Renewal Rights
Cases
Stapleyside Company v Carraig Donn Retail Ltd
[2015] IESC 60
Judgment of Mr. Justice Clarke delivered the 9th July, 2015.
1. Introduction
1.1 The background to these proceedings is the difficulty faced by many tenants, at the height of the financial crisis, in paying the rent due under leases where that rent had been fixed at the height of the boom. In common with many such cases an attempt was made by the parties to these proceedings to negotiate a temporary reduction in rent. The plaintiff/appellant (“Stapleyside”) is the landlord and the defendant/respondent (“Carraig Donn”) the lessee of a shop at the Crescent Shopping Centre in Limerick held under a 25 year lease which commenced in 2001. In circumstances which will need to be explained in more detail, an arrangement was entered into between the parties which provided for a reduced rent for the year 2009, but also contained a provision concerning the possible termination or surrender of the lease in question. The principal issue which arose between the parties, and which is the focus of this appeal, concerns the proper interpretation of those arrangements and in particular the termination/surrender term included in same.
1.2 As a result of the service of a document, the precise legal status of which is in dispute, Carraig Donn claimed that the relevant lease had come to an end, but in circumstances where it was entitled to bring an application before the Circuit Court for the grant of a new lease under the provisions of the Landlord and Tenant (Amendment) Act 1980 (“the 1980 Act”). On the other hand, Stapleyside maintained initially that it was entitled to an order of specific performance requiring Carraig Donn to surrender the lease in question. However, by the time the case came to be heard before the High Court, Stapleyside had abandoned that claim and simply argued that the original lease continued in existence.
1.3 Carraig Donn succeeded in the High Court. On that basis, and without prejudice to the appeal brought by Stapleyside to this Court, the Circuit Court proceeded to fix the terms of a new lease under the provisions of the 1980 Act.
1.4 In substance, Carraig Donn asserts that the High Court ruling was correct. On that basis, it is said that the original lease was terminated, that its entitlement to a new lease under the provisions of the 1980 Act thereby arose, and that now it can properly be said to hold the relevant premises on foot of the new lease and at the rent fixed by the Circuit Court.
1.5 On the other hand, Stapleyside asserts that the High Court incorrectly concluded that the lease in question had been terminated. On that basis, it is argued that it follows that the original lease continues in effect. While it is, therefore, common case between the parties that Carraig Donn is entitled to continue to occupy the relevant premises, the lease under which that entitlement arises is the subject of dispute and, importantly, the rent payable both in respect of certain periods to date and also into the future is likewise disputed. If Carraig Donn is right, the rent payable is €230,000.00 per annum on the basis of the Circuit Court order, while if Stapleyside is correct, the rent payable is the sum of €309,500.00 payable as a result of the original lease and a review of rent which had already occurred prior to the events which gave rise to these proceedings. In substance, the issue between the parties turns principally on the proper interpretation of the arrangements entered into at the time when a reduced rent for the year 2009 was agreed. In order to understand precisely how that issue arises, it is necessary to turn to the facts.
2. The Facts
2.1 On 6th February, 2002, Carraig Donn entered into a 25-year lease (“the Lease”) with Stapleyside of the relevant retail unit at the Crescent Shopping Centre. Although the Lease is dated the 6th of February, 2002, the term of the lease is stated to commence, at p. 5 thereof, on the 7th September, 2001. Under the terms of the Lease it was agreed that an annual rent of IR£120,000.00 would be paid subject to a rent review every five years for the duration of the term. On that basis, on 7th September, 2006, a rent review was conducted with the annual rent being set at €309,500.00 thereafter.
2.2 In early 2009, Carraig Donn encountered some financial difficulties and contacted Stapleyside with a view to negotiating a reduction in rent. The parties commenced negotiations. As part of those discussions, Stapleyside sent an email to Carraig Donn on 29th April, 2009, communicating an offer of “two options” for such a reduction. While there was no formal written acceptance of either of the proffered options, it is accepted by both of the parties that a letter dated 13th May, 2009, sent by Carraig Donn to Stapleyside’s parent company (“Clancourt”) enclosing a cheque for the sums due under the second option (“Option 2”) – being €207,365.00, or 67% of the full 2009 rent – can be taken as an acceptance of Option 2. The parties therefore accept that an agreement in terms of Option 2 was entered into as a result of the sums concerned being proffered and accepted on 13th May, 2009 (the “May Agreement’).
2.3 Option 2 is in the following terms:-
“Pay 67% of the full years 2009 rent + 100% of Q1 and Q2 service charge and insurances now
Pay Q3 and Q4 service charge quarterly in the normal way
Clancourt have an option to take surrender of the Unit 25X lease subject to 90 days notice and refund of rent paid in advance
Clancourt/Carraig Donn to negotiate new lease on alternative unit in event that Unit 25X lease surrendered
Review position again at 31/12/2009 if option not exercised”.
2.4 On 28th May, 2009, Stapleyside emailed a proposed written contract to Carraig Donn which was said to be intended to formalise the position as agreed in the May Agreement. Ultimately, neither party signed that contract. However, neither side suggests that the failure to sign that proposed formal contract had any effect on the binding nature in law of the May Agreement.
2.5 On 10th November, 2009, Stapleyside served Carraig Donn by post with a notice, described as a notice of termination, in the following terms:
“We, STAPLEYSIDE COMPANY, HEREBY GIVE YOU NOTICE that it is our intention to terminate on the 16th day of February 2010 the term granted by the Lease referred to in the Schedule hereunder in respect of premises located within the Crescent Shopping Centre, Dooradoyle, County Limerick.”
2.6 Carraig Donn took that notice as bringing the Lease to an end, and invoked what is argued by them to have been a statutory right to claim a new tenancy under Part II of the 1980 Act, as Stapleyside was a commercial tenant for five years or more prior to the alleged termination. On that basis, on 18th December, 2009, Carraig Donn served Stapleyside with a notice of intention to claim relief under s.20 of the 1980 Act.
2.7 Conversely, Stapleyside contended that, on the basis of the May Agreement, and s.17(1)(a)(iii) of the 1980 Act, Carraig Donn has lost its right to a new tenancy.
2.8 As a result of the High Court decision, which, of course, upheld Carraig Donn’s position, an Order has now been made by the Circuit Court to grant a new lease under the 1980 Act with annual rent set at €230,000.00
2.9 I now turn to the High Court judgment.
3. The High Court Judgment
3.1 Ultimately, the view which McGovern J. took was that the notice served by Stapleyside on Carraig Donn which was, as has already been noted, described as a “Notice of a Termination” brought the Lease to an end in circumstances which were outside of the arrangements contemplated in the May Agreement. While it is clear that McGovern J. did not take the view that Stapleyside had any legal entitlement to bring the tenancy to an end in that way, it is also clear that he concluded that Carraig Donn had accepted that the notice had terminated the Lease and that the combination of the service of the notice and its acceptance by Carraig Donn brought the Lease to an end.
3.2 That being said, McGovern J. took the view (at para. 10 of his judgment) that “[t]he resolution of the dispute between the parties turns, to a significant extent, on an interpretation of the clause in the email of 29th April, 2009, [which contained Option 2 of the May Agreement] which states:
‘Clancourt have an option to take surrender of the Unit 25X Lease subject to 90 days notice and refund of rent paid in advance.’”
3.3 The trial judge then went on to deal with the argument put forward by Stapleyside that the true legal effect of the May Agreement meant that Carraig Donn had, for valuable consideration, agreed to surrender the Lease and the argument that s.17(1)(a)(iii) of the 1980 Act was said to have the effect of depriving Carraig Donn of its right to a new tenancy where it had agreed to surrender its tenancy when called upon. McGovern J. held that “this was not what happened here”, as the subsection specifically provided for surrender by the tenant. The trial judge did not consider that it was appropriate to characterise the events which happened as amounting to a surrender precisely because there was no act of surrender on the part of Carraig Donn and on the basis that it was inherent in the nature of a “surrender” that it was an act carried out by a tenant rather than a landlord.
3.4 McGovern J. did not accept Stapleyside’s submission that by not “yielding up possession or surrendering the Lease, [Carraig Donn] has repudiated the agreement as set out in Option 2”, which, it was said, thereby entitled Stapleyside to recision. Ultimately, McGovern J. held that “having regard to the application of the contra proferentem rule and the use of the word ‘surrender’ in Option 2 when, what in fact happened was a demand for possession by the plaintiff on giving ninety days notice” there was no repudiatory breach of the May Agreement on the part of Carraig Donn.
3.5 McGovern J. was of the view that Stapleyside took a step which was outside the terms of the May Agreement because it did not “take surrender of the Unit . . .” but rather, served a notice of termination, which was accepted by Carraig Donn subject to its right to claim a new tenancy. On that basis, it was held that the Lease could no longer subsist. Accordingly, McGovern J. took the view that the claim by Carraig Donn for a new tenancy was a matter for the Circuit Court.
4. The Appeal
4.1 In arguing its appeal before this Court, Stapleyside suggested that the trial judge was incorrect in suggesting that the parties were agreed that the Lease had come to an end. In that context, it is necessary to look at the pleadings. When the case was originally commenced, Stapleyside sought specific performance in the following terms:-
“1. Specific performance of an Agreement made between the Plaintiff and the Defendant on 15 May 2009;
2. Damages, in addition to and/or in lieu of specific performance, pursuant to section 2 of the Chancery Amendment Act, 1858 or otherwise;
Further or in the alternative and without prejudice to paragraphs 1. and 2.:
3. An Order for possession of the premises described in the Schedule hereto”
Other, ancillary relief was also sought.
4.2 However, in the case as ultimately argued before the High Court, Stapleyside departed from its original claim. By Amended Statement of Claim dated 27th October, 2010, on foot of an Order of the High Court dated 18th October, 2010, permitting such amendment, Stapleyside, in electing to purport to accept what was said to be the repudiation of the May Agreement by Carraig Donn, and abandoning its claim for specific performance, sought recision of the May Agreement including, as a consequence, the payment of the balance of all monies which were due on the foot of the Lease without deduction.
4.3 On that basis, it was argued by Stapleyside that the position which it ultimately urged on the High Court was one entirely consistent with the situation argued for on appeal, being that, in all the circumstances of the case, the Lease continued to subsist. In substance, the argument made was that the proper interpretation of the relevant sentence from the May Agreement was that Stapleyside could give notice calling on Carraig Donn to surrender the Lease and could, as they in fact initially sought to do, bring proceedings to require Carraig Donn to surrender the Lease in the event that Carraig Donn did not comply with the requirement to surrender. On that basis, it was said that, Carraig Donn not having in fact surrendered the Lease and Stapleyside not having proceeded with its application for specific performance, the Lease continued in existence.
4.4 It was said that the notice of termination could not be effective to terminate the Lease because there was no legal entitlement on the part of Stapleyside, as landlord, to terminate the Lease in that manner. On that basis, it was said either that the notice in question was ineffective completely or was only effective to require Carraig Donn to surrender the Lease. It was said that it followed that, for the Lease to come to an end, a further step would have been required, being an actual surrender by Carraig Donn. As that step had not been taken by Carraig Donn, and had not been directed by the Court because of the abandonment by Stapleyside of its claim for specific performance, it was said that the service of the relevant notice had not in fact terminated the Lease at all.
4.5 Counsel for Carraig Donn, on the other hand, argued that the proper interpretation of the May Agreement was that it amounted in substance to the equivalent of an agreement which provided for a break clause in the Lease. As a consequence it was said that Stapleyside was entitled, in return for having agreed to accept the payment of a reduced rent, to serve a notice of termination. On that basis, it was argued that the effect of the service of the relevant notice was to terminate the Lease with effect from the 16th February, 2010. On that argument, it was said that the Lease has now been terminated and that a new lease has properly been granted by the Circuit Court under the provisions of the 1980 Act.
4.6 As is clear from that analysis, the central issue in dispute between the parties is as to the proper interpretation of the May Agreement. I will shortly turn to a discussion of that issue, but before so doing it is necessary to touch briefly on the potential impact of the 1980 Act on that question.
5. The 1980 Act
5.1 Two provisions of the 1980 Act are relevant.
5.2 Section 17(1)(a)(iii) of the 1980 Act provides that:-
“A tenant shall not be entitled to a new tenancy under this Part if – (iii) a tenant has terminated the tenancy by notice of surrender or otherwise.”
5.3 Section 85 of the 1980 Act provides that:-
“So much of any contract, whether made before or after the commencement of this Act, as provides that any provision of this Act shall not apply in relation to a person or that the application of any such provision shall be varied, modified or restricted in any way in relation to a person shall be void.”
5.4 In addition, reference was made to Bank of Ireland v. Fitzmaurice [1989] I.L.R.M. 452, in which Lardner J. held that a clause providing for an exaggerated rent in particular circumstances was intended to exercise a compelling pressure on the lessee in question to surrender his tenancy, thus losing any right to claim a new tenancy. It was held that such a clause, while not expressly disentitling the lessee to a new lease, nonetheless fell foul of s.85 of the 1980 Act.
5.5 In those circumstances, there was some debate at the hearing before this Court as to whether a term in a lease between a landlord and a tenant, which provided that the landlord be entitled to require the tenant to surrender, might fall foul of section 85.
5.6 Counsel for Stapleyside accepted that there might be a strong argument that the inclusion of a simple and straightforward clause in a lease which allowed the landlord to serve a notice on the lessee requiring the lessee to surrender might well be void under section 85. However, counsel argued that the facts of this case were significantly different in that, it was said, the arrangement entered into in this case was that Carraig Donn, in return for obtaining a significant benefit to which it was not otherwise entitled (being the acceptance of a significantly reduced rent for one year) thus saving it a sum in excess of €100,000, agreed to surrender the Lease if called on to do so in accordance with the terms of the May Agreement.
5.7 However, those, and possibly other, Landlord and Tenant Act issues may well not arise depending on the view which is taken as to the proper interpretation of the May Agreement in the first place. If, properly interpreted, that agreement required an actual surrender by Carraig Donn (whether completely voluntarily or as a result of an order for specific performance of a court of competent jurisdiction) then the Lease clearly could not have terminated, and no question of the application of either s.17 or s.85 would arise.
5.8 If, on the other hand, the May Agreement is to be interpreted, as counsel for Carraig Donn suggested, as entitling Stapleyside to serve a notice which would have the effect of terminating the Lease, then, for somewhat different reasons, neither s.17 nor s.85 may have had any effect, for there would be no surrender and thus no arguable exclusion by contract of the right to a new tenancy.
5.9 It follows that the first and key question which the Court was required to address was as to which interpretation of the May Agreement was correct. I turn to that question.
6. Discussion
6.1 It seems to me that the key question is the proper characterisation of the notice served by Stapleyside on Carraig Donn in the context of the May Agreement as properly construed. It must be recalled that the relevant sentence from the May Agreement provided that Clancourt (which it was accepted could be taken as a reference to Stapleyside) would “have an option to take surrender”. It seems to me to be clear, therefore, that what the agreement contemplated was that Clancourt/Stapleyside could serve a 90 day notice on Carraig Donn which would have the effect of requiring Carraig Donn to surrender the Lease. Whether such an agreement might fall foul of s.85 of the 1980 Act is not an issue which it is necessary to address just at this stage. Looked at as a matter of contract, and having regard to the terms of the agreement placed in their context, it seems to me that the meaning can only be as I have just suggested.
6.2 If I might digress, it is of some importance to emphasise that those engaged in commerce are often critical of what they might see as barriers placed in the way of doing sensible business by lawyers who are concerned with attempting to put arrangements agreed into a legally acceptable form. It must be accepted that there may be times when this can have the effect of slowing down the conduct of business. However, as this and many other cases amply demonstrate, the problem with arrangements not being adequately converted into a legally recognisable form is that significant problems can be encountered if things go wrong. In such circumstances, a court is required to do the best it can with the language used by the parties (the text) to be construed in the light of all of the circumstances in which the agreement was entered into (the context). But it is important to acknowledge that both text and context are relevant in the proper interpretation of commercial documents.
6.3 Those principles of interpretation (the “text in context” method) apply to no lesser extent in the field of property documentation. To ignore context is to ignore the well accepted fact that words used in agreements would be seen by any reasonable person having knowledge of the surrounding circumstances as being potentially affected as to their meaning by the context in which the agreement was entered into in the first place. But equally, the text must be given all appropriate weight, for it is in the terms of that text that the parties have settled on their arrangement.
6.4 In this case, the parties, for better or worse, used the term “surrender”. As the trial judge pointed out, a surrender is an act of a tenant or lessee in giving up their interest to the landlord. A landlord cannot, by a unilateral act, cause a surrender of a lease. However, the May Agreement contemplates that the landlord in this case can serve a 90 day notice which will give the landlord the option to “take a surrender”. The only workable meaning of the language used is that the intention of the parties was that the landlord (by serving the relevant notice) placed on the lessee an obligation to surrender at the end of 90 days.
6.5 In my view, therefore, the proper construction of the May Agreement is that Stapleyside was entitled to serve a notice which placed a legal obligation on Carraig Donn to surrender the Lease at the expiry of the 90 days.
6.6 In the context of that interpretation, how then should one characterise the notice served by Stapleyside? Two possibilities arise. First, it might be said that the notice is ineffective to achieve the end contemplated by the May Agreement because it purports to terminate the Lease rather than to call on Carraig Donn to surrender the Lease. Second, it is possible to say that, in the context of the May Agreement, the notice should be interpreted as invoking the entitlement of Stapleyside to require Carraig Donn to surrender. However, in my view, it is not necessary to choose between those two possible characterisations, for in either event the notice could not have brought the Lease to an end. It may be the case that the notice was entirely ineffective, in the terms of the May Agreement, because it purported to terminate when the only entitlement was to call on Carraig Donn to surrender. Alternatively, the notice may only have had the effect of creating a legal obligation on Carraig Donn, by virtue of the terms of the May Agreement, to surrender. Given that Carraig Donn did not, in fact, surrender and was not required by court order to surrender, the Lease would not, in that scenario, have come to an end either.
6.7 It only remains to consider whether, as the trial judge clearly felt, the notice, having been accepted by Carraig Donn, could give rise to a termination of the Lease altogether outside of the scope of the May Agreement. I am not persuaded that the notice could be said to have had that legal effect even if accepted by Carraig Donn. Stapleyside had no right to terminate the Lease by the simple service of a notice. Such a right did not exist under the terms of the Lease itself. Such a right did not arise under the May Agreement as properly construed. The service of such a notice could not, therefore, be legally effective to bring the Lease to an end. If it had any potential legal consequence it was only to require Carraig Donn to surrender. As Carraig Donn did not surrender and as Stapleyside abandoned any claim for specific performance of the May Agreement, thus abandoning any claim for an order which would have required Carraig Donn, in conformity with the May Agreement, to surrender, it seems to me to follow that under none of the relevant scenarios can it be said that the Lease has come to an end.
7. Conclusions
7.1 On that basis, I am satisfied that the Lease remains in existence. It follows that Carraig Donn holds the property in question under the Lease at the reviewed rent of €309,500.00 fixed in accordance with the rent review to which I have referred. It likewise follows that, the Lease not having terminated at all, there could have been no question of a valid application to the Circuit Court for a new lease under the terms of the 1980 Act.
7.2 In the light of those findings, I would propose that the Court hear counsel further as to the orders which should be made on this appeal and, indeed, on the quest
Cuprum Properties Ltd v Murray
[2017] IEHC 699
JUDGMENT of Mr Justice Max Barrett delivered on 23rd November, 2017.
I. Overview
1. Mr Murray is a publican who operates The Long Stone Pub, a hostelry on Townsend Street in Dublin City Centre. It appears that his lease has expired and his landlord wants him out of the premises so that a re-development scheme can proceed. “Delay to that development,” the court is advised in the plaintiff’s written submissions, “will result in losses amounting to millions of euro”. However, the Commercial Court is but a part of the High Court; a case cannot be ‘fast tracked’ through the Commercial Court that the High Court has no jurisdiction to hear; and the unambiguous import of the Landlord and Tenant (Amendment) Act 1980, as interpreted by the Supreme Court in its long-standing decision, binding on this Court, in Kenny Homes & Co Ltd v. Leonard (Unreported, Supreme Court, 18th June, 1998) is that the within proceedings must now be dismissed for want of jurisdiction on the part of this Court.
II. Some Undisputed Facts
2. Counsel for Mr Murray has, in his written submissions, helpfully extracted from the affidavit evidence before the court a summary of the following undisputed facts, which the court respectfully adopts:
“(a) The Defendant is currently in occupation of the Premises (the Townsend Street property) in pursuance of the terms of an indenture of lease dated…5th October, 2012 between the Plaintiff…and the Defendant…(the ‘2012 Lease’);
(b) The 2012 Lease had a term of five years’ duration, which…term expired on…4th October, 2017;
(c) The Defendant has been in occupation of the Premises for a period of in excess of five years’ duration;
(d) The Defendant has, throughout the aforesaid period of occupation, used the Premises wholly or partly for the purposes of carrying on a business, specifically the operation of a public house;
(e) The Defendant has complied in full with the covenants contained within the 2012 Lease, in particular the covenant to pay the agreed rent…
(f) Prior to the expiry of the 2012 Lease, the Defendant served a Notice of Intention to Claim Relief dated…2nd October, 2017 (the ‘Notice’) in accordance with the provisions of section 20(1) of [the Act of 1980]…
(g) The Notice claims a new tenancy of the Premises or, in the alternative, compensation for disturbance;
(h) In spite of the service of the Notice, the Plaintiff has not offered the Defendant a new tenancy nor indeed any compensation for disturbance; and
(i) The claim of the Defendant for a new tenancy of the Premises has yet to be determined by the Circuit Court.”
3. Arising from the foregoing, Mr Murray maintains that he has a valid claim for a new tenancy of the premises that are the subject of the expired lease. It would be fair to say that this is strenuously resisted by the plaintiffs who have drawn the attention of the court (though, in truth, they should be drawing this to the attention of the Circuit Court) that prior to entering into the said lease, Mr Murray, on 25th June 2012, executed a Deed of Renunciation, which states Mr Murray to have been acting, with the benefit of “independent legal advice”, and which further provides as follows:
“Pursuant to the provisions of Section 47 of the Civil Law (Miscellaneous Provisions) act 2008 the Tenant [-to-be] hereby renounces any entitlement to a new tenancy in the premises at The Long Stone Pub…in which the tenant might hereinafter acquire, whether under the above-recited Lease or upon the expiry of its term or the sooner determination thereof or otherwise howsoever arising.”
4. There is no “above-recited Lease”; however, the introductory line of the Deed reads “NOEL MURRAY…has negotiated with CUPRUM PROPERTIES LIMITED…to take a tenancy of The Long Stone Pub” and it is doubtless this contemplated lease to which the Deed intends to refer. Ostensibly it may seem odd to renounce what has not yet been executed, but presumably matters are structured so because if execution of the lease preceded execution of the renunciation, it could as a matter of practice prove difficult to procure from a sitting tenant a previously promised execution of a deed of renunciation.
5. Armed with its Deed of Renunciation, the plaintiff clearly considers that it has a complete answer to Mr Murray’s assertion that he is entitled to a new tenancy at this time. Thus, the plaintiff asserts in its written submissions:
“[Mr Murray’s] claim is spurious, mischievous and knowingly without substance. The Defendant has expressly renounced any such entitlement by way of a deed of renunciation….In truth, the Defendant is seeking to invoke the 1980 Act, not for a bona fide purpose, but because he knows this will delay and frustrate the Plaintiff to the commercial advantage of the Defendant.”
6. Maybe the plaintiff is right in this, maybe it is wrong – the court does not know. But what it is not going to do is consider the dispute between the parties or to make any adjudication thereon. Because if either of them has something to say concerning that dispute, and each clearly does, that, for the reasons identified in the within judgment, is something which falls to be said in the Circuit Court and to be adjudicated upon by a Circuit Court judge.
III. Reliefs Sought
(i) The Reliefs Sought by the Plaintiff in Its Principal Application.
7. The following are the reliefs sought by the plaintiff in the substantive proceedings:
“1. An Order for possession of the licensed premises known as ‘The Long Stone Pub’…(the Premises)…
2. An Order directing the Defendant and each of them, their servants and/or agents and all other persons having notice of the making of the Order to immediately cease occupancy of and vacate the Premises.
3. An Order restraining the Defendant, whether by himself, his servants and/or agents and all other persons having notice of the making of the Order, from preventing, impeding and/or obstructing the Plaintiffs, their servants and/or agents, from taking possession of the Premises.
4. An Order restraining the Defendant, whether by himself, his servants and/or agents and all other persons having notice of the making of the Order from trespassing upon, entering upon or otherwise attending at the Premises.
5. An Order directing the Defendant to deliver up to the Plaintiffs all intoxicating liquor licenses, certificates and other permits attached to the Premises…
6. An Order directing the Defendant, his servants and/or agents and all other persons having notice of the making of the Order, to deliver up to the Plaintiffs, their servants or agents, forthwith possession of the keys, alarm codes, locks and all other security and access devices and equipment in respect of that Property.
7. A Declaration that the Defendant has renounced his entitlement to a new tenancy and hereby renounced his entitlement to seek relief pursuant to part II of the Landlord and Tenant (Amendment) Act 1980 (as amended) in relation to the Premises.
8. A declaration that the Defendant’s intended application for a new tenancy pursuant to Part II of the Landlord and Tenant (Amendment) Act 1980 (as amended) is being pursued for an ulterior purposes and is an abuse of process.
9. An Order restraining the Defendant’s purported service of a Notice of Intention to Claim Relief and/or intended application to the Circuit Court to seek relief in the form of a new tenancy of the Premises pursuant to Sections 20 and 21 of the Landlord and Tenant (Amendment) Act 1980 (as amended) on the grounds that same constitutes an abuse of process.
10. A Declaration, if necessary, that the purported Notice of Intention to Claim Relief served on behalf of the Defendant is null, void and of no effect.
11. Damages for trespass.
12. Double rent pursuant to section 76 of the Landlord & Tenant Law Amendment Act (Ireland) 1860.
13. Damages of mesne rates in respect of the Premises from the date of the within proceedings to the date of the judgment in the amount of €65,000 per annum.
14. Such further or other Order as to this Honourable Court shall see fit.
15. Interest pursuant to statute.
16. Costs.”
(ii) The Reliefs Sought by Mr Murray in His Preliminary Motion.
8. The following are the reliefs sought by Mr Murray in the preliminary motion to which the within judgment relates:
“(a) An order pursuant to the inherent jurisdiction of this Honourable Court dismissing or striking out the proceedings on the basis that the High Court has no jurisdiction to hear or determine the claim of the Plaintiff;
(b) Further or in the alternative, an order pursuant to Order 19, rule 28 of the Rules of the Superior Courts 1986 and/or pursuant to the inherent jurisdiction of this Honourable Court dismissing or placing a permanent stay on the proceedings as against the Third Defendant [sic] on the basis that they are frivolous and vexatious;
(c) Further or in the alternative, an order pursuant to Order 19, rule 28 of the Rules of the Superior Courts and/or pursuant to the inherent jurisdiction of this Honourable Court dismissing or placing a permanent stay on the proceedings as against the Third Defendant [sic] on the basis that they constitute an abuse of process;
(d) Further or in the alternative an order pursuant to the inherent jurisdiction of this Honourable Court dismissing, striking out or placing a permanent stay on the proceedings as against the Third Defendant [sic] on the basis that they are bound to fail;
(e) Such further or other order as to this Honourable Court shall seem just and appropriate; and
(f) An Order providing for the costs of, and incidental to, this application and these proceedings.”
IV. Applicable Statute-Law
(i) The Landlord and Tenant (Amendment) Act 1980
a. Overview.
9. In a perfect world, landlords and tenants would co-exist in harmony; in the real world they sometimes quarrel. While the Act of 1980 seeks to promote consensual settlement of such quarrels, it also offers a mechanism whereby they may effectively be adjudicated upon by the Circuit Court. Various provisions of the Act of 1980 are of relevance in the context of the within proceedings. These are considered briefly hereafter.
b. Section 20.
10. Section 20 of the Act of 1980 provides, inter alia, as follows:
“(1) A claim for a new tenancy under this Part shall not be maintained unless the claimant, within the time limited in subsection (2), serves on each person against whom the claim is intended to be made a notice of intention to claim relief on the prescribed form.
(2) A notice of intention to claim relief may be served
(a) in the case of a tenancy terminating by the expiration of a term of years or other certain period or by any other certain event –
(i) before the termination of the tenancy, or
(ii) at any time thereafter but before the expiration of three months after the service (not earlier than three months before the termination of the tenancy) on the claimant by the landlord of notice in the prescribed form of the expiration of the term or period of the happening of the event…”.
11. In the within case, the notice contemplated by s.20 was served prior to the termination of the tenancy.
c. Section 21.
12. Under s.21 of the Act of 1980:
“(1) A person who serves a notice of intention to claim relief may, at any time not less than one month thereafter,1 apply to the Court to determine his right to relief and (as the case may be) to fix the amount of the compensation or the terms of the new tenancy to which he is found to be entitled.
[1] This one-month waiting-period has the effect that, if one has regard to the sequence of events that unfolded between the parties to the within proceedings, Mr Murray could not commence his Circuit Court proceedings prior to 2nd November, 2017 (and, in point of fact, they were duly commenced on that date).
(2) If he does not do so within three months after service of the notice, any person on whom the notice was served may apply to the Court to determine the matters to which the notice relates.
(3) An application under this section may be made, heard and determined either before and in anticipation of or after the termination of the tenancy.”
[Emphasis added].
13. Which court is “the Court”? The answer, per. s.3(1) of the Act of 1980, is “‘the Court’ means the Circuit Court”. And on that simple fact, the within application greatly flounders.
d. Section 28.
14. Section 28 affords a level of protection to a tenant pending the determination of a claim under Part II (ss.13–29) of the Act of 1980). Thus, per s.28:
“Where an application is pending under this Part for a new tenancy or to fix the terms of a new tenancy and the pre-existing tenancy was terminated otherwise than by ejectment or surrender the tenant may, if he so desires, continue in occupation of the tenement from the termination of the tenancy until the application is determined by the Court or, in the event of an appeal, by the final appellate court, and the tenant shall while so continuing be subject to the terms (including the payment of rent) of such tenancy, but without prejudice to such recoupments and adjustments as may be necessary in the event of a new tenancy being granted to commence from such termination.”
15. At the time that Mr Murray’s preliminary motion came on from hearing, he enjoyed, and at the time of the writing of this judgment he continues to enjoy, the protection afforded by s.28.
V. Some Applicable Case-Law
(i) Tormey v. Ireland
[1985] 1 I.R. 289
16. Is the exclusive jurisdiction conferred on the Circuit Court by the Act of 1980 permissible as a matter of constitutional law? The short answer to this question is ‘yes’. In truth, this has been settled law, since the decision of the Supreme Court in Tormey. That was a case in which an accused person facing trial in the Circuit Criminal Court claimed that he was entitled to trial by the Central Criminal Court. In the course of his judgment for the Supreme Court, Henchy J. observed, inter alia, as follows, at 296-7:
“The Court accepts that Article 34, s. 3, sub-s. 1 [of the Constitution], read literally and in isolation from the rest of the Constitution, supports the plaintiff’s claim to be entitled to a trial in the High Court. But the Court considers that such an approach would not be a correct mode of interpretation. The “full” original jurisdiction of the High Court, referred to in Article 34, s. 3, sub-s. 1, must be deemed to be full in the sense that all justiciable matters and questions (save those removed by the Constitution itself from the original jurisdiction of the High Court) shall be within the original jurisdiction of the High Court in one form or another. If, in exercise of its powers under Article 34, s. 3, sub-s. 4, Parliament commits certain matters or questions to the jurisdiction of the District Court or of the Circuit Court, the functions of hearing and determining those matters and questions may, expressly or by necessary implication, be given exclusively to those courts. But that does not mean that those matters and questions are put outside the original jurisdiction of the High Court. The inter-relation of Article 34, s. 3, sub-s. 1 and Article 34, s. 3, sub-s. 4 has the effect that, while the District Court or the Circuit Court may be given sole jurisdiction to hear and determine a particular matter or question, the full original jurisdiction of the High Court can be invoked so as to ensure that justice will be done in that matter or question. In this context the original jurisdiction of the High Court is exercisable in one or other of two ways. If there has not been a statutory devolution of jurisdiction on a local and limited basis to a court such as the District Court or the Circuit Court, the High Court will hear and determine the matter or question, without any qualitative or quantitative limitation of jurisdiction. On the other hand, if there has been such a devolution on an exclusive basis, the High Court will not hear and determine the matter or question, but its full jurisdiction is there to be invoked – in proceedings such as habeas corpus, certiorari, prohibition, mandamus, quo warranto, injunction or a declaratory action – so as to ensure that the hearing and determination will be in accordance with law.”
