Improvements
UK Cases
F.W Woolworth & Co v Lambert
F.W. WOOLWORTH AND COMPANY LIMITED V. LAMBERT
(Court of Appeal)
[1936] 2 All E.R. 1523
Lord Wright M.R.: There are two questions to be considered ina matter of this sort: first, whether the proposed alterations or improvements are of sucha character as not in law to be capable of coming within the provisions of the Act; secondly, if that matter of law is answered in favour of the plaintiffs, whether the proposed alterations are in fact within the meaning of the Act. Now the word “improvements” is here used not as importing that the covenant, condition or agreement referred to must contain those words, because they would not, I imagine, generally be used. The sub-section refers to any covenant against alterations without licence or consent. If you have such a clause, in whatever terms, and the proposed alterations are in fact capable of being deemed to be improvements, then the section would apply.
It is said here that the word “improvement” means an improvement first of all from the point of view of the landlord. I think the learned judge was not disposed to accept that; on the contrary he construed the word “improvements” as meaning improve ments from the point of view of the tenant. I think he was right in that, and he followed a decision of Luxmoore J in Balls Brothers Ltd v. Sinclair and an earlier decision of Rowlatt J. I agree completely with that decision and the reasons given, and I say no more about it.
Then it was said these cannot be improvements within the meaning of the section because even regarding the matter from the point of view of the tenants they must be improvements of the demised property specifically, and in this particular case the proposed alterations were not such improvements, and so far from increasing the value of the demised property regarded separately and in itself, they had just the opposite effect. There was some picturesque language used about it. They were improvements which had the effect of removing a necessary part of the shop, re garded as an isolated shop, such as the main staircase, the heating and lavatory arrangements, and in particular the back wall. It was said the effect would be to destroy the premises as a shop altogether, and that therefore they could not in law be treated as improvements.
I do not take that view. I think the word “improvements” is used here in a wider sense. The question, being regarded from the point of view of the tenant, is: How can he get, consistently with the other conditions of his lease, the most beneficial user of these premises as premises? One way of achieving that result may be to use these premises along with and in conjunction with some other premises, and to achieve that result some structural alterations may be, and probably always will be, neces sary. Take the case where it is desired to include an adjoining shop, as was done in the case of Nos. 18 and 20 Commercial Road originally, or take the case where, in order to make the best use of a shop opening out in the street, it is desirable to remove to another position ancillary conveniences and apparatus. For instance, it might be desirable to shift the heating and other apparatus and lavatories to adjoin ing premises, making any necessary openings for that purpose, and it might be desirable for that purpose to take out of the shop those things which are provided for in other quarters. In all these cases the shop would cease to be a self-contained shop, and in a sense some part of it would be dismantled, and there would be structural alterations; but the result would be that from the point of view of the tenant he would be getting, during the period of his lease, a more beneficial user of the demised premises.
That, I think, is exactly what was proposed here. Instead of taking any of the adjoining premises at the side, the premises were to be extended at the back, and to that new back portion the various ancillary provisions which originally were on the demised premises were to be shifted. The effect of all that was to give a more bene ficial enjoyment to the lessee.
Now it is perfectly true that, for the purpose of the lease, all that is material is what happens on the actual demised premises. For the purpose of the lease it is not necessary to look beyond to other premises in other occupation; and that being so, and the tenant’s enjoyment for the period of his lease being what is considered – his enjoyment consistent with the other conditions of the lease – there does not seem to me to be any reason at all for saying that from that point of view these alterations would not be improvements of the demised premises; that is to say, the user of the tenant during the period of the lease. Of course, if structural alterations are made, if the proposals are to be carried out, it is necessary to provide for reinstatement at the conclusion of the lease of these premises; and that is adequately provided for in the proposals by the undertaking of Messrs Woolworths, supported by the guarantee of an approved insurance company. The precise terms of that undertaking may meet with some little objection, but, as I have said, no real difficulty arises about it.
