Judgement of the Tokyo District Court on February 9, 2016 (Case Number: 2013-WA-34265, 2014-WA-23999)
- Tokyo District Court acknowledged the validity of cancellation of building lease contract based on 1 months’ non-payment of sublease rent and renewal fees, but acknowledged the lender’s responsibility to compensate for damages because of an illegal self-enforcement.
- A real estate company (lender) vs. a real estate company (sublessor)
- Claim by former sublessor to compensate for damages because of the lender’s illegal self-enforcement
Location and Purpose of Use of the Building
- 880,000 yen per month (the total of subleased 10 rooms’ rent)
- The lender consigned the sublessor to sublease 10 rooms to dwellers. The 10 rooms were entrusted by owners of them to the lender to operate.
- The sublessor delayed payment of one month’s sublease rent to the lender frequently. As the sublessor delayed payment of one month’s sublease rent and renewal fees, the lender cancelled the consignment agreement.
- The lender not only cancelled the contract but urged the dwellers to leave the room or contract directly with the owners of the rooms. Some dwellers sued the sublessor arguing that they suffered damage, and the sublessor paid compensation for damages.
- The sublessor argued that cancellation by the lender was invalid. The sublessor also claimed the lender to compensate for damages because of its illegal self-enforcement.
- The court judged that the relationship of mutual trust between the lender and the sublessor had been dissolved because the sublessor frequently delayed payment of the sublease rent; and acknowledged that the lease contract was validly cancelled based on one months’ non-payment of the sublease rent and renewal fees.
- However, the court judged that it was an illegal self-enforcement that the lender urged the dwellers to leave the room or contract directly with the owners of the rooms; and ordered the lender to compensate 516,451 yen.
- This is one of the cases that cancellation of building lease contract based on one months’ non-payment of sublease rent and renewal fees was acknowledged, and compensation for damages because of an illegal self-enforcement was acknowledged.