17. Notably, Tormey was a criminal case. However, it seems an inexorable consequence of the logic applied by the Supreme Court in that case, that exclusive jurisdiction over specified civil claims can likewise be conferred on the Circuit Court (and perhaps the District Court too), provided that the decisions of those courts can be the subject of the types of review proceedings contemplated by Henchy J. in the last sentence of the above-quoted text – Henchy J.’s wording does not suggest that the possibility of an entire re-hearing of a case before the High Court is necessary; provided there exists a supplementary or complementary jurisdiction of the nature that he references, that is sufficient as a matter of constitutional law.
(ii) Kenny Homes & Co Ltd v. Leonard
(Unreported, Supreme Court, 18th June, 1998)
18. This was a case in which, inter alia, the appellants had served a notice of intention to claim a new tenancy in particular premises pursuant to the Act of 1980, and thereafter commenced proceedings before the Circuit Court claiming such a tenancy or, in the alternative, compensation for disturbance. Meanwhile the respondent served a plenary summons seeking, inter alia, certain injunctive relief of the High Court, which relief was granted by the High Court, its decision being affirmed on appeal by the Supreme Court. In the course of his judgment for the Supreme Court, Lynch J., in his judgment for the court, quoted with approval various observations of Costello P. in the High Court, including the following:
“‘It was submitted that the [High] Court had no jurisdiction to grant an injunction because of the proceedings pending in the Cork Circuit Court under the 1980 Act. It was urged that
(a) exclusive jurisdiction was given to the Circuit Court under the 1980 Act to determine Lecorn’s right to a new tenancy
(b) that this Court had no jurisdiction to determine the issues arising in that application.
(c) that by virtue of Section 28 of the 1980 Act Lecorn were entitled to retain possession of the premises pending their application for a new tenancy
(d) that accordingly the injunction claimed could not be granted.
I [Costello P.] disagreed with these submissions. I concluded that
(a) the Circuit Court had exclusive jurisdiction under the 1980 Act to hear and determine claims for a new tenancy
(b) that the present proceedings were for injunctive relief based on a claim that the Defendants were trespassers
(c) that the 1980 Act did not deprive this Court of jurisdiction to hear such a claim
(d) that ordinarily, where a right to a new tenancy under the 1980 Act was contested on the ground that a tenancy did not exist or that the premises were not a tenement these issues should be determined in the Circuit Court and this Court should stay proceedings in which these issues were raised
(e) that because of the particular urgency in this case the Court should not decline jurisdiction
(f) that should the Court decide that (i) the agreement of the 1st October 1994 constituted a tenancy and (ii) the site constituted a tenement within the meaning of the Act then Section 28 of the Act applied and Lecorn would be entitled to retain possession pending the determination of the Circuit Court of the application for a new tenancy and I would accordingly dismiss these proceedings. I therefore decided to hear oral evidence and determine these two issues. Should I decide them in Lecorn’s favour the Circuit Court would then be required to determine whether or not a new tenancy should be granted in the light of the Plaintiffs intended use of the site and for the issue of compensation.’”
19. Of particular note in the foregoing are Costello P.’s observations that:
“I concluded that
(a) the Circuit Court had exclusive jurisdiction under the 1980 Act to hear and determine claims for a new tenancy
(b) that the present proceedings were for injunctive relief based on a claim that the Defendants were trespassers
…
(f) that should the Court decide that (i) the agreement of the 1st October 1994 constituted a tenancy and (ii) the site constituted a tenement within the meaning of the Act then Section 28 of the Act applied and Lecorn would be entitled to retain possession pending the determination of the Circuit Court of the application for a new tenancy and I would accordingly dismiss these proceedings.”
20. And of note in the context of the just-highlighted observations of Costello P. are the following features of the within application:
(1) there is no dispute concerning the validity of the expired lease pertaining to the The Long Stone Pub;
(2) there is no dispute that the premises the subject of that lease are a tenement within the meaning of s.5 of the Act of 1980; and
(3) there is no basis for the proposition that Mr Murray, an individual who presently enjoys the statutory protection afforded by s.28 is a trespasser who, to borrow from that provision is and has been entitled, consequent upon the commencement of his proceedings:
“[to] continue in occupation of the tenement from the termination of the tenancy until the application is determined by the Court or, in the event of an appeal, by the final appellate court”.
It would be entirely illogical for a court to conclude that a person who is entitled under s.28 to “continue in occupation of the tenement from the termination of the tenancy until the application is determined by the Court or, in the event of an appeal, by the final appellate court” is a trespasser on such tenement once that statutory protection has, to borrow a colloquialism, ‘kicked in’. And if Mr Murray is not a trespasser on the tenement that he occupies at present – and he is not – then there is no basis for injunctive relief against him as a trespasser. Indeed, as counsel for Mr Murray noted at hearing, with any finding that Mr Murray is not now a trespasser, and it scarcely needed a court to arrive at that finding, “[T]he vitality of the entire set of High Court proceedings [that the plaintiff]…has brought falls away, because nothing useful can be achieved by them pending the determination of the Circuit Court proceedings.”
In passing, the court notes that there is a degree of retrospectivity to the protection available under s.28. So, for example, the timeline mandated by s.21(1) of the Act of 1980 for the commencement of Circuit Court proceedings meant that, on the facts of this case, they could not commence until 2nd November, 2017 (and they did commence on that date), with the lease having expired on 4th October, 2017. Yet the protection available under s.28 applies from the termination of the tenancy and so applied from 4th October, 2017, just under a month previous to the commencement of the Circuit Court proceedings. It was not contended that such retrospectivity presents any legal difficulty. Moreover, because that retrospectivity presents, the court does not have to address the lacuna that presents under s.28 as to what is the position of a tenant who remains in occupation of a tenement during the period between the expiry of a lease and the making of an application for a new tenancy. Is he a trespasser, a licensee or, e.g., a periodic tenant? The likely answer, it seems to the court, is that there is no one answer: the correct answer in any one case will depend on the individual facts at play in that case. Here, however, the court does not even have to attempt an answer because here s.28 has, to borrow a colloquialism, ‘kicked into effect’, and Mr Murray now enjoys the protection afforded by that provision.
(iii) Walpoles (Ireland) Ltd v. Dixon
[1935] 69 I.L.T.R. 232
21. The court has been referred to Walpoles (Ireland) Ltd v. Dixon [1935], a decision of the then High Court concerning legislative arrangements under the Landlord and Tenant Act 1931 that were akin to those at issue in the within proceedings. The court does not propose to consider Walpoles in detail because, in truth, Kenny Homes offers a complete answer to the issues raised by the defendant’s motion and on which the court is now adjudging. Suffice it to note that Walpoles was a case in which the High Court (affirmed by the Supreme Court) refused to allow an ejectment action to stand over pending a decision of the Circuit Court regarding the defendant tenant’s rights under the act of 1931. Central, however, to the conclusion reached by the High Court in Walpoles was the fact that the premises at the heart of the dispute between the parties were not a tenement. Thus per O’Byrne J., in the penultimate paragraph of his judgment:
“The difficulty which arises on the threshold of this case, from the point of view of [the tenant]…is that the premises with which we are concerned do not seem to me to come within the definition of a tenement”.
22. It followed from the just-quoted finding that the tenant in Walpoles fell outside the protections afforded by s.38 of the Act of 1931, a provision akin to s.28 of the Act of 1980. Therefore, the High Court, and the Supreme Court on appeal, could not allow the action for possession to stand over pending the decision of the Circuit Court. (It will be recalled that there is no dispute that the premises that are the focus of the within proceedings/application are a tenement within the meaning of s.5 of the Act of 1980).
23. It follows from all of the foregoing that Walpoles is but an older example of the type of reasoning applied in Kenny Homes, with the latter decision enjoying a greater resonance in these proceedings, inter alia, because it is concerned with the Act of 1980 which is the Act at play in the application now before the court.
(iv) Esso Ireland Ltd v. Nine One One Retail Ltd
[2013] IEHC 514
24. Kenny Homes is clear and binding authority for the proposition that the within proceedings should now be dismissed for want of jurisdiction. However, before proceeding to its conclusion, the court pauses to consider a recent judgment of the High Court that was touched upon at hearing, viz. that of Esso Ireland Ltd v. Nine One One Retail Ltd. In that case, Mc Govern J. observed, inter alia, as follows, at para. 18:
“18. The Circuit Court has exclusive jurisdiction under the 1980 Act to deal with claims for new tenancies. In the 1980 Act, ‘the Court’ means the Circuit Court (Section 3). In the case of Kenny Homes & Co. Limited v. Leonard, Costello P. (High Court, Unreported, 11th December, 1987) held that the High Court could have jurisdiction where there was particular urgency in a case. The Supreme Court confirmed the reasoning of Costello P. on the preliminary issue. Costello P. had decided ‘that because of the particular urgency in this case, the Court should not decline jurisdiction’. I am satisfied that in a case such as this, the court has power to decide the issues in dispute without first remitting the matter to the Circuit Court. The jurisdiction of the Circuit Court only arises in the event that I conclude the relationship between the parties is one of landlord and tenant.”
25. The issue of whether a landlord and tenant relationship presents is not an issue of controversy in the within proceedings. But what is perhaps worth mentioning by reference to Esso Ireland, lest there be misapprehension in this regard, is that that case does not recognise a free-standing “urgency” ground on which the comprehensive provisions of the Act of 1980 can in effect be side-stepped and proceedings such as those now presenting ‘fast-tracked’ through the Commercial Court. The Commercial Court is but a part of the High Court and a case cannot be ‘fast tracked’ through the Commercial Court that the High Court has no jurisdiction to hear. Esso Ireland seeks but to apply Kenny Homes, and if one returns to Kenny Homes and the full and complete text of the observations of Costello P., as quoted and approved by Lynch J. in the Supreme Court (and as replicated by this Court previously above), it is clear that what Costello P. did in Kenny Homes vis-à-vis the Act of 1980, and in light of the urgency presenting, was to determine whether, on the facts confronting him, there was a tenant and a tenement, observing, inter alia:
“I concluded that…should the Court decide that (i) the agreement of the 1st October 1994 constituted a tenancy and (ii) the site constituted a tenement within the meaning of the Act then Section 28 of the Act applied and Lecorn would be entitled to retain possession pending the determination of the Circuit Court of the application for a new tenancy and I would accordingly dismiss these proceedings.”
26. To paraphrase, what Costello P. is saying in the last-quoted text is ‘If I decide that Lecorn is a tenant and if I decide that I am confronted with a tenement, then I have no jurisdiction to go any further.’ There is, with every respect, no intellectually respectable argument which could persuade the court that Kenny Homes means anything other than that.
(v) Emo Oil Limited v. Oil Rig Supplies
[2017] IEHC 594
27. One last case on which the plaintiff sought to place reliance is the recent decision of the High Court in Emo Oil. That was a case in which the plaintiff tenant sought an interlocutory injunction prohibiting the defendant assignee from trespassing and the defendant contended that it was entitled to renew its business tenancy. For two reasons, the court does not propose to consider that case in any detail. First, Emo Oil does not deal with the issue of jurisdiction. Second, McDermott J. was confronted in Emo Oil with a tenant in breach of its rent obligations (which appears to have yielded the compromise solution arrived at in that case, viz. an injunction granted but stayed on payment of rent until the determination of the High Court proceedings (so the injunction was ‘sort of’ not granted). No like breach presents here, making Emo Oil entirely distinguishable from the within proceedings on that factual difference alone.
VI. Conclusion
28. For all of the reasons aforesaid, and having particular regard to the decision of the Supreme Court in Kenny Homes, the court is coerced as a matter of law into concluding that the within proceedings must now be dismissed for want of jurisdiction. The court will therefore grant the relief sought by Mr Murray at item (a) of his notice of motion. That being so, the court does not consider it necessary to consider the reliefs sought at items (b)-(d) of the said notice of motion. The court will hear the parties as to costs.
Corry v Hatch and others
High Court
11 July 1934
[1934] 68 I.L.T.R 241
Sullivan P., O’Byrne J.
O’Byrne, J., said that the applicant was a rate collector and bona fide used the room in the house more or less as an office. Practically all his business of collection of rates was carried on in and from this house. [His Lordship read sec. 19 (1) (a) and re-read it substituting the definition of “business” in sec. 2]. Could it be said that the collection of rates was not a “business carried on for gam or reward?” As the learned Circuit Judge suggested—if the applicant were asked his business he would sav he was a rate collector. His Lordship saw no reason against a wide interpretation which would include the applicant’s calling in life, carried on “for gain or reward” in these premises The occupation was fairly within the term It had been argued that “business” must be interpreted as it was under the 1906 Act, but by sec. 5 of that Act the reference to “business” was confined to cases concerned with compensation for loss of “goodwill” The matter was different under the 1931 Act. The Court was, accordingly, not bound to follow the decision on “business” under the earlier statute. That statute was repealed and new provisions were made, including those concerned with “disturbance,” and there was no limitation to confine *241 “business” to cases where “goodwill” attached. “Business” had a different and wider meaning under the present Act.
Appeal dismissed with costs.
Emo Oil Ltd -v- Oil Rig Supplies Ltd
[2017] IEHC 594
JUDGMENT of Mr. Justice McDermott delivered on the 18th day of August, 2017
1. This is an application for an interlocutory injunction prohibiting the defendant, its servants or agents from trespassing on lands comprising a retail service station at Lock Quay, Clare Street, Limerick.
2. Under a lease dated the 26th July, 2011, John Lyons and Patrick Murray (the landlords) granted a five year tenancy to the plaintiff commencing on 1st August, 2011 at an annual rent of €46,224.00 per annum. Under Clause 3.20 of the lease the plaintiff agreed that on its expiration it would peacefully surrender and yield up the premises to the landlord. Clause 5.3 provided that should the tenancy continue beyond that term it would be deemed to be a tenancy determinable by one month’s notice in writing to be given to the other party in the absence of any new agreement.
3. The plaintiff granted a temporary sublease to Gavin Fernando (the sub-tenant) on the 26th July, 2011 for a term of four years and nine months also commencing on 1st August, 2011 for an annual rent of €46,224.00. The sub-tenant executed a Deed of Renunciation in respect of this sub-letting renouncing all rights of entitlement which he may have under the Landlord and Tenant Acts to a new tenancy in the premises at the termination of the tenancy.
4. The original lease between the landlord and the plaintiff, the sub-lease between the plaintiff and Gavin Fernando and the Deed of Renunciation by Mr. Fernando were all executed on the 26th July, 2011.
5. By Deed of Assignment dated 12th August, 2014, the sub-tenant assigned his interest to the defendant Oil Rig Supplies Ltd. subject to the covenants and conditions contained in the original lease dated the 26th July, 2011.
6. It is clear from the affidavits that there was a longer and more extensive business relationship between the plaintiff and the defendant than the connection evidenced by the sub-lease taken by the defendant from Mr. Fernando in August 2014 who was the sub-tenant of the plaintiff . By agreement made 18th December, 2012 between Great Gas Petroleum (Ireland) Ltd. (now trading as EMO Oil) and the defendant, Great Gas Petroleum Ltd. agreed to supply the defendant with motor fuels and the defendant agreed to exclusively purchase motor fuel from it. The plaintiff effectively ceased to supply fuel to the defendant on 17th October, 2015 in circumstances where it is said the defendant fell into arrears and also commenced to source his fuel from an alternative source.
7. The plaintiff claims that its lease on the premises terminated by effluxion of time on 31st July, 2016. On the expiration of the lease the plaintiff continued in possession of the premises pursuant to the terms of Clause 5.3 which states:-
“That if the tenancy hereby created should continue beyond the Term it shall in the absence of a new Agreement be deemed to be a tenancy determinable by 1 Month notice in writing to be given by either party to the other and expiring on any day not necessarily being a gale day.”
8. The plaintiff claims that the sub-lease terminated by effluxion of time on 30th April, 2016. Clause 5.4 states that if the tenancy should continue beyond the term of the sub-lease it would be deemed to be a tenancy determinable by one month’s notice in writing to be given by either party to the other and expiring on any day not necessarily being a gale day. The sub-lease between the plaintiff and Mr. Fernando also provided that the subtenant would not assign sublet or part with or share the possession of the premises or any part thereof or permit any other person or company to occupy the same as a licensee or otherwise.
9. The history of the business relationship between the plaintiff, Mr. Fernando and the defendant is somewhat unclear. Mr. Sikka in affidavits sworn on behalf of the defendant states that Mr. Fernando was a tenant of the premises which were demised by lease made in or around 2008. He states that Mr. Fernando was in continuous occupation of the premises since that time without any break in the tenancy until he assigned his interests in the premises to the defendant in April 2011. Furthermore, Mr. Sikka claims that the plaintiff began to supply the defendant with fuel for sale in or around April 2011 pursuant to an agency agreement. He states that to the best of his knowledge the plaintiff was aware at all times that the defendant was in possession of the premises since April 2011. He also states that the defendant paid rent to the plaintiff and purchased fuel from it throughout this period. However, he also states that the rent was initially paid to the plaintiff through Mr. Fernando. It is then claimed that the terms of this ‘tenancy’ were reduced to writing in 2014 under the Deed of Assignment dated the 12th August. Though it was initially claimed that bank statements exhibited indicated rent paid by the defendant to the plaintiff from the 30th March, 2011, it is clear that no such payments of rent appear in the bank statements exhibited at Exhibit “NS 3” in Mr. Sikka’s affidavit.
10. Mr. Hurley on behalf of the plaintiff states that there is no evidence that the defendant was assigned any interest in the premises in April 2011 and that whatever informal arrangement the defendant had with Mr. Fernando prior to 12th August, 2014 and/or under a Deed of Assignment did not bind the plaintiff in any way. He comments that since Mr. Sikka states that rent was paid through Mr. Fernando, Mr. Sikka held the premises on the basis of some informal letting agreement with Mr. Fernando and not as a purported assignee. He denies that this tenancy was reduced to writing in 2014. Mr. Hurley states that the sub-lease created on 26th July, 2011 was thereafter assigned to the defendant “without seeking the consent of the plaintiff as legally required in 2014”. While the plaintiff had extensive business dealings with the defendant since April 2011 as evidenced in accounts produced and exhibited in the affidavits and while the defendant may have been ‘sub-letting’ the premises from Mr. Fernando, the plaintiff claims to be a stranger to this arrangement and to have been unaware of its existence. Thus the plaintiff claimed that firstly, the Deed of Assignment was made without its knowledge; secondly, the term of the sub-lease has now expired by the effluxion of time and thirdly, any claim made by the defendant that it is entitled to a new tenancy by reason of the length of time for which it and its predecessors in title had been in possession of the premises as tenants is unsustainable because of the Deed of Renunciation entered into by Mr. Fernando at the time of taking the sub-lease. It is further submitted that Mr. Fernando has given up any possible right to a new tenancy (if it existed) by virtue of the provisions of s. 17(1)(a) of the Landlord and Tenant Act as amended by the substitution made pursuant to s. 47 of the Civil Law (Miscellaneous Provisions) Act 2008, whereby that right may be renounced and was renounced by him.
11. The plaintiff also states that upon the determination of the sub-lease the defendant paid “a fee for its [the premises] further occupation until July 2016”. Mr. Hurley states that by agreement with the plaintiff the defendant has not paid any sum for its occupation of the premises since July 2016. It is said that discussions took place between the plaintiff and the defendant relating to a new agency agreement between the parties. An interim agreement was proposed subject to renewal of the plaintiff’s lease with its landlord. The interim agreement proposed was withdrawn because no response was received from the defendant. The defendant was invited to indicate whether he wished to proceed with the arrangement but did not respond.
12. The Plaintiff claims that on Friday 29th July, 2016 it reached an agreement with Mr. Sikka on behalf of the defendant whereby a “tenancy at will” under which the premises was occupied by the defendant would cease and no rent would accrue from the 29th July. A new agreement would be put in place to trade at the site which would be an agency agreement. Fuel would be sold by the defendant and commission paid to the plaintiff. The agreement was said to be subject to renewal of the lease which the plaintiff held from its landlord. Outstanding rent for July which was said to be due would be deducted over the following three months. Thus it was proposed that Mr. Sikka’s company would have a licence to remain in possession if the fresh agency agreement was entered with the plaintiff. No rent would be payable in respect of the licence.
13. Mr. Sikka denies occupation as a licensee and contends that the defendant paid rent on the premises until March 2017. This is said to be evidenced by Exhibit NS 5. This is a statement of account which purports to show payments of rent up to that date. However, the last demand for rent was on the 31st August, 2016 and a sum of €4,737.96 was debited to the defendant’s rent account with the plaintiff. The plaintiff claims that this was an error by the plaintiff’s accounts office. Mr. Hurley says that he met with Mr. Sikka who demanded that the debit be reversed because following the agreement of 29th July the defendant was remaining in occupation as a bare licensee paying no rent until the situation of the head landlord could be sorted out, namely until the plaintiff could ascertain if it could obtain a renewal of the plaintiff’s head lease. The sum was therefore credited to the defendant’s account which is clear from Exhibit NS 5. In accordance with the agreement of the 29th July, Mr. Hurley states that no further rent was demanded or sought or indeed paid by the defendant. Thus the plaintiff’s position is that since August 2016 the defendant has been a bare licensee operating his business on the premises.
14. The plaintiff claims that it was unable to reach an agreement with the landlord in relation to a new lease. Consequently, by letter dated 9th March, 2017 the plaintiff gave one month’s notice to his landlord to expire on 12th April. By letter of the same date the plaintiff wrote to the defendant and informed it that the plaintiff’s tenancy would expire on 12th April and that the defendant was required to give up possession of the premises on or before that date. Mr. Hurley states that he met with Mr. Sikka on behalf of the defendant on 28th March who indicated that he would take legal advice as to whether he would vacate the premises. The defendant then wrote to the plaintiff by letter dated 31st March and asserted that it had established “tenancy rights under the Landlord and Tenant Acts”. The plaintiff claims that the time for delivering possession to the landlord has now expired and that the defendant is trespassing on the premises. The landlord agreed to allow the plaintiff to withdraw its notice of surrender and granted the plaintiff a short extension of its tenancy on the premises in order to allow the plaintiff an opportunity to secure and surrender vacant possession thereof. That facility has been extended due to the difficulties encountered by the plaintiff in securing vacant possession from the defendant.
15. Mr. Sikka states that he was informed that a new lease would be forthcoming to the defendant and that an agency agreement was proposed to be put in place in respect of the management of the pumps. He rejects an allegation that he refused to sign the agency agreement. He contends that the defendant awaited details of the new lease on the basis that all agreements would be concluded together. He believed that rent for the premises would be backdated to August 2016 when the new rent was set by the head landlord. He disputes Mr. Hurley’s account of reimbursing the rent for August 2016 on Mr. Sikka’s request. He states that the plaintiff did not expect to be in occupation rent free for any period. Nevertheless, it is clear that the defendant has not paid a single monthly amount since August 2016 but the plaintiff is liable for and paid the monthly rent to the landlord in the amount of €4,737.96 per month. The defendant has indicated that he continues to trade from the premises in these circumstances with an annual turnover of €1 million in respect of fuel sales and €1 million in respect of other sales. It continues to employ ten persons.
16. As is clear from the volume of exhibits and the detailed affidavits submitted in respect of the business relationship between the plaintiff and the defendant and the various differences arising on the affidavits, much of the conflict that arises in this case will be the subject of oral evidence at the trial of the action. This summary of the parties respected positions is not comprehensive but gives a flavour of the issues which will arise at the trial of the action.
17. A further issue raised by the defendant arises from his initiation of proceedings for a new tenancy under the Landlord and Tenant Acts in the Circuit Court in Limerick. While at the time of the initiation of these proceedings no such application had been made, it would appear that steps have now been taken to commence those proceedings and to bring them on for hearing in the Circuit Court in Limerick.
18. In order to establish the basis for the granting of an interlocutory injunction the plaintiff must establish that there is a fair bona fide question to be tried. As stated by O’Higgins C.J. in Campus Oil Ltd. v. Minister for Industry and Energy (No. 2) [1983] I.R. 88:-
“In my view, the test to be applied is whether a fair bona fide question has been raised by the person seeking the relief. If such a question has been raised, it is not for the court to determine that question on an interlocutory application: that remains to be decided at the trial. Once a fair question has been raised … then the court should consider the other matters which are appropriate to the exercise of its discretion to grant interlocutory relief. …”
19. The court is satisfied that the plaintiff has raised a fair, bona fide or serious question to be tried in these proceedings. The plaintiff claims that the sub-lease under which the defendant had possession of the premises (if valid, which is denied) has expired by the effluxion of time. It is therefore submitted that the defendant is a trespasser and has no right to remain on the premises and operate its business. The plaintiff submits that the defendant’s case is unarguable and unsupported by any evidence of a lawful entitlement to remain in possession of the premises in the circumstances outlined in the affidavits. It is submitted that no stateable defence is demonstrated by the defendant.
20. The limits of the court’s determination in an application for an interlocutory injunction were considered by Kelly J. (as he then was) in ESSO Ireland Ltd. v. 911 Retail Ltd. [2013] IEHC 389 in which he stated:-
“9. It is important to point out that this is my judgment on an interlocutory application only. Whilst the plaintiffs were prepared to treat the interlocutory hearing as the trial of the action, no such concession was made by the defendant. Accordingly, the court is constrained to remain strictly within the limits of what is permitted on an interlocutory application. Those limits are identified in the speech of Lord Diplock in American Cyanamid v. Ethicon [1975] 1 All ER 504 at 510, where he says:-
“It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial”.
10. Notwithstanding that constraint the plaintiffs say that the defendant is so devoid of any arguable case supportive of an entitlement to remain in occupation of the premises that the relief sought should be granted.
11. In examining the question of what defence is demonstrated by the defendant it is accepted that a low threshold of proof needs to be discharged. It is only necessary that the defendant should demonstrate an argument which would survive an application to have it struck out under the inherent jurisdiction of the court as having no reasonable prospect of success. …”
21. In demonstrating the existence of a serious issue for trial the defendant points to a course of negotiation following the termination of the sub-lease in which it was represented to the defendant that it ought to continue in possession and occupation of the premises pending the conclusion of a new lease between the plaintiff and the landlord. Its sub-lease would then be renewed and that renewal would date from the date of termination of the previous sub-lease pursuant to the terms of a new rent which would be retrospectively payable by it.
22. An additional point of defence raised is that notwithstanding the existence of a Deed of Renunciation said to have been executed by Mr. Fernando (of which the defendant disavows any knowledge) the defendant claims to be entitled to relief by way of renewal of tenancy under the Landlord and Tenant legislation. Though there are very significant difficulties for the defendant in making that case on the evidence I am not satisfied to conclude that the proposed points of defence are unstateable having considered the affidavits submitted.
23. A number of cases such as Gatien Motor Co. Ltd. v. Continental Oil Co. [1979] I.R. 406 and Kenny Homes and Co. Ltd. v. Leonard and Other (Unreported Supreme Court 18th June, 1998) were relied upon. However, these cases concerned proceedings in which the hearing of the interlocutory injunction were treated as a trial of the action and oral evidence heard. I do not have that advantage in this interlocutory application. I find therefore that I am left somewhat in a similar position to that in which Kelly J. was placed in ESSO Ireland Ltd. I am satisfied that I should be very slow to entertain a submission at this stage that the points of defence proposed are totally unstateable though they may give rise to significant difficulties at trial. The court is not satisfied to conclude that the defences outlined in the replying affidavits are frivolous, vexatious and have no prospect of success in the sense considered by Kelly J. at paras. 48 to 53 of his judgment. If an injunction issues it should not be on the basis that the Plaintiff will undoubtedly succeed. It has however raised a fair, bona fide or serious issue to be tried.
24. The question must also be considered whether the plaintiff, if it succeeds in the substantive action, would be adequately compensated by an award of damages for any loss suffered between the hearing of the interlocutory injunction and the trial of the action. If the plaintiff would be adequately compensated by damages the interlocutory injunction should be refused subject to the proviso that it appears likely that the relevant defendant would be able to discharge any damages likely to arise.
25. The plaintiff submits that it is at a continuing loss in that it is obliged to pay the monthly rental to the landlord until it is in a position to give up vacant possession in accordance with the terms of the original lease. The defendant has paid nothing to the plaintiff since August 2016. The plaintiff has lost substantial rent while the defendant has paid nothing and continued to trade. It claims that it is still unable to pay any sum owing but is willing as evidenced by letter dated 12th July, 2017 to pay the sum of €4,730.96 per month to be deducted from the fuel account operated with the plaintiff in the course of business. An intention was expressed in that letter to discharge the monthly amount “in accordance with the lease between the parties” until all matters between the parties have been determined by the court. No such monies have been paid notwithstanding the fact that the matters were before this Court towards the end of July. The defendant maintains that it cannot pay arrears of “rent” and still maintain the payment into the future until the determination of the proceedings. The defendant accepts therefore that even if it had a tenancy during this period it has not paid and has no means to pay the rent. On the other hand, it claims to have a turnover of approximately €2 million from its business and employs ten people. I am not satisfied that the evidence indicates that the defendants would be in a position to meet a claim for damages of a continuing nature until the hearing of the action. I am not satisfied that the plaintiff could recover damages having regard to the stance adopted by the defendant on non-payment of any amount since August 2016. Furthermore, the plaintiff has been in default of its obligation to surrender possession of the premises to the landlord and has only been permitted to remain on the premises on the basis of a short term extension of its tenancy in recognition that it has been thwarted in its efforts to obtain vacant possession from the defendant so that it can fulfil its obligation to surrender possession to the landlord. It is clear that this gives rise to not only a continuing liability but also damage to its business name and its relationship with the landlord.
26. I am therefore not satisfied that damages would be an adequate remedy for the plaintiff in this case and I am not satisfied that the defendant will be in a position to discharge any damages likely to arise.
27. I am satisfied that the plaintiff’s undertaking as to damages will adequately compensate the defendant should the defendant be successful at the trial of the action in respect of any loss suffered. Furthermore, if the defendant is correct in respect of its entitlement to renew a business tenancy (which it is intended to pursue in the Circuit Court and in respect of which the court anticipates the defendant will have something of a difficult task to establish) it will have to discharge or have discharged the arrears of rent in those circumstances. It is difficult to conclude that the defendant would be at any particular let alone substantive loss from the granting of the injunction. However, even leaving that aside, I am satisfied that the undertaking as to damages will adequately compensate the defendant should he be successful in the trial of the action or indeed in his Circuit Court proceedings in respect of a business tenancy.
28. The remaining issue is whether the balance of convenience justifies the granting of the injunction. The court must consider the consequences for the plaintiff in the event that the interlocutory injunction is refused but the plaintiff succeeds at trial and the consequences for the defendant in the event that the interlocutory injunction is granted and the plaintiff fails to establish its case. Furthermore, in the background the court must also have regard to the fact that the defendant now seeks relief under the Landlord and Tenant Acts in respect of a business tenancy in the Circuit Court.
29. The court is obliged to minimise the risk of injustice and the risk of injustice from not acting must be greater than that from acting in order for the court to depart from the status quo which now applies in this case.
30. If the status quo is not maintained in this case the defendant contends that ten employees will be out of work, his business upon which he and his family have been engaged for a number of years will be lost and his family income will be immediately affected because it is generated by the company’s business. Furthermore, the plaintiff’s claim will effectively have been determined without a full hearing in which oral evidence and other documentary evidence will be fully considered by the court in determining the issues.
31. I feel that there is considerable strength in these arguments even if having regard to the substantive defence I am of the view that on the papers before the court (which perhaps do not reflect the entire documentation or evidence that may be available to a court of trial) the defendant may have something of an uphill struggle to maintain aspects of that defence.
32. I am satisfied having considered all of the evidence and exhibits in the case and the submissions of counsel that this is a somewhat finely balanced case. The court must have regard to the strengths of the plaintiff’s case as set out above and in the affidavits of Mr. Hurley and the significant difficulties with the defendant’s case, the fact that the undertaking for damages will be an adequate remedy for the defendant should he succeed and the court’s view that the defendant would be adequately compensated by an award of damages for any loss suffered in the granting of an injunction. I must also give considerable weight to the fact that damages in my view would not adequately compensate the plaintiff in this case for the reasons already given. Considerable weight must also be given to the consequences of the granting of the injunction for the defendant. However, I am satisfied that the court should grant an injunction in this case in the terms sought but taking account of the finely balanced nature of the case and the serious consequences for the defendant will do so on terms intended to minimise any risk of injustice to the defendant.
33. The court will grant an injunction but will place a stay on the order on condition that:-
(a) The defendant pays a monthly amount equivalent to the amount of rent payable by the plaintiff to the landlord every month that is the sum of €4,737.96 to commence on the 1st September 2017.
(b) The defendant to pay a sum of €61,593.48 to the plaintiff within two months of the date hereof; it appears to me that the payment of this sum will in any event be necessary if the defendant is to establish its claim for a new tenancy in the Circuit Court under s. 28 of the Landlord and Tenant (Amendment) Act 1980 (though it may well be regarded as in default of its obligation in that respect, but that is not a matter for this Court).
If the defendant defaults in respect of either of these conditions an application may be made to lift the stay and it is the intention of the court that the injunction should in those circumstances take immediate effect.
