London Trocadero (2015) LLP v Picturehouse Cinemas Limited and others [2021] EWHC 2591 (Ch) 

Summary judgment in favour of the landlord was handed down in this case on 28 September 2021.

The landlord's claim against its tenants was for rent arrears in the region of £2.9million. The arrears had built up since June 2020. Throughout much of this period the tenants were unable to use the premises as a cinema (their permitted use under the leases), due to restrictions imposed by the Government that were intended to mitigate the effects of Covid-19.

The tenants put forward the following defences to the landlord's claim:

(1) That terms should be implied into the leases to the effect that payment of rent and service charges should be suspended during any period for which the use of the premises as a cinema was illegal and/or during which attendances would not be at a level anticipated by the parties at the time the leases were entered into; and

(2) That there had been a partial failure of consideration, on the basis that the payments due under the leases were for the use of the premises as a cinema, with the result that no payments were due under the leases in respect of periods for which the premises could not be used as a cinema.

Robin Vos (sitting as a Deputy Judge of the High Court), rejected both of the tenants' defences, in a carefully reasoned judgment. 

This continues a line of reported decisions in which tenants have failed to persuade the Court that they are not liable for rent that has accrued during periods in which they were unable to trade from their premises due to Covid-19.

Significantly, in London Trocadero, the tenants also tried to argue that the landlord's application for summary judgment should be adjourned and/or dismissed on the basis that (a) the earlier decision of the High Court in Cine-UK was being appealed and (b) the Government will shortly be introducing a binding arbitration process in respect of Covid-related rent arrears. However, Robin Vos also rejected both of these arguments.

In light of these recent decisions, tenants will doubtless increase their calls on the Government to bring forward concrete plans for the promised arbitration scheme. Landlords, on the other hand, are likely to be emboldened and we may see further claims issued, and summary judgments applied for, in advance of the implementation of the arbitration scheme.