In my view, therefore, not only are these proposed alterations of the demised premises alterations which are in law capable of being construed as improvements, but in fact, on the true construction of this clause, they are improvements, and, with the greatest respect, I am unable to follow the view of the learned judge on that point. I am quite satisfied to say that the proposed alteration would constitute, as far as
I can see, no breach of any of the covenants of this lease. That being so, the matter of debate now, in my opinion, is left entirely to rest on this one issue of whether £7,000 was or was not a reasonable sum to demand. If it had been proved that it was an unreasonable sum to demand, then I think the tenant would have succeeded in proving that consent was unreasonably withheld. I have not come to that conclusion. On the evidence before me, I apprehend the matter will be open now. Attempts have been made to induce the defendants to agree to submit this one issue to arbitration. They are not bound to submit it to arbitration, and the plaintiffs, therefore, if they desire to proceed in this matter, and if my view of the construction and application of the section to the facts of this case prevails, will be able to take such action as they think fit in order to meet this serious difficulty about the question of the reasonable sum. I do not pretend to follow out the various possibilities, some of which have been considered in the course of the argument. It is enough to say that, for the reasons I have given, however unsatisfactory the result may appear, this appeal fails and should be dismissed with costs.
Romer L.J.: The question whether the terms offered by the defendants were unreasonable depends entirely upon the question whether they might reasonably ask for payment of £7,000 in respect of the damage to be sustained by their rever sion, because the other terms whicti they suggested are agreed by the plaintiffs to be quite reasonable, the terms being a covenant of reinstatement supported by a policy. The question whether the counter-offer put forward by the plaintiffs was one which the defendants ought to have reasonably accepted really involves precisely the same point, because it would be reasonable on the part of the defendants to refuse that offer of the plaintiffs if the offer. put forward by the defendants was a reasonable one. So that in either case the question resolves itself into this: Was the £7,000 offered by the defendants a reasonable sum for them to require? Clauson J, after hearing the evidence, came to the conclusion, as I read his judgment, that he was not in a position to say that the defendants had been unreasonable in making that offer. It is said by Mr Fergus Morton that the learned judge ought to have referred that question, if he felt any doubt about it, to the decision of an official referee under section 88 of the Judicature Act, 1925. But the plaintiffs had not asked him to do that. The plaintiffs called evidence and the defendants called evidence, and when the learned judge heard the evidence on both sides he came to the conclusion that the plaintiffs had not discharged the onus that lay upon them.
It was too late for the plaintiff to say: “Well, now, as I have failed to satisfy you on this point, refer it to an official referee”. I think the learned judge was right in those circumstances in dismissing the action, because the onus was clearly on the plain tiffs of proving that the defendants had unreasonably refused their consent, seeing that they came to the Court to ask for a declaration that such consent had been in fact unreasonably withheld.
In my opinion on that ground this appeal fails.
Haines v Florensa
HAINES v. FLORENSA
(Court of Appeal)
(1990) 09 E.G. 70
The lessee respondent held a long lease of an upper flat of which the freehold reversion was vested in the appellant lessor, who was also the occupier ofa garden flat in the building. The lease expressly included the roof in the demise and containeda covenant by the lessee not to carry out alterations without the lessor’s consent. On the assumption that the works proposed by the tenant respondents were in fact improvements, section 19(2) of the Landlord and Tenant Act 1927 would have application. The works for which the lessee sought consent were in substance the conversion of the loft to increase the lessee’s usable living space, involving raising the height of the roof and installinga room witha bathroom en suite. Despite repeated applications to the lessor, no consent was forthcoming and the lessee eventually made an originating application to the court seeking, according to the usual practice, a declaration that consent had been unreason ably refused and that, in consequence, the applicant was entitled to proceed with the works without consent. The county court recorder decided that the proposed works were improvements and that consent had been unreasonably refused. He rejected a
submission that the probable disruption caused by the building works wasa ground for withholding consent. The landlords appealed but no issue was raised in the notice of appeal as to the likelihood that torts of nuisance or trespass would occur if the proposed
wHoerlkds:wTehreewcaorrrkisedprooupto.sed were “improvements” for the purposes of section 19(2). The Recorder’s finding that there was insufficient evidence of possible disruption by way of noise, dirt and disturbance, was an acceptable basis from which it could be inferred that any refusal of consent by the landlord pursuant to section 19(2) was unjustifiable.
