Into Nominee One Limited & Anor v Study Group UK Limited & Anor

Summary

A landlord sued the tenant of a purpose-built student accommodation and teaching building for arrears under the lease. The tenant said the lease had been frustrated, because serious fire safety and cladding defects, and the fire safety legislation that followed Grenfell, meant the building could no longer be used for its educational purpose.

The landlord applied for summary judgment, arguing that even taking the tenant's case at its highest, a lease of this kind is not frustrated by the discovery of remediable defects.

Mr Roger ter Haar KC gave the landlord summary judgment. The parties had allocated the risk of serious fire safety defects, so the lease was not frustrated, and the post-Grenfell legislation did not change that, because remedial works were already needed for the building to be used.

Background and facts

The building, Voyager House, is a purpose-built education facility with an academic block and a residential block containing 376 student bedrooms. The tenant, Study Group, held it under a lease, and Daily Mail and General Trust Plc stood behind the tenant as surety.

Serious fire safety and cladding defects were identified in the building. The tenant stopped paying and defended the landlord's claim on the ground that the lease had been frustrated. Its primary case was that the common purpose of the lease, the use of the building for education, had been defeated. In the alternative it relied on the fire safety legislation that came into force after the Grenfell fire.

The landlord applied for summary judgment, accepting that the court should take the tenant's factual case at its highest, and arguing that the frustration defence failed as a matter of law.

The issue

The question was whether the lease had been frustrated, either because the fire safety defects defeated the common purpose of the lease, or because the post-Grenfell fire safety legislation had fundamentally changed the position, so that the tenant was discharged from its obligations.

The decision

Mr Roger ter Haar KC gave the landlord summary judgment. Frustration is kept within very narrow limits, and it does not apply where the contract has allocated the risk of the event relied on. Here the parties had allocated the risk of fire safety defects:

"the Parties have allocated the relevant risk and either took into account or should have taken into account that there could be fire safety defects in the Premises of sufficient seriousness that the Premises might need to be rebuilt or remedied so as to prevent their use for SGUK's educational purposes."Mr Roger ter Haar KC, paragraph 130

Because the lease had allocated that risk, the discovery of the defects, however serious, did not frustrate it:

"For these reasons I hold that the Lease was not discharged on the basis that the Parties' common purpose in entering into the Lease was frustrated."Mr Roger ter Haar KC, paragraph 132

The alternative case on the post-Grenfell fire safety legislation also failed. Before the legislative changes, remedial works to deal with the fire safety issues were already necessary if the building was to be used for education, so the legislation did not bring about the fundamental change that frustration requires. The judge decided these points of law on the summary judgment application, and gave judgment for the landlord, with the precise sum to be settled after an application to amend the claim.

Practical implications

Frustration will rarely discharge a lease. The doctrine is confined to narrow limits, and a tenant that finds itself with a building it can no longer use as intended faces a high hurdle. The discovery of serious defects, even fire safety and cladding defects that require the building to be remediated or rebuilt, will not usually frustrate the lease.

Allocated risk defeats frustration. Where the contract has allocated, expressly or by implication, the risk of the event relied on, that event cannot frustrate the contract. A long lease of a building carries with it the risk that defects may be found, and a court will often treat that risk as one the parties took on. A tenant relying on frustration must show that the event was outside the risks the lease allocated.

Post-Grenfell legislation does not by itself rewrite existing obligations. The tenant could not treat the fire safety legislation as a frustrating event, because the underlying need for remediation predated it. A party seeking to rely on a change in the law as frustrating a contract must show that the change produced a fundamental difference, rather than a new label on a problem that already existed.

A well-targeted summary judgment application can resolve a frustration defence. Where the defence turns on points of law and the facts can be taken at the defendant's highest, the court can decide it without a trial. A landlord facing a frustration defence to a claim for arrears should consider whether the point can be determined summarily, saving the cost of a trial on a defence that fails as a matter of law.

Into Nominee One Limited and Into Nominee Two Limited v Study Group UK Limited and Daily Mail and General Trust Plc [2026] EWHC 1201 (TCC), Technology and Construction Court, Mr Roger ter Haar KC sitting as a Deputy Judge of the High Court. Judgment handed down 21 May 2026.