Donnelly & Sons, Ltd. v Keogh
Circuit Court.
29 June 1933
[1933] 67 I.L.T.R 157
This was an application by P. Donnelly & Sons, the tenants of the premises situated at 37 Westmoreland Street, Dublin, for a new tenancy.
The premises—the subject-matter of this application—were conveyed to Andrew J. Keogh by an Indenture of Conveyance dated 16th April, 1913. The consideration for the purchase was £3,500, and the premises were held under a fee-farm grant subject to an annual rent of £52 10s. present currency.
On the 20th December, 1918, Andrew J. Keogh made a demise of the premises by lease to the present applicants for the term of 14 years from the 1st November, 1918, at the annual rent of £400.
The applicants retained possession of the ground floor, one room on the third floor, and the whole of the first floor. Other portions of the premises were sub-let.
The applicant’s lease expired on November 1st, 1932, and on 20th December, 1932, an application was made to the Circuit Court of Dublin, pursuant to sec. 45 of the Landlord and Tenant Act, 1931, and the Court made an order extending for a period of seven days from the hearing of the application of the time limited by sec. 24 of that Act for serving notice of intention to claim relief and for a new tenancy of these premises.
William Black (with him Lavery, K.C.) for the applicants—The applicants are entitled to a new tenancy of their entire premises notwithstanding that they have sublet portions to occupying sub-tenants. It might be otherwise if these sub-tenants had been 3 years in occupation; for then each sub-let holding would be itself a “tenement” within section 19, and each subtenant could himself claim a new tenancy under section 20. Moreover, he could claim such new tenancy directly from the respondent, eliminating the applicants, under section 31 (3). In such a case, the respondent could not grant a new tenancy to the applicants in respect of their entire premises, being bound to grant new tenancies of portions to the sub-tenants thereof. But, in the present case, the sub-tenants have not been 3 years in occupation. They have therefore no rights under the Act. Hence there is no obstacle to the grant of a new tenancy to the applicants in respect of the entire premises. Such a new tenancy must be granted wherever it is possible; and in cases where it is impossible owing to the conflicting rights of sub-tenants as regards parts, it must be granted to the extent to which those conflicting rights do not extend.
The words “entitled to the occupation of a tenement” in the definition of “tenant” in section 2 do not imply occupation of every part of the premises leased. It is sufficient if the tenant occupies a part—certainly if he *157 occupies a substantial part. Otherwise a lessee who had spent a lifetime in building up a valuable goodwill in premises consisting of say, 50 rooms would lose everything and get no relief under the Act if he had sub-let one room out of the 50, while the sub-tenant of that room, if he had used it for business for only 3 years, could claim a new lease of it indisputably. That absurdity is got over by a rational interpretation of the words “entitled to the occupation.” The Increase of Rent Act decisions furnish a perfect analogy of such an interpretation. Skinner v. Geary, [1931] 2 K. B. 546, in England and Foley v. Galvin, 66 Ir. L. T. R. 169; [1932] I.R. 339; (1932), L J., I. F. S. 113, in the Free State establish that a tenant must be an “occupying tenant” in order to claim under the Rent Acts. Yet Roe v. Russell, [1928] 2 K. B. 117, establishes that even a statutory tenant does not lose his rights under these Acts by sub-letting. Both lines of authority subsist as good law side by side. Hence, an “occupying tenant” within the Rent Acts may only occupy part of his holding, the rest being occupied by sub-tenants Similarly, under the Landlord and Tenant Act, 1931, the applicants are “entitled to the occupation” of the tenement they hold although they only occupy a part and have sublet the remainder. A fortiori, the applicants are entitled to a new tenancy of the portion they in fact occupy. The definition of “tenant” in section 2 cannot put their rights in doubt as regards that portion which is fully covered by the definition of “tenement.” That portion at least is “held by the occupier thereof under a lease,” to use the words of section 2 (c); and it is none the less so held because it is held along with other portions which are sub-let, but which applicant’s lease also comprises.
Odell for respondents—The consequences or general objects of an Act of this nature should only be looked to as a last resort; if the language of the Act can be interpreted with reasonable certainty, the Court should not consider any questions of policy, intention or expediency (McCarthy v. Swanton, 14 L. R. Ir. 365, per FitzGibbon, L.J., at p. 382).
In this case the wording of the Act is clear. The applicants are not a “tenant” nor are the premises a “tenement” as defined in sect. 2 The applicant’s contention would be correct if the definition of tenant in Deasy’s Act, sect. 1, were substituted for the definition in this Act. “Occupation” means “the actual possession and maintenance of the land” (Ironmongers Co. v. Naylor, Pollexfen 216). The definition of tenant in this Act closely resembles the definitions in Land Law (Ir.) Act, 1881, s. 57, and Town Tenants Act, 1906. Under both these Acts the tenant had to be in actual possession of the entire premises (McKee v. Mussenden, 19 I. L. T. R. 51; Maconchy v. Robertson, 18 L. R. Ir. 483; McCarthy v. Swanton, 14 L. R. Ir. 365; Byrne v. Meath, 42 I. L. T. R. 43; McFarland v. Montgomery, (1926), N.I. 119). Under this Act the sub-tenants are entitled to obtain new leases direct from the landlord: the fact that the sub-tenants in this case have not yet acquired any rights cannot affect the principle.
As regards the portion of the premises actually in the possession of the applicants, this does not comply with the definition of “tenement.” The contract of tenancy was a lease of the whole premises, not of a portion.
No analogy can be drawn from the Rent Restriction Acts; they constitute a special code and are construed on their own wording.
William Black, in reply—Unlike the Rent Acts, the Land Act of 1881 provides no analogy there being an obvious reason peculiar to the framework of sect. 21 of that Act for holding that the words “bona fide in occupation” in that section must imply occupation of the entire holding. This reason is explained by FitzGibbon, L.J., in Maconchy v. Robertson (18 L. R. I. 483), and is quite inapplicable to the Landlord and Tenant Act, 1931.
Judge Davitt held that the applicants were not entitled under the Landlord and Tenant Act, 1931, to a new tenancy in respect of those portions of the premises which were occupied by their sub-tenants. He declared that the applicants were only entitled to a new lease in respect of those portions of the premises which had not been sub-let and of which they were in actual occupation. The term of the new lease of the said portions of the premises which the respondent was required to grant was fixed at twenty-one years, and Judge Davitt directed that the new lease should incorporate all the terms of the original lease, save as to the rent.
Conlon v Lambe
Circuit Court.
20 December 1937
[1938] 72 I.L.T.R 92
Judge Davitt
Judge Davitt
The facts in this case are as follows:—The applicant, Mrs. Conlon, purchased the tenant’s interest in the house No. 56 Merrion Square on the 27th March, 1930, with the idea of carrying on there the business of boardinghouse keeper. The lease was for 127 years from the 25th March, 1807, and expired on the 25th March, 1934. Her rent was £100 adjusted to £88 10s. 0d. On the expiration of her lease she continued on as a yearly tenant until her tenancy was terminated by Notice to Quit expiring on the 25th March, 1936. From 1931 she resided in the house and, saving the hall flat, used it as a boardinghouse. From 1932 on she sub-let the hall flat as a separate dwelling.
She now comes before the Court applying for a new tenancy in the house No. 56 Merrion Square under Section 20 of the Landlord and Tenant Act, 1931, contained in Part III. That section reads as follows:—“Subject to the provisions of this Act a tenant of a tenement to which this part of this Act applies shall, on the termination of his tenancy in such tenement, be entitled to a new tenancy in such tenement on such terms as may be agreed on between such tenant and his landlord, or as shall, in default of such agreement, be fixed by the Court.” The word tenement is in Section 2 defined:—The word “tenement” means lands or premises complying with all the following conditions:
1. Consists either of land covered wholly or partly by buildings or of a defined portion of a building.
2. Is held by the occupier thereof under a lease or other contract of tenancy.
I quote only those portions of the sections relevant to the facts of the present case.
Tenant is defined as follows:—The word tenant means the person for the time being entitled to the occupation of a tenement and, where the context so admits, includes a person who has ceased to be entitled to such occupation by reason of the termination of his tenancy. In this case I am of opinion that No. 56 Merrion Square is not a tenement within the meaning of the Act by reason of the fact that it is not held by the occupier thereof under a contract of tenancy. Mrs. Conlon is not the occupier of No. 56 as she has parted with the occupation of the hall flat. She is merely one of the occupiers, and none the less so because she occupies the major portion of the premises. Assuming that No. 56 is a tenement within the meaning of the Act then the difficulty arises that Mrs. Conlon is not a tenant thereof within the meaning of the Act. She is not the person entitled for the time being to the occupation of No. 56. She is entitled to occupation of that part only which she in fact does occupy. For these reasons I am of opinion that I cannot hold Mrs. Conlon entitled to a new tenancy in No. 56 Merrion Square.
Though not specifically raised by the terms of Mrs Conlon’s application the question was discussed in argument before me as to whether Mrs. Conlon was entitled to a new tenancy in that part of No. 56 which she does in fact occupy, and it was at least impliedly agreed that if I considered that she was so entitled the necessary amendments should be made. I have come to the conclusion that Mrs. Conlon is not entitled to a new tenancy in that portion of No. 56 Merrion Square which she occupies.
The applicant was ordered to pay the costs.
O’Reilly v Kevans and others
Circuit Court.
22 November 1934
[1935] 69 I.L.T.R 1
Judge Shannon K.C.
November 22, 1934
A scheme of development of school property contained provisions for the building and erection of a science laboratory and for the enlargement of an existing playground for pupils of a secondary school. Held, to be a scheme of development of property within section 22 (1) (b).
The Court was satisfied that the site of a tenement, to which the Act applies, was required, by the owners in fee-simple, for the purpose of, either, building and erecting a science laboratory thereon, or enlarging an existing but inadequate playground for the use of pupils of an adjoining secondary school, the property of the owners. Held, that the tenant is not entitled to a new tenancy.
The tenant of a tenement, bona fide used by him for carrying on a business, to which the Act applied, brought an application to the Court for a new tenancy in such tenement, or, in the alternative, for compensation for disturbance, and failed in his application for a new tenancy but succeeded in his application, in the alternative, for compensation for disturbance. Held, that the tenant was not entitled to his costs of the application.
This was an application under the Landlord and Tenant Act, 1931, for an order that the applicant, John O’Reilly, was entitled to a new tenancy in the tenement consisting of the shed or yard known as “The Forge” at the rere partly of No. 27 Hill Street, situate in Douglas Court Lane off Hill Street, in the City of Dublin, on such terms as might be fixed by the Court; that the Court do fix such terms and do order the respondents to grant the applicant a new tenancy in the said tenement on such terms as the Court might fix, and, in the alternative, for an order that the Court do award to the applicant compensation for disturbance to be paid by the respondents, and for the costs of and appertaining to the application. The respondents disputed the claim of the applicant on the following statutory grounds, namely:—1. That the premises had not been and were not being bona fide used by the applicant for the purpose of carrying on a business. 2. That the premises were not covered wholly or partly by buildings or a defined portion of a building. 3. That the respondents required vacant possession of the tenement for the purpose of carrying out a scheme of development of property which included such tenement. 4. That the creation of a new tenancy in such tenement would not be consistent with good estate management. *1
The applicant was a builder and contractor residing at No. 26 Hill Street. In the yard of No. 26 Hill Street stands a two-storey slated building. The applicant used the ground floor of this building for storing timber, cement and other building materials. He used the top storey as a joiner’s loft for making joinery required by him for purposes of his business as builder and contractor. Adjoining this building and the yard proper of No. 26 Hill Street stands the tenement the subject of this application. The said tenement was a one-storey building, roofed with corrugated iron, which roof at the date of the application was in a dilapidated condition. The applicant used the tenement for the purpose of storing therein scaffolding poles, timber planks, ladders, bricks, granite stones, sand, and other heavy non-perishable building materials; he also used it for the purpose of making mortar for use in building operations carried out by him in the course of his business as builder and contractor. Access to the said tenement was through a laneway known as Douglas Court Lane leading from Hill Street. This laneway terminated at the double gate entrance to the said tenement. Communication between the said tenement and the two-storied building in the yard of No. 26 Hill Street was effected through two doorways in the adjoining walls of both buildings. The premises No. 26 Hill Street adjoined on the north an old building the property of the respondents. Immediately at the rere of No. 26 Hill Street, and the said tenement was a small playground for school children, also the property of the respondents. On the south of No. 26 Hill Street stands a licensed premises known as No. 27 Hill Street. This premises is bounded on its south by Douglas Court Lane, access being had to the rere of the licensed premises through a doorway opening into the said laneway. To the south of the said laneway was a vacant plot of ground, the site of condemned buildings, also the property of the respondents. School buildings and a concert hall, with access from 43 North Great George’s Street, all the property of the respondents, lay to the west of No. 26 Hill Street and the said tenement and were separated therefrom by the small playground mentioned above. Access to the vacant plot of ground to the south of the said laneway from the said playground was interrupted by an area adjoining the said concert hall, which it was not convenient for the respondents to bridge over. The said schools were frequented by about 200 secondary school students and the available playground space was only 16 feet per pupil whereas the regulations for National Schools required a playground space of at least 30 feet per pupil.
The respondents were trustees for the Loreto Convent of 43 North Great George’s Street in the City of Dublin. They were the lessors of the premises No. 26 Hill Street and in 1931 became the owners in fee-simple of the said tenement.
John A. Costello, K.C. (with him Diarmaid Fawsitt ) for the applicant.
R. Brereton Barry for the respondents.
The evidence for the applicant proved that in the year 1913 the then trustee for the respondents had approached the applicant to purchase the premises No. 26 Hill Street; this the applicant agreed to do provided the trustee obtained for him the said adjoining tenement. This the trustee agreed to do, and on the 24th July, 1913, a letting agreement of the said tenement was executed by one Patrick Murphy, the then lessee of the said tenement, whereby the applicant acquired the said tenement for a term of 21 years from the 1st day of August, 1913, subject, inter alia, to a rent at the rate of £2 12s. 0d. per year clear over all rates and taxes (landlord’s proportion of income tax only excepted). Subsequently the applicant acquired for valuable consideration the lessee’s interest in the premises No. 26 Hill Street, which premises were held under lease dated 15th day of December, 1876, for a term of 199 years from that date, subject, inter alia, to a yearly rent of £35 over and above all taxes. The applicant went into residence in No. 26 Hill Street and occupied same continuously as a residence down to and at the date of the application. The applicant had also entered into occupation of the said tenement and used same continuously as a store down to and at the date of this application for the purpose of his business of builder and contractor. He had also used the two-storey building in the yard of No. 26 both as a joinery and store in conjunction with the said tenement, also for the purposes of his said business. He could not use the two-storey building in the yard of No. 26 Hill Street for the purposes of his said business except in conjunction with the said tenement as there was no other means of access to said building except through the interior of his residence, and it would be impossible to bring in or take out through his said residence any long or bulky materials or appliances necessary for building operations. His term of 21 years in the said tenement had expired on the 1st day of August, 1934, and the *2 respondents had refused to grant him a new tenancy therein on any terms whatsoever. The evidence for the respondents proved that the respondents had a scheme of development of their property whereby it was proposed to build a science laboratory on the vacant plot to the south of Douglas Court laneway or on the site of the said tenement, or to employ the site of the said tenement for enlarging the playground space available for school children attending the secondary school on adjoining property. It was not possible to use the site of the old building to the north of No. 26 Hill Street for either purpose by reason of the fact that it was a controlled premises within the meaning of the Increase of Rent and Mortgage Interest (Restrictions) Acts. Both purposes were considered by the respondents absolutely essential for the proper development of their school property.
Judge Shannon, in his judgment, held— (1) that the said shed or yard known as “The Forge,” the subject of this application, was a tenement within the meaning of section 2 of the Landlord and Tenant Act, 1931; (2) that there was real and substantial user of the said tenement by the applicant throughout the whole of the said term of 21 years for the purposes of his business as builder and contractor; but (3) that the respondents had brought themselves within the provisions of sec. 22 (1) (b) of the Act of 1931, which is as follows: “Sec. 22 (1) Where it appears to the Court, either (a) …. or (b), that such landlord requires vacant possession of such tenement for the purpose of carrying out a scheme of development of property which includes such tenement: or (c) …. the tenant of such tenement shall not be entitled under this Part (III) of this Act to a new tenancy in such tenement.” Accordingly, the respondents were entitled to the said tenement and the application for a new tenancy would be refused. The learned Judge assessed compensation for disturbance at £225, to be paid by the respondents to the applicant on the surrender by him of the said tenement.
Having heard argument on the question of costs, Judge Shannon said that in his view the applicant had failed on one ground and succeeded on the other, and accordingly both parties should abide their respective costs of the application.
Bridgeman v. Powell
[1937] IR 580
JOHNSTON J. :
These appeals come before us by way of applications in respect of orders made by Judge Shannon in two cases in which applications were made to him for orders extending the time in which to serve notice of intention to claim relief under the Landlord and Tenant Act, 1931.
Sect. 45 of that Act provides:
“Where by or under this Part or any of the foregoing Parts of this Act a period is fixed for the doing of any act or thing the Court may, either before or after the expiration of such period, extend such period upon such terms as the Court thinks proper.”
Now, in Dominick Bridgeman’s case (the other case is not very different) the lease expired on the 26th June, 1936. No notice of intention to claim a new tenancy or any other relief under the Act was served on the landlord on or before that date, and it was not until December 8th, 1936, that the tenant served notice of his intention to bring the matter before the Court, seeking to have the time extended. From the orders made by Judge Shannon on that occasion the present appeals are taken.
Prima facie an application of that kind ought to be refused. More than five months had elapsed from the expiration of the lease, and the intention to apply for relief had not been signified to the landlord. It seems to me that the statutory power given to the Circuit Court by sect. 45 does not enable the Judge to exercise his statutory power in the matter casually, capriciously, lightly, or even good-naturedly, and, contrary to Mr. Costello’s contention in reply to a question by Gavan Duffy J., the Court is not entitled to extend the time for any reason other than the desire to do justice between the parties. The principle, or want of principle, suggested by Mr. Costello, is not the way in which the discretion contemplated by the Act ought to be exercised. There must be some special circumstances or reasons to justify a Court in exercising such a powersome special circumstances such as suggest themselves as reasonable in the opinion of the Judge. Further, such exercise of discretion should not be prejudicial to the landlord. For instance, the failure of the tenant to know of, or to appreciate, his legal rights would not at all constitute such special circumstances. I can conceive a great many other reasons and circumstances which would not be sufficient.
A Court of Appeal will always hesitate to interfere with the decision of a Court of first instance, especially in cases such as the present, where the learned Judge of that Court of first instance has shown clearly that he appreciates the principle that such special circumstances are necessary.
Now, is there anything here upon which Judge Shannon could base the exercise of his statutory power. He says in his judgment, which is very clear and full: “I grant this application on the grounds that there were peculiar circumstances, namely, the demolition of the buildings at the critical period when the tenancies were about to expire. I fully recognise the force of what Mr. McCarthy has urged, that I should adhere to my previous decisions that mere ignorance of rights and standing-by cannot justify a party coming into Court; but in these cases I think there was a little more than that. The premises, the subject-matter of the tenancies, were about to be destroyed and, in these circumstances, I think that nothing could have been done towards advancing the applications if they had been brought.” As a term of so exercising his discretion Judge Shannon directed the applicants to pay the costs.
Now, in these cases, there were circumstances of a peculiar character, and the learned Judge thought them sufficient to enable him to deal with the cases as he did. Can we, ought we, to interfere? I do not think so. I think that the learned Judge, who had delivered a judgment explaining so fully the reasons why the circumstances justified his decision, should not be reversed, and that this Court should not interfere with his decision. Accordingly I think these appeals should be dismissed.
SULLIVAN P. :
In this case the jurisdiction of this Court to grant the extension of time asked for is not questioned; the question is whether that jurisdiction should be exercised.
In support of the application we have been referred to cases in which the Courts in this country and in England have considered similar applications and discussed the grounds on which such applications should be granted. So far as I can see the only principle that can be gathered from the decisions in these cases is that an extension of time should be granted whenever the Court is satisfied that it would be just to do so.
In the present case the application is based solely on the ground that the applicant was not aware that the Act prescribed a limited time within which the application should be made. I do not think that that is a sufficient reason for granting the application; it does not satisfy me that it would be just to do so. The Circuit Judge in his discretion refused the application, and I think that his decision was right. This appeal should, in my opinion, be dismissed.
HANNA J. :
I agree.
Sect. 45 of the Landlord and Tenant Act, 1931, under which Judge Shannon made the order appealed against, is a section which gives a very wide discretion to the Court, and the order made by the learned Judge was undoubtedly a discretionary order. Mr. Lavery has, however, made the point that we cannot deal with this order as a discretionary order. It seems to me, nevertheless, that the only kind of determination which can be made under sect. 45 is of its nature discretionary, and even if the subject-matter of this appeal were to be regarded as coming before us de novo, as Mr. Lavery suggested, yet we must be satisfied in the exercise of our discretion, that Judge Shannon exercised his discretion correctly.
The grounds upon which a discretionary order may be appealed from have been frequently discussed and are well set out in the judgments of the Law Lords in Donald Campbell & Co. v. Pollak (1), particularly by Viscount Haldane and Viscount Dunedin. That case dealt with the special case of an appeal as to costs, which are admittedly a matter for the discretion of the Judge, but the opinions expressed as to the general question of appeals from orders made in the exercise of a discretion are general in their application, and apply fully to the present case. The general result of the authorities collected and examined in that case appears to be this. An appeal will be allowed from a discretionary order if the discretion was exercised on “material that is illegitimate or is non-existent, or in violation of some principle of substantive right”: see per Viscount Haldane at p. 752; or, again, “if a rule of law and not mere discretion could decide the question”: see per Viscount Dunedin at p. 756.
In the present case, even if this were not an appeal from a discretionary order, yet in my own view of the case, I am independantly of the opinion that Judge Shannon was right in refusing to extend the time within which the tenant might serve his notice to claim relief. The most that can be said for the tenant here is that he made a slip: in other words he pleads ignorance, if not of the existence of the Act itself, of the fact that the Act laid down certain times within which he must serve certain notices before he could benefit thereunder.
I am not to be taken as laying down a rule that mere ignorance of the Act itself or of the times prescribed thereby is in itself a sufficient or insufficient ground upon which a Judge might extend the times under sect. 45. I can conceive cases of absence beyond the seas or even of illness on the part of the tenant in which he might successfully plead ignorance of the Act or of its provisions. But in this case, without in any way binding myself to a view of the effect of ignorance in all possible cases, I am of opinion that ignorance of the provisions of this well-known Act cannot be pleaded three years after its passing by a tenant who was living in Dublin and has read the newspapers, presumably, in which the Act has been discussed, and who is, on his own showing, well aware of the existence of the Act and of the fact that he has rights thereunder.
Mr. Lavery has referred to the vested right given by the Act to a tenant. But the Act also gives the landlord certain rights which may be as valuable as those of the tenant. Moreover, this tenant, though excluded from the Act, is not precluded from negotiating a new lease with his landlord or from buying the premises if he should so desire.
In the circumstances I hold that the Circuit Judge was right and that this appeal must be dismissed.
GAVAN DUFFY J. :
I, also, see no reason to interfere with the exercise by Judge Shannon of his discretion.
Walpoles (Ireland), Ltd. v Rosa Dixon
Supreme Court.
22 October 1935
[1935] 69 I.L.T.R 232
Kennedy C.J. FitzGibbon Murnaghan JJ.
O’Byrne, J.
This is a case in which I have no doubt as to the position between theparties. The action is brought for the ejectment of the tenant from premises, 14 Suffolk Street, Dublin. The premises are held by the defendant under an Agreement dated the 30th day of April. 1930, and made between Charles Thomas Blair White and Gerald Edward Grove-White, landlords, of the one part, and Rosa Dixon, tenant, of the other part. By this agreement the premises are expressly let for the temporary convemence of the landlords and to facilitate the tenant. The letting is stated to be for the term of nine months from the 15th day of April, 1930, or for such further time as may suit the landlords, as a tenancy from month to month. There is a provision in the agreement that after the 15th January. 1932 *232 (if the landlords shall have allowed the tenancy to last so long) the tenant may terminate the tenancy by giving the landlords one month’s notice in writing and that the tenant will deliver up possession of the premises whenever required by the landlord on receipt of two calendar months’ notice. Such last-mentioned notice has been duly and properly served, and the only question that now arises is in regard to the rights of the parties under the Landlord and Tenant Act, 1931.
Mr. Campbell, who appears for the defendant, says that his client has served a notice under that Act, and that the issue raised therein will come on for hearing in the Circuit Court; and that pending such hearing I should adjourn this action. I would certainly take that course if I thought there was any substantial ground on which such application might be granted, but in my opinion, having regard to the facts of the case, and to the documents, and to the provisions of the Act of 1931, such an application could not possibly succeed. Mr. Campbell relied on Section 38 of the Act, which provides that where an application under the Act is made to the Court for a new tenancy, the tenant may, if he so desires, continue in occupation of the tenement to which such application relates from the expiration of such tenancy until such application is heard by the Court, or in the event of an appeal, by the final Appellate Court. The difficulty which arises on the threshold of this case, from the point of view of Mr. Campbell’s client, is that the premises with which we are concerned do not seem to me to come within the definition of a tenement in Section 2 of the Act. That section contains various definitions of a “tenement,” and sets out six separate and distinct conditions with which the “tenement” must comply in order that it may constitute a “tenement” within the Act. One of the conditions is that the contract of tenancy was not a letting which was made for the temporary convenience of the lessor, or of the lessee. It has not been suggested in this case that the arrangement made between the parties and contained in the tenancy agreement was a bogus arrangement, and that being so, then it is clear that the letting was made, as it is expressed to be made, for temporary convenience. For these reasons I have come to the conclusion that this tenancy is, by the terms of the Act, excluded from its provisions and therefore the application to allow this action to stand over pending the decision of the Circuit Court cannot be granted. In my opinion, no defence has been shown to the action, and I must therefore give judgment for possession of the premises.
The defendant appealed and the Supreme Court affirmed the decision of O’Byrne, J.
Like It Love It Productions -v- Dun Laoighre/Rathdown County Council
[2008] IEHC 26
Mr. Justice Roderick Murphy dated the 5th day of February, 2008.
1. Pleadings
By Landlord and Tenant Civil Bill dated 22nd May, 2007 the appellant gave notice of an application for a new tenancy of the premises known as Blackrock Town Hall (excluding the library and rates office), relying on evidence relating to the premises being a tenement held on a weekly tenancy from 26th January, 1998, varied by subsequent agreement in writing. The application was refused by the Circuit Court and comes by way of appeal to this Court of the whole of the judgment of that court, of 2nd July, 1997.
The respondent claimed that the tenancy had terminated on 31st August, 2006 by means of a notice in writing dated 23rd June, 2006. The appellant claimed that that notice was not a valid notice to quit.
In the event that the notice in writing was a valid notice to quit and that the tenancy determined on 31st August, the appellant claimed a new tenancy pursuant to Part II of the Landlord and Tenant (Amendment) Act, 1980. As, in the whole of the five years preceding that date, the premises was bona fide used by the appellant as tenant for the time being wholly for the purposes of carrying on a business. On 30th August, 2006 the appellant, complying with the provisions of s. 21 of the Act, duly served on the respondent a notice of intention to claim the relief sought, and claimed a new tenancy and compensation for improvements and/or compensation for disturbance. The parties failed to agree on the terms of a new tenancy.
By defence and counterclaim delivered 18th June, 2007 the respondent denied the plaintiff’s entitlement. The agreement of 26th January, 1998, extended by letter of 22nd July, 1998 was for a temporary convenience letting of the premises for the purposes of s. 75(4) of the Local Government (Planning and Development) Act, 1963. Accordingly, the said agreement is excluded from the provisions of the Landlord and Tenant (Amendment) Act, 1980.
Moreover, in the alternative the respondent requires vacant possession thereof for the purpose of carrying out a scheme of development which includes the said premises and in respect of which planning permission exists. Accordingly, the appellant is not entitled to a new tenancy.
Furthermore, the creation of a new tenancy would not be consistent with good estate management. A notice to quit is not required in respect of the temporary agreement letting. The appellant is estopped and precluded from saying that a notice in writing dated 23rd June, 2006 is not a valid notice of termination. The appellant was at all material times fully aware of the nature of the temporary convenience letting as entitlement to occupy the premises. It was denied it made improvements or was entitled to a new tenancy or to compensation for improvements or compensation for disturbance.
By way of counterclaim the respondent sought a declaration that the appellant was not entitled to a new tenancy in the premises or to compensation for improvements or compensation for disturbance under the provisions of the 1980 Act.
The temporary convenience was the letting of the premises for such period until the respondent Council required possession of the premises for the purposes of its statutory powers, functions and duties and that the grounds thereof were stated in the agreement of 26th January, 1998. The Vocational Education Committee of the Council had obtained permission on 18th December, 2003 for the refurbishment, alterations and extension of the premises.
2. Issue to be determined
The plaintiff/appellant, having appealed the order of the Circuit Court, submitted that the question as to whether the letting under which the premises was held as a temporary convenience letting was a matter to be determined under s. 5(1)(a)(iv) of the 1980 Act which states:
“(iv) Such contract or tenancy is not a letting which is made and expressed to be made for the temporary convenience of the lessor or lessee and, (if made after the passing of the Act of 1931) stating the nature of the temporary convenience …”
Such temporary convenience must be stated in the agreement and must actually be made for a temporary convenience: Eamonn Andrews Productions Limited v. Gaiety Theatre Enterprises (Circuit Appeal – 26th July, 1972) and see Wiley: Irish Landlord and Tenant Law (second edition) p. 3.40.
The plaintiff says that the temporary convenience was not identified.
3. Evidence on behalf of respondent
Mr. Andrew Coffey, the principal of the plaintiff company (also known as Andy Ruane), gave evidence of his contact with Mr. O’Hare of the defendant Council with regard to the company’s use of the room above the library in autumn, 1997. The company wished to use the premises for the purpose of making programmes for TnaG, in early January, 1998. He gave evidence of spending IR£25,000 for repairs and looking for permanence. He agreed that the letting was a temporary convenience letting and was initially for five and a half months and that s. 75(4) of the 1963 Planning and Development Act applied. In cross-examination he agreed that the premises was 5,000 sq. ft. and the rent reserved was £100 per month. While repairs and refurbishment was done, there were not any improvements. He said he signed the agreement on 26th January, 1998 with legal advice. A letter from his solicitor of 19th December, 1997 referred to a caretaker’s agreement.
He agreed that the wording of the letting agreement did not provide for permanence.
4. Evidence on behalf of the respondent
4.1 Mr. Eamonn O’Hare was then the Acting County Manager of the defendant until May, 2006. He was involved in the letting agreement of 26th September, 1998 which is a lease agreement and simply he was involved in the letting negotiations from 26th September, 1998.
There had been no funding for the development of the premises from 1994/1995. In 1997/1998 there was some discussion regarding a joint venture for the library refurbishment. There was nothing more specific. Now there was planning permission in place for the Vocational Education Committee of the County Council to extend into the building.
Under cross-examination Mr. O’Hare said that the plaintiff required the building for six months. He told them that they had plans for the building and, accordingly, agreed for a temporary convenience letting for six months. Normally the County Council gave eleven months convenience letting. The County Council wished to preserve the building and possibly to move the library upstairs and to upgrade it.
He was advised that the then open market rent would be £60,000 per annum on the basis of evaluation of £12 per sq. ft. (This equates to a monthly rent of £5,000)
4.2 Mr. Eugene Conlon said that the current plans of the County Council were to develop the library and the premises as a senior college. Planning permission had been granted to the VEC. The Council, as freeholder, would give a lease to the VEC who would develop the entire civic building.
5. Submissions of the plaintiff/appellant
Mr. Hugh O’Neill S.C., on behalf of the plaintiff/appellant submitted that the entitlement to a new tenancy under Part II of the 1980 Act was dependent on the premises being a “tenement” as defined in s. 5(1) of the Act as stated above.
He said that the evidence adduced established that no temporary convenience was ever identified other than a possible assertion by Mr. O’Hare to the effect that the Council required the property to be put into repair/made watertight. That general desire was not capable of rendering any letting made for that purpose a valid temporary convenience letting. It was not the reason stated for the letting in the agreement of 26th January, 1998. The Council did not identify the temporary convenience as being “until the Council in its absolute discretion requires clear possession (of the premises) for the purpose of its statutory powers, functions and duties”. The temporary convenience was never requested by the plaintiff.
He referred to O’Driscoll v. Riordan [1985] 16 L.R. Ire, 235 where Palles C.B. quoted with approval the following passage from the judgment of Fitzgibbon L.J. in McCutcheon v. Wilson 12 L.R. Ir. 151:
“Every letting is in a sense for the convenience or to meet a necessity of one or other or both of the parties; but the temporary convenience or necessity contemplated here must, I think, be something special, peculiar to the party or parties or to the holding, collateral to, or possible even irrespective of the quantity or quality of the tenant’s interest, not expected to continue to exist at another time or in other hands, and must be shown to form the motive of the letting at the time.” (at 244)
Even if the agreement did create a temporary convenience letting sufficient of s. 5(1), that temporary convenience was expressed to be for the period 19th January, 1998 until 30th June, 1998. By definition, the temporary convenience terminated at the end of the fixed term.
