NPS (40GP) Limited v Liberty Commodities Limited [2023] EWHC 2137 (Ch)

On 4 August 2023 Master Pester handed down judgment in respect of NPS (40GP) Limited’s claim against Liberty Commodities Limited for declaratory relief. An approved copy of the judgment can be found here.

In October 2019 NPS let the second floor of 40 Grosvenor Place in Belgravia to Liberty pursuant to a lease that attracted a basic rent of c.£3.1 million + VAT per annum, plus various further amounts for service charge, parking, utilities and insurance charges (theLease). Rent was payable on the usual quarter days and regular demands were issued. Liberty planned to use the premises as its head office. In the event, together with other companies in the Gupta Family Group Alliance, Liberty has been the subject of some recent well-publicised financial difficulties. Liberty failed to pay any rent (or other charges) to NPS, instead it sought to negotiate a surrender of the Lease and voluntarily vacated the premises on 8 April 2022. Meanwhile NPS conducted routine maintenance works to the ground floor entry system at 40 Grosvenor Place which resulted in the deactivation of keycards held by Liberty to the ground floor turnstiles on 8 April 2022, and no new keycards being issued to Liberty (who had confirmed to NPS that they had vacated the premises). The parties continued to negotiate a surrender of the Lease after 8 April 2022, however, on 15 July 2022 Liberty alleged that the maintenance works carried out by NPS to the ground floor and the failure to re-issue new keycards amounted to a forfeiture of the Lease on 8 April 2022. Liberty claimed that its payment liabilities under the Lease ended on that date.

NPS brought Part 7 proceedings for a declaration that the Lease was continuing and thereafter issued an application for summary judgment. By the time of the summary judgment hearing, Liberty’s liabilities to NPS under the Lease (assuming it was continuing) amounted to c.£9 million (inclusive of VAT). NPS argued that (i) the right to forfeit for basic rent due on 29 March 2022 had not accrued to it by 8 April 2022 when the 14-day forfeiture proviso in the Lease was correctly construed and (ii) in any event the deactivation of Liberty’s keycards giving access to the common parts did not amount to a peaceable re-entry. Master Pester agreed with NPS and granted summary judgment, thereby disposing of the claim.

Isabel Petrie acted for NPS. The dispute concerned questions about the calculation of time in respect of provisos as to forfeiture in leases, which Master Pester addressed by applying the reasoning of the Court of Appeal in Zoan v Rouamba [2001] WLR 1509 (CA). The decision also contributes to the debate about what amounts to a peaceable re-entry of premises and considers the decision of Revlok Properties v Dixon [1973] 25 P&CR.

Earlier this summer Isabel also successfully represented NPS in its application to obtain substitution as the petitioning creditor in insolvency proceedings against Liberty (in Liberty Commodities Ltd v Citibank NA London & Ors [2023] EWHC 2020 (Ch)), details of which can be found here.