Head Lease Rectification

The parties to a head lease agreed to extend the term of the head lease, as part of the redevelopment of a building from years to 150 years. That agreement was evidenced by an Agreement to Lease entered into prior to redevelopment. Following completion a reversionary lease was entered into commencing 110 years later, for a term of 40 years. That lease was subsequently found to be invalid as contracts for land are invalid if they commence more than 21 years after grant.

The initial legal advice was that rectification was not possible and that a new lease would have to be granted. This had significant cost implications because of the introduction of SDLT and because of the necessity to negotiate and give tax indemnities. 

We were able to persuade the lawyers that as the commercial intention of the parties had been to grant a 150 year lease, the courts should be capable of granting rectification notwithstanding that this would require not a change to the wording of a document (where rectification is commonly applied) but an entire new document. The process was cleared with the tax authorities and the court granted rectification setting an important precedent (albeit in an unreported case).

"I was Counsel instructed by Peter in relation to this case. Peter has all the ingredients of a top class litigator: first, an ability to communicate his commercial requirements in a clear and concise way, which means that nobody is ever unsure of the objective of the exercise; second, a toughness of mind, both in terms of intellect and strength of purpose, which he uses to ensure that his side prevails; third, a nose for the right deal - not just the right price, but the right sense of the correct timing at which to seek that deal; fourth, a deep understanding of the Courts and of alternative means of dispute resolution, such that he always has a strong instinct about what a Judge or Mediator would do; finally, he has an unerring ability to pick the right team around him - ... but I suppose I would say that about this case, wouldn't I?"

Jonathan Seitler QC
Wilberforce Chambers