He referred to Murphy v. O’Connell [1949] I.R. Jur. Rep. 1, where Murnaghan J. said:
“It is not the law that a letting which was for temporary convenience at the beginning remains always a letting for temporary convenience. I think that, in this case, where there was a fresh letting made each month by reason of the tenancy being a monthly tenancy, it cannot be said that this letting remained a letting for the temporary convenience of the defendant all the time or that after the period of eighteen months a tenancy which ensued was a tenancy for temporary convenience.” (at 2,3)
The VEC had obtained planning permission. Counsel agreed that a prima facie entitlement to a new tenancy was defeated where it appears that the landlord required vacant possession for the purpose of carrying out a scheme of development of property, which includes the tenement and has planning permission for the scheme. However, the VEC is a separate body from the Council. Section 7(3) of the Vocational Education Act, 1930 provides that every Vocational Education Committee shall be a body corporate by its said style or name, and shall have perpetual succession and an official seal (which shall be judicially noticed), with power to acquire and hold land for the purpose of its powers and duties. (Section 7(3) of the Vocational Education Act, 1930). The personal involvement of the landlord is important because the following subsection provides that the landlord may be ordered to pay to the tenant such sum as it considers proper by way of punitive damage if the scheme of arrangement has not been carried out within a reasonable time.
Moreover, it was submitted that no evidence was led by the respondent to suggest that the creation of a new tenancy would not be consistent with good estate management. He referred to Hamilton v. Sun Alliance, a decision of 5th July, 1971, where Murnaghan J. was not prepared to say that the grant of a new tenancy for a term of 21 years was inconsistent with good management of the estate as the respondents have not as yet become the owners of the estate. (at p. 4).
6. Submissions of the respondent Council
Mr. Connolly S.C. said that the appeal involved a determination of a net point of law as whether or not the premises in question constituted a tenement within the meaning of s. 5 of the 1980 Act.
Counsel submitted that Mr. Ruane/Coffey in his evidence to the court stated that he had read and signed the agreement of 26th January, 1998 on behalf of the plaintiff which clearly, on its face, provided for a temporary convenience letting. The plaintiff had independent legal advice. The plaintiff remained in possession on foot of an agreement made by letter dated 22nd July, 1998 which expressly extended “your temporary convenience letting of Blackrock Town Hall”.
The nature of the temporary convenience letting in the agreement of 26th January, 1998 was stated to be for the purposes of s. 75(4) of the 1963 Act until the Council in its absolute discretion “requires clear possession thereof for the purpose of its statutory powers, functions or duties”. In Igote Limited v. Badsey Limited [2001] 4 IR 511 at 561, Murphy J., delivering the judgment of the Supreme Court, referred to Kramer v. Ireland [1997] 3 I.R. 43 at 55:
“In this case, as in any case, where the parties are in disagreement as to what a particular provision of a contract means, the task of the court is to decide what the intention of the parties was, having regard to the language used in the contract itself and the surrounding circumstances.”
Igote held, at 516, that the intention of the parties to an agreement may be ascertained only from the document concluded by them:
“In my view the judge erred in asserting the intentions of the parties from the evidence heard by him as well as the alterations aforesaid and documents prepared in the course of the negotiations. The intention of the parties may be gleaned only from the document ultimately concluded by them, albeit constrained in the light of the surrounding circumstances but not ascertaining their intentions in such circumstances. Such a process would be justified only where one or other of the parties claimed rectification of the document executed by him: this is not the present case.”
It was submitted that the plaintiff must have known at all material times, including at the time of the letter of 22nd July, 1998, to which no objection was ever raised, that the plaintiff was let into possession of the premises on a temporary convenience letting until such time as the Council required possession for the purpose of its statutory powers, functions or duties. The plaintiff is estopped from contending that the said letting of the premises is other than a temporary convenience letting. The provisions of s. 5 of the 1980 Act disapply the provisions of the Act compared to how Costello J. in Philips v. The Medical Council [1991] 2 I.R. 115 referred to the statement in Pickard v. Sears as follows:
“Where one by his words or conduct wilfully causes another to believe in the existence of certain state of things and induces him to act in that belief, or to alter his own previous position, the former is precluded from averring against the latter a different state of things as existing at that time.”
Moreover, the plaintiff cannot seek to assert that the tenancy under consideration is other than the tenancy referred to in the written agreement of 26th January, 1998. This is the tenancy referred to in the plaintiff’s original (and second and most recent) notice claiming a new tenancy and also in the Landlord and Tenant Civil Bill before the court which is the subject of the appeal.
Section 75(4) of the 1963 Act gives wide powers to planning authorities to dispose of lands in order to secure the best use of that land, including the granting of a lease where the authority considers that they will not require the use of the land for the period of the lease. That provision extends the provisions of the 1980 Act. It follows that the letting agreement was therefore not a tenancy within the meaning of the 1980 Act.
7. Decision of the Court
7.1 The issue in this appeal involves a determination of a net point of law as to whether the premises in question constitutes a tenement within the meaning of s. 5 of the Landlord and Tenant (Amendment) Act, 1980. Section 5(1) of the 1980 Act provides, insofar as it is material:-
“In this Act ‘tenement’ means –
(a) premises complying with the
(i) they consist either of land covered wholly or partly by buildings or of a defined portion of a building;
(ii) …
(iii) they are held by the occupier thereof under a lease or other contract of tenancy express or implied or arising by statute;
(iv) such contract of tenancy is not a letting which is made and expressed to be made for the temporary convenience of the lessor or lessee and, (if made after the passing of the Act of 1931) stating the nature of the temporary convenience; and
(v) …”
7.2 The agreement of 26th January, 1998 seems to the court to be unambiguous. It recites:
“AND WHEREAS the tenant has requested the Council to allow him into possession of the said premises on a temporary convenience letting for the purpose of section 75(4) of the Local Government (Planning and Development) Act, 1963 and the Council in its absolute discretion requires clear possession thereof for the purpose of its statutory powers, functions, or duties which the Council has consented to do …”
The operative part is also without ambiguity:
“NOW THIS AGREEMENT WITNESSES that for the temporary convenience of the tenant and the Council and for the purposes of section 75(4) of the Local Government (Planning and Development) Act, 1963 THE COUNCIL LETS AND THE TENANT TAKES ALL AND SINGULAR …”
Section 5(1) excludes a contract of tenancy which is made and expressed to be made for the temporary convenience of the lessor or the lessee. The temporary convenience of the Council is expressly established by the agreement and is identified in the phrase “for the purpose of its statutory powers, functions or duties”.
Moreover, the letter of 22nd July, 1998 is expressed to extend the tenant’s temporary convenience letting. The short letter states:
“The Council is prepared to extend your Temporary Convenience Letting of Blackrock Town Hall on a month to month basis with it being renewed each month.”
7.3 It seems to me that the unambiguous intention of the parties may be gleaned from the agreement (including that letter) ultimately concluded by them as is clear from the judgments of Kramer v. Ireland [1997] 3 I.R. 43 at 55, and Igote Limited v. Bardsley Limited [2001] 4 IR 511 referred to in the defendant’s counsel’s submissions above.
The statement in Pickard v Sears, approved by Costello J. in Phillips v. The Medical Council [1991] 2 I.R. 115 applies.
Pickard v. Sears stated:
“Where one by his words or conduct causes another to believe in the existence of a certain state of things, and induces him to act in that belief, or to alter his own position, the former is precluded from averring against the latter a different state of things as existing at that time.”
The conduct of the plaintiff/appellant, the agreement and its renewal and the level of rent prevent the tenant from denying the temporary convenience of the agreement.
Moreover, in his evidence, Mr. Coffey, the principal of the appellant company, said that he had read and signed the agreement, had independent legal advice in doing so and, in this appeal, relies thereon.
7.4 In relation to land acquired by a planning authority under that Act, s. 75(4) of the Local Government (Planning and Development) Act, 1963 gives power to the authority, inter alia, to grant a lease of land where the authority considers that they will not require the use of the land for the period of the lease.
Section 75(4)(b) provides that neither the Landlord and Tenants Acts, 1931 to 1958 nor the Rent Restrictions Act, 1960 shall apply in relation to a lease granted as aforesaid for the purpose of the section.
That paragraph extends to the provisions of the 1980 Act pursuant to s. 20(1) of the Interpretation Act, 1937 which provides:
“Whenever any statute or portion of a statute is repealed and re-enacted, with or without modification, by an Act of the Oireachtas, references in any other statute or in any other statutory instrument to the statute or portion of the statutes so repealed and re-enacted shall, unless the contrary intention appears, be construed as references to the portion of such Act of the Oireachtas containing such re-enactment.”
Accordingly, the provisions of paragraph (b) of s. 75(4) extend to the 1980 Act. It appears to follow that the letting agreement granted on 26th January, 1998 and extended by letter dated 22nd July, 1998 is therefore excluded from the provisions of the 1980 Act.
Murphy v. O’Connell, which does not concern a local authority, is, accordingly, not relevant.
7.5 Even if the letting agreement were not so excluded, the premises are not a tenement within the meaning of s. 5 of the Landlord and Tenant (Amendment) Act, 1980.
In the circumstances the court affirms the decision of the Circuit Court dated 2nd July, 2007.
Kevin Kenny v James Quinn
Circuit Court
28 April 1981
[1981] I.L.R.M. 385
GLEESON J
having recited the facts of the case delivered his judgment on 28 April 1981 saying: … Mr Sweeney, for the Landlord, relied on the written answer filed on behalf of the Landlord on 24 March 1981 in which (1) it was denied that the premises were a tenament within the meaning of the 1980 Act; (2) it was pleaded that the tenancy had terminated by Notice to Quit followed by the decree to possession; and (3) that the existing rights and liabilities of the parties were preserved by Section 11 (4) of the 1980 Act.
Mr Leonard, for the tenant, argued (1) that the premises were a tenement despite Mr Sweeney’s contention that the applicant had not satisfied the third condition required in s.5(1)(a) of the 1980 Act. Mr Leonard maintained that as his client is still there, the premises are held by the applicant under letting agreement despite the fact that an order of ejectment stands against him; he referred to the definition of tenant in the Act, which, he says, includes a person who has ceased to be entitled to the occupation by reason of the termination of his tenancy. (2) Mr Leonard whilst admitting that he had no rights under the *386 1931 Act, which was the legal situation at the time the President made the order of ejectment, argued the situation was changed for his client by the new Act which came into operation on 8 September 1980. He relied particularly on s.29 which provides as follows:
Where the tenancy of a tenement having terminated before the commencement of this Act, the tenent is at such commencement in possession of the tenement under (1) a tenancy arising by implication from the acts of the parties (2) or under a statutoty tenancy under the Rents Restrictions Act, 1960 and 1967, (3) or as a tenant at will or otherwise, without having obtained a new tenancy, the tenancy shall for the purposes of this Act be deemed to terminate immediately after such commencement and this Act shall apply accordingly.
He went on to say that (a) his clients tenancy terminated before the commencement of the new Act (this was the case), (b) that the circumstances of his client’s overholding after the date of the commencement of the new Act were brought in under s.29 by the words ‘or otherwise’, that consequently the tenancy should be deemed to terminate immediately after the commencement of the new Act, and, in the result, his client, who heretofore had no right to a new tenancy, now had a right after an occupation of over three years.
Mr Leonard conceded, in my view correctly, that he could not argue that his client was in possession under a tenancy arising by implication from the acts of the parties, or under a Statutory Tenancy under the Rent Acts, or as a tenant at will. He conceded that to get the protection and benefit of s.29, he would have to bring his client’s possession within the meaning of the words ‘or otherwise’. It is manifest that the legislature had the 1931 Act very much in mind. They were expressly repealing it and amending the law. It seems inevitable that they considered s.39 of the 1931 Act when they were making s.29 of the new Act, as they are in Pari Materia. S.39 of the 1931 Act with the clearest of retrospective intent, gives the benefits of the Act to overholding tenants who are still in occupation on the day the Act came in, ‘whether a decree in ejectment has been made against such tenant or not’. S.29 of the new Act, although adopting verbatim, some of the phraseology of the old section and its general arrangement and syntax, omits what is highly relevant in the present context the phrase ‘whether a decree in ejectment has been made against such tenant or not’. Furthermore instead of conferring the benefits of the new Act on all ex-tenants who were in occupation on the day the 1931 Act came in, the 1980 Act purports to narrow the retrospective benefits to such ex-tenants as were in possession under a tenancy arising by implication from the Acts of the parties or under a statutory tenancy under the Rent Acts or as a tenant at will or otherwise.
It appears plain that the legislature deliberately omitted from the new benefits a tenant who had a decree in ejectment against him. I am fortified in that conclusion also by the application of the ejusdem generis rule which is an acknowledged part of the general law of interpretation of statutes. I have read this topic both in the 9th and 12th Editions of Maxwell’s standard work on Interpretation. I am using the 9th ed. as the subject of ejusdem generis is one of the matters that may have lost something from Mr Langan’s (the Editors of the 12th Ed.) reducing the number of old cases.
*387
I quote from page 337 et seq.—
In the abstract, general words, like all others receive their full and natural meaning although they should not be extended so as to confine matters to which they are obviously not germane … In such and cognate cases the general principle applies that the terms are to receive their plain and ordinary meaning and courts are not at liberty to impose on them limitations not called for by the sense, the objects or the mischief of the enactment. But the general word which follows particular and specific words of the same nature as itself takes its meaning from them and is presumed to be restricted to the same genus as those words. In other words it is to be read as comprehending only things of the same kind as those designated by them, unless, of course, there be something to show that a wider sense was intended. S.43 of the Customs Consolidation Act, 1876 provided that by an Order in Council the importation of arms, ammunition, gunpowder or any other goods could be forbidden. It was held it related only to goods of a like character to those specifically mentioned and not to other things of an entirely different description … The Distress for Rent Act, 1737 authorised the Distress for Rent ‘of Corn, grass or other products of the land’. It was held that this included only products similar to grass and corn and not to young trees, which, though unquestionably products of the land, were of a different character from the products specified by the earlier terms … A Bye Law which imposed a penalty for causing an obstruction in the streets in various specific ways, all of which were of a temporary character, or otherwise causing or committing ‘any other obstruction, nuisance or annoyance’ in any of the streets was held not to include, under the latter words, any obstruction which was not of a temporary character.
Bearing in mind that the tenant who had been decreed in ejectment and who had been given the benefit of occupation under the 1931 Act, was not included in the 1980 Act and having regard to the fact that each of the three special categories mentioned in s.29 were categories of persons who, so far from having been decreed in ejectment, had actually a present right to be in possession, I am constrained to conclude that the words ‘or otherwise’ can, at the best, include only such germane classes of continuing possession as that enjoyed by a permissive occupant or a guest and cannot, according to the ejusdem generis rule, include such a dissimilar category as a person who had been ordered by the court to surrender possession. To take an analogy from the framework of the present facts, let us suppose that, after the termination of his tenancy, Mr Quinn, entertaining a reasonable belief that Mr Kenny intended to buy other premises and leave the one in dispute, and accordingly allowed him to remain on as a permissive occupant in the hope that he would soon leave quietly, then I think such a continued possession, being with the owner’s consent, would probably, under the ejusdem generis rule, be contained in the words ‘or otherwise’. Unfortunately Mr Kenny was not in continued possession with the consent of the owner and therefore in my opinion does not get the protection of s.29. The fact that an appeal against the ejectment is pending does not in my opinion affect the situation, unless the High Court allows the ejectment appeal on the grounds that the tenancy was not properly determined.
Another factor which fortifies my view that Mr Kenny is not entitled to the benefit of s.29 is my consideration of a comparison of two hypothetical tenants; let us assume that the landlord gets a court order in ejectment against each, and that, following this, one tenant obeys the court order and gives up possession. Is *388 he to be in a less favourable legal position than Mr Kenny, who does not obey the court order? I think not.
Not every type of continuing possession carries an ex-tenant to the benefit of the retrospective provisions of the new Act — only the three specific types of continuing possession and only such other types of possession as can fairly be considered germane to the three specified types, and, I regret to say, this does not include Mr Kenny’s case.
I do not think that Quilter’s Case 9 QBD 672 can help the applicant, despite some similarity in the facts. The court of first instance gave a decree in ejectment for breach of covenant to insure. The court of appeal reversed it on the ground that the conveyancing Act, 1881 changed the law between the date of the hearing and the date of the appeal, even though they took the view that the lower court had been right according to the law as it then was. I am not surprised that Viscount Simonds said in his judgment in AG v Vernazza [1960] AC 975: ‘I do not find Quilter’s Case in all respects easy to understand’. Quilter’s Case does not offer any authority for the proposition on which I am deciding this case — that the words ‘or otherwise’ in the context used in s.29, do not include the category of an ex-tenant who has been decreed in ejectment. The question of the effect of a repeal or change in the law on proceedings in which an appeal is pending does not affect my reasoning. I think the purpose of s.29 was to include cases like permissive occupancy in the words ‘or otherwise’ and possibly to provide the machinery and benefits of the new Act for a tenant, say, whose tenancy for lives ended on the fall of a life the day before the new Act came in. The Act under which he had rights was repealed before he had time to do anything under its provisions; but again, that speculation is not essential to my view of s.29 and in particular the words ‘or otherwise’.
For the same reasons, I do not think that s.11 of the 1980 Act or s.21 of the Interpretation Act, 1937 affect my decision. The applicant had no rights under the repealed Act and there were no proceedings under it. I have read the decision of McMahon J in Caulfield v D H Bourke & Son Ltd, where the Circuit Court judge had fixed the terms of a new tenancy under the provisions of the 1931 Act and McMahon J held that it was proper for him to operate the same Act, even though it had been repealed by the 1980 Act when the Appeal went to hearing. As he was not asked to address himself to the meaning of the words ‘or otherwise’ that has no bearing on my decision. Neither has the English case of Wilson v Dagnall [1972] 2 All ER 44, which was a case where the statutory method of assessing compensation in a fatal accident had been changed between the hearing of first instance and the appeal. As the change of law was not merely procedural but substantive, it was held not to be retrospective. The only real interest in the case is the stated unwillingness of the majority to follow their colleague Lord Denning in his approval of Quilter’s Case. On all grounds I am satisfied that this application must fail.
In the matter of the Landlord and Tenant (Amendment) Act, 1980.
George Plant and Gwen Plant Applicants v. Dorothy Oakes,
[1991] I.R. 185
O’Hanlon J.
16th March 1989
For the purpose of the present proceedings it is not in dispute that the respondent is the legal owner of the house and premises, Kilcannon House, Enniscorthy, County Wexford, and that the first applicant, George Plant, was given a tenancy of the said premises by the respondent’s late husband and predecessor in title, in or about the year 1971.
Since that time the applicants, who are husband and wife, have lived in Kilcannon House as their family home. The house is set back from the Dublin Road about 500 yards, and at the road frontage and connected to the house by a long avenue, is a garage where the first applicant has carried on business since the 1976/1977 period. The garage premises were erected on land sold to the said applicant by William Oakes deceased.
In the year 1988 the respondent served a notice to quit dated the 4th March, 1988, for the purpose of terminating the applicant’s periodic tenancy in Kilcannon House and the applicants have countered by claiming a new lease in the said premises pursuant to the provisions of the Landlord and Tenant (Amendment) Act, 1980, and relying on what is known as the “business equity” as referred to in s. 13, sub-s. 1 (a) of that Act. I am satisfied that the original tenancy in the premises was granted to the first applicant only and that the entitlement (if any) to a new lease would arise in his favour only and not in favour of the second applicant.
For the purpose of satisfying the requirements of s. 13, sub-s. 1 (a) of the Act of 1980 the applicant must show that the premises are a “tenement” within the meaning of the Act (an issue which has not been contested); that he was tenant for not less than three years ending with the termination of the previous tenancy (again undisputed), and that the premises were during the whole of such three-year period “bona fide used wholly or partly for the purpose of carrying on a business.” The latter requirement is descriptive of the real issue which arises for determination in this case.
The applicant claims that the dining room in the house was set aside for use as an office as a necessary adjunct to the garage business carried on by him in the garage premises at the foot of the avenue leading to the Dublin Road. His wife (the second applicant) appears to have carried out all the bookkeeping and other paperwork which arose in connection with the business, and for this purpose two, and in later times three, filing cabinets were installed in the said room on the ground floor of the house, together with a typewriter and whatever was needed for the Kalamazoo system of bookkeeping and accounts.
There was a small office annexe to the garage proper, but it was not used as such and all the secretarial and bookkeeping work was said to have been carried out by Mrs. Plant in the family home. There was a telephone in the garage and also in the house with no internal telephone system linking the two. VAT inspectors were called as witnesses to say that when they called to check the VAT returns they were directed up to the house and dealt with by Mrs. Plant. Both telephone numbers are listed in the telephone directory, with the addition of the descriptive words “motor dealers”, opposite the garage number only.
The description of the contents of the room where Mrs. Plant operated suggested that it was not used exclusively for office work, and she herself confirmed that some work done on a few days per week was generally sufficient to cope with the secretarial and bookkeeping work of the garage business.
On the evidence I have heard as to the division of labour between the garage premises and the house I am driven to the conclusion that the house was, in fact, being used partly for the purpose of carrying on the garage business and as a necessary adjunct to the operations carried on in the garage proper, at all relevant times and certainly for a period of three years and upwards prior to the termination of the tenancy.
With regard to the meaning to be attributed to the phrase “bona fide” in the sub-section I think these words are probably intended to exclude a claim based on purported business user which was not genuine but was merely embarked upon as a subterfuge for the purpose of building up a “business equity” as a basis for a claim to a new lease under the Act of 1980.
In the present case, I am satisfied that the use made of the house for office purposes as an adjunct to the garage business was a means adopted to carry on the business in the most convenient and economic way having regard to the circumstancesof the tenant and his family, and, was “bona fide” within the meaning of the sub-section.
A nice question arises as to whether the tenant was under an obligation to apply for “change of user” permission before converting part of his residence to business purposes, under the Local Government (Planning and Development) Acts, but the respondent did not seek to rely on this failure in resisting the claim to a new lease, and as I had previously decided in Terry v. Stokes (Unreported, High Court, 13th March, 1986) that I should not allow it to defeat a claim to a new tenancy, I would propose to adhere to that decision in deciding the present case.
I therefore propose to affirm the order made by the learned Circuit Court Judge and declare the first applicant (only) entitled to a new tenancy in the premises referred to in the notice of application, beginning at the termination of his previous tenancy and refer the matter back to the Circuit Court to make any further determination that may be necessary in relation to the terms of the new tenancy.
Kevin Kenny v James Quinn
Circuit Court
28 April 1981
[1981] I.L.R.M. 385
GLEESON J
having recited the facts of the case delivered his judgment on 28 April 1981 saying: … Mr Sweeney, for the Landlord, relied on the written answer filed on behalf of the Landlord on 24 March 1981 in which (1) it was denied that the premises were a tenament within the meaning of the 1980 Act; (2) it was pleaded that the tenancy had terminated by Notice to Quit followed by the decree to possession; and (3) that the existing rights and liabilities of the parties were preserved by Section 11 (4) of the 1980 Act.
Mr Leonard, for the tenant, argued (1) that the premises were a tenement despite Mr Sweeney’s contention that the applicant had not satisfied the third condition required in s.5(1)(a) of the 1980 Act. Mr Leonard maintained that as his client is still there, the premises are held by the applicant under letting agreement despite the fact that an order of ejectment stands against him; he referred to the definition of tenant in the Act, which, he says, includes a person who has ceased to be entitled to the occupation by reason of the termination of his tenancy. (2) Mr Leonard whilst admitting that he had no rights under the *386 1931 Act, which was the legal situation at the time the President made the order of ejectment, argued the situation was changed for his client by the new Act which came into operation on 8 September 1980. He relied particularly on s.29 which provides as follows:
Where the tenancy of a tenement having terminated before the commencement of this Act, the tenent is at such commencement in possession of the tenement under (1) a tenancy arising by implication from the acts of the parties (2) or under a statutoty tenancy under the Rents Restrictions Act, 1960 and 1967, (3) or as a tenant at will or otherwise, without having obtained a new tenancy, the tenancy shall for the purposes of this Act be deemed to terminate immediately after such commencement and this Act shall apply accordingly.
He went on to say that (a) his clients tenancy terminated before the commencement of the new Act (this was the case), (b) that the circumstances of his client’s overholding after the date of the commencement of the new Act were brought in under s.29 by the words ‘or otherwise’, that consequently the tenancy should be deemed to terminate immediately after the commencement of the new Act, and, in the result, his client, who heretofore had no right to a new tenancy, now had a right after an occupation of over three years.
Mr Leonard conceded, in my view correctly, that he could not argue that his client was in possession under a tenancy arising by implication from the acts of the parties, or under a Statutory Tenancy under the Rent Acts, or as a tenant at will. He conceded that to get the protection and benefit of s.29, he would have to bring his client’s possession within the meaning of the words ‘or otherwise’. It is manifest that the legislature had the 1931 Act very much in mind. They were expressly repealing it and amending the law. It seems inevitable that they considered s.39 of the 1931 Act when they were making s.29 of the new Act, as they are in Pari Materia. S.39 of the 1931 Act with the clearest of retrospective intent, gives the benefits of the Act to overholding tenants who are still in occupation on the day the Act came in, ‘whether a decree in ejectment has been made against such tenant or not’. S.29 of the new Act, although adopting verbatim, some of the phraseology of the old section and its general arrangement and syntax, omits what is highly relevant in the present context the phrase ‘whether a decree in ejectment has been made against such tenant or not’. Furthermore instead of conferring the benefits of the new Act on all ex-tenants who were in occupation on the day the 1931 Act came in, the 1980 Act purports to narrow the retrospective benefits to such ex-tenants as were in possession under a tenancy arising by implication from the Acts of the parties or under a statutory tenancy under the Rent Acts or as a tenant at will or otherwise.
It appears plain that the legislature deliberately omitted from the new benefits a tenant who had a decree in ejectment against him. I am fortified in that conclusion also by the application of the ejusdem generis rule which is an acknowledged part of the general law of interpretation of statutes. I have read this topic both in the 9th and 12th Editions of Maxwell’s standard work on Interpretation. I am using the 9th ed. as the subject of ejusdem generis is one of the matters that may have lost something from Mr Langan’s (the Editors of the 12th Ed.) reducing the number of old cases.
*387
I quote from page 337 et seq.—
In the abstract, general words, like all others receive their full and natural meaning although they should not be extended so as to confine matters to which they are obviously not germane … In such and cognate cases the general principle applies that the terms are to receive their plain and ordinary meaning and courts are not at liberty to impose on them limitations not called for by the sense, the objects or the mischief of the enactment. But the general word which follows particular and specific words of the same nature as itself takes its meaning from them and is presumed to be restricted to the same genus as those words. In other words it is to be read as comprehending only things of the same kind as those designated by them, unless, of course, there be something to show that a wider sense was intended. S.43 of the Customs Consolidation Act, 1876 provided that by an Order in Council the importation of arms, ammunition, gunpowder or any other goods could be forbidden. It was held it related only to goods of a like character to those specifically mentioned and not to other things of an entirely different description … The Distress for Rent Act, 1737 authorised the Distress for Rent ‘of Corn, grass or other products of the land’. It was held that this included only products similar to grass and corn and not to young trees, which, though unquestionably products of the land, were of a different character from the products specified by the earlier terms … A Bye Law which imposed a penalty for causing an obstruction in the streets in various specific ways, all of which were of a temporary character, or otherwise causing or committing ‘any other obstruction, nuisance or annoyance’ in any of the streets was held not to include, under the latter words, any obstruction which was not of a temporary character.
Bearing in mind that the tenant who had been decreed in ejectment and who had been given the benefit of occupation under the 1931 Act, was not included in the 1980 Act and having regard to the fact that each of the three special categories mentioned in s.29 were categories of persons who, so far from having been decreed in ejectment, had actually a present right to be in possession, I am constrained to conclude that the words ‘or otherwise’ can, at the best, include only such germane classes of continuing possession as that enjoyed by a permissive occupant or a guest and cannot, according to the ejusdem generis rule, include such a dissimilar category as a person who had been ordered by the court to surrender possession. To take an analogy from the framework of the present facts, let us suppose that, after the termination of his tenancy, Mr Quinn, entertaining a reasonable belief that Mr Kenny intended to buy other premises and leave the one in dispute, and accordingly allowed him to remain on as a permissive occupant in the hope that he would soon leave quietly, then I think such a continued possession, being with the owner’s consent, would probably, under the ejusdem generis rule, be contained in the words ‘or otherwise’. Unfortunately Mr Kenny was not in continued possession with the consent of the owner and therefore in my opinion does not get the protection of s.29. The fact that an appeal against the ejectment is pending does not in my opinion affect the situation, unless the High Court allows the ejectment appeal on the grounds that the tenancy was not properly determined.
Another factor which fortifies my view that Mr Kenny is not entitled to the benefit of s.29 is my consideration of a comparison of two hypothetical tenants; let us assume that the landlord gets a court order in ejectment against each, and that, following this, one tenant obeys the court order and gives up possession. Is *388 he to be in a less favourable legal position than Mr Kenny, who does not obey the court order? I think not.
Not every type of continuing possession carries an ex-tenant to the benefit of the retrospective provisions of the new Act — only the three specific types of continuing possession and only such other types of possession as can fairly be considered germane to the three specified types, and, I regret to say, this does not include Mr Kenny’s case.
I do not think that Quilter’s Case 9 QBD 672 can help the applicant, despite some similarity in the facts. The court of first instance gave a decree in ejectment for breach of covenant to insure. The court of appeal reversed it on the ground that the conveyancing Act, 1881 changed the law between the date of the hearing and the date of the appeal, even though they took the view that the lower court had been right according to the law as it then was. I am not surprised that Viscount Simonds said in his judgment in AG v Vernazza [1960] AC 975: ‘I do not find Quilter’s Case in all respects easy to understand’. Quilter’s Case does not offer any authority for the proposition on which I am deciding this case — that the words ‘or otherwise’ in the context used in s.29, do not include the category of an ex-tenant who has been decreed in ejectment. The question of the effect of a repeal or change in the law on proceedings in which an appeal is pending does not affect my reasoning. I think the purpose of s.29 was to include cases like permissive occupancy in the words ‘or otherwise’ and possibly to provide the machinery and benefits of the new Act for a tenant, say, whose tenancy for lives ended on the fall of a life the day before the new Act came in. The Act under which he had rights was repealed before he had time to do anything under its provisions; but again, that speculation is not essential to my view of s.29 and in particular the words ‘or otherwise’.
For the same reasons, I do not think that s.11 of the 1980 Act or s.21 of the Interpretation Act, 1937 affect my decision. The applicant had no rights under the repealed Act and there were no proceedings under it. I have read the decision of McMahon J in Caulfield v D H Bourke & Son Ltd, where the Circuit Court judge had fixed the terms of a new tenancy under the provisions of the 1931 Act and McMahon J held that it was proper for him to operate the same Act, even though it had been repealed by the 1980 Act when the Appeal went to hearing. As he was not asked to address himself to the meaning of the words ‘or otherwise’ that has no bearing on my decision. Neither has the English case of Wilson v Dagnall [1972] 2 All ER 44, which was a case where the statutory method of assessing compensation in a fatal accident had been changed between the hearing of first instance and the appeal. As the change of law was not merely procedural but substantive, it was held not to be retrospective. The only real interest in the case is the stated unwillingness of the majority to follow their colleague Lord Denning in his approval of Quilter’s Case. On all grounds I am satisfied that this application must fail.
Jeffers v Odeon (Ireland) Limited
Circuit Court.
21 July 1953
[1953] 87 I.L.T.R 187
Judge Shannon.:
No dispute can arise as to the facts of this case. The question in issue is what is the reasonable construction to be drawn therefrom. It is abundantly clear that Miss Whelan, the former tenant, and her staff had the user of the toilet for all usual purposes and at all reasonable times. Water from the tap in the toilet was taken for purposes in connection with the shop. The present occupier and his employees availed of the same facilities since his going into business in the premises. Mr. Jeffers claims that the disputed user constitutes a term of his tenancy, that he is entitled there to as a matter of right, and that there should be a clause in the tenancy agreement entitling him to the same.
By virtue of section 6 of the Conveyancing Act, 1881, the applicant became entitled to all rights appertaining to the premises enjoyed by the former tenant, up to the time of the applicant’s agreement with the landlords. The whole case is reducible to one question, namely, what is the right inference to be drawn from the facts. I hold the correct inference to be that the tenant enjoyed the disputed facilities not merely by way of permission, but as a term of his tenancy. There was no mention of the rights in question in any tenancy agreement between the parties; the said rights form part thereof by implication.
