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Westfield Wins Legal Case Against Tenant For Unpaid Rent

Westfield London

The owners of the Westfield London shopping centre have won a High Court case against a tenant over rents that went unpaid in the wake of the coronavirus.

A High Court judge granted a summary judgement in favour of the owners of London’s most valuable shopping centre in their case against retailer The Fragrance Shop, meaning the case does not have to proceed to a trial, Estates Gazette reported.

The owners of the centre, Commerz Real and Unbail-Rodamco-Westfield, were seeking £160K in unpaid rent plus interest. 

Bisnow revealed in March that the owners of Westfield London and Westfield Stratford City had launched 16 legal cases against 11 different retailers across the centres seeking a total of £5.5M in unpaid rent. 

The Fragrance Shop was one of several retailers that argued in a defence to claims against them that their stores were in effect damaged and made unfit for use by the impact of Covid-19. They argued that the centre owners should be able to claim back from insurers any financial losses that came about as a result of this damage; and because they can claim the payment from their insurer, the terms of their leases say they shouldn’t have to pay rent.

On examining the retailer’s lease and the centre owners’ insurance policy, the judge disagreed. Judges in the United States have likewise mostly declared that income losses from the pandemic do not need to be covered by insurance policies and business interruption from the pandemic does not constitute damage to property.

The Fragrance Shop also argued that the case against it contravened government measures put in place to protect tenants that had been forced to close, like the moratorium on evictions or winding up petitions to seek unpaid rent. 

Again, the judge disagreed, saying the government had put a block on some but not all legal avenues to retrieve rent. The judgement added that even though the centre owners had won the case, there was actually still little they could do to claim the rent, as they still can’t kick tenants out or lodge a petition to have them wound up for the unpaid debt.