Stocker L.J.: This isa respondent’s appeal from the judgment of Mr Recorder Walker-Smith sitting at the West London County Court, and given on November 21 1988, whereby it was declared that the respondent had unreasonably withheld her consent undera lease dated March 25 1959 of the premises known as 53A Quarrendon Street, Fulham, London SW6, as to the making of improvements to the said premises. The respondent seeks an order that the said works were not improvements within the meaning of section 19(2) of the Landlord and Tenant Act 1927; or, alternatively, that the respondent did not unreasonably withhold her consent. The premises in question consist of a flat or maisonette known as 53A Quarrendon Street, Fulham. The applicant held that flat pursuant toa lease dated March 25 1959. The lease became vested in the applicant on March 6 1985. The respondent had become the owner of the freehold reversion some five years ago and she also happens to be the occupier of the garden flat on the ground floor of the same
building. She was therefore both landlord and a resident occupant of that building. The relevant terms of the lease as demised state that the premises consist of:
ALL THAT upper maisonette (hereinafter referred to as “the demised premises”) which said maisonette shall be deemed to extend from and include the top surface of the ceiling of the lower maisonette and extend to and include the roof and which said premises form part of
the building known as Number 53 Quarrendon Street Fulham …
The covenant against alterations is contained in para 1 of the First Schedule to the lease:
The Lessee will not without the written consent of the Lessor first being obtained make any alteration in or addition to the height sides front back walls timbers or elevations of the premises hereby demised
That restriction is not in terms concerned with improvements, but it is common ground that it is relevant to the question of improvements for the purposes of section 19 of the Landlord and Tenant Act 1927, and no question has arisen on this appeal with regard to that.
The improvements sought to be made by the applicant were in substance the conversion of the loft of the premises in order to increase his usable living space. In effect, that involved raising the roof and installing a room with an en suite bathroom in what had been the loft area. The nature of the improvements can be seen better than they can be described from the plan, which is annexed to the agreed bundle of court documents, and in particular from a photograph of the outside of the premises, because the adjacent next-door building has already had such a loft improvement carried out to it, and its visual effect, at least, can be seen very clearly from that photograph. We do not know whether the conversion of the next-door roof space would have been identical to the conversion proposed in this case, but there is nothing to suggest that there would be any material distinction between the two. That, then, was the improvement which the applicant sought to achieve.
Matters really commenced by a letter from the applicant of November 20 1986 with which there was included a plan in respect of which the applicant sought the landlord’s consent to implement his proposed improvements. There was a further letter on June 8 enclosing a letter from the proposed builders and enclosing also a formal request for permission to carry out the improvements. On July 22 by letter the applicant asked for dates to be suggested upon which his structural engineer could call and inspect the flat in connection with the proposed alterations. On August 13 1987 there was a further letter seeking consent. No consent was in fact granted, and the matter came before the court under an originating application of August 28 1987. By that originating application the applicant sought, in effect, first, a declaration that consent had been unreasonably withheld for the making of improvements to the building as specified in the plans which had been supplied and, second, that the applicant was entitled to make the improvements notwithstanding the absence of
such consent.
There was an amended answer by the respondent, dated May 5 1988, which contained a number of matters of objection. First, the allegations contained in the application were disputed under six headings. It is unnecessary to go through all of them in detail, because in the event none of them were pursued at the hearing. It is sufficient to say that all of them really related to structural matters. The question of the increased loading was raised; the effect upon the drains of the excessive loading; the question of the adequacy of the underpinning and its structural implications for the lower flat. A report of consulting engineers indicating a possible further settle ment of the foundations was referred to. As I have said, none of those matters was pursued at the hearing and, indeed, I understand that they were withdrawn before
The earned recorder, in giving his judgment in favour of the applicant, did so, so far as is relevant, in these terms. He referred to the amended answer of the respondent in which it was claimed “that the proposed roof extension is nota work of improvement within the Act and this is now the first basis of resisting the Applicant’s application. The second basis is that she is entitled to refuse her consent because of the disruption that the work would cause”. The learned recorder then went on to deal with the first question in these terms:
The first question is whether the proposed work is in fact an improvement within section 19(2). It is settled law that improvement means improvement as far as the applicant is concerned. In the case of Lambert v. FW Woolworth & Co Ltd [1938) Ch 883 at p. 901 Slesser LJ said the question of improvement must be regarded from the point of view of the tenant and also must be limited to an improvement of the demised property. There are therefore two questions applicable to the present case- (1) is the proposed work an improvement so far as the applicant is concerned? (2) is the proposed work an improvement
to the demised property?
