[2023] UKUT 153 (LC)

Mrs Okell said that the relocation property became available very late in the CPO process. Mr Appleby identified the unit as a possibility in August 2015 and discussions about it continued through September. It was made clear by Mr Sanderson, of Intu’s advisors CWM Retail Property Advisors LLP, that the unit was already under offer but there was some doubt that the transaction might not complete. Mr Sanderson also said that the unit was not being openly marketed but there was additional interest from MenKind.

Mrs Okell’s report contained copies of emails and correspondence between Mr Lightowler, Mr Appleby and Mr Sanderson in relation to the various properties under consideration. In an email of 16 October 2015 Mr Sanderson set out in the briefest of terms his client’s requirements in relation to the proposed occupation. These were for a base rent of £100,000 per annum, a rent-free period of 6 months and a tenant only break clause with a penalty of 50% of the incentive, namely £25,000. In an email of 19 October Mr Appleby asked for heads of terms. On the same day Mr Sanderson reported to various individuals at Intu (a copy of the email was appended to Mr Henderson’s report) that he had been able to ‘improve the terms further’. Specifically, he said that:

For his part, notwithstanding that he had attached this correspondence to his report, Mr Henderson said that having been provided with Intu’s tenancy schedules and transactions relating to the time of the letting he was satisfied that the lease terms were ‘at a market level’ and in line with levels established through other lettings of comparable units in the centre.

The claimant entered into an agreement for lease on the terms stated above on 24 March 2016 and on 12 October 2020 exercised the five year break clause by serving the requisite notice and paying a penalty of £25,000. This brought the lease to an end with effect from 23 June 2021. The claimant negotiated with the landlord for a new two year lease outside Part II of the Landlord and Tenant Act 1954 and this lease took effect from 23 June 2021 as well. The lease was at nil rent and the only outgoings were the service charge, insurance rent and business rates. This lease contained a rolling mutual break with effect from 23 March 2022 on six weeks’ notice.