The applicant is entitled to a new tenancy in the premises the subject-matter of these proceedings—together with the right of himself and his employees in the said premises at all reasonable times to use the existing lavatory in the defendants’ cinema; and at all hours up to 2.30 in each afternoon to use the tap in the said lavatory for the purpose of drawing water for all purposes connected with the shop, and of depositing waste water in the drainage system thereof—for the term of twenty-one years from the 16th March, 1953, at the yearly rent of £96; the applicant paying all rates assessed in respect of the said shop, and subject to the agreements on the part of the tenant contained in the agreement in writing dated the 31st August, 1945, under which the applicant formerly held the said premises1. . . . . .The applicant is entitled to three-fourths of the costs of the proceedings.
Butler and Others v. Fitzgerald.
[1955] IR 310
Lavery J.
LAVERY J. :
30 July
On the hearing of this appeal the following facts were established:
At the date of his death on the 2nd December, 1953, one, Timothy Butler, was in possession and occupation of premises consisting of a lock-up butcher’s shop at no. 2A,Ardnacarrig, Bandon Road, Cork, under a weekly tenancy created by an agreement in writing made on the 23rd August, 1927, between the defendant, Robert Fitzgerald, and the said Timothy Butler at the weekly rent of £1 6s. 0d. (later increased to £1 12s. 0d.) and subject to the terms thereof.
Timothy Butler died intestate leaving his father, John Butler, his sole next of kin, him surviving after his death. It is agreed that the family (the word used) continued to carry on the business in the premises and does so up to the present time. In fact the active person was the plaintiff, Patrick Butler.
On the 15th December, 1953, the defendant served notice to quit determining the tenancy to expire on the 28th December, 1953. This notice was served on Patrick Butler and Mrs. John Butler, described as “Representatives of Timothy Butler” as the persons then in occupation.
This notice was effective to determine the tenancy: Sweeny v. Sweeny (1) and also Hill v. Carroll and Others (2).
By notice in writing, dated the 23rd December, 1953, Patrick Butler, Mrs. John (Annie) Butler and John Butler, describing themselves as representatives of Timothy Butler, deceased, gave notice pursuant to s. 24, sub-s. 1, of the Landlord and Tenant Act, 1931, of their intention to claim a new tenancy under Part III of the said Act.
On the 12th February, 1954, letters of administration of the personal estate of Timothy Butler, deceased, were granted to the plaintiff, Patrick Butler. The grant recites that John Butler, the sole next of kin, had duly renounced his rights and consented to the grant.
I am informed that this grant was made in accordance with the practice of the Court but I express no opinion thereon as it is sufficient for the purposes of this case that Patrick Butler is the administrator of the personal estate of the deceased and he establishes this by production of the grant.
On the 10th April, 1954, Patrick Butler, Mrs. John (Annie) Butler, John Butler and Patrick Butler, personal representatives of Timothy Butler, deceased, served an application to the Circuit Court pursuant to s. 25, sub-s. 1, of the Act of 1931, for the determination of the right of the applicants to a new tenancy in the premises and to fix the terms of such new tenancy, or, in the alternative, for compensation and named the landlord, Mr. Fitzgerald, as respondent.
By order of the 2nd July, 1954, the learned Circuit Judge ordered and declared that Patrick Butler as personal representative of Timothy Butler, deceased, was entitled to a new tenancy and he fixed the terms of the new tenancy as a lease commencing on the 2nd day of December, 1953, and expiring on the 1st day of May, 1971, at a weekly rent of £1 10s. 0d. payable in advance. The order further fixes certain terms which I need not set out as the parties are agreed that if the applicant is entitled to a new tenancy, the terms so fixed are satisfactory.
The landlord has appealed to this Court against this order.
Mr. Barrett, for the landlord, submits that as the tenancy was determined before representation was raised to the estate of the deceased tenant there was nothing to pass to the representative when the grant was obtained and that as there was no tenancy existing when the claim was made a new tenancy cannot be granted under the terms of the Act.
He further submits that the claim being made by a person other than the tenant, s. 24 of the Act has no application.
Mr. McMahon for the personal representative and the other plaintiffs submits 1, that the premises are a tenement as defined by s. 2 of the Act.
There can be no doubt that they do satisfy the conditions of the definition provided they can be said to be heldas required by clause (c)”by the occupier thereof under a lease or other contract of tenancy expressed or implied or arising by virtue of a statute.”
2, That s. 19 of the Act applied, the premises being a tenement complying with one of the conditions of s. 19, namely, the conditions of clause (a)”that the tenement was, during the whole of the three years next preceding the termination of such tenancy, bona-fide used by the tenant for the time being thereof wholly or partly for the purpose of carrying on a business and immediately before such termination, either was held by the tenant thereof under a tenancy from year to year or under a lease or other contract of tenancy for a term of not less than one year or a lease for a life or lives or had been for not less than seven years continuously in the occupation of the person who was the tenant thereof immediately before such termination or of his predecessors in title.”
The premises do satisfy the last clause of this condition subject again to the question whether Patrick Butler, who was in occupation at the date of the termination of the tenancy but who had not yet clothed himself with the character of personal representative, can be regarded as the tenant or the successor in title of the tenant.
3, That the notice of intention to claim relief pursuant to s. 24 was served in due time by a person entitled to serve as “claimant.”
There is no doubt that so far as the time is concerned the notice was duly served. Whether the personal representative or one of the other plaintiffs is entitled to be claimant is again a question similar to that posed under submissions 1 and 2.
4, That Patrick Butler as personal representative and being a person in occupation at the time of the termination of the tenancy and at all material times is and was the occupier under a contract of tenancy within the meaning of s. 2, defining “tenement,” and the “tenant” within the meaning of s. 19 and a person entitled to serve notice of intention to claim relief as claimant under s. 24.
Mr. McMahon refers to the definition of “tenant” for the purposes of the Act by s. 2 as “the person for the time being entitled to the occupation of a tenement and, where the context so admits, includes a person who has ceased to be entitled to such occupation by reason of the termination of his tenancy.”
It is clear that the death of the tenant did not determine the tenancy and that the tenant’s interest was part of the personal estate of the deceased tenant and would vest in the personal representative when raised.
Pending the obtaining of a grant it is, I think, the legal position that they are vested in the Judge of the Court of Probate but the next of kin have a specific interest therein: see Cooper v. Cooper (1) and Tevlin v. Gilsenan (2).
It is not clear whether John Butler, the father and sole next of kin, was himself in occupation of the premises, but whether he was so physically or not it is, I think, common case that his son, Patrick Butler, who carried on the business, was so with his authority and on his behalf.
The landlord was clearly not entitled to recover possession till the expiry of the notice to quit on the 28th December, 1953, and on that date and from the date of death of the tenant, Patrick Butler in the right of his father was the person in occupation and in my opinion entitled to retain possession against the landlord.
On this view he was entitled to serve the notice of intention to claim a new tenancy and satisfies the definition of tenant for the purposes of the Act.
Mr. McMahon further relies on the doctrine that when a grant of administration is obtained the acts of the administrator done prior to the obtaining of the grant will be validated if they are acts done for the purpose of protecting the assets: see Halsbury’s Laws of England, Hailsham ed., vol. 14, at p. 176, paras. 277 and 278.
It is clear that the steps taken to obtain a new tenancy were acts done to protect and preserve the assets.
I reserved judgment at the hearing in Cork in order to examine the decision of the Supreme Court in Hill v. Carroll and Others (1) which had not then been reported and of which counsel had no knowledge. That case does not deal with the Landlord and Tenant Act, 1931, but with the Rent Restriction Acts.
It may however have a bearing on this case as there arose for consideration the position of a person in occupation after the death of a tenant. It was contended that such a person might be entitled to the protection of those Acts but as the person concerned did not belong to the class of persons protected the general question did not arise for discussion.
It was, however, heldfollowing Sweeny v. Sweeny (2)that a notice to quit served on such a person was effective to determine the tenancy. It was argued, relying on a phrase of Dowse B. in Sweeny’s Case (2) that the landlord having served a notice to quit on him must be prepared to accept him as “tenant for all intents and purposes.”This contention was rejected and it was held that such a person was not a tenant. It was not decided whether, if he had come within the class of persons protected, he would have become a statutory tenant.
Having regard however to the particular definition of the word, “tenant,” in the Landlord and Tenant Act, 1931, which I have quoted, I do not consider that this decision affects the conclusion I have stated above.
Patrick Butler is the “tenant” for the purposes of the Act, not because he was in occupation or because a notice to quit was served on him but because he was entitled to occupation, was in occupation, and by the grant of administration as related back had the duty and the right to protect the estate.
The question involved is one of general importance and I offered to state a case for the opinion of the Supreme Court thereon, but for reasons which I appreciate the parties did not wish this done. I have, therefore, had to decide it.
In my opinion, Patrick Butler, as personal representative was a person entitled to claim a new tenancy and the Circuit Court Judge was correct in so holding.
The terms of the new tenancy as fixed by him are acceptable to the parties and I, therefore, confirm his order.
A small point arises as to the date when the lease should commence. It may not be of any real importance but I should like to hear counsel on it. The date of death of the deceased, according to the death certificate and the recital in the grant of administration, was the 2nd December, 1953.
It is given as the 9th December in the application, but I accept the 2nd December as the date of death.
The weekly tenancy was not determined till the 28th December, which should, I think, be the date of the commencement of the lease, and I shall confirm the order of the learned Circuit Court Judge, varying it only in making the date of commencement of the lease the 28th December, 1953.
In the Matter of the Landlord and Tenant Acts, 1931 to 1978
Gerald Stakelum v William Ryan
The Circuit Court
8 November 1979
[1980] 114 I.L.T.R 42
Judge Sheridan:
This case arises from the expiration of a lease dated 22nd March, 1972, which event took place on 1st February, 1979. No point arises of a technical nature and indeed, by agreement at the bar the respondents rely solely on the provisions of section 22 (1) C) which permits the Court to refuse relief under Part III of the Act where it appears to the Court that for any reason the creation of the new tenancy in such tenement would not be consistent with good estate management.
Oddly, enough of this section appears to be more passive than active, inasmuch that no sanction appears to be provided should a landlord succeed under the sub-section in persuading a Court that a particular purpose stated by him to be the main ingredient of good estate management is not subsequently given effect to, whereas in regard to an intention to rebuild or an intention to carry out a scheme of development under section 22 (1) (a) and (b) of the Act failure to carry out the intention, agreement or purpose (as the case may be) shall, under section 22 (2) be contempt of Court and punishable accordingly. Section 22 (1) (c) with which I am dealing in the present case is not included in section 22 (2) of the Act. It is therefore necessary to tread with caution as the landlord, should he succeed under the sub-section, will not be inhibited subsequently from changing his mind or intention relating to the premises.
Part III of the Act of 1931 relating to restrictions on relief is somewhat curious. Much of the evidence of the landlord in the present case might conveniently fit the term good and sufficient reason under section 21, but this phrase bears its own definition which clearly does not cover the conduct or intentions of the landlord. What, therefore, does “good estate management” mean? The nearest case on its facts cited to me is Cliff v. Taylor [1948] 2 KB 394 which relates to the desire of a firm of auctioneers and valuers to acquire the ground floor of a premises used by the tenant as an established tea shop, the rest of the premises being oc *43 cupied by the landlords. This case must be looked at with a certain amount of caution as the British Act of 1927 by sections 4 and 5 was much more restrictive as regards tenants rights than Part III of the 1931 Act and contained nothing in the way of scheme of development of alterations to the premises, but provided, inter alia, that (according to the report) a test of reasonableness should apply, although I must confess that I cannot find this test as applying to a tenant in either sections 4 or 5 of the 1927 Act and also a provision relating to good estate management similar to the provision of 22 (1) (c) of the 1931 Act. However, Scott I. J., who delivered the Judgment of the Court, at p 403 states:—
“There remains the answer to the claim … that it would be inconsistent with good estate management. On this there was overwhelming evidence that the firm needed the tea shop … for the proper expansion of their headquarter premises … and we cannot imagine a clearer case of bad estate management than the decision of the senior partner to throw away the opportunity … to bring that part of the premises within the firms business occupation”.
As I have observed, there is no provision under the 1927 Act relating to a scheme of development of property and it seems to me that if there were, the intentions of the landlord might well have come under this heading. I must regard the Oireachtais as having knowledge of the law when they choose to extend the ambit of grounds, while, at the same time, restricting the rights of landlords far more sharply than in the 1927 Act.
I must confess that the case of Barton -v- Trinity College (1963) 97 I.L.T. & S.J. 144 affords no great help in that the circumstances were far removed from the present case. I feel that the desire of the College to use the entire building for academic purposes might easily come under section 22 (1) (b) and the short report is silent as to the precise sub-section relied upon by Judge Conroy in refusing relief. Even if I were to find that the learned Judge relied on section 22 (1) (c), I could not find similarities with the present case sufficient to afford material assistance. No other Irish case has been cited and it appears that I must therefore attempt an Irish definition of good estate management. It clearly cannot include hardship present or past and having regard ro section 22 (2) I must look at the situation as it exists at the present time. It seems to me that I must enquire as to what a landlord of adjoining premises, which, together with the premises in question would be rendered viable, would require in the prudent manegement of his property as I do not give the word estate any extended meaning apart from the word property. It is true that he willingly gave the portion in question away by the original lease but I am satisfied that his motives in that regard were temporary due to the pressure of a young family and I am also satisfied that three persons made unsuccessful efforts to make a success of the remaining portion. The joining of the let portion and the retained portion will provide at little or no cost a frontage to capture the passing trade rather than a mere premises not readily identifiable as a licenced premises by persons unfamiliar with the locality. To adopt the words of Scott L. J., I cannot conceive a clearer case of bad estate management than for the landlord to throw away the opportunity to bring that part of the premises within his business occupation. I must apply the law and define good estate management as the prudent management of more than one property of a landlord, normally adjoining or at least contiguous, and I have come to the conclusion that the landlord is entitled to refuse to renew the lease under section 22 (1) (c) of the 1931 Act.
The Grey Door Hotel Company Ltd v Pembroke Trust Ltd
High Court, Circuit Court Appeal
29 January 1976
[1976-7] I.L.R.M. 14
(Hamilton J)
This is an appeal brought by the applicant against the refusal of the Circuit Court to extend the time for service of a notice of intention to claim relief pursuant to the Landlord and Tenant Acts 1931 to 1971 seeking a new tenancy in respect of the tenement ‘… all and singular the flat comprising the basement and the return room on the ground floor in the premises of 22 Upper Pembroke Street in the city of Dublin’ which order was made on 3 March 1975.
The said premises were held by the applicant pursuant to an agreement in writing made 1 April 1965 between Pembroke Trust Ltd the respondents herein of the one part and the Grey Door Hotel Company Ltd, the applicant herein of the other part, whereby it was agreed that:
(1) the landlord shall let and the tenant shall take all and singular the flat comprising the basement and the return room on the ground floor in the premises 22 Upper Pembroke Street in the City of Dublin (hereinafter called ‘the demised premises’) to hold for a term of 10 years from 1 January 1965 paying therefor the yearly rent of £200 payable by equal quarterly payments of £50 each in advance on 1 January, 1 April, 1 July and 1 October in each year, the first of such quarterly payments to be made on the execution of this agreement.
The term granted by the said agreement expired on 31 December 1974.
By letter dated 9 January 1975 written on behalf of the respondent company *16 by the secretary thereto and addressed to the applicant herein the respondent company pointed out that:
As the term of your lease expired on 31 December 1974 possession is required and we shall be glad if you would make arrangements to give us possession as soon as possible.
It is quite clear that the term of years granted by the said agreement dated 1 April 1965 had expired on 31 December 1974.
S. 24(1) of the Landlord and Tenant Act 1931 provides that:
No claim for relief under this Act shall be maintained unless the claimant shall, within the time hereinafter mentioned, have served on the person against whom such claims is intended to be made notice (in this Act referred to as a notice of intention to claim relief) in the prescribed form of his intention to make such claim.
Subs. 2 of the said section provides that:
Every notice of intention to claim relief shall be served within whichever of the following times is applicable that is to say:
(b) in the case of a tenancy terminating by the expiration of a term of years or other certain period or by any other such event, not less than 3 months before the termination of the tenancy.
It is also quite clear that no such notice of intention to claim relief was served by the applicant herein on the respondent within the time prescribed by s. 24 of the Landord and Tenant Act 1931 or at all.
For this reason the applicant herein brought this motion seeking an order extending the time to serve such notice of intention claiming relief under the Landlord and Tenant Act 1931.
This motion falls to be considered under s. 45 of the 1931 Act which provides as follows:
Whereby or under this part or any of the foregoing parts of this Act a period is fixed for the doing of any act or thing, the court may, either before or after the expiration of such period, extend such period upon such terms as the court thinks proper.
The circumstances in which an order extending time under the provisions of s. 45 of the Act should be made have been considered in many cases and the attention of the court has been directed to the decisions in O’Neill v Carthy [1937] IR 580 and Bridgeman v Powell [1937] IR 584, Hayes, Conyngham and Robinson Ltd v Kilbride [1963] IR 185 and Linders (Chapelizod) Ltd v Syme [1975] IR 161.
In the course of his judgment in O’Neill v Carthy Sullivan P stated (at 581): *17
In support of the application we have been referred to cases in which the courts in this country and in England have considered similar applications and discussed the grounds on which such application should be granted. So far as I can see the only principle that can be gathered from the decisions in these cases is that an extension of time should be granted whenever the court is satisfied that it would be just to do so.
In the course of his judgment in Bridgeman v Powell Johnson J stated (at 590) that:
It seems to me that the statutory power given to the Circuit Court by s. 45 does not enable the judge to exercise his statutory power in the matter casually, capriciously, lightly or even good-naturedly and …, the Court is not entitled to extend the time for any reason other than the desire to do justice between the parties. There must be some special circumstances or reasons to justify a court in exercising such a power — some special circumstances such as to justify themselves as reasonable in the opinion of the judge. Further, such exercise of discretion should not be prejudicial to the landlord.
In the course of his judgment in Linders (Chapelizod) Ltd v Syme the present Chief Justice stated that:
The fundamental consideration is whether the interests of justice in the circumstances of this case require that the relief sought be granted. The Landlord and Tenant Act 1931 is entitled ‘an Act to make provision for the further improvement and amelioration of the position of tenants …’. Under such an Act when the court is given powers to extend time provided by the Act for the service of statutory notice I think the court should do so unless a clear injustice would be caused.
The order sought and appealed from in this case is a discretionary order and in this connection Davitt P in the course of his judgment in Hayes, Cunningham and Robinson v Kilbride, having reviewed the authorities O’Neill v Carthy and Bridgeman v Powell stated (at 190) that:
I am bound by these authorities; and in my opinion, they decide that an order made in pursuance of s. 45 of the Act is a discretionary order which should not be interfered with unless the Circuit Court judge has erred in principle, as, for instance, by allowing his discretion to be influenced by something which it was unreasonable to take into account. In my opinion, before the Circuit judge can exercise his discretion to grant an extension of time he must be satisfied that there are special circumstances which, having regard to the interests of both parties, render it just that the time should be extended. I take the view that this Court should not interfere with the Circuit judge’s order unless clearly of opinion that there were no reasonable grounds for considering that such special circumstances did in fact exist.
Accepting as I do the statement of the present Chief Justice in the course of his judgment in Linders (Chapelizod) Ltd v Syme that: ‘The fundamental *18 consideration is whether the interests of justice in the circumstances of this case require that the relief sought be granted’ and ‘under such an Act when the court is given powers to extend time provided by the Act for the service of statutory notices I think the court should do so unless a clear injustice would be caused’. I take the view that I am entitled to consider the matter de novo and decide whether the circumstances of this particular case require that the relief sought be granted.
The circumstances in this case are set out in the affidavits of Paul W. Keogh, the solicitor for the applicant, Francis B. Farrelly, a director of the applicant company, Austin F. Reddy, a director of the respondent company and Desmond O’Toole, an auctioneer in the firm of Osborne, King & Megran and the exhibits therein referred to.
It is always difficult to ascertain the exact position when the matter is dealt with by affidavit but it appears from the affidavit of Mr Reddy, the director of the respondent company that there were some preliminary negotiations in 1973 between the applicant company and the defendant company towards the purchase of the applicant company and the defendant company’s interest in the premises number 22 Pembroke Street.
It is alleged by him that these negotiations had already come to an end by the end of 1973 and that the only negotiations in progress in 1974 were based on the terms of the letter dated 3 April 1974 written by Mr Farrelly on behalf of the applicant company to Mr Reddy on behalf of the defendant company and that they relate to the possible purchase by the respondent company of the applicant company’s interest in the premises in the basement of number 22.
Subsequent to the receipt of this letter dated 3 April 1974 Mr Reddy states that by letter dated 6 May 1974 he instructed the respondent company’s auctioneers, Messrs Osborne, King & Megran to negotiate with the applicant company for the purchase of its premises number 22.
Such negotiations as persisted after that date were conducted by Mr O’Toole of the firm of Osborne, King & Megran on behalf of the respondent company.
Mr O’Toole in his affidavit stated that after receiving instructions to negotiate on behalf of the respondent for the purchase of the applicant’s interest in the premises 22 Upper Pembroke Street Dublin he telephoned Mr Farrelly to make an appointment to inspect the property and that he did inspect the same on the morning of 16 May 1974.
He further states that towards the end of May 1974 he telephoned Mr Farrelly and had a discussion with him about the price he was asking for his interest and that when he (Mr Farrelly) named a price he informed him that it was too high.
He also averred in his affidavit that he informed Mr Farrelly that he would take instructions and that if the respondent were further interested he would get in touch with him on Wednesday or Thursday of the first week in June.
He alleges that he informed Mr Farrelly that he would only get in touch with *19 him ‘if our client was interested’. He states in his affidavit that he subsequently informed Mr Reddy of the price mentioned by Mr Farrelly and that on or about 3 July 1974 he received the letter dated 2 July 1974 from Mr Reddy which stated that ‘in view of the costs involved we have decided to take no further action in the matter at this stage’. He goes on to say at paragraph 5 of his affidavit that:
I had no further negotiations or discussions of any kind with Mr Farrelly, or with any other person acting on his behalf or on behalf of the above-named applicant in connection with the applicant’s interest in the basement of number 22 Upper Pembroke Street, for the purchase or sale thereof or otherwise howsoever.
In his affidavit Mr Reddy stated at paragraph 6 thereof that:
By July of 1974 it had become perfectly clear to myself and my company that the price being asked by the applicant and by the said Francis B. Farrelly on its behalf, for its interest in the basement of number 22 is too high, and we accordingly terminated all negotiations and instructed Messrs Osborne, King & Megran to do the same.
It is quite clear from the affidavit of Mr O’Toole that subsequent to receiving the instructions from Mr Reddy to terminate all negotiations that he did in fact communicate such decision to Mr Farrelly.
It is submitted on behalf of the respondent that such notice was not necessary as they allege that Mr O’Toole had informed Mr Farrelly that he would get in touch with him on Wednesday or Thursday of the first week in June if the respondent company were interested in purchasing the premises at the price suggested by Mr Farrelly in the course of his telephone call with Mr O’Toole which appears to have taken place towards the end of May 1974.
In his affidavit Mr Farrelly states that:
I deny that at the conclusion of this conversation that Mr O’Toole undertook to contact me only in the event of the respondent’s further interest in the matter. I understood and relied on the fact that Mr O’Toole would contact me when the respondent considered the matter further and accordingly that there was no time factor involved.
It is quite clear from the affidavit of Mr Reddy that the decision to terminate the negotiations was not made by the respondent company until June 1974 and that the respondent company’s decision with regard to the matter was not communicated to the applicant company.
In these circumstances the court is of opinion that the attitude taken by Mr Farrelly and as averred to in his affidavit at paragraph 4 where he states that:
I therefore assumed that at all times by virtue of our continuing negotiations that an agreement would be reached.
An application for a new lease was not considered essential unless this should *20 compromise the good relationship between the parties
was a reasonable one.
The decision to terminate the negotiations with the applicant company made by the respondent in June or July 1974 should have been communicated to the applicant company.
Between the months of May and the end of September, which is the relevant period, I consider that Mr Farrelly was justified in believing that the negotiations originated by him were continuing even though Mr O’Toole had not come back to him after the telephone conversation in May 1974.
I do not consider that an injustice would be caused if I were to extend the time for service of the notice of intention to claim relief in this case because of the foregoing fact and also because Mr Reddy clearly anticipated that ‘new negotiations for terms upon which the applicant might either remain in possession of the premises or give up vacant possession thereof’ would most probably be opened by the applicant company.
Consequently I will allow the appeal herein and extend the time for service of the notice of intention to claim relief.
Eamonn Andrews Productions Ltd v Gaiety Theatre (Dublin) Ltd
1976 No. 33
High Court
31 May 1976
[1976-7] I.L.R.M. 119
Cir. App. (Gannon J)
GANNON J
delivered his judgment on 31 May 1976 saying: Eamonn Andrews Productions Ltd brought an application before the Circuit Court pursuant to the provisions of Part IV of the Landlord and Tenant Act 1931 seeking an order for the granting by Gaiety Theatre (Dublin) Ltd of a lease for not less than 21 years of the premises at South King Street in the city of Dublin which then was in their occupation for the business purposes appropriate to the use of a theatre. That application came before His Honour Judge Sheehy on 9 June 1975 and it is from his decision, given on 23 June 1975, granting the relief sought that this appeal was taken by Gaiety Theatre (Dublin) Ltd. Against the determination by Judge Sheehy that the annual rent of the new lease for the 21 year term should be £22,000 Eamonn Andrews Productions Ltd appealed and both appeals have come to this Court and have been heard together.
The notice of application to the Circuit Court was served on the respondent, the landlord, on 11 February 1974. The facts alleged in that notice were admitted, save in respect of the date on which it it alleged the applicant first became aware that the interest in the premises of Gaiety Theatre (Enterprise) Ltd had terminated. Oral evidence relative to the matter of that date was given by Mr Conal Clancy, solicitor for the applicants, the respondents on this appeal, to the effect that the correct date was 8 October 1973. He confirmed also that the applicants had served on the respondents, Gaiety Theatre (Dublin) Ltd, notice of intention to claim relief as referred to in paragraph 9 of the application to the court and that such notice had been served on Gaiety Theatre (Enterprises) Ltd subsequent to that which had been served on the latter in March 1972 following which an application to the Circuit Court was served in July 1972.
In their answer dated 3 May 1974 to this application — the respondents, the appellants in this appeal, raised a number of issues of which the only one contested was as stated in paragraphs 4 and 5 of the answer as follows:
(4) That the relationship of landlord and tenant has not subsisted nor does it subsist between the applicant and respondent named herein as alleged or at all. *121
(5) That the applicant has no rights in the said premises under the said Acts.
The purpose of these pleas in the answer, as explained by Mr Landy SC for the respondents, was to raise for determination the question of whether or not a notice of intention to claim relief, which is a necessary prerequisite to the relief claimed, was served on the correct person and the appropriate procedural steps taken. Although in paragraph 7 of the answer the respondents also alleged that the applicant’s claim was out of time, it transpired from two letters of 16 May 1974 and 23 May 1974 that this plea had been waived and the respondents were estopped from contesting the claim on this ground. The facts and circumstances giving rise to the issue for trial are, it is agreed by both parties, quite unusual and peculiar to this case being derived from the ‘history’ of the applicant’s occupation of the premises and are unlikely to arise again or in any other case.
The applicants, Eamonn Andrews Productions Ltd, first took a lease of the Gaiety Theatre premises in 1966. The copy lease put in evidence shows that it was granted by Gaiety Theatre (Enterprises) Ltd on 22 September 1966 for a term of three years commencing on 23 September 1966 at a yearly rent of £10,000. Among the provisions of the lease there are two worthy of note, firstly, the covenant by the lessee to pay two specified head rents of a total amount of £365 reserved by leases dated 2 February 1970 and 24 August 1970 the parties to which are not named, and secondly, the covenant by the lessee to
Perform and observe the covenants and conditions contained in the letters patent dated 1 May 1956 granted bo Louis Elliman and Abraham Elliman, their executors, administrators and assigns in trust for the Gaiety Theatre (Dublin) Ltd their successors and assigns.
Before the expiration of that term of three years the applicants were granted a further lease of the same premises. The copy lease put in evidence shows that it was granted by Gaiety Theatre (Enterprises) Ltd on 5 August 1969 for a term of three years commencing on 23 September 1969 at a yearly rent of £14,365. Among the provisions of this lease there are two worthy of note, namely, the covenant by the lessee in the same terms as in the 1966 lease to observe the requirements of the letters patent held in trust for Gaiety Theatre (Dublin) Ltd and secondly, a declaration that the lease was made for the temporary convenience, described as mutual, of the lessor. It is also worthy of note that the covenant to pay the head rents was omitted but the amount of the annual rent appears to include the total of the two annual payments for ground rents undertaken by the lessee under the 1966 lease. From these several clauses it would appear therefore, that Gaiety Theatre (Dublin) Ltd then had an estate or interest in the premises as a theatre to which the letters patent related and inferentially superior to the interest of the lessors Gaiety Theatre (Enterprises) Ltd. It would also seem that as the head rents continued to be payable annually, *122 but from 1969 to the lessors Gaiety Theatre (Enterprises) Ltd, the latter must have acquired the several interests of the persons to whom the head rents were payable and inferentially these were superior to the interests of Gaiety Theatre (Dublin) Ltd who had the benefit of the trust declared in respect of the letters patent. These clauses together with the other provisions of the lease of 5 August 1969, including in particular the term of years granted and the ancillary covenants and the declaration of a specified temporary convenience, constituted a representation by the lessors, Gaiety Theatre (Enterprises) Ltd that they had such a title or an interest in the demised property that it was within their competence to grant a term of three years commencing on 23 September 1969. It transpires that this was a false representation, though presumably made inadvertently. It is now agreed that such estate or interest in the property as Gaiety Theatre (Enterprises) Ltd then had in 1969 expired by efflux of time on 22 September 1971 as stated in the notice of application of the court. The nature of the estate or interest which Gaiety Theatre (Enterprises) Ltd then had has not been disclosed, nor have the identities of the shareholders or directors of Gaiety Theatre (Enterprises) Ltd and Gaiety Theatre (Dublin) Ltd been revealed.
In ignorance of the true position in relation to their lessor’s interest and of the termination on 22 September 1971 of their own term of years with determination of the estate or interest out of which it was granted the applicants, having remained on in possession, served Gaiety Theatre (Enterprises) Ltd with a notice of intention to claim relief under s. 24 of the Landlord and Tenant Act 1931 on or about 9 March 1972. A notice of application to the Circuit Court for such relief pursuant to s. 25 of the 1931 Act was served in June 1972 on Gaiety Theatre (Enterprises) Ltd who opposed the claim solely on the ground as set out in their answer that the lease of 5 August 1969 was a letting for temporary convenience as referred to in s. 2(b) of the 1931 Act. This issue was tried in the Circuit Court and decided in favour of the applicants on 11 July 1972 and affirmed by the High Court on 26 July 1972 on appeal taken by the then respondents. I am not aware of whether or not it was disclosed to either court that the then respondents at the time had no estate or interest in the property and certainly had no interest in the supposed temporary convenience as expressed in the lease. Because the then respondents Gaiety Theatre (Enterprises) Ltd took the matter to the Supreme Court which dismissed their appeal, no determination had been made in the Circuit Court concerning the terms upon which the applicants should be granted a new lease by Gaiety Theatre (Enterprises) Ltd as claimed until 16 November 1973. The matter came before the Circuit Court on the last mentioned date pursuant to liberty in that behalf reserved and granted by the order of 11 July 1972 as affirmed by the High Court order of 26 July 1972. When the matter came before the High Court in November 1973 the court was then informed for the first time, so far as I can ascertain, that the interests of Gaiety Theatre (Enterprises) Ltd in the property had been terminated but it *123 appears to have been represented to the court that such interest had not terminated until 22 September 1973. Apparently both the applicant and the court were informed by Gaiety Theatre (Enterprises) Ltd that the latter held the interest in reversion expectant on the termination of the lease to the applicants of 5 August 1969 upon a tenancy from year to year from Gaiety Theatre (Dublin) Ltd by whom a notice to quit had been served effective as from 22 September 1973. Immediately following the court proceedings, that is to say on 23 November 1973, the applicants served on the present respondents Gaiety Theatre (Dublin) Ltd a notice of intention to claim relief under the provisions of the Landlord and Tenant Act 1931. Between then and the serving on 11 February 1974 of the notice of application to the court giving rise to the present proceedings by a lease dated 14 January 1974, Gaiety Theatre (Enterprises) Ltd purported to grant to the applicants a lease of the property for a term of one year commencing on 23 September 1972 and expiring on 22 September 1973 at a rent of £17,000. Apparently the acceptance of this lease by the applicants and the approval of the Circuit Court to the granting of it were procured by the representations made by Gaiety Theatre (Enterprises) Ltd, the then respondents, that they had such an estate or interest in reversion in the property as would enable them to grant such a lease. The lease so granted was expressed in the same terms in all respects as the lease of 5 August 1969 including also the declaration that it was made for the mutual temporary convenience of the lessor.