He answered those questions which he had posed to himself, and which as ques tions have not been challenged before this court, in the following terms:
In answer to question oneI have in mind the test of Romer LJ in FW Woolworth & Co Ltd
v. Lambert [1937) Ch 37 at p. 56 where he said that the court should only be concerned with improvements to the demised premises themselves. “Will the alterations render the tenant’s occupation more convenient and comfortable for him?” In my judgment the proposed work will undoubtedly make the premises more convenient and comfortable for him, and in my judgment they represent unequivocally an improvement. It would be surprising if Mr Haines contemplated spending thousands of pounds if it were not an improvement so far as he is concerned.I then have to ask the question “do they constitute improvement of the demised premises?”
On the first of those grounds – ie that the works were not an improvement within the terms of section 19(2)- Mr Ellis on behalf of the respondent put forward the following arguments before this court. First, the extension of the loft as proposed goes outside the scope of the prer.nises demised, that is to say, does not relate to the demised premises. Therefore, the case can be distinguished from other decided
cases, and perhaps that argument can be succinctly encapsulated by the way in which it is expressed in his skeleton argument:
In all the cases on improvements what can be described as the spirit of section 19(2) is to allow the tenant to make use of his property_in the most beneficial way. The respondent in this matter came to an upper maisonette which comprised four rooms namelya lounge, one bedroom, kitchen with dining area and bathroom with wc. It is submitted the respondent can only effect an improvement which allows him to make more .beneficial use of the property as it is now and not to enlarge the property so to take it outside of what he has already got.
Second, Mr Ellis argues that the airspace above the roof is of the nature of an easement and is not part of the premises demised. For my part, it seems to me that the decision of McNair J in the case of Ke/sen v. Imperial Tobacco Co (of Great Britain and Ireland) Ltd[1957] 2 All ER 343 is against that proposition, for it was there mheisldesthdaetmthiseeadi.rspace above the roof of demised premises formed part of the pre
After the argument on this appeal had been concluded, we were referred to the case of Davies v. Yadegar [1989] EGGS 68, decided by this court on May3 1989, the court consisting of Woolf LJ and Sir Roger Ormrod. The headnote reads:
The respondent is the tenant of a first-floor flat at 13 Beechcroft Avenue, London NW11, holdinga 99-year lease from June 1960; the appellant is the lessor. In 1987 the respondent proposed to convert the loft space and provide further living accommodation. The intended work included modifications to the roof including the insertion of two dormer windows. Because the appellant refused to give written consent to the proposed alterations, the respondent brought proceedings claiming that consent had been unreasonably refused. One reason given for refusing consent was that the alterations would constitutea trespass to the airspace of the appellant. In the Willesden County Court Mr Recorder Russell … considered the words of the demise, “all that the first floor … and the roof and roof space thereover”. He also considered a clause that the respondent was not to” … erect or place
Mr Ellis cited to the court the case of FW Woolworth & Co Ltd v. Lambert [1937] Ch 37 and the case of Lambert v. FW Woolworth & Co Ltd [1938] Ch 883. Both of those cases were concerned with the same premises and raised, so far as relevant to this appeal, the same issues. Mr Ellis relies upon those cases as indicating support for his basic proposition. I therefore turn to consider the relevant passages in those cases. I start with the case reported in [1937] Ch 37. The facts appear from a paragraph of the headnote on p. 38:
The plaintiffs proposed to enlarge the shop by pulling down the wall at the back and connecting it with other adjoining land of which they held a lease from another lessor, and by erecting over the whole combined property one large shop, in which the main staircase, staff accommodation etc, would be removed from the demised premises to the extension. The defendants refused their consent to the proposed alterations except on the payment by the plaintiffs to them of £7,000 …
It is unnecessary to read the facts further. The case in the 1937 reports turned very largely on whether or not the applicants had discharged the onus of proof upon them that the £7,000 requested amounted to an unreasonable refusal, an issue which does not arise in the instant case. Lord Wright at p. 49 said:
It is said here that the word “improvement” means an improvement first of all from the point of view of the landlord. I think the learned judge was not disposed to accept that; on the contrary he construed the word “improvements” as meaning improvements from the point of view of the tenant. I think he was right in that, and he followed a decision of Luxmoore J in Balls Brothers Ltd v. Sinclair and an earlier decision of Rowlatt J. I agree completely with that decision and the reasons given, and I say no more about it.
