The Court of Appeal held that a guarantor of a lease cannot escape liability because the landlord failed to give him early notice of rent arrears.
Greene King (landlord) agreed to notify Shasha (lessee) if Dite’s (sublessee) rent fell two months into arrears. On Dite falling behind on rent, the landlord failed to notify Shasha.
The court considered the purpose of the notice and noted that Shasha had no actual control over Dite. Further, it would be disproportionate if any failure to give notice released the guarantors completely as there was no absolute obligation to give notice – there was only an obligation to use reasonable endeavours.
It was held that the ‘breach’ by Greene King did not entitle either guarantor to be discharged from their liabilities for sums claimed.