How Gaiety Theatre (Enterprises) Ltd acquired a tenancy from year to year in the property demised by them to the applicants by the lease of 5 August 1969 was not disclosed, and I infer that the applicants were not parties to a contract in that behalf (if any) between Gaiety Theatre (Dublin) Ltd and Gaiety Theatre (Enterprises) Ltd and the applicants did not attorn tenants. Whether Gaiety Theatre (Enterprises) Ltd became entitled to a tenancy from year to year from 22 September 1971 in the property the subject of the lease of 5 August 1969, of which the applicants then had beneficial possession and occupation, upon an implication of law depends on the existence of facts and circumstances from which the court would draw such inference. The relevant facts and circumstances were never disclosed to this Court, nor to any of the courts before which the question of the applicant’s entitlement to exercise the rights conferred by the Landlord and Tenant Act 1931 was referred for determination. The continued relationship of tenant to landlord upon an implied tenancy from year to year, whether by virtue of s. 5 of the Landlord and Tenant (Ireland) Act 1860 or otherwise, is founded on the principle of estoppel as between the parties to the expired contract. Upon a contested issue as to the implied tenancy evidence must be adduced of facts to support the estoppel and the inference of an implied new contract. Where the rights of other parties may be put in jeopardy whose interests are not represented upon the determination of such issue it is improbable that the inference of a contract which would defeat such *124 unrepresented interests would be accepted. Estoppel is basically a principle of the law of evidence and relates essentially to the burden of proof on contested matters and consequently does not affect the rights or duties of others not parties to the contested issues. Consequently whatever the relationship which was created between Gaiety Theatre (Dublin) Ltd and Gaiety Theatre (Enterprises) Ltd whether by express agreement or by implication of law upon the termination of the lease or other contract on 22 September 1971, such new relationship was not such as would or could of itself create a contractual relationship of landlord and tenant between Gaiety Theatre (Enterprises) Ltd and Eamonn Andrews Productions Ltd. As from 22 September 1971 the term of three years granted to Eamonn Andrews Productions Ltd on 5 August 1969 under sub-lease was terminated and thereafter Eamonn Andrews Productions Ltd were tenants at sufferance of Gaiety Theatre (Dublin) Ltd but with the benefit by virtue of s. 20 of the Landlord and Tenant Act 1931 of the inchoate rights to a new tenancy upon compliance with the requirements therefor contained in the 1931 Act.
Had Gaiety Theatre (Enterprises) Ltd in fact had a reversion expectant on the termination of the lease of 5 August 1969 as represented exceeding one month but not exceeding five years in duration, then Gaiety Theatre (Enterprises) Ltd upon receipt of the notice of intention to claim relief should have served a notice pursuant to s. 33 of the 1931 Act on Eamonn Andrews Productions Ltd continuing the tenancy of the latter until the expiration of their own reversion at the same rent terms and conditions as in the 1969 lease. By failing to disclose the true facts and by failing to serve the notice provided for in s. 33 of the 1931 Act, Gaiety Theatre (Enterprises) Ltd succeeded in persuading the Circuit Court judge in November 1973 to make an order requiring Eamonn Andrews Productions Ltd to take a lease dated 14 January 1974 for a term of one year to expire on 22 September 1973, a date then passed, at a substantially increased rent though otherwise on the same terms as the expired lease of 5 August 1969 including the declaration of a temporary convenience which had been condemned by the court on the previous court hearing.
Upon the present application now under appeal the respondents, Gaiety Theatre (Dublin) Ltd adopt the reservation that Gaiety Theatre (Enterprises) Ltd held from them the premises in the occupation of Eamonn Andrews Productions Ltd upon a tenancy from year to year from 22 September 1971 and purport to adopt also the irregular procedure by virtue of which Gaiety Theatre (Enterprises) Ltd obtained in 1974 a rent of £17,000 from Eamonn Andrews Productions Ltd in respect of the year ending 22 September 1973. Gaiety Theatre (Dublin) Ltd now oppose this application on the ground that the notice of intention to claim relief dated 23 November 1973 which was served on them, should not have been addressed to them and should have been a duplicate only of such a notice which, they say, should have been served on Gaiety Theatre (Enterprises) Ltd pursuant to s. 31(2) of the 1931 Act.
*125
Gaiety Theatre (Dublin) Ltd do not dispute that the court proceedings initiated by the notice of application of June 1972 had been preceded by a valid notice of intention to claim relief served in March 1972 by the applicants upon the proper person namely, Gaiety Theatre (Enterprises) Ltd. The 1931 Act, which prescribes that the preliminary notice of intention to claim relief must have been served before the application to the court, prescribes a minimum time but no maximum time before the application to the court for the service of the notice of intention to claim relief. The only reported case I could find in which an excessive delay between the time of service of the notice of intention to claim relief and the notice of application to the court defeated the applicant, is Farrell v Barron [1938] Ir Jur Rep 19 in which it was held that the relationship of landlord and tenant between the applicant and the respondent became one of a continuing tenancy from year to year by implication of law upon the facts and circumstances special to the case. The facts and circumstances of the case now before me could not give rise to any such implication in this instance. Gaiety Theatre (Dublin) Ltd have not disclosed whether or not Gaiety Theatre (Enterprises) Ltd served on them within the time prescribed the notices provided for in s. 31(1) and in particular that required to be served on Gaiety Theatre (Dublin) Ltd pursuant to s. 31(1)(b). At the time of service on 9 March 1972 of the notice of intention to claim relief, Gaiety Theatre (Enterprises) Ltd had no reversion express or implied in the premises to which the notice related. Accordingly, in the absence of evidence to the contrary from Gaiety Theatre (Dublin) Ltd I must assume that they were served by Gaiety Theatre (Enterprises) Ltd subsequent to 9 March 1972 with notice of the fact that Gaiety Theatre (Enterprises) Ltd had received from Eamonn Andrews Productions Ltd a notice of intention to claim relief and with a copy thereof as required by s. 31(1)(b) of the 1931 Act. S. 31(3) as applied to the facts of this case provides that if Gaiety Theatre (Enterprises) Ltd did serve Gaiety Theatre (Dublin) Ltd with the notices prescribed by s. 31(1) then the claim to relief of Eamonn Andrews Productions Ltd shall be deemed to be made against and, if awarded, shall be given by Gaiety Theatre (Dublin) Ltd. The provisions of s. 31(2), which are relied upon in this case by Gaiety Theatre (Dublin) Ltd apply only if Gaiety Theatre (Enterprises) Ltd did not serve on Gaiety Theatre (Dublin) Ltd the notices that should have been served, pursuant to s. 31(1)(b). The onus of proving that such notices were not served lies on Gaiety Theatre (Dublin) Ltd and they have given no evidence relating to this matter. The notice of 23 November 1973 which was served on them by Eamonn Andrews Productions Ltd put them on notice of the nature of the continued occupation by Eamonn Andrews Productions Ltd of the premises from 22 September 1971 from which it is evident that such continued occupation was not of such nature as would deprive Eamonn Andrews Productions Ltd of their right to obtain a new tenancy under the provisions of the 1931 Act from Gaiety Theatre (Dublin) Ltd.
From the documents before me it is clear that the respondents Gaiety Theatre (Dublin) Ltd were aware at all material times of the true nature of the interest of Gaiety Theatre (Enterprises) Ltd in the premises and of the right of the applicants and of their intention to claim a new tenancy under the provisions of the Landlord and Tenant Act 1931. They were also aware of the fact and the nature of the continued occupation and user of the premises by the applicants. As they have not shown that they were not served by Gaiety Theatre (Enterprises) Ltd with the notices prescribed by s. 31(1)(b) they cannot rely upon an alleged failure by the applicants to comply with the alternative requirements of s. 31(2) as a ground for contesting this application as being irregular and not in accordance with the procedure prescribed by s. 31(3). This application was presented in the Circuit Court and argued here in this Court on the assumption that the lease dated 14 January 1974 granted pursuant to order of the Circuit Court of 23 November 1973 for a term of one year from 22 September 1972 to 22 September 1973 was a necessary basis for the presentation of the applicants’ claim now to a new tenancy in the premises. However had the interest of Gaiety Theatre (Enterprises) Ltd been such as they had represented to the court upon the application when the order for that lease was made, it is evident that the provisions of s. 33 of the 1931 Act would have made it unnecessary to have made any application to the court for such lease of one year and would have enabled the applicants to have remained in occupation of the premises at the same rent as they had held the premises under the expired lease of 1969. Had the procedure prescribed by s. 33 been followed the application before this Court now would have to have been an application by the applicants calling upon the present respondents Gaiety Theatre (Dublin) Ltd to grant the new lease of 21 years such as is now claimed. In the result, I am of opinion that the objections of the respondents to this application are invalid and without merit.
In relation to the cross appeal of the applicants against the order determining the amount of the yearly rent of the intended new lease at £22,000 I have heard the evidence of valuers called on behalf of both parties. I am also informed that it is the wish of the parties that the proposed new lease, if granted, should contain a provision enabling the rent of it to be reviewed after a period of seven years with a provision for arbitration if necessary. This is a prudent provision in the circumstances of this case, having regard in particular to the commitment of the lessee in relation to the provisions of the letters patent which will require to be renewed within a period of seven years. It follows therefore that the amount of the rent appropriate in these circumstances can only be an amount which would be suitable for a term of seven years and involves factors which were not brought to the attention of the Circuit Court judge. I am advised by the valuers who gave evidence in this matter that the amount of the rent which would be recommended on a lease containing provision for reviews after a period of seven years would necessarily be less than the amount which might be expected on a term for a 21 *127 year lease without any review. Having regard to the evidence which has been adduced before me I consider that the appropriate rent for the first period of seven years of a 21 year lease in this case, should be the rent of £17,000 per annum.
In the result I allow the appeal of the applicants against that part of the Circuit Court order which determined the amount of the rent of the new lease at £22,000 by varying that order so as to direct that the amount of rent of a new lease for 21 years should be £17,000 and that the lease should contain a provision for review of the rent after a period of seven years with an arbitration clause appropriate thereto. In regard to the applicants appeal I will make no order as to costs. In relation to the appeal of the respondents against the order of the Circuit Court determining that the applicants are entitled to a new lease and directing the respondents to grant such a lease I will dismiss this appeal and I will dismiss it with costs in both the Circuit Court and in the High Court. I think that this is an unusual case in that it appears to me the respondents have relied upon a technicality without validity and without merit and founded upon the facts and circumstances indicating that the court had been misled, not only on this application but to the knowledge of these respondents on previous applications which they sought to adopt.
Peggy Mealiffe v G.N. Walsh Ltd and George I. Walsh
[1987] I.L.R.M. 301
(Carroll J)
28 November 1986
This case concerns a net legal point whether a tenant who holds on a periodic letting is entitled to a new tenancy under Part II of the Landlord and Tenant (Amendment) Act 1980 (the 1980 Act) even though the tenancy has not been determined.
The entitlement is expressed in s. 16 as follows:
Subject to the provisions of this Act, where this Part applies to a tenement, the tenant shall be entitled to a new tenancy in the tenement beginning on the termination of his previous tenancy, and the new tenancy shall be on such terms as may be agreed upon between the tenant and the person or persons granting or joining in the grant of the new tenancy or, in default of agreement, as shall be fixed by the court.
The premises are a tenement as defined by s. 5 of the 1980 Act held by the applicant on a monthly tenancy arising on the expiration of a term granted by agreement in writing made in 1981 between the second named respondent as landlord and the applicant as tenant. Under that agreement the applicant was granted a term of years from 1 August 1981 to 1 July 1984 at the rent of £ 35 per week in the premises described as Cleo’s Hairdressing Salon situate at O’Connor Square, Tullamore, Co. Offaly, consisting of one room on the first floor of the landlord’s premises together with shared use of toilet and hall including furniture, fittings and effects specified in the Third Schedule. Since this was a preliminary legal issue, no evidence was taken but I was informed by counsel for the applicant that the reason for the application is that the premises may be sold and that a new purchaser may be able under s. 17(2) of the 1980 Act to resist an application for a new tenancy.
The applicant claims to be entitled to a new tenancy under Part II of the 1980 Act which the applicant says applies to her premises by virtue of s. 13(1)(a) which provides as follows:
(1) This Part applies to a tenement at any time if—
(a) the tenement was, during the whole of the period of three years ending at that time, continuously in the occupation of the person who was the tenant immediately before that time or of his predecessors in title and bona fide used wholly or partly for the purpose of carrying on a business.
This is commonly referred to as a business equity.
This section must be constrasted with s. 19, the corresponding section in the Landlord and Tenant Act 1931 (the 1931 Act):
(1) On the termination within the meaning of this section of a tenancy in a tenement, this Part of this Act shall apply to such tenement if such tenement complies with any one of the following conditions, that is to say:
(a) such tenement was, during the whole of the three years next preceeding the termination of such tenancy, bona fide used by the tenant for the time being thereof wholly or partly for the purpose of carrying on a business and, immediately before such termination, either was held by the tenant thereof under a tenancy from year to year or under a lease or other contract of tenancy for a term of not less than one year or a lease for a life or lives or had been for not less than seven years continuously in the occupation of the person who was the tenant thereof immediately before such termination or of his predecessors in title.
Termination of a tenancy as a point of time within the meaning of that section was to be construed as referring, in the case of a tenancy terminated by notice to quit, to the date of the service of such notice to quit (see s. 19(2)(a)).
It is clear there is a difference between the position under the 1931 Act and the 1980 Act. Prior to the 1980 Act, the question whether Part 3 applied (which contains the provisions relating to entitlement to a new tenancy) depended on whether, in the case of a business equity, the conditions set out in s. (19)(1)(a) existed at the date of the service of the notice to quit. Under the 1980 Act the application of Part II (the equivalent Part to Part III under the 1931 Act) is not related to a fixed point in time. It applies at any time the conditions in S. 13(1)(a) are fulfilled.
There is also a difference between the two Acts in relation to the service of a notice of intention to claim relief.
S. 20 of the 1980 Act provides:
(1) A claim for a new tenancy under this Part shall not be maintained unless the claimant, within the time limited in subsection (2), serves on each person against whom the claim is intended to be made a notice of intention to claim relief in the prescribed form.
(2) A notice of intention to claim relief may be served—
(c) in the case of a tenancy which is terminable by notice to quit — at any time but before the expiration of three months (or, in the case of premises to which section 14 or 15 applies, six months) after the service of the notice.
This must be contrasted with s. 24 of the 1931 Act which provides:
(1) No claim for relief under this Act shall be maintained unless the claimant shall, within the time hereinafter mentioned, have served on the person against whom such claim is intended to be made notice (in this Act referred to as notice of intention to claim relief) in the prescribed form of his intention to make such claim.
(2) Every notice of intention to claim relief shall be served within whichever of the following times is applicable, that is to say:
(a) in the case of a tenancy terminated by notice to quit, after but not more than one month after the service of such notice to quit.
*304
Therefore while under the 1931 Act notice of intention to claim relief had to be served after but not more than one month after service of the notice to quit, under the 1980 Act the notice of intention to claim relief can be served at any time but not later than three months after service of the notice to quit.
The applicant has served notice of intention to claim relief before service of a notice to quit and claims that she is entitled to do so as the Act says it can be served at any time as long as it is not later than three months after the service of a notice to quit.
The applicant also claims that by virtue of s. 21 of the 1980 Act she is entitled to apply to the court and to have her application heard and determined before the termination of her tenancy in anticipation that it will be terminated, although the respondents do not admit or concede that the tenancy is about to be terminated.
S. 21 of the 1980 Act provides:
(1) A person who serves a notice of intention to claim relief may, at any time not less than one month thereafter, apply to the Court to determine his right to relief and (as the case may be) to fix the amount of the compensation or the terms of the new tenancy to which he is found to be entitled.
(2) If he does not do so within three months after service of the notice, any person on whom the notice was served may apply to the Court to determine the matters to which the notice relates.
(3) An application under this section may be made, heard and determined either before and in anticipaton of or after the termination of the tenancy.
This must be compared with s. 25 of the 1931 Act which provides:
(1) A person who has duly served a notice of intention to claim relief may, at any time not less than two months after the service of such notice, apply to the court to determine his right to such relief and (as the case may be) to fix the amount of the compensation or the terms of the new tenancy to which he is found to be entitled.
(2) An application to the court under this section may be made, heard and determined either before and in anticipation of or after the expiration of the tenancy which gives rise to the claim.
The difference between these two sections is that under the 1980 Act the landlord can apply to the court to determine the matter if the tenant fails to apply within three months of the service of the notice of intention to claim relief (which is a new provision) and in subsection (3) of the 1980 Act the application can be made, heard and determined either before and in anticipation of or after the termination of the tenancy and in the 1931 Act (subsection (2)) the application can be made heard and determined before and in anticipation of or after the termination of the tenancy.
In my opinion there is no difference in meaning between the expiration of the tenancy and the termination of the tenancy. A tenancy, terminable by notice to quit terminates or expires on the date specified in the notice to quit not on the date of the service of the notice to quit.
Under both Acts therefore the court could determine the entitlement to a new tenancy even though the tenancy had not in fact expired.
In dealing with a periodic tenancy which had not expired under the 1931 Act the court would of necessity, by virtue of s. 24, know when the tenancy would expire and whether the restrictions on the right to a new tenancy contained in s. 21 of the 1931 Act applied. The court could establish the rent (if any) payable by the landlord at the commencement of the new tenancy necessary under s. 29 (d) and could hear evidence to enable it to fix the gross rent at the commencement of the new term (necessary under s. 29 (e)).
Therefore under the 1931 Act the power of the court to hear and to determine an application before and in anticipation of the expiration of tenancy, meant the anticipation of a known termination date.
To my mind the same result must follow from s. 21 (3) of the 1980 Act and an application to the court can only be made in anticipation of a known termination date. Under the 1980 Act, the court in order to find whether a tenant is entitled to a new tenancy (s.20(1)) must know whether restrictions in s. 17(1) which are referable to the tenant’s conduct, apply. This can only be decided when it is known why the tenancy has been determined. In order to fix the rent payable under a new tenancy (ss. 18(2) and 23(4)) the court must know the commencement date of the new tenancy, so that it can establish what is the rent payable by the landlord on that date. The rent payable under the new tenancy cannot be less than the rent payable by the landlord referable to the premesis (s. 23(3). The court must also fix the gross rent under s. 23(5) which can only be done by reference to the commencement date of the new tenancy.
There is no provision for declaratory relief under the 1980 Act declaring that if the tenancy is determined the tenant is entitled to relief. S. 18 specifically provides that where the court finds a tenant is entitled to a new tenancy the court shall fix the terms of the new tenancy and make an order requiring the landlord and any superior landlord whose joinder may be necessary to grant or join in the grant of, and the tenant to accept, a new tenancy accordingly.
In my opinion the meaning which must be attributed to s. 21(3) is that ‘before and in anticipation of’ the termination of a tenancy means in anticipation of an actual termination. The phrase ‘before and in anticipation of’ means more than simply ‘before’.
S. 21 does not entitle a tenant to apply to court and have the matter determined when no notice to quit has been served merely because he is apprehensive that it may be served.
He can serve notice of intention to claim relief by virtue of s. 20(2)(c) in advance of the service of a notice to quit. But until the actual notice to quit is served, thus fixing a date for termination, the court cannot hear a
Twil Ltd. v. Kearney
[2001] IESC 52 (28th June, 2001)
JUDGMENT OF MR JUSTICE FRANCIS D MURPHY DELIVERED THE 28 TH DAY OF JUNE, 2001
_____________________________________________________________________
1. By an indenture of lease dated the 12th day of March, 1970, P Donnelly & Sons Ltd demised the premises known as 76, Sir John Rogerson’s Quay, in the City of Dublin to Transport and Warehousing (Ireland) Limited (whose name was subsequently changed to Twil Limited) for the term of 28 years from the 1st day of February, 1970. The interest of the lessor subsequently became, and is now, vested in the above named John F Kearney (the Lessor).
2. The right of Twil to a new tenancy in the said premises or any part thereof pursuant to s.16 of the Landlord and Tenant (Amendment) Act, 1980, was disputed by the Lessor and that matter came before Judge John F Buckley of the Circuit Court on the 16th day of March, 2000. Having regard to the questions of law which arose on the interpretation of the Landlord and Tenant (Amendment) Act, 1980, Judge Buckley stated a case dated the 31st October, 2000, for the consideration of this Court.
3. The facts as established or admitted before the trial Judge included the following:-
1 The demised premises comprised a warehouse and yard consisting of the building with ancillary yard space comprising a total of approximately 38,000 square feet. Twil carried on the business of transportation and warehousing. In particular the premises and yard were used for the storage of goods for the customers of Twil. The customer was charged an appropriate rate depending upon size or weight of the goods stored and the length of time for which they were retained.
2 The demised premises were divided into six divisions. In the case of two of them (those numbered 2 and 6) Twil had made subleases with the consent of the Lessor. Unit number 6 had been sublet to Abbey Transport Ltd (Abbey) for a term of two years and nine months from the 1st April, 1993, but the sublease was surrendered in or about April, 1994. Unit number 2 was likewise sublet to Abbey (presumably as a replacement for unit number 6) for a period of one year and nine months from the 1st day of April 1994 to the 1st day of January, 1996. On the expiration of that subletting, Unit number 2 likewise reverted to Twil.
3 It seems that the following dates are material to the issues arising herein:-
(a) 1st April, 1994: surrender of the sublease of unit 6.
(b) 1st January, 1996: the termination of the sublease of unit number 2.
(c) 31st January, 1998: termination of the Lease dated 12th March, 1970, by effluxion of time.
(d) 5th August, 1999: the date of the notice by the Lessor to Twil of the expiration of the Lease.
(e) 19th August, 1999: the date of the notice of intention by Twil to claim relief under s.20 of the Act of 1980.
(f) 31st January, 2000: the date of the application to the Circuit Court to determine the right of Twil to relief.
(g) 22nd March, 2000, and 6th April, 2000, the dates on which the application was heard by the Circuit Court Judge.
4. The fundamental issue which arises on the case stated derives from an apparently modest variation of the terms in which are expressed the right to a new tenancy deriving from business user in s.13 (1)(a) of the Act of 1980 in comparison to the terms in which the same or a similar right had been expressed in s.19(1)(a) of the Landlord and Tenant Act, 1931. The Act of 1931 had provided as follows:-
“19(1) On the termination within the meaning of this section of a tenancy in a tenement, this Part of this Act shall apply to such tenement if such tenement complies with any one of the following conditions, that is to say:-
(a) Such tenement was, during the whole of the three years next proceeding the termination of such tenancy, bona fide used by the tenant for the time being thereof wholly or partly for the purpose of carrying on a business and, immediately before such termination , either was held by the tenant thereof under a tenancy from year to year or under a lease or other contract of tenancy for a term of not less than one year or a lease for a life or lives or had been for not less than seven years continuously in the occupation of the person who was the tenant thereof immediately before such termination or of his predecessors in title …”
(emphasis added)
5. The comparable provision in the Act of 1980 is as follows:-
“13(1) This Part applies to a tenement at any time if –
(a) the tenement was, during the whole of the period of three years ending at that time , continuously in the occupation of the person who was the tenant immediately before that time or of his predecessors in title and bona fide used wholly or partly for the purpose of carrying on a business.”
(emphasis added)
6. The operation of the Act of 1931 had been complicated by the fact that s.19(2) thereof gave an artificial meaning to the expression “the termination of a tenancy”. In the case of a tenancy terminating by the expiration of a term of years the termination was deemed to occur on the day which was three months before the actual expiration of the term. In the case of a tenancy terminated by notice to quit the tenancy was deemed to terminate on the date of the service of the notice. Further problems had been identified in the application of the Act of 1931 by the decision of Circuit Court JudgeDavitt (as he then was) in Farrell .v. Barron. In that case it was held that a lessee who held over on the expiration of a lease and paid rent having served a notice of intention to claim a new tenancy was precluded from obtaining relief under the Act of 1931 because the subsisting lease, which arose by implication as a result of the payment and acceptance of the rent, had not been terminated.
7. In identifying the tenements to which the right of a new tenancy attached, the Act of 1980 not only abandoned the concept of an artificial termination of the tenancy but any reference to “termination” at all. It substituted for that word the phrase “at any time”. The essential problem raised by the case stated is the meaning and effect to be given to the words “ at any time” in s.13 of the Act of 1980 in relation to the right of a tenant to a new tenancy.
8. Before turning to the arguments recorded in the case stated and addressed to this Court it is important to advert to certain undisputed provisions of the Act of 1980, namely,
9. “1 Where a new tenancy is granted to the tenant of a tenement it commences “on the termination of his previous tenancy” (see section 16).
2 A notice of intention to claim relief – which is the condition precedent to enforcing any such claims – may be served in the case of a tenancy terminating by the expiration of the term of years either:-
(1) before the termination of the tenancy or
(2) at any time thereafter but before the expiration of three months after the service (not earlier than three months before the termination of the tenancy) on the claimant by the landlord of notice in the prescribed form of the expiration of the term (see section 20) and
3 An application to the Court to determine the right of a tenant to relief “may be made, heard and determined either before and in anticipation of or after termination of the tenancy” (see section 21).
10. The legislative attempt to remedy the defects in the Act of 1931, which had been recognised by a generation of practitioners and more particularly by the Landlord and Tenant Commission over which the late Judge John C Conroy presided, does give rise to a number of problems which are clearly identified by the questions posed at paragraph 9(b) of the case stated in the following terms:-
“In section 13(1)(a), does the expression “at any time”, when applied to the facts of this case, refer to:-
1 The date on which the Applicant first achieved occupation of the premises for business purposes for a period of three years, prior or subsequent to the commencement of the 1980 Act,
2 The date of the expiry of the Lease, 31st January 1998,
3 The date of service by the Respondent of the Notice of Termination, 5th August 1999,
4 The date of service by the Applicant of the Notice of Intention to Claim Relief, 19th August 1999,
5 The date of issue by the Applicant of the Notice of Application, 31st January 2000,
6 The date of the hearing before me, or
7 Any other relevant date.”
11. Most, if not all, of the foregoing candidates held significant attractions but also serious shortcomings in their bid to fill the position as the operative or relevant date by reference to which the performance of the tenant’s conditions precedent to the grant of a new tenancy must be determined.
12. To say that a tenant has achieved a statutory right to a new tenancy as soon as he has completed three years occupation for business purposes would seem to fall within the literal meaning of the phrase “at any time”. On the other hand it is argued with considerable force that this would lead to an absurd result. If a lease were granted for a term of twenty-five years and the tenant could and did apply for a new lease after, say, five years it would seem inconceivable that the Court could or would fix the terms of, and in particular determine the rent to be payable under, areverionary lease which would not commence for a further twenty years. If the purpose of the “business equity” to a new tenancy is the need to protect the goodwill which a tenant has established in the business carried on by him or his predecessors in the tenement that purpose might be defeated or abused by the determination of the tenant’s rights several years before the expiration of the lease.
13. The date on which the lease actually expires – as opposed to some date on which it may be deemed to expire – would appear to be the most logical date by reference to which the performance of the conditions precedent should be tested. On the other hand it must be observed that not only did the draftsman refrain from using the word “termination” in this context but the express power conferred upon the Court by s.21 of the Act of 1980 to determine the applicant “ before and in anticipation of” the termination of the tenancy suggests that this was not the date which was intended.
14. Whilst it does not seem the date of service by the Lessor of a notice pursuant to s.20(A)(ii) could have any relevance Twil argued, with considerable force, that the date of the service of the notice of intention to claim relief is the operative date. It is pointed out that relief is claimed on the footing that the tenant is at that stage entitled to the statutory relief and that any subsequent hearing is simply determinative of that claim. However, this proposal is subject to the criticism already noted: it would enable a tenant to bring an application at an early date and establish his rights on a basis which might not be valid on the termination of his tenancy.
15. Both parties would dismiss, rightly in my view, the suggestion that the date of the hearing by the Court could be material in determining the rights of the parties. It is inconceivable that the Legislature would have intended that the right of the tenant to a new lease should be dependant upon his conduct or activities at and immediately prior to a date which was wholly fortuitous and dependant upon the volume of business to be dealt with in a particular Circuit Court at any given period of time.
16. The researches of distinguished Counsel did not produce any fully convincing interpretation of the relevant statutory provisions whether on a literal analysis or on a purposive approach..
17. It seems to me that the words “at any time” and “at that time” when used in s.13 of the Act of 1980 were neither authorising nor directing an application to be brought at a particular time. The particular phrase was neutral and permitted parties relying on the Act to ascertain their rights by inserting an appropriate date which fell to be identified by other provisions of the Act and the circumstances of the case. This flexible interpretation would permit theappropriate date to be determined by different methods in different circumstances. Whilst the Act does not expressly so provide, it seems to me that the general thrust of the Act and some of its provisions indicate that where the tenancy has expired the “appropriate date” to insert in s.13(1) would be the date of the expiration of the lease. That approach would be consistent with preserving the continuing right of the tenant to carry on his business in the tenement and certainly would afford the Court a realistic possibility of determining the rent to be payable under the new lease which is required to commence from that date. Most of all it would accord with the policy of the Legislature in abolishing – as it manifestly did – the artificial, or deemed, date of termination by substituting therefor the actual date of termination.
18. That solution leaves unresolved the problem of ascertaining an appropriate date where the application for the new tenancy is made, heard and determined before the termination of the tenancy in accordance with s.21(3) of the Act. In my view – as Counsel for the Respondents contended – the most probable explanation is that the appropriate date in that case is the date of service of the notice of intention to claim relief. However, having said that I think it is unlikely that the Legislature intended the Courts to determine an application for relief – or indeed that the Courts would be willing to attempt to make such a determination – at any time significantly in advance of the termination of an existing tenancy. Certainly I believe that any Court would be justified in disclaiming the competence to fix the commercial rent for a new lease of commercial premises which would not commence for some years after the decision of the Court and perhaps in very different economic circumstances.
19. In my view the crucial question raised by the case stated in the present case, namely, whether the expression “at any time” in s.13(1)(a) of the Act of 1980 when applied to the facts of the present case is the date of the expiry of the lease, namely, the 31st January, 1998, should be answered in the affirmative.
20. Whilst the case stated did raise a question as to the nature and effect of occupation of premises by a licensee, the Court was informed that there was no issue between the parties in relation to that matter. The remaining question concerned the consequences for Twil of the occupation of unit number 2 by Abbey Transport Ltd under a subletting which expired on the 1st day of January, 1996, that is to say, within the period of three years next preceding the 31st January, 1998. The question posed in that regard was in the following terms:-
“Does the occupation of a subtenant for a period of time constitute occupation by the person who was the tenant immediately before that time in section 13(1)(a).”
21. I agree that this question should be answered in the negative for the reasons set out in the judgment of Mr Justice Fennelly.
22. I believe that the attention of the appropriate authorities should be drawn to the fact that doubts have arisen in relation to a proposition which is fundamental to the operation of legislation which is of great practical and commercial importance so thatthe legislation could be reviewed and any necessary amendments made to it.
THE SUPREME COURT
290/00
Murphy J.
Murray J.
Fennelly J.
BETWEEN
TWIL LIMITED
APPLICANT
AND
JOHN F. KEARNEY
RESPONDENT
JUDGMENT delivered the 28th day of June, 2001 by FENNELLY J.
23. The Court is asked by the Circuit Court, His Honour Judge John F. Buckley, in a Case Stated pursuant to section 16 of the Court of Justice Act, 1947, to answer a number of questions which have arisen in the course of the hearing of an application for a new business tenancy by virtue of the Landlord and Tenant (Amendment) Act, 1980. (the act of 1980)
THE FACTS
24. The relevant facts can be summarised as follows:
(a) the premises comprise an area of some 38,000 square feet at Sir John Rogerson’s Quay in the City of Dublin consisting of a warehouse and ancillary yard space. The learned Circuit Court judge has found that, subject to the questions raised in the case, they come within the definition of a “tenement” for the purposes of section 5 of the act of 1980;
(b) the premises were the subject of a lease dated the 12 th March 1970 made between P. Donnelly and Sons Limited (Lessor) (the predecessor in title of the Respondent) and Transport and Warehousing (Ireland) Limited (the Applicant under its former name) for a term of twenty eight years form 1 st February 1970. The lease thus terminated by effluxion of time on 31 st January 1998, which I will call the termination date;
(c) the Applicant carried on, in the premises, the business of transport and warehousing, which includes the storage of goods for customers; in some cases where parts of the premises were used for long-term storage, the customer entered a license agreement with the applicant and had keys to a particular area of the store, which was subdivided into a number of units; it is unnecessary to consider this aspect of the user of the premises, as I will explain;
(d) the questions posed in the Case Stated centre more particularly on two sub-leases in writing, which I will summarise, each of which ended within the period of three years prior the termination date;
(e) in 1993, Unit 6 was sub-let for a term of two years and nine months, but this Unit was surrendered after one year; instead, Unit 2 was sub-let to the same tenant for a term of two years and nine months from 1 st April 1994 to 1 st January 1996. It was then handed back and was held on one of the forms of license agreement mentioned in paragraph (c);
(f) Unit 3 was sub-let for a term from 13th September 1993 to 12th June 1996;
(g) the following procedures were carried out pursuant to section 20 of the act of 1980:
– a notice of termination in the prescribed form was served by the respondent on the Applicant on 5th August 1999;
– a notice of intention to claim relief was served by the Applicant on the Respondent on 19th August 1999.
