Avondale Park Ltd v Miss Delaney's Nursery Schools Ltd ("Miss Delaney's") is an interesting recent case, demonstrating the serious issues a head leaseholder could face when granting a sub-lease out of a 1954 Act protected head-lease.
As a brief summary, the Court decided that the sub-lease automatically determined as a result of the Appellant's failure to provide a deed of variation due to the specific wording of the sub-lease. The sub-tenant had remained in occupation despite expiry of the sub-lease and continued to pay the rent so a periodic tenancy had arisen. The Court must now decide whether they can rely on the protection of the 1954 Act or whether they should be estopped from doing so.
It will certainly be interesting to follow this matter to trial, should the parties not be able to settle. For now, it does serve as a stark reminder as to the importance of getting it right and the implications on obtaining possession that inadvertent protection from the 1954 Act can have.
The sub-lease contained an express term which provided that, if the Appellant did not provide a certificate to the Respondent sub-tenant by 14th December 2014 stating that the freeholder had permitted a change of use under the head-lease, then the sub-lease “will be terminated immediately”.
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