Then it was said these cannot be improvements within the meaning of the section because even regarding the matter from the point of view of the tenants they must be improvements of the demised property specifically, and in this particular case the proposed alterations were not such improvements, and so far from increasing the value of the demised property regarded separately and in itself, they had just the opposite effect. There was some picturesque language used about it. They were improvements which had the effect of removing a necessary part of the shop, regarded as an isolated shop, such as the main staircase, the heating and lavatory arrangements, and, in particular, the back wall. It was said the effect would be to destroy the premises as a shop altogether, and that there fore they could not in law be treated as improvements. I do not take that view. I think the word “improvements” is used here in a wider sense. The question, being regarded from the point of view of the tenant, is: How can he get, consistently with the other conditions of his lease, the most beneficial user of these premises as premises.
.
I pause there to observe that it seems to me that the test posed by Lord Wright was that contained in the last sentence. Lord Wright continued:One way of achieving that result may be to use these premises along with and in_ conjunc tion with some other premises, and to achieve that result some structural alterations may be: n_d probably always will be, necessary. Take the case where it is _desired to !n?lude an adJoin1ng shop, as Was done in the case of Nos 18 and 20 Commercial Road originally, or take the case where, in order to make the best use of a shop opening out in the street, it is desirable to remove to another position ancillary conveniences and apparatus. For instance, it might be desirable to shift the heating and other apparatus and lavatories to adjoining premises, making any necessary openings for that purpose, and it might be desirable for that purpose to take out of the shop those things which are provided for in other quarters. In all t ese cases the shop would cease to be a self-contained shop, and ina sense some part of it would be dismantled, and there would be structural alterations; but the result would
be that from the Point of view of the tenant he would be getting, during the period of his lease,a more beneficial user of the demised premises.
Romer LJ, who agreed with Lord Wright, said at p. 56:
AsI see it, the question is this: Will these alterations render the tenants’ occupation of the demised premises more convenient and comfortable to them? In the course of the argument
I ventured to give an illustration of an alteration of demised premises, which would be an improvement, from the tenant’s point /:>f view, in the sense that it would add to the reason
able enjoyment by him of the demised premises, even although it was an alteration in connection with premises which adjoin the demised premises.
Those were the dicta which have been relied upon by the applicant in this case as representing the appropriate test to apply in the instant case.
In the subsequent case, involving the same parties, Lambert v. FW Woolworth & Co_ Ltd [1938] Ch 883, it was pointed out that the judgments of the majority (Lord Wright and Ron:er l.J) were obiter: since the issue in the first of those cases was concerned not with the test but with the reasonableness or not of the sum demanded as condition of granting consent. Undoubtedly that is right; those dicta were obiter.
But it then remains to examine what was said in the subsequent case where that was a relevant issue. Slesser LJ said at p. 901:
In other words (as the court has, by a majority, I think, already decided), the question whether the alteration is an improvement must be regarded from the point of view of the tenant. This was the View taken by Luxmoore J in Balls Brothers Ltd v. Sinclair following the ecision of Rowlatt J in Lilley & Skinner Ltd v. Crump. It isa view which, as _I ead their Judgments, found favour with the majority of this court on the last appeal, but 1f It be, asI think it is, open to I.ls to consider the matter, I would say that I also have come to the conclusion that the question of improvement must be regarded from the point of view of the tenant. I also accept the view that it must be limited to an improvement of the demised
p operty, for !hat and that only is the subject-matter of the whole subsection which is dealing with the making of 1nnprovements of the demised premises.
On p. 904, Slesser LJ said:
In each case, the me.tter must be regarded, I agree, from the point of view of the demised premises as such. It is from that point of view that the tenant here contends that the user of the present shop, 11,e demised premises, will be improved by access toa wider area;
whether that wider area include contiguous premises or be an arcade or give better access toa highway, seems to me immaterial.
I follow, therefore, the views expressed by the majority of this court in the recent appeal in itmhipsrcoavesemeantd.a..m of Opinion that the alteration here required can properly be said to be an
Although the majority of the court in that case did not expressly approve the reasoning of Lord Wright and Romer LJ in the earlier case, it seems to me that they implicitly did so and Certainly did so as far as the conclusion is concerned.
Mr Ellis therefore argues that one of the tests proposed in these cases- in particular and in others which he says reached a similar conclusion, a commercial need for the improvements sought, whereas in the instant case no such need has been demonstrated. The applicant, however, was not asked about this, and in my view it 11 Implicit for the purpose of his application that the applicant’s need was for greater accommodation. Nor do I think that there is substance in Mr Ellis’ submission that there is a distinction between enlarging premises upwards – ie into the airspace – which differentiates that situation from lateral additions. That part of the proposed Improvement involved an addition which does not, on the test applied by Lord Wright, mean that the beneficial use of the premises themselves as demised did not occur almply because that beneficial use is improved by some addition to premises which had not been demised except in the sense that they were embraced by the airspace above. It seems to me that the flat will benefit by such improvement and that the use of the flat was itself improved by the additional accommodation provided. For the sake of example, a guest could now be accommodated, since there would be an addi tional room and bathroom for his use.
For my part, therefore, I agree with the learned recorder and reject that aspect of this appeal.
As to the second issue raised on this appeal, that the respondent had not unreasonably withheld her consent, I have the following comments. Before this court It was sought to argue the proposition that the improvements could not be carried out without committing torts of one sort, either trespass or nuisance. It seems to me, however, that that argument is really not open to the respondent. First of all, it finds no place in the notice of appeal; it finds no place at all in the amended answer; it was not argued before the learned recorder, who has therefore made no ruling upon it, and the elements which would be necessary to establish either of those propositions have never been investigated. It may be that if the only way in which the improve ments sought could be carried out would have involved a tort such as trespass, and the improvements therefore could not be carried out without the licence of the landlord and that such licence had been refused, then without a licence to commit a tort, the refusal to consent to the improvements would not be unreasonable. But it seems to me that such an argument cannot arise here. It was never investigated before, nor has it ever seen the light of day in any pleading. As far as I am aware, that aspect of the argument was advanced for the first time before this court, which cannot deal with it, since there is not the factual finding or investigation upon which to decide. The learned recorder, because the issue was never raised before him, of course has made no finding upon it. Accordingly, in my view, it would not be open to this court, even if it were practicable to do so, to consider those matters.
There remain matters which were raised in the notice of appeal and which were in one form or another clearly put before the learned judge in the court below, that is to say, the disturbance inevitably likely to result from building operations taking place over some six weeks. One must, however, observe that the respondent herself, in the very short note of her evidence, did not raise this as a ground of objection at all. She said, so far as is relevant:
I looked at the applicant’s letter dated November 20 1986: I answered it shortly thereafter by registered letter, asking him to refer to the condition of the lease. I have refused to allow the conversion to go ahead because it goes beyond the demised premises; in other words it would change the structure of the building.
Thus far, of course, she is adverting to ground 1 of the notice of the appeal, and she continues:
Furthermore I know that building works sometimes go wrong; there would for instance be the possibility of the ceiling in my flat underneath collapsing.
….although it is perfectly plain that argument was addressed to the learned recorder on those points. Nor does it seem to have been put to the applicant in cross examination, save in so far as reference was made to the letter of November 20 1986. The relevant paragraph of that letter reads (and it is a letter written by the applicant):
Apart from the obvious inconvenience of having building works in progress, your flower beds at the front of the site will be disturbed to accommodate some building materials – the remainder will be kept in the street. A scaffolding frame will be erected above the front door which should be sufficient, and they will need a similar frame for a short while only at the rear by the bedroom windows.
There he may be said to be adverting to inconvenience in general terms and pos sibly, so far as the flower beds are concerned, to a matter which would require the respondent’s consent if in fact that method of work was in due course carried out. There is, however, nothing in that paragraph to suggest that the only way of carrying out the work would involve either trespass or nuisance.
The matter clearly was put before the learned recorder, even though it does not appear to have been in the respondent’s mind at all, and certainly not in the forefront of her mind, because from the passage which has already been cited it is said:
The second limb of Mr Ellis’ subciission argues that Mrs Florensa’s refusal is reasonable because of the disruption it will entail.
The learned recorder went on to aeal with that aspect, and he did so, so far as was possible, on the evidence before·him. ….
It seems to me clear that, in so far as landlords are allowed to rely on reasons which were
not stated to the tenant, they can only be permitted to rely on reasons which did actually Influence their minds at the relevant date …
– He goes on to say what the relevant date in that case was-
The decision of this court in Lovelock v. Margo [19631 2 QB 786 clearly establishes that in cases such as the present the court has to have regard to the landlord’s actual state of mind at the relevant time. The test is not a purely objective one, though no doubt inferences may be drawn as to his state of mind from his words and actions and all the other circumstances
of the case.
Although not conclusive, and I certainly would not base my judgment upon it, it does, for the reasons I have indicated, appear that certainly questions of disturbance, noise and so on were not at the forefront of the respondent’s mind, if indeed they were ever in her mind at all, having regard to the absence of any reference to them
in the note of her own evidence.
So far as canvassed before the recorder, he madea finding of fact on the evidence which was before him, that is to say that the prospect of noise, dirt and dis turbance was not such as in the circumstances to justify the refusal of consent for the improvement sought. That was a finding of fact on such evidence as was before him. For my part,I am quite unable to say that the conclusion and finding he made was wrong, despite the fact that the applicant had to discharge the onus which was upon him that the consent was unreasonably withheld.
It would obviously entail some noise, some dirt and quite possibly temporary loss of light to Mrs Florensa. Any building work inevitably entails some noise and dirt, and that, in my judg ment, is not reasonable grounds for withholding consent to the proposed work.
No expert evidence was called before the court to support the proposition that the works, if carried out, would inevitably cause such disturbance, dust or noise as could amount of the tort of nuisance, nor indeed was any expert evidence called at all on that aspect of the case as it would seem to me would need to be. The reason for that is manifest, that there had been an exchange of experts’ reports but they had been confined to the six matters raised in the amended answer, which had been abandoned before trial.
Neither expert’s report, as I understood it, dealt at all with the question of incon venience or disturbance. For that very good reason, neither expert was called. But it follows, however, that the matter was not really fully canvassed in so far as evidence is concerned, although it is plain that arguments were addressed to the learned recorder involving those propositions.
The learned recorder dealt with the evidence in so far as it existed and was put before him. It seems to me that it is clear that Mrs Florensa’s state of mind, when initially refusing to grant permission for the alterations, was not based at all on the disturbance which might thereby be caused. There was a suggestion in the short note of evidence of the applicant that in fact she was out all day working and that accordingly, if the evidence proved to be right that the building works would be carried on only between 8 or 8.30 am and 4 or 4.30 pm, it may well be that she would not have been very adversely affected by any noise, disturbance or dirt, although no doubt those would be to some extent manifest on her return.
Clevelland Petroleum v Dartstone Limited
Lord Denning M.R.: This case concerns a garage and petrol station called the County Oak Service Station, at Crawley in Sussex. Mr Sainsbury was the owner in fee simple. On July 1, 1960 there were three separate transactions. First, Mr Sainsbury granteda lease of the entire premises to the Cleveland Petroleum Co. Ltd for 25 years, from July 1, 1960. Cleveland paid him £50,000 premium and agreed also to paya nominal rent of £10 a year. Second, Cleveland granted an underlease of the premises toa company called the County Oak Service Station Ltd. That company was one in which Mr Sainsbury had a predominant interest. The underlease was for 25 years, less three days from July 1, 1960, ata rent of £2,000 a year. In that underlease there was this covenant tying the underlessees to
Cleveland:
At all times to carry on the business of a petrol-filling station at the premises and not to store
handle sell or distribute on or from the premises any motor fuels other than those supplied
by the lessors.
There wasa provision that if Cleveland could not supply petrol the underlessees
could get it from Esso; and if Esso could not supply, they could get it from somebody else. There was another covenant about lubricating oil, anda further covenant to
keep the premises open to the public from7 a.m. to8 p.m.
The underlessees, County Oak Service Station Ltd, duly carried on business in accordance with the covenants. They took all their petrol from Cleveland and paid their rent of £2,000a year. Afterwards they assigned, with the consent of Cleveland, to another company; and that other company afterwards assigned, with Cleveland’s
assent, toa company called J. A Gregory (Car Sales) Ltd. All those assignees com plied with the tie to Cleveland.
On August 30, 1968, the underlessees assigned the underlease toa company called Dartstone Ltd.A licence was granted by Cleveland for that assignment. Under the assignment Dartstone Ltd undertook to pay the rent and “observe and perform the covenants and conditions” on the part of the underlessees contained in the
underlease. Mr Gregory, who was the dominant shareholder in Dartstone Ltd, went surety for the company.
The ink was hardly dry on that assignment when Dartstone Ltd challenged the covenant trying the underlessee to Cleveland. On September 30 1968, solicitors on behalf of Dartstone Ltd. wrote saying that they had been considering the validity of the ties, and they were advised that they were void. Thereupon Cleveland issueda writ against Dartstone Ltd for an injunction to restrain them from breaking the agreement by storing, handling, selling or distributing on or from the County Oak Service Station any motor fuels other than Cleveland. Eveleigh J. granted an interim injunction until trial. The underlessees, Dartstone Ltd, with Mr Gregory, appeal to this tcroaudret.aTnhdeayrseavyotidh.at prima facie. ttie covenants in the underlease are in restraint of
The law on this subject was fully considered by the House of Lords in Essa Petroleum Co. Ltd v. Harper’s G11tage (Stourport) Ltd [1968] AC. 269.I need not go through all the judgments today,’ but it seems plain to me that in three at least of the speeches of their Lordships a distinction is taken betweena man who is already in possession of the land before he, ties himself to an oil company anda man who is out of possession and is let into it by an oil company. If an owner in possession ties himself for more than five years to take all his supplies from one company, that is an unreasonable restraint of trade and is invalid. But if a man who is out of possession
is let into possession by the oil company on the terms that he is to tie himself to that company, such a tie is good. Lord Reid said (at p. 298):
Restraint of trade appears to me to imply that a man contracts to give up some freedom which otherwise he would have had. A person buying or leasing land had no previous right to be there at all, let alone to trade there, and when he takes possession of that land, subject toa negative restrictive covenant he gives up no right or freedom which he previously had.
Lord Morris of Borth-y-Gest said at p. 309:
If one who seeks to takea lease of land knows that the only lease which is available to him isa lease witha restriction, then he must either take what is offered (on the appropriate
financial terms) or he must seek a lease elsewhere. No feature of public policy requires that if he freely contracted he should be excused from honouring his contract.
Lord Pearce said (at p. 325):
It would be intolerable if, when a man chooses of his own free will to buy, or takea tenancy of, land which is made subject to a tie (doing so on terms more favourable to himself owing to the existence of the tie) he can then repudiate the lie while retaining the benefit.
It seems to me that in this court, on an interlocutory application, we should go by those sayings in the House of Lords. We should hold that whena person takes pos session of premises undera lease, not having been in possession previously, and on taking possession, enters into a restrictive covenant tying him to take all his supplies from the lessor, prima facie the tie is valid. It is not an unreasonable restraint of trade. Such was the case here, because the County Oak Service Station Ltd did not, so far as we know, have possession before the underlease of July 1, 1960. Sothe tie in the original underlease was valid. In any case, however, it is to be observed that Dartstone Ltd took possession themselves with their eyes open. They knew that there was this restrictive covenant upon the land and nevertheless entered into this assignment binding themselves to it. Prima facie it is valid.
This seems to meet the justice of the case. Mr Sainsbury himself has had his £50,000 free to use as he pleases. It would be strange if, immediately after receiving the £50,000, he could have sold off his shares in the County Oak Service Station Ltd and that that company could then have repudiated the tie. It would mean that Cleveland would have paid their £50,000 for very little. That would not seem to me to be right. I think the judge was right to grant an interim injunction. I would therefore, dismiss this appeal.