– on 31st January, 2000 the applicant gave notice of application to the Circuit Court to determine its right to relief.
25. At the hearing of the Application before His Honour Judge Buckley, it was accepted that the Applicant was entitled to a new tenancy in respect of the parts of the premises which had been occupied by it for the period of three years prior to the termination date, but the Applicant submitted that “at any time” in Section 13 means that, once the tenant has satisfied the specified qualifying period of 3 years business use, Part II of the Act applied. It was also submitted, in the alternative, that the expression “continuously in the occupation of the person who was the tenant” included a person occupying as a sub-tenant and that so long as the applicant occupied the premises for the purpose of its business at the date of termination of the lease it was entitled to relief under Part II. The Respondent does not dispute that the Applicant should be considered as having carried on business in respect of the areas covered by the license agreements mentioned in paragraph (c) above, although the first question in the Case Stated concerns that issue.
26. The questions posed by the Learned Circuit Judge are as follows:
27. A. Does occupation of property by a licensee, in the circumstances outlined herein, constitute use by the tenant for the purposes of carrying on a business within the meaning of Section 13(1)(a) of the 1980 Act.
B. In Section 13(1)(a), does the expression “at any time”, when applied to the facts of this case, refer to:-
1. The date on which the Applicant first achieved occupation of the premises for business purposes for a period of three years, prior or subsequent to the commencement of the 1980 Act,
2. The date of the expiry of the Lease, 31st January 1998,
3. The date of service by the Respondent of the Notice of Termination, 5th August, 1999,
4. The date of service by the Applicant of the Notice of Intention to Claim Relief, 19th August 1999,
5. The date of issue by the Applicant of the Notice of Application 31st January 2000,
6. The date of the hearing before me, or
7. any other relevant date.
28. C. If “at any time” means the date referred to at paragraph B.1. above, is the tenant entitled to a new tenancy in the entire of the demised premises notwithstanding that portions were subsequently sublet and particularly during the last 3 years of the term.
29. D. Does the occupation by a sub-tenant for a period of time constitute occupation by the person who was the tenant immediately before that time in Section 13(1)(a).
30. E. Are there any other circumstances on the facts outlined in which the Applicant is entitled to a new tenancy under the provisions of Section 13(1)(a) of the 1980 Act.
31. It is agreed, correctly in my view, that to the extent that the Applicant permitted certain persons or companies to store their goods in certain designated areas of the store under license agreements, it was nonetheless carrying on a business there. Question A should consequently be answered in affirmative.
THE LAW
32. All the remaining questions concern the interpretation of section 13(1)(a) of the act of 1980 and particularly the expression “at any time.”
33. The act of 1980 repealed the Landlord and Tenant Act, 1931 (“the act of 1931”) in its entirety. However, it retains the essentials of the notion of the right to a new tenancy – “business equity”- in business premises established by the act of 1931. Business had to be carried on in the premises by the occupying tenant for a minimum period of three years. It is helpful, for this case, to recall the antecedents of the section under consideration. For the sake of clarity, I should emphasise that I will recall only those provisions which relate to leases for terms of years certain, as only they are relevant. It is agreed that the facts of the present case occurred at a time when theycould not be affected by the Landlord and Tenant (Amendment) Act, 1994.
34. Section 19 of the act of 1931 provided:
“19(1) On the termination within the meaning of this section of a tenancy in a tenement, this Part of this Act shall apply to such tenement if such tenement complies with any one of the following conditions, that is to say:-
(a) such tenement was, during the whole of the three years next preceding the termination of such tenancy, bona fide used by the tenant for the time being thereof wholly or partly for the purpose of carrying on a business and, immediately before such termination, either was held by the tenant thereof under a tenancy from year to year or under a lease or other contract of tenancy for a term of not less than one year or a lease for a live or lives or had been for not less than seven years continuously in the occupation of the person who was the tenant thereof immediately before such termination or of his predecessors in title, or …”
35. The troublesome feature of this provision was the special definition given by section 19(2) to the “termination of a tenancy.” For a case like the present, of termination by the expiration of a term years, it was “the day which is three months before the expiration of such term.” Thus, the conditions of the grant of the right to a new tenancy – in particular three years business user – could not be satisfied where the lease was for a fixed period of three years. A Landlord and Tenant Commission was established in 1966 to inquire into the workings of the law relating to landlord and tenant and, in particular, to furnish an Interim Report on the provisions relating to grant of new tenancies in the Landlord and Tenant Act, 1931. The latter report dated (Pr. No. 9685) noted that the “artificial meaning given to “termination” by section 19(2) was criticised” by witnesses who advocated a “meaning more in accordance with realities.” The Commission recommended the amendment of the definition. For cases of termination by the expiration of a term of years, it recommended that “termination” be defined as “the expiration of the term or period.” If that simple recommendation had been followed, the difficulty which has arisen in the present case would have been avoided.
36. The legislative solution adopted was, however, to provide in section 13(1) as follows:
“This Part applies to a tenement at any time if –
(a) the tenement was, during the whole of the period of three years ending at that time, continuously in the occupation of the person who was the tenant immediately before that time or of his predecessors in title and bona fide used wholly or partly for the purpose of carrying on a business …”
37. This provision has to be read with section 16 of the act of 1980 which reads:
“Subject to the provisions of this Act, where this Part applies to a tenement, the tenant shall be entitled to a new tenancy in the tenement beginning on the termination of his previous tenancy, and the new tenancy shall be on such terms as may be agreed upon between the tenant and the persons granting or joining in the grant of the new tenancy or, in default of agreement, as shall be fixed by the Court.”
The term, “tenant” is defined in section 3 as follows:
“‘tenant’ means the person for the time being entitled to the occupation of premises and, where the context so admits, includes a person who has ceased to be entitled to that occupation by reason of the termination of his tenancy;”
Furthermore, section 5 defines the crucial term, “tenement.” One of the conditions of that definition (section 5(1)(a)(iii)) is that the premises “are held by the occupier thereof under a lease or other contract of tenancy express or implied or arising by statute ..”
The act of 1980 made a number of other potentially relevant changes to the act of 1931 . Section 20 establishes a new procedure for initiating the claim for a new tenancy. The statutory notice of intention o claim relief may be served by the tenant on any date “before the termination of the tenancy.” In addition, it may be served “at any time thereafter but before the expiration three months after the service … on the claimant by the landlord of notice in the prescribed form of the expiration of the term or period…” (Section 20(2)(a)) Under the former legislation, the tenant was required, in order to protect his right to a new tenancy, to serve his notice at least three months before the expiration. The effect of the present provisions is to ensure that the right to a new tenancy cannot be defeated unless the landlord serves this notice.
Section 21 deals with the giving of application to the court and creates a special difficulty. Sub-section (3) provides:
“An application under this section may be made, heard and determined either before and in anticipation of or after the termination of the tenancy.”
Section 28 provides:
“Where an application is pending under this Part for a new tenancy or to fix the terms of a new tenancy and the pre-existing tenancy was terminated otherwise than by ejectment or surrender the tenancy may, if he so desires, continue in occupation of the tenement from the termination of the tenancy until the application is determined by the Court or, in the event of an appeal, by the final appellate court, and the tenant shall while so continuing be subject to the terms (including the payment of rent) of such tenancy, but without prejudice to suchrecoupments and readjustments as may be necessary in the event of a new tenancy being granted to commence from such termination.”
ARGUMENTS OF THE PARTIES
38. The first argument of the Applicant is that the expression “at any time” should be read literally: the tenant satisfies the requirements for a new tenancy, if he can show three years continuous occupancy and business user terminating at any time during the currency of the lease. At the end of any such three year period, the right to a new tenancy, in a familiar phrase “crystallises”.As a matter of fact, the Applicant says that it satisfied the necessary criteria as long ago as 1983. Counsel accepted at the hearing that this submission would have the consequence that a tenant in that position could apply to the court and have his right to a new tenancy determined and the terms fixed in reliance on that fact at a very early point during the term. Thus, he could obtain the grant of a reversionary lease many years before the end of the current lease. The legislature, it is claimed in explanation of this, went further than was intended by the Landlord and Tenant Commission. The concept of termination was dropped altogether. Section 21(3) is cited in support of this point of view; it allows the application to be heard and determined at any time. The Applicant criticised the High Court decisions in Mealiffe v Walsh [1987] ILRM and Baumann v Elgin Contractors [1973] I.R., while relying on the latter for the proposition that the act should receive a purposive interpretation.
39. Secondly, the applicant has submitted that the expression , “continuously in the occupation of the person who was the tenant” in Section 13(1)(a) includes the occupation of a person occupying as a sub-tenant. This argument turns on the contention that a comma should be interpolated both before and after the expression, “who was the tenant.” This would separate this from the ensuing qualification of the tenant as the person satisfying the condition “immediately before that time.” Thus, it would include any sub-tenant, although counsel accepted at the hearing that a sub-tenant could not be a predecessor in title of the tenant, by reason of the definition of the latter expression in section 3, where it includes only “all previous tenants under the same tenancy .”
40. Thirdly, it was submitted that the application of the notion, “at any time”, for consideration of the application continues beyond the expiry of the term up to such time as the occupation of the tenant is lawfully terminated.
41. The respondent submits that section 5(1)(a)(iii) shows that the premises to be a tenement must be held by the occupier for the entire of the relevant three-year period and the Applicant was not so in occupation of the sub-let parts and emphasises that the new tenancy is to commence form the termination of the previous tenancy. The Respondent did not explicitly contest the literal interpretation of the expression, “at any time” propounded by the Applicant or its extreme consequences. He says that the Applicant has, in fact, relied in this particular case on the situation existing during the last three years of the lease and not on having satisfied the statutory requirements as long ago as 1983.
CONCLUSION
42. This being a Case Stated, I believe that the Court is bound to provide an interpretation of the statutory provisions cited by the Learned Circuit Court Judge, even if the solution proposed has not been explicitly advocated by any party. In Dublin Corporation v Ashley [1986] I.R. 781 at 785, Finlay C.J. stated:-
“The purpose and effect of a consultative case stated by a Circuit Court judge to the Supreme Court is to enable him to obtain the advice and opinion of the Supreme Court so as to assist him in reaching a correct legal decision. Having regard to that purpose and the relationship which exists between the two courts, it would, in my view, be quite inappropriate for the Supreme Court, for any reason of procedure, to abstain from expressing a view on an issue of law which may determine the result of the case before the learned Circuit Court judge.”
43. The language chosen to give effect to a desired reform has left an unintended uncertainty to be resolved by the Court. It would be unfortunate if the Court were compelled to conclude that the legislature had replaced one anomaly with another.
44. The literal reading of the expression, “at any time,” would, in my view produce a serious anomaly. The conditions for the grant of a new lease would be satisfied by reference to a date unconnected with the end of the previous tenancy and, thus, unrelated to the date from which a new tenancy would commence. The termination of a tenancy is no longer the date at which to assess the concept of “equity”. This is well illustrated by the Applicant’s argument that it achieved the necessary status as long ago as 1983 and could not lose it thereafter. Section 16 provides that “the tenant shall be entitled to a new tenancy … beginning on the termination of his previous tenancy ..” (emphasis added). Consequently, there is no necessity, on the applicant’s case, for there to be compliance with the conditions of section 13(1)(a) at the time of termination of the tenancy. In particular, the logic of this argument appears to mean that the act does not require that there be business user either for a continuous period of three years before termination or, indeed, for any part of that period. Such a reading would, in my view, defeat one of the essential and fundamental purposes of the act, carried through from the act of 1931, the protection of business equity. A tenant who had satisfied section 13(1)(a) could, if the Applicant is correct, maintain his right to a new tenancy, though he had long abandoned business user. He would merely have to ensure he was in occupation at the expiry of the lease.
45. The act of 1980, accords a right, originally created by the act of 1931, to a tenant in occupation of a tenement after defined periods of actual occupation and business user, to a renewal of his existing tenancy. This has been justified historically as a socially necessary encroachment on the rights of landlords. An occupying tenant who establishes and continues business in a premises has contributed to the goodwill associated with it and hence has potentially enhanced its rental value. It would be unjust–inequitable-to deprive such a person of the right to continued occupancy of a premises thus associated with him and his business; by the same token, a landlord not in possession would acquire an uncovenanted gain if entitled to repossess the premises at the end of the term. This is, as I understand it, the meaning of business equity. By parity of reasoning, however, it would be unjust to the landlord to deprive him of his right to repossess his property in the interests of a tenant, who can no longer point to continuing business user at the point when his tenancy comes to be renewed.
46. The Applicant relies also on the power given to the court by section 21(3) to hear and determine an application “either before and in anticipation of or after the termination of the tenancy.” By implication, any hearing which takes place prior to termination is, in my opinion, linked directly with the latter event by the word, “anticipation”. To anticipate is not merely to expect but to take into account and act by reference to a future event. This qualifies the necessary implication flowing from the applicant’s argument that the rights can crystallise “at any time,” that they can also be heard and determined at any time however early without any limit before termination. In my view, any hearing before the termination of the term of the lease would have to be at a time when it was possible to establish that the requirements of section 13(1)(a) would, without doubt or dispute, be satisfied at the date of termination.
47. It has to be accepted that the words used are, to the say the least, not a model of clarity. In that situation, the Court should consider the act as a whole. It should seek a meaning of the expression in question, which is most consistent with the aims of the legislation. It is also entitled to take into account the legislative history includingthe act of 1931 the recommendation of the Landlord and Tenant Commission and the mischief that it was intended to remedy.
Section 16 shows clearly and the applicant accepts that the beneficiary of the right to the new tenancy is the tenant entitled to the occupation of the premises at the end of the previous term: “tenant” is defined by section 3 as “the person for the time being entitled to the occupation of the premises…”
The term, “at any time,” must, in my view, be read as referring to the time from which a new tenancy can be granted. There is no reason to believe that the Oireachtas intended to go against the wishes of the Landlord and Tenant Commission. It seems most likely that the admittedly ill-chosen expression, “at any time”, was intended to relate the inquiry into whether a tenant had satisfied the requirements of section 13(1)(a) to the termination of the tenancy. That is both the date recommended and the most logical date.
48. The report of the Landlord and Tenant Commission identifies the mischief to be remedied as the anomaly flowing from the artificial meaning assigned to “termination” by the act of 1931. Section 13 of the act of 1980 aims to remedy that mischief. It is not possible to discern any intention to abandon the date of termination as a date relevant to the determination of the rights of tenants. To allow a tenant to “crystallise” his rights at any time of his choosing would not merely be unjust to landlords, for the reasons given above, but would run counter to the long established notion of the nature and purpose of business equity.
49. Although my analysis of the terms of the act differs significantly from that of Murphy J, it is clear that I agree with his proposed answer to Question B.
50. I would also reject the second argument of the Applicant. There is no warrant for the introduction into the text of punctuation not provided by the legislator, particularly when that would alter the clear meaning of the provision. The expression “person who was the tenant immediately before that time” is clear and unambiguous. It identifies the tenant as a single (legal) person and the subsequent words extend the term to include “predecessors in title,” a term which does not, by virtue of section 3 include sub-tenants. The intention to exclude sub-tenants from its scope is beyond dispute.
Section 13(1)(a) is, apart from the expression, “at any time,” clear and unambiguous in its existing form. It means that for the entire period of three years in question, the person in occupation must be the same person as is the tenant at the end of the period or his predecessor in title. In addition, business user must exist for the entire of that period. While the vagueness of the expression, “at any time,” has presented a troublesome issue of interpretation in respect of the applicant’s first argument, there is no warrant to seek ambiguity where it does not exist.
51. Similarly, I would also reject the third argument of the Applicant. The Applicant has presumably continued in occupation of the premises at least in part in exercise of his rights under section 28. However, for his occupation and business user during that time to meet the requirements of section 13(1)(a), he must also be the tenant. The definition of “tenant” certainly includes “where the context so admits , a person who has ceased to be entitled to that occupation by reason of the termination of his tenancy.” (emphasis added) However, I do not believe this provision was designed to enable the over-holding occupier to establish rights to a new tenancy which he would not otherwise have had. This would not accord with the “context” of section 13(1)(a). Section permits a tenant, strictly speaking a former tenant, to continue in occupation while his application for a new tenancy is pending. The purpose of the provision is to avoid the hardship of requiring a tenant to vacate a premises with obvious inconvenience, while his rights are being established, a situation discussed by Finlay J, as he then was, in Baumann v Elgin Contractors Ltd [1973] I.R. 169. It is implicit that the such a tenant has satisfied or, at least, claims he has satisfied the requirements of section 13(1)(a). It would be unjust to the landlord to allow this protective provision enabling a tenant to remain occupation to be used to establish the rights themselves. Although the Applicant points out that section 28 does not apply until the making of the Application to the court, I think analogous considerations apply. I respectfully agree with the analysis of Finlay J of the issue in Baumann, in particular, his rejection of the contention that a new tenancy by operation of law should be inferred merely from the fact that the tenant has remained in occupation and continued paying rent. The facts of this case differ from those of Baumann, where notice of intention to claim relief had been served before the end of the term. In the altered statutory circumstances, that was not necessary in this case. However, the underlying reality was the same. It rebuts any implication of a new tenancy. Furthermore, as has been pointed out by the Respondent, the definition of a “tenement” envisages an occupier who holds “under a lease or other contract of tenancy.” The premises do not comply with this requirement during the statutory period of permissive or over-holding occupancy and that is essential if that occupancy is to be relied on to satisfy section 13(1)(a).
52. I would propose answering the questions pose in the Case Stated as follows:
A. Yes.
53. B. The date of expiry of the lease, namely 31 st January 1998.
54. C. Does not arise.
D. No.
E. No.
UK Cases
Stumbles v Whitely
STUMBLES v. WHITLEY
(House of Lords) [1930] A.C. 544
Viscount Hailsham: When we look at section 17, the definition section, and we find the reference to “any premises held under a lease”, I see no sufficient reason for sup posing that the Legislature did not there include not merely the actual buildings in which a trade is carried on, but also the land surrounding them, the easements granted as appurtenant to them, and any other incorporeal hereditaments which may form part of the premises in the strict legal sense of the term which are the subject matter of the habendum. Any other construction would, it seems to me, defeat the plain purpose of the Act, which obviously was to provide that in the circumstances defined in the Act the tenant should have a right to continue to carry on his trade or business in the premises in the legal sense in which he was carrying them on under the lease for which he seeks that renewal.
Bagettes Ltd v G.P. Estates Ltd.
BAGETTES LTD V. G.P. ESTATES LTD
(Chancery Division)
[1956] Ch. 290; [1956] 2 W.L.R. 773; [1956] 1 All E.R. 729
The defendants took an assignment of a lease of premises comprising 13 self-contained flats, 10 of which were sub-let at the material time.
Held: Such an occupation, although for a “business”, was not one to which Part II of the 1954 Act applied since it involved the progressive elimination of the holding.
Jenkins L.J.: A building wholly sublet in flats from top to bottom could not qualify for protection under Part I of the Act of 1927 because such subletting would not be a
tenant of the entirety of the premises, whether occupied by him or sublet. Once the flats which it is his business to sublet are excluded from his tenancy the remaining parts of the premises, though still in his occupation, are no longer occupied by him for the purposes of any business. Once the flats are gone the business for the pur poses of which he formerly occupied the remainder of the premises, that is to say, the provision of services for the tenants of the flats sublet, as part of the entire busi ness of letting and managing those flats, is gone also, and is incapable of continuance
or revival.
What is the bearing of Part II of the Act of 1954 on such a case? I repeat that its
manifest intention is (to quote once more the language of the long title appropriate to this case) “to enable tenants occupying property for business … purposes to obtain new tenancies in certain cases”. That intention is, as I think, faithfully carried out by the provisions of Part II of the Act upon a fair and reasonable construction of those provisions. I think it is implicit in those provisions, and in particular sections 23 and 32, that the business for the purposes of which a tenant occupies premises of which he claims a new tenancy must not be of such a character that it is necessarily brought to an end by the very process of the ascertainment of the holding and the ordering and granting of a new tenancy of the holding as ascertained, with the result that the tenant is presented with a holding which, though occupied by him, is not so occupied for the purposes of any business whatever.
Applying this principle to the present case, I find that the ascertainment of the
holding must involve the subtraction from the property comprised in the tenancy of the 1 o sublet flats, for these are occupied neither by the tenant nor by any person employed by him. There thus remain as the potential subject-matter .of the new
tenancy the caretaker’s rooms, storerooms and boiler rooms in the basement, the common parts of the premises, and the three unlet flats. Divorced from the 1O sublet flats, can any part of these premises be said to be occupied by the tenant for the pur poses of any business carried on by him? That question must, I think, be answered in the negative. There can be no business carried on by the tenant of providing hot water for the sublet flats, or of cleaning the common parts of the premises for the benefit of the tenants of those flats, or of providing those t nants with means of access to and from those flats, once the sublet flats are ruled out of consideration as disqualified from inclusion in the holding to which any new tenancy granted must be confined. Nor, in my view, can there be any business carried on by the tenant of serving in any of the ways above mentioned the three unlet flats so long as they remain unlet, while if let at any time before the ordering of a new tenancy, they would be subject to the same disqualification as the 10 flats now let.
Lee-Verhulst (Investments) Ltd v Harwood Trust
(Court of Appeal)
[1973] Q.B. 204; [1972] 3 W.L.R. 772; [1972] 3 All E.R. 619; 24 P. & C.R. 346
Stamp L.J.: The question then to be asked is whether it can be correctly stated of any part of 11, Courtfield Gardens that it is not occupied by the tenant, or by Mr or Mrs Lee for the purposes of the bJsiness. Can it be said that the tenant of the house who carried on there the business described and conducted the activities enumer ated by Sachs L.J., including, to m ntion only some of them, the supply of furniture, blankets, bed linen and towels to the rooms where the occupants reside, the clean ing of the rooms and, when required, the provision of light meals to those rooms, was not occupying them for the purposes of the business?
As Sachs L.J. has pointed out and as a glance at Stroud’s Judicial Dictionary will show, the words “occupation” and “occupier” are not words of art having an ascer tained legal meaning applicable, or prima facie applicable, wherever you find them ina statute, but take their colour from the context of the statute in which they are found; and I am not prepared to give the word “occupied” where it appears in section 23(3)a construction which would exclude from ”the holding” a part ofa house in which the business is carried on day by day, and the whole of which is used by the tenant for the purposes of his business. The situation is very different to that in Bagettes Ltd v. G. P. Estates Ltd [1956] Ch. 290, where the tenant did not by his servants enter the flats which had been let to carry on the business which one finds here of providing services to the residents.
In the context of statutory provisions to give security of tenure to business tenants the occupation referred to in section 23(3) must as a matter of construction be given the same meaning as the occupation referred to in subsection (1), and what in my judgment is contemplated by both subsections is occupation “for the purposes of” the business carried on by the tenant; and if you find the business – here that part of the business which consists of what can conveniently be summarised as “room service”
– being carried on in each room in the way this tenant carries it on in this case, I conclude that the whole house and each room in it is within the meaning of the section “occupied” by the tenant “for the purposes of’ its business and that no part is excluded from “the holding” by the effect of subsection (3).
But the point remains that the residents of 11, Courtfield Gardens have had granted to them within the meaning of section 70 of the Rent Act 1968 ”the right to occupy” their respective rooms “as a residence”. Is it then right to say that the two types of occupation of a single room, one for the purposes of a business and the other “as a residence”, one an occupation within the meaning of section 23 of the Landlord and Tenant Act 1954 for the purposes of a business and the other within the meaning of section 70 of the Rent Act 1968 “as a residence”, cannot co-exist? In my judgment the submission to that effect is not well founded.
Chaman v Freeman
CHAPMAN V. FREEMAN
(Court of Appeal)
[1978]1 W.L.R. 1298; [1978] 3 All E.R. 878; 247 E.G. 295; 36 P. & C.R. 323
Lord Denning M.R.: This raises a very nice question. Illustrations were canvassed in the course of the argument. One of the most interesting was of a barrister who has his business chambers in the Temple but has his residential flat a block or two away. Is he occupying the flat for the purposes of his profession which he carries on in his chambers? The answer is No. He occupies his flat for his convenience in connection with his profession, but he does not occupy it for the purposes of his profession. Another illustration was where a company sets up a new factory in a town and finds houses for its staff in the neighbourhood. They are not occupied for the purposes of the business which the company is running. They are used for housing purposes.
Those illustrations remind one of the cases we used to have in the old days about service occupations. Such as the toll-keeper who had to live in a cottage next to the toll-bridge, or the stockman who has to live in the centre of the stockyard so as to carry out his duties. Those servants occupied for the purposes of the business: see Ramsbottom v. Snelson [1948] 1 K.B. 473.
Speaking generally, the test is whether it is necessary for the individual to live in the house in order to perform his own particular duties properly; or whether it is just for convenience that he should live there in connection with his duties.
Coming back to our present case, it seems to me that there is no evidence, and was no evidence before the judge, to show that it was necessary for any of the staff to live in the cottage for the better performance of their duties. It is no doubt highly convenient that they should live there, but that is not enough. It would be extending the Act far too widely if it were held that every dwelling house which the owner of a business took in order to house his staff was held on a business tenancy. The truth is that it is a dwelling house simply for the convenience of the person carrying on the business. It is not a business tenancy.
Cheryl Investments Ltd v Saldanha
Royal Life Saving Society v Page
CHERYL INVESTMENTS LTD v. SALDANHA ROYAL LIFE SAVING SOCIETY V. PAGE
(Court of Appeal)
[1978] 1 W.L.R. 1329; [1979) 1 All E.R. 5; (1978) 37 P. & C.R. 349; (1978) 248 E.G. 591
Lord Denning M.R.: The application of the statute
There was much discussion before us as to the meaning of the Business Tenancy Act 1954 (I use those words because I think “Landlord and Tenant Act 1954” isa little confusing), especially the word “purposes” in section 23(1) and the time or times at which those “purposes” had to exist: and the effect of a change by the tenant in the use to which he put the property. Could he take himself in or out of the Act at his option?I found all these matters so confusing that I do not propose to attempta solu
tion today. I am only going to take four simple illustrations to show how the statute works: for they will suffice for our present cases.
First, take the case where a professional man is the tenant of two premises: one his office where he works, the other his flat, conveniently near, where he has his home. He has thena “business tenancy” f his office and a “regulated tenancy” of his home. This remains the situation even though he takes papers home and works on them at evenings or weekends and occasionally sees a client at home. He cannot in sucha case be said to be occupying his flat “for the purpose of” his profession. He is occupy ing it for the purpose of his horn . even though he incidentally does some work there: see Sweet v. Parsley (1970] A.C. 132, 155 per Lord Morris of Borth-y-Gest.
Second, take the case where a professional man takes a tenancy of one house for the very purpose of carrying on his profession in one room and of residing in the rest of the house with his family, like the doctor who has a consulting room in his house. He has not thena “regulated tenancy” at all. His tenancy isa “business ten ancy” and nothing else. He is clearly occupying part of the house “for the purpose of” his profession, as one purpose; and the other part for the purpose of his dwelling as another purpose. Each purpose is significant. Neither is merely incidental to the other.
Third, suppose now that the first man decides to give up his office and to do all his work from his home: there being nothing in the tenancy of his home to prevent him doing it. In that case he becomes in the same position as the second man. He ceases to havea “regulated tenancy” of his home. He has only a “business tenancy” of it.
Fourth, suppose now that the second man decides to give up his office at home and to takea tenancy of an office elsewhere so as to carry on his profession else where. He then hasa “business tenancy” of his new premises. But he does not get a “regulated tenancy” of his original home, even though he occupies it now only as
his home, because it was never let to him as a separate dwelling: unless the landlord agrees to the change.
Those illustrations point to the solution of the present two cases.
ROYAL LIFE SAVING SOCIETY v. PAGE
No. 14, Devonshire Street is a house with four floors. It is owned by the Howard de Walden Marylebone Estate. In 1945 they let it on a long lease to the Royal Life Saving Society for 64½ years. That society occupy most of the house themselves: but in 1960 they let the top two floors as a maisonette to a Mr Gut for 14 years ata rent of £600a year. There was a covenant prohibiting assignment without the land lord’s consent. There was no restriction on the use which the tenant made of the pre mises. But it would appear that the maisonette was constructed for use asa separate
dwelling: and that the letting was “as a separate dwelling” within the tests laid down In Wolfe v. Hogan (1949] 2 K.B. 194, 204-205.
In 1963 Mr Gut made arrangements to assign the lease to the present tenant, Dr Page. He was a medical practitioner who had his consulting rooms at no. 52, Harley Street. His major appointment was medical adviser to Selfridges and he held clinics there five days a week. Dr Page took the maisonette in Devonshire Street so that he could live there as his home. But he thought that in the future he might possibly want to use it occasionally to see patients there. So, when he took the assignment, he asked for consent to do so. Such consent was readily given by the Royal Life Saving Society (his immediate landlords) and by the Howard de Walden Estate (the head landlords). It was a consent for Dr Page to carry on his profession in the maisonette. After the assignment he moved in and occupied it as his home. He put both ad dresses (Harley Street and Devonshire Street) in the medical directory. He had separate notepaper for each address and put both telephone numbers on each. This was, of course, so that anyone who wished to telephone him could get him at one or other place. But he did very little professional work at the maisonette. Over the whole period of the tenancy, he had only seen about one patient a year there. The last patient was in distress 18 months ago. He summarised the position in one sentence: “Harley Street is my professional address, and the other is my home.”
On those facts it is quite clear that no. 14, Devonshire Street was let as a separate dwelling and occupied by Dr Page as a separate dwelling. There was only one signi ficant purpose for which he occupied it. It was for his home. He carried on his profes sional elsewhere in Harley Street. His purpose is evidenced by his actual use of it. Such user as he made in Devonshire Street for his profession was not a significant user. It was only incidental to his use of it as his home. He comes within my first illustration. He is, therefore, protected by the Rent Acts as a “regulated tenancy”.
The landlords later alleged that he was a business tenant and gave him notice to terminate under the Business Tenancy Act 1954. He was quite right to ignore it. He is entitled to stay on as a statutory tenant under the Rent Acts. I agree with the judge, and would dismiss the appeal.
CHERYL INVESTMENTS LTD v. SALDANA
Beaufort Gardens is a fine London square, in which there were in former times large houses occupied by well-to-do families and their servants. These houses have long since been converted into apartment houses. In particular nos. 46/47 Beaufort Gardens have been turned into 25 separate apartments. These are owned by a property company called Cheryl Investments Ltd, which Is run by a Mr Welcoop. In December 1975 the company advertised the apartments in the “Evening Standard” in these words: “Knightsbridge. Essex House, near Harrods, serviced flat and flatlets. Doubles from 20 guineas, Flats from 27 guineas. Short-long lets.”
Mr Roland Saldanha answered the advertisement. He had been living in Weybridge, but he wanted a permanent residence in the centre of London. He was shown one of the flats which he liked. It had a large double room with twin beds in it, a bathroom and a toilet. It had no separate kitchen, but there was an entrance hall with a cooker in it which could be used as a kitchen. The landlords provided the furniture and service in the shape of a maid to clean it and change the towels, etc. It took her half an hour a day. The charge was £36.75 a week, plus five per cent surcharge.
Mr Saldanha’s stay there turned out to be very unhappy with quarrels between him and the landlords. Eventually on February 9, 1977, the landlords gave him notice to quit on March 26, 1977. He claimed the protection of the Rent Acts. He said: “I am a fully fledged tenant entitled to full protection under the Rent Acts.” The landlords took proceedings in the county court claiming that he was not a tenant but a licensee. They relied on Appah v. Pamcliffe Investments Ltd (1964] 1 W.L.R. 1064. But the judge held that he was a tenant, and that the amount in respect of attendance did not form a substantial part of the whole rent: see section 7 of the Rent Act 1977 and Pa/ser v. Grinling (1948] A.C. 291. So the judge decided those points in favour of Mr Saldanha, and there is no appeal on them.
But on the day of the trial, September 27, 1977, after previous notice, the landlords amended their particulars of claim so as to assert that Mr Saldanha occupied the flat for business purposes and was, therefore, not entitled to the protection of the Rent Acts; and they sought a declaration accordingly. The judge rejected this claim. It is from this decision that the landlords appeal to this court.
On this point the evidence was that Mr Saldanha is an accountant by profession and a partner in a firm called Best Marine Enterprises. They carry on the business of importing sea foods from India and processing them in Scotland. The firm has no trade premises. The two partners carry on the business from their own homes. The other partner works at his home at Basildon. Mr Saldanha works at the flat in Beau fort Gardens: and goes from there out to visit clients. When he went into the flat, he had a telephone specially installed for his own use, with the number 589 0232. He put a table in the hall. He had a typewriter there, files and lots of paper: “The usual office equipment,” said the manageress. He had frequent visitors carrying brief cases. He had notepaper printed: “Best Marine Enterprises. Importers of Quality Sea-foods. Telephone 589 0232” – that is the number I have just mentioned – “P.O. Box 211, Knightsbridge, London, S.W.3.”
He issued business statements oQ that very notepaper. A copy of one was found by the maid in a wastepaper basket showing that the firm had imported goods at a
total cost of £49,903.30 and sold them for £58,152.35. The maid (whose evidence the judge explicitly accepted in pref rence to Mr Saldanha’s) said: “I presumed Mr Saldanha conducted business there.”
On that evidence I should have thought it plain that Mr Saldanha was occupying the flat, not only as his dwelling, but also for the purposes of a business carried on by him in partnership with another. When he took the flat it was, no doubt, let to him as a separate dwelling. It was obviously a residential flat with just one large room with twin beds in it. No one can doubt that it was constructed for use as a dwelling and let to him as such within the test in Wolfe v. Hogan (1949] 2 K.B. 194, 204. But as soon as he equipped it for the purposes of his business of importing sea foods – with telephone, table and printed notepaper – and afterwards used it by receiving business calls there, seeing customers there and issuing business statements from there – it is plain that he was occupying it ”for the purposes of a business carried on by him”. This was a significant purpose for which he was occupying the flat, as well as a dwelling. It was his only home, and he was carrying on his business from it. It comes within my second illustration.
Addiscombe Garden Estates v Crabbe
ADDISCOMBE GARDEN ESTATES V. CRABBE
(Court of Appeal)
[1958]1 Q.B. 513; [1957] 3 W.L.R. 980; [1957] 3 All E.R. 563
For facts of this case, see earlier, p. 30.
Jenkins L.J.: There remains the second branch of Mr Blundell’s argument, which is, asI have said, that although this may be a tenancy agreement, the tenancy is not one to which the Landlord and Tenant Act, 1954, applies, because the premises were not “occupied for the purposes of a business”. Mr Blundell has said all that possibly could be said in favour of the view that the premises here in question were not occupied for the purposes of a business carried on by the tenants. But, in my view, the plain language of the Act is too strong for him. I read again subsection (2) of section 23: “In this Part of this Act the expression ‘business’ includesa trade, profession or employment and includes any activity carried on bya body of persons, whether corporate or unincorporate.” Here the premises were used for the activities ofa body of persons called the Shirley Park Lawn Tennis Club, and activities were there carried on, whether one should look at the individual members, or at the incorporated body. “A body of persons, whether corporate or unincorporate”- it matters not which- was carrying on on the premises an activity in the shape ofa lawn tennis club. The premises were, therefore, in my judgment, the subject ofa
tenancy to which the Act applies.
Abernethie v AM & J Kleiman Ltd
ABERNETHIE V. A.M. & J. KLEIMAN LTD
(Court of Appeal)
[1970]1 Q.B. 10; [1969] 2 W.L.R. 1364; [1969] 2 All E.R. 790; 20 P.& C.R. 561
Harman L.J.: Is it a trade, profession or employment? It is clearly nota “trade-” clearly, I should have thought, not a “profession”. It is not carried on professionally: it is carried on amateurishly, just the opposite to “professionally”. So far as payment is concerned, it is without reward and for the satisfaction, I take it, of the conscience of the person who carried it on: he feels morally obliged to do so.
Is it, then, an “employment”? True, the tenant does “employ” himself oncea week for an hour in teaching children the scriptures. Is that an “employment”? In my judgment, it clearly is not. “Employment” in that sense must mean something much more regular than that. It means, I should ,have thought, either employing somebody else or being employed by somebody else. However that may be, I cannot think that teaching scripture for one hour a week, done voluntarily, even witha serious sense of social obligation, is a “business”; and I am rather at a loss to find out how the judge came to sucha conclusion. He might have relied on Rolls v. Miller(1884) 27 Ch.D. 71,a decision of the Court of Appeal so clearly right that one need not really bother with its facts. It was merely this, that, there being a covenant in a lease not to carry on any trade or business of any description, a committee of benevolent minded persons decided to carry on in the premises a hostel for working girls, which clearly would completely alter the character of the property, and not unnaturally the land lords, andI expect the neighbouring tenants too, objected very strongly. It was held
that that wasa “business” and that it would be a breach of the covenant to carry it on and it was restrained.
Bell v Alfred Franks and Bartlett Co Lted
BELL V. ALFRED FRANKS AND BARTLETT CO. LTD
(Court of Appeal)
[1980] 1 W.L.R. 340; [1980] 1 All E.R. 356; 39 P. & C.R. 591; (1979) 253 E.G. 903
Shaw L.J.: That leaves for decision only the question whether there had been at some stage in the history a consent to the use of the garage against the prohibition contained in the agreement. This is a semantic and philosophical question which re quires definition of the distinction between acquiescence and consent. It is quite clear that what section 23(4) of the Act of 1954 intended was to ensure that the immediate landlord should not be bound by mere – and I use that word deliberately
– acquiescence on the part of the immediate predecessor in title, because that goes
far to giving to the tenant a protection and exposing the immediate landlord to an undue risk to which he ought not to be exposed. What is meant by acquiescence? It may involve no more than a merely passive attitude, doing nothing at all. It requires as an essential factor that there was knowledge of what was acquiesced In. In this case it is not in controversy that there was such knowledge on the part of the plaintiff’s predecessor in title that the garage was used in the way In which It was.
If acquiescence is something passive in the face of knowledge, what does “con sent” mean? In the context of the contrast implicit in subsection (4), the only practical and sensible distinction that can be drawn is that if acquiescence can arise out of passive failure to do anything, consent must involve a positive demonstrative act, something of an affirmative kind. It is not to be Implied, because the resort to impli cation betokens an absence of express affirmation. The only sense in which there can be implied consent is where a consent Is demonstrated, not by language but by some positive act other than words which amounts to an affirmation of what is being done and goes beyond mere acquiescence in it. It may lead, in this context, to a false conclusion to speak of “implied consent”, which Is what the judge said was the proper inference to be drawn from the long history of acquiescence. l would prefer for myself to say “consent” involves something which is of a positive affirmative kind and that is what is required by section 23(4) if the immediate landlord is to be deprived of the opportunity of taking advantage of a breach of a prohibition contained in the terms of the tenancy.
In my view, what is decisive of the appeal is that there was no acquiescence on the part of the plaintiff and no consent by Mr Allen. Accordingly, the requirements of the Act of 1954 were not called into play. The notice to quit was effective to terminate the tenancy and the plaintiff was entitled to an order for possession of the garage premises.
Wheeler v Mercer
WHEELER V. MERCER
(House of Lords)
(1957] A.C. 416; (1956] 3 W.L.R. 841; (1956] 3 All E.R. 631
Lord Cohen: It was common ground between the parties that there were two questions which your Lordships had to decide: (1) When the present proceedings were commenced, was the relationship between the parties that of a tenancy at will? Unless it was, it was common ground that the appellant was entitled to succeed. But if it was, then the second question arises. (2) Is a tenancy at will a tenancy within the meaning of the Act?
My Lords, on the first question I find myself in complete agreement with the county court judge when he says:
In my opinion the defendant was a typical tenant at will, conforming to all the classical defini tions of such a tenant. I refer to Woodfall’s Law of Landlord and Tenant, 23rd edn, pp. 283, 284; Foa, 7th edn, p. 3, and Hill and Redman, 10th edn, pp. 16 and 17, and the cases cited by those authorities. She was not in my view a mere licensee because she was in exclusive possession with the consent of the owner; nor was she a tenant at sufferance because I think the landlord’s positive assent must be implied from the circumstances.
I would, therefore, answer the first question in the affirmative, and I turn to the second question.
Mr Megarry, for the respondent, says that a tenancy at will is “a tenancy agreement” within the meaning of section 69(1), since a tenancy at will isa tenancy and agreement is of the essence of a tenancy at will; it is indeed the feature which dis tinguishesa tenancy at will from a tenancy at sufferance. I am prepared to accept that the expression “a tenancy agreement” may comprise a tenancy at will, butI think that it might also be the apt language to use where the draftsman had in mind only a tenancy fora fixed term and a periodical tenancy. The question of the sense in which it is used in a particular statute must be answered by construing the statute as a whole, and, in my opinion, the language of section 25 is consistent only with the adoption of the narrower construction I have indicated. It is, I think, clear, reading subsections (2), (3) and (4) together, that subsections (3) and (4) are intended to comprise all the tenancies to which the Act applies. Subsection (3) deals only with tenancies which could be determined by notice to quit, and it was common ground between the parties that a tenancy at will is not such a tenancy, sincea tenancy at will is determined, not by a notice to quit, but, for example, by death, bankruptcy or a demand for possession. Subsection (4) is to apply “in the case of any other ten ancy”. This is an omnibus phrase covering all tenancies to which the Act applies
except such as are determinable by a notice to quit. It is clear, however, from the language of the subsection that it cannot comprise a tenancy at will because sucha tenancy could never come to an end by effluxion of time.
Hagee(London) Ltd v AB Erikson and Larson
HAGEE (LONDON) LTD V. A.B. ERIKSON AND LARSON
(Court of Appeal)
(1976] Q.B. 209; (1975] 3 W.L.R. 272; (1975] 3 All E.R. 234; 29 P.& C.R. 512
Lord Denning M.R.: In Wheeler v. Mercer[1957] A.C. 416, a tenant held over after his lease expired. He became a tenant at will by operation of law. He was held not to be entitled under the Act of 1954. That decision does not govern this case. Viscount Simonds left open the case of a tenancy at wlll created by express agreement. He
said, at p. 427:
On studying the provisions of the Act of f954, I think that tenancies at will are not contemplated at all, no matter whether created by operation of law or by express agreement. Section 25(3) and (4) show that the only tenancies contemplated as being within the Act are those which are brought to an end by notice to quit and those which are brought to an end by effluxion of time. Section 69 defines “notice to quit” as meaning:
a notice to terminate a tenancy (whether a periodical tenancy or a tenancy for a term of years certain) given in accordance with the provisions (whether express or implied) of that tenancy.
There is no room there for a tenancy at will. It may be an oversight, but those sec tions do not contemplate a tenancy at will at all.
It is obvious, however, that if parties, by agreeing on a tenancy at will, can escape the provisions of the Act, it means that there is readily to hand a way of contracting out of the Act. This would be contrary to the intention of the Act of 1954, as it originally stood: because section 38 forbad contracting out, save in the case of tenancies for less than three months or at most six months: see section 43(3). But in 1969 the legislature changed its mind on contracting out. By section 5 of the Law of Property Act 1969 it amended section 38 so as to permit a landlord and tenant to agree together that the:Act shall not apply and that the tenant will not have a right to a new lease. Such an agreement is good and binding provided always that it is approved by the court and duly endorsed. We are told that the court invariably approves such . an agreement when it is made by business people, properly advised by their lawyers. The court has no materials on which to refuse it.
Seeing that the legislature has opened up this new way of contracting out of the Act of 1954, I feel no hesitation in approving the alternative way which was opened by Cooke J. in Manfield & Sons Ltd v. Botchin [1970] 2 Q.B. 612, namely, that an express contract for a tenancy at will is not within the Act of 1954. Such a tenant has no right to a new lease when his tenancy at will is determined.
If the tenant takes such a tenancy at will, he runs the risk of being turned out; but so long as he does it on proper advice wi.th his eyes open, he is bound by it. I would only add that a tenancy at will of this kind is very rare. The court will look into it very closely to see whether or not it really is a tenancy at will, or whether it is a cloak for a periodic tenancy. But once it is decided to be a tenancy at will, the tenant has no right to a new lease.
In Land at Uss, Hants
IN RE LAND AND PREMISES AT USS, HANTS
(Goulding J.)
[1971] Ch. 986; [1971] 3 W.L.R. 77; [1971] 3 All E.R. 380; 22 P.& C.R. 861
Goulding J.: The effect of the authorities and statutes to which I have referred is that in the Act of 1969I cannot take the expression “term of years certain” as extending to the proposed tenancy for six months unless I can find some context which will enable me to give the expression a more extended meaning than that which the
words strictly bear.
… on the whole, weighing up all those indications and relying most strongly on Mr
Aldous’ observations about section 24 of the Act of 1954, I feel that there is enough context to justify me in giving an extended meaning to the words in the new subsection, section 38(4), and, in my judgment, in that subsection the phrase “a term of years certain” includes not only a term of one year or more but alsoa term fora
period certain less than one year.
Morrisons Holdings Ltd v Manders Property (Wolverhampton) Ltf
MORRISONS HOLDINGS LTD V. MANDERS PROPERTY (WOLVERHAMPTON) LTD
(Court of Appeal)
[1976] 1 W.L.R. 533; [1976] 2 All E.R. 205; 32 P. & C.R. 218
Sir Gordon Willmer: So far as the law is concerned, I think it can be taken as axiomatic that in order to be in occupation one does not have to be physically present every second of every minute of every hour of every day. All of us remain in occupa tion, for instance, of our houses even while we are away doing our day’s work. It follows, therefore, that occupation necessarily must include an element of intention as well as a physical element. If I leave my premises and emigrate to the United States of America with no intention of returning, it can well be said that I no longer remain in occupation. But if as a shopkeeper I close my shop for a fortnight in the summer to enable my staff to have a holiday, I apprehend that no one would contend that during that fortnight I ceased to be in occupation of my shop.
It is in the light of those considerations that I think one must look at the facts of this particular case. After the fire the tenants, as tenants, enjoyed the same right to occu py the premises as they enjoyed before. The premises, although damaged, were still in existence, and, as I understand the evidence, the tenants exercised during the first day or two following the fire their rights by going into the premises in order to save such stores and equipment as they could. If the tenants did not remain in occupation,then one might well ask the question: who did? The answer, I think, having regard to the argument in this case, would have to be that immediately following the fire the tenants ceased to be in occupation and the landlords themselves resumed occupa tion. But the landlords would be faced with the same difficult question as the tenants are faced with here, that they were not physically on the premises. For my part, I cannot accept that view of the case. It seems to me that the tenants, who had been in continuous occupation up to the fire and immediately after the fire, and who re tained the intention to occupy, remained both in fact and in law the occupiers of the premises at the relevant time. They are consequently entitled to prosecute whatever remedy they may have in pursuance of the Landlord and Tenant Act 1954.
I omitted to observe, although Scarman L.J. mentioned it, that the tenants retained the keys of the premises. They were thus in a position to exclude the public from the premises, or to open the door and invite the public to come in. If some person was invited to come in, I apprehend that the tenants would have had some difficulty in escaping their liabilities under the Occupiers’ Liability Act 1957.
However one looks at it, it seems to me that one cannot disregard the tenants’ continuing occupation of these premises, notwithstanding the somewhat devastating effects of the fire that took place. I am glad to find that the view which I have been ex pressing is in accord with that of Cross J. in Caplan (I. & H.) Ltd v. Caplan (No. 2), (1963] 1 W.L.R. 1247. I need not read again the passage at p. 1260 of the report to which Scarman L.J. has referred. I only need to say that, for my part, I fully concur with it. It only remains to add that, assuming I am right so far, I do not see how the sub sequent demolition of the buildi119 at the instance of the landlords, which took place on June 17, can possibly have,affected one way or the other such rights as the ten ants had.
My conclusion, therefore, in agreement with Scarman L.J. is that these tenants do have a perfectly good locus standi to pursue their remedy under the Act of 1954.
Safeway Food Stores Ltd v. Morris
(1980) 254 E.G. 1091,
Walton J.
In the present case on that basis I think the question is first of all – is this curious building, the site of the former garage and now a frontless and backless wonder, pointing to the supermarket and nothing else, so closely connected with the supermarket that anybody would think that it was part of that supermarket known as the ground floor and basement of the numbers I have already read out? And it would seem to me that one has only to postulate that question to get the answer that of course it has no real connection with anything else and could not be used as part of anything else at all. It might have been much more difficult if it had remained as an actual garage which could have had some independent use and validity. At the moment the building has no independent use or validity whatsoever except as a way through from the other side of the road across the service road into the supermarket.
The matter does not rest there, because there is a reported case, Germax Securities Ltd v. Spiegal in the Court of Appeal reported in (1978) 37 P & CR 204 in which the Court of Appeal approved the following formulation by Goulding J in Carradine Properties Ltd v. Aslam [1976] 1 WLR 442 of a test to decide whether a notice was valid:
I would put the test generally applicable as being this. Is the notice quite clear to a re11on11ble tenant reading it? Is it plain that he cannot be misled by it? Applying that test as applicable to the present case I think the notice would be so, because the tenant receiving that notice and knowing the terms of the lease must have seen there was a mistake as it would not say 1973 In 1974. Once that is accepted it is obvious the notice is for 1975 and not 1973.
That test was blessed by Buckley LJ in that case, Roskill LJ entirely agreeing with Buckley LJ, as also did Goff LJ. I was cited, of course, the case of very great weight and standing, Hankey v. Clavering [1942] 2 KB 326, where there was a notice to determine a lease on Dec ember 21 1941 when it should have been in fact December 25 1941. But that was a pro spective notice, and the tenant would undoubtedly have been in reasonable doubt as to whether the landlord had made a mistake or whether the landlord was not really trying to bring the lease to an end on a date on which he had no right to bring it to an end at all.
So I return to the section 25 notice in the present case and it appears to me quite clear that no tenant of the supermarket, for such the premises are in fact, would have the slightest hesitation in knowing that the notice which he had received was a notice to terminate the whole of his tenancy. Indeed, as Mr Bernstein for the defendant pointed out, it is not really anywhere suggested that the lessees were in any doubt, and the nearest that one gets to it is a solicitors’ letter of May 15 1979 in which it is said, “Our clients expressly reserve their rights as to the validity and effect of the two notices given by you and dated March 19 1979”, which being interpreted is “We think we have found a jolly good technical point which we hope to be able to run later”, and it certainly does not mean, “We are in any real genuine doubt” whatsoever.
Herongrove Ltd v. Wates City of London Properties plc
[1988] 24 E.G. 108
Then there was another case in th Court of Appeal, Marks (Morris) v. British Waterways Board [1963] 1 WLR 1008. I think it is helpful if I read some short extracts from the judgment in that case. It should be borne in mlnd that the court there was considering not a landlord’s notice under subsection (6) of section 25 of the Act but a landlord’s countemotice under subsection (6) of section 26 thereof, which has to be served if the landlord desires to oppose a tenant’s request for a new tenancy under section 26. Subsection (6) in section 26, like that in section 25, requires the counternotice to state on which of the grounds mentioned in section 30 of the Act the landlord will oppose the application. Accordingly, in my view, Mark’s case is in pari materia with the cases on landlord’s notices under section 25 although referring to the following section. Lord Denning MR at p. 1015, having referred to an argument that the notice in that case was bad because it did not correctly represent the landlord’s intention at the time, said:
I think the correct answer is that the notice opposing the new tenancy – a landlord’s notice – is to be regarded as in the nature of a pleading. It is a pleading which comes for proof at the date of the hearing. It is sufficient as long as it gives notice to the tenant of the case he has to meet. So long as it is not deceptive or misleading it avails the subsequent owner of the property who is the landlord at the date of the hearing.
Harman LJ at p. 1018 said:
The only object, as Lord Simonds said in the Betty’s Cafes case, of a counternotice is to inform the tenant of the case which will be made against him when the hearing comes on and provided it does that it is, I think, a good counternotice …
And, omitting two or three sentences, he continued:
You must not mislead the tenant. You must not say anything which is fraudulent but if your notice is given in good faith and the fact about reconstruction can be substantiated by the person who is the landlord when the hearing comes on, I think the counternotice really has served the purpose which the legislature can be said to have required of it.
And he finished that paragraph of his judgment by saying:
It is true the notice is in a most unhappy form. It was not candid as it should have been. If I had thought it could have misled Marks I should be inclined to say it was a bad notice, but I do not think it did, having regard to the prior notice served and the knowledge of the facts which he had. There- fore, although I think we do perhaps rather stretch the section in doing so, I agree with the county court judge that this counternotice was a valid counternotice.And, at the every end of the report, at p. 1021, Pearson LJ says of the counternotice:
It gave him [that is the tenant] adequate warning of what was the contention on the other side which he would have to meet at the hearing and, therefore, it performed its function adequately.
It will be observed, I remark in passing, from Harman LJ’s judgment in the passage which I have cited, that in the Marks case there was some extrinsic evidence of the tenant’s knowledge of material facts at the time of service of the notice. Nothing of that sort is before the court here and I have to construe the notice simply as a self-contained document, with
out reference to prior knowledge of either party.
Then there is another case in the Court of Appeal Housleys Ltd v. Bloomer-Holt Ltd [1966]
1 WLR 1244 and I cite from that a very compendious and generally expressed observation by Diplock LJ (as he then was). He said at p. 1251:
First as regards the technical point that the notice by the landlords given under section 25(6) of the Act did not follow precisely the wording of paragraph (f) of section 30(1) of the Act. This is a highly technical point. It is not, in my view, in any event an attractive one nor do I find it well founded. It is sufficient if a notice under section 25(6) makes it clear to the tenant which of the seven separate grounds specified in section 30(1) the landlord is relying on. The purpose of the notice under section 25(6) is to let the tenant know on what grounds his request for a new tenancy, if made, will be resisted, so that he may make up his mind whether to exercise his rights and bring the matter
eventually before a court for a decision.
Other cases cited were Lewis v. MTC (Cars) Ltd [1974] 1 WLR 1499, a decision of Temple man J, another decision at first instance of Carradine Properties v. Aslam [1976]1 WLR 442a, recent case, unreported, in the Court of Appeal of Jomac Securities v. Speigel whereofI have seena transcript of the court’s judgment dated June 14 1978, and a still more recent case at first instance of Safeway Food Stores Ltd v. Morris (1980) 254 EG 1091.
Having gone through those authorities, from which I have cited one or two passages,I
ask myself these questions about the notice dated March 8 1979. Did it give notice to the tenant of the case she had to meet? Was it deceptive or misleading? Did it make clear which of the seven separate grounds specified in section 30 the landlord was relying on? It is all important, I think, in looking at the notice, to observe that the notes on the back are part of the statutory form; that the body of the notice expressly calls the tenant’s attention to those endorsed notes and that the statement of the landlord’s ground of opposition is qualified by a parenthesis referring in particular to note 4 where the alternatives (a) to (g) are set out. If the tenant compared the language in paragraph 3 of the notice with that of the subpara graphs of note 4, she could, in my view, have no doubt that the landlord was aiming at subparagraph (f). There is a close resemblance between the language actually used and part of that in subparagraph (f) and there is not the slightest resemblance to or close relation with any of the other subparagraphs. A reasonable tenant, reading this notice, would I think conclude that the landlord was seeking to rely on subparagraph (f), but the same hypo thetical reasonable tenant would also conclude that there was considerable doubt whether the landlord could make its case good, because it would be indeed strange if a substantial work of redecoration could be shown to be, in the statutory language, a substantial work of construction. Therefore, I answer my questions by saying: “Yes, on a fair and not too tech nical construction the notice does give notice to the tenant of the case she had to meet”; and
I would say “No, it is not deceptive or misleading”, although it is inaccurately expressed.
And then I would say “Yes, it does make it clear which of the seven separate grounds the landlord is relying on”.
Dodson Bull Carpet v City of London Corp
DODSON BULL CARPET CO. LTD V. CITY OF LONDON CORPORATION
[1975] 1 W.L.R. 781; [1975) 2 All E.R. 497; 29 P. & C.R. 311
Goff J.: In my judgment, looking at the document as a whole, as a matter of con struction, this is clearly a single tenancy of nos. 5 and 6, and not two tenancies. Defendants’ counsel sought to escape these difficulties by saying the draftsman had intended to create two separate tenancies but had used and very imperfectly adapted a form appropriate to a single one. That is far too speculative, and in my view I can not on any such ground violate what appears to me to be the plain meaning of what he has said. Alternatively, defendants’ counsel submitted there might be a case for rectification, but nobody has ever; asked for that, nor is there any evidence to establish a case for it. I therefore hold that there is but one tenancy.
The plaintiffs submit that there is: nothing in the Landlord and Tenant Act 1954 to authorise a landlord to serve a notice of determination under section 25 as to part only of the premises comprised jn’ the relevant tenancy, and indeed, quite the re verse, to allow him to do so would cut across and jeopardise the protection afforded by the Act. Defendants’ counsel states that he cannot dispute that proposition and in my judgment he is plainly right in SG> doing. Prima facie therefore the no. 5 notice was invalid.
Defendants’ counsel however finally sought to extricate himself from these diffi
culties by relying on section 140 of the Law of Property Act 1925. That section applies as far as it goes because, as I have already observed, there had been a severance of the reversion, but to succeed on that ground the defendants must read the right to serve the statutory notice in section 25″of the Act of 1954 as a right to determine the lease otherwise than by notice to quit within section 140(2) of the Act of 1925.
It is clear, and defendants’ counsel was again forced to admit, that that would be a very strange reading of section 140(2) because the Act of 1954 draws a sharp distinction between a notice to quit which is defined in section 69 and a notice to terminate under section 25 (see for example, section 25(3)) because the section 25 notice is not given under any provision contained in the lease, and it is only a right of re-entry, which of course is so contained, with which section 140 of the Act of 1925 is dealing, and because the statutory notice does not determine the contractual tenancy but only the statutory continuation of the tenancy, and then only subject to the provisions of the Act under which there may be further interim continuation pend ing agreement or the court’s decision on the question of a new lease. The definition is further discussed and explained in Woodfa/1, Landlord and Tenant, 27th edn (1968) vol. II, p. 1322, para. 2461.
The defendants submit that I should do violence to the language of section 140 of
the Act of 1925 because there may be hardship if a person grants two wholly separ ate leases and they fall into the same hands and then an under-lease is granted of the whole and, the reversion being severed between the two properties, he is unable to serve a notice as to the property originally comprised in one of his first two leases. That may be so, but it is clear that the Act does in some cases bring hardship on landlords against whom it may serve to validate an unlawful sub-letting: see D’Silva v. Lister House Development Ltd [1971) Ch. 17. In any case I do not see how I can possibly, on the grounds of some real or supposed hardship, do violence, not merely
be it observed to the Act said to have caused it, but to an Act passed years before and passed with no such considerations in mind.
For these reasons I have come to the conclusion that the no. 5 notice is invalid.
The conclusion that the Act of 1954 does not allow service of a notice under section 25 as to part only of the premises may give rise to difficulties where there has been a severance of the reversion and each reversioner is the landlord of his part within the definition in section 44 of the Act of 1954. It may be that the two can combine to give a notice, or it may be that no notice at all can be given until there is againa single landlord within the meaning of section 44. That problem can be dealt with when it arises. It cannot produce the result that the landlord whether of the whole or
part can give a notice as to part, even the whole of his part.
Bristol Cars Ltd v RHK (hotels) Limited
BRISTOL CARS LTD V. R.K.H. (HOTELS) LTD
(Court pf Appeal)
I
(1979) 38 P. & C.R. 411; (1979) 251 E.G. 1279
Templeman L.J.: So far as the first point is concerned, it seems quite plain that, on principle and authority, this is a defect in a document that is capable of being waived. So far as principle is concerned, in Tennant v. London County Council, the landlords serveda notice under section 25 of the Act of 1954 determining the tenancy and objecting to the grant of a new tenancy. The tenant served a counter-notice, and applied under the Act for a new tenancy. He was held to have waived any objection to the validity of the landlords’ notice. His point there was that the notice had not been signed by the correct person and therefore was not binding on him and wasa defective notice. Jenkins L.J. found – I think, as an alternative ground for his decision – that the tenant had waived objection. It never seems to have occurred to him or to the other members of the court, or to counsel, that waiver was not possible. Not only did Jenkins L.J. find that waiver had taken place, but he had these words of advice to give:
…I do regard it as most desirable in cases under the Landlord and Tenant Act 1954, where time may be an important consideration, that parties who wish to take objection to the form or the validity of the proceedings should act promptly and not reserve objections of this sort until the proceedings have been on foot for a matter perhaps of months.
That seems to be an indication of what should be done in principle.
So far as direct authority is concerned, the matter is determined by the decision of the House of Lords in Kammins Ballrooms Co. Ltd v. Zenith Investments (Torquay) Ltd. In that case, the tenants made a request for a new tenancy on August 2 and applied to the court for a new lease on September 4. The application was itself defective, because section 29(3) of the Act provides that:
No application … shall be entertained unless it is made not less than two nor more than four months after the giving of the landlord’s notice under section 25 …
Having regard to the dates, the application to the court in Kammins’ case had been made less than two months after, and therefore offended against the peremptory order that it should not be entertained unless made not less than two months after, the date of the landlord’s notice or the tenant’s request.
The House of Lords (Viscount Dilhorne dissenting) held that the requirements of section 29(3) “… were only procedural, and consequently the landlords had a right to ignore or object to the tenants’ premature application but could waive that right.” In that case, the House of Lords, again by a majority, this time of three to two, de cided that, on the facts of that case, the landlords had not waived their right to object that the application was bad, but, nevertheless, the case is clear authority that the requirements of the Act of 1954 can be waived. I can see no ground for distinguish ing a waiver of the requirements of section 29 from a waiver of the requirements of section 26.
In my judgment, it is quite clear that the defect in the present case could be waived. It remains to consider whether the landlords did waive the requirements.
In the Kammins case, Lord Diplock, having agreed on what he called “the pur- posive approach to statutory construction”, said:
… this is the reason why in a statute of this character a procedural requirement imposed for the benefit or protection of one party alone is construed as subject to the implied exception that it can be “waived” by the party for whose benefit it is imposed even though the statute states the requirement in unqualified and unequivocal words. In this context “waived” means that the party has chosen not to rely upon the non-compliance of the other party with the requirement, or has disentitled himself from relying upon it either by agreeing with the other party not do to so or because he has so conducted himself that it would not be fair to allow him to rely upon the non-compliance.
Lord Diplock proceeded to analyse what he meant by the expression “it would not be fair”, which, as one might expect, he reduced to judicial and legal characteristics and did not leave to the general discretion of the court on any particular occasion.
On the question whether, in the present case, the landlords have waived the de fect in the request, the argument for the landlords is beguilingly simple. Mr Marder put it in a variety of ways, but, at the end of the day, I think that it comes down to this. He says that there can be no waiver or acquiescence without knowledge: that the landlords did not know that the tenants’ request dated February 4, 1976, was invalid until April 1977, and that, as soon as they found that it was, they took the point and objected to the grant of a new tenancy. If knowledge is requisite, as it is in some cases of waiver and acquiescence, then it is quite clear that the landlords did not have that knowledge.
In my judgment, however, this is a case of estoppal rather than waiver. The land lords innocently led the tenants to believe that they would not, and, after a certain period, could not, oppose the grant of a new tenancy. By the time that the landlords sought to assert the contrary, the position of the tenants had so altered that it would be unfair to allow the landlords now to contest the validity of the request and then to oppose the grant of a new tenancy. When the tenants served their request on the
landlords, they were seeking, as is plain from the Act and the form, to ascertain
whether the landlords would oppose the grant of a new tenancy – and, of course, a tenant does need to know that when he is contemplating how he is to conduct hll business in the future. The landlords, on receiving that request, could have chal• lenged it. They could have opposed the grant of a new tenancy, or they could hlVI said nothing. If the validity of the request had been challenged, or if the grant of a new tenancy had been opposed, or if the landlords had remained silent, the tenants would at any rate have been on their guard. They might have reconsidered the request and served another notice. They might have looked elsewhere for premises. At any rate, they would not necessarily have spent the next year blissfully in the illusion that they were bound to obtain a new tenancy – a belief that, no doubt, affected their business administration and planning throughout the year.
The time came, viz. April 4, 1976, when the tenants, having received the letter from the receiver and knowing that the surveyors were in negotiation, were entitled, because of those events, and because the time for delivering a counter-notice had expired, to assume thereafter that the landlords not only were not going to oppose the grant of a new tenancy, but could not successfully do so. On that hypothesis, so far as they were concerned, time was irrelevant. No matter how long the negotiations took, no matter what changes of landlord there were, everything could be governed by an application to the court, and, so long as that was kept alive, they were bound to end with a new tenancy in the long run.
The lapse of time between February 1976, when the tenants served their request, and April 1977, when the landlords sought to assert the invalidity of the request, is a long time in the life of businessmen. The tenants were faced with an entirely new situation – the danger of losing their premises in 1977 at a time when, possibly, the property market had altered qr the position as to alternative accommodation had altered: any plans that they had made during that year, on the assumption that they were going to stay, would be frustrated. Worse than that, however, the position was that, whereas, as I have indicated, it seems highly likely, to put it at its lowest, that the landlords and their predecessors in title had had no grