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Edlington Properties Ltd v JH Fenner & Co Ltd

A lessee was not entitled to set off a claim for damages against the original freeholder for defective construction of the building against post-assignment rent due to the assignee of the freehold.

14 April 2006

The appellant lessee (F) appealed against a decision ([2005] EWHC 2158 (QB) on a preliminary issue that it was not entitled to set off claims it had against its former landlord (W) against rent due to the respondent assignee of the reversion (E). W had owned the freehold of a site and had concluded an agreement with F that obliged W to build a factory on the site and F to take a lease of it once it was built. F contended that W was in breach of its building obligations contained in the building agreement by constructing a factory that was defective and inadequate. W assigned the freehold to a third party, and it was then assigned to E. E claimed for rent due under F’s tenancy, and an issue arose as to whether F had a right to set off its damages claim against W for the alleged breaches of the building agreement against E’s claim for rent. The judge determined that F could not set off its claim for damages against the rent due to E. F contended that a tenant was entitled to invok...

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