenant D for inducing breach of contract failed, for want of the necessary mental element post OBG v Allan.  Importantly, however, the judge went out of his way to observe that in other cases, with more sophisticated parties, a court might be more sceptical of a subtenant's argument that it did not know that it was inducing a breach by the head tenant by agreeing to take a sub-lease.

I'm sure there must be more out there, but that may be a start for you.

John

John Randall QC
DD: +44 (0)121 246 2126 | f: +44 (0)121 246 7001 | e: jrandall@st-philips.com

St Philips Chambers
Birmingham | 55 Temple Row, Birmingham B2 5LS | t: +44 (0)121 246 7000
Leeds | 41 Park Square North, Leeds LS1 2NP | t: +44 (0)113 244 6691
London | 4 Field Court, Gray's Inn, London WC1R 5EF | t: +44 (0)207 440 6900


________________________________________
From: Gerard Sadlier [gerard.sadlier@gmail.com]
Sent: 29 September 2017 03:45
To: obligations@uwo.ca
Subject: is a Sub-Tenant who Occupies Property in Breach of a Covenant not to Sub-Let Liable to the Head Landlord?

Dear all

If a tenant purports to sub-let, in breach of the terms of their
lease, they are clearly liable in damages to the head landlord for
breach of contract.  I wonder however, if anyone could point me to any
authority on the liability (if any) of the sub-tenant to the head
landlord, arising out of the sub-tenant's occupation of the property
which the landlord had leased to the tenant?

I am thinking in particular of causes of action like inducement to
breach of contract, interference with economic relations or perhaps
conspiracy (between the tenant and sub-tenant), depending on the facts
and in particular what the sub-tenant knew of the lease before
sub-letting.  My understanding is that a claim in trespass would not
lie, since the landlord does not have the right to possession of the
land which it has leased to the tenant.

If a sub-tenant went into occupation without knowledge of the lease
but declined to vacate when made aware that their occupation
constituted a continuing breach of contract by the tenant, would the
landlord thereafter have  a cause of action against the sub-tenant for
continuing the breach of contract with knowledge?

I am not, I hope, using the list as a substitute for my own research
and will be happy to share any authority I do dig up with anyone who
may be interested in due course.

Kind regards

Ger

THIS EMAIL IS NOT AN INTERNAL COMMUNICATION
The email above was delivered to the Advanced365 Hosted Mail system from an internet sender
This email message has been scanned for viruses and other dangerous content by the Advanced365 Hosted  systems and is believed to be clean but is not
warranted to be free of any malicious content.
All internet emails are inherently unsecure and you should always exercise caution when opening attachments from, or clicking on links in emails
even when the sender of the email appears to be someone you know.