In the first High Court decision to look at the Good Harvest ruling John Randall QC, sitting as a deputy judge of the Chancery Division, this morning gave a judicial thumbs-up but only after a fair amount of shaking.
Good Harvest had challenged the industry assumption that landlords can rely on a former tenant's guarantor following a lease assignment.
In Good Harvest the landlord attempted to recover rent that had gone unpaid by an assignee of premises but earlier this year the High Court ruled that the guarantee given by the guarantor of the original tenant at the time of the assignment was unenforceable under the Landlord and Tenant Act 1995.
Newey J in the Good Harvest case said that the Act was meant to ensure that any obligations undertaken by a guarantor on behalf of a tenant should terminate on assignment.
However, last week in the case of K/S Victoria Street v House of Fraser (Stores Management) Ltd counsel for the landlord argued that Good Harvest could be distinguished from the present case and, in any event, had been wrongly decided.
This morning the deputy judge ruled that the matters relied upon "were not materially distinguishing factors" and that while he had been persuaded that there were "difficulties with parts, and I emphasise parts, of the reasoning of Newey J in Good Harvest" he could not conscientiously say that he would have come to a different conclusion.
Photo by Ian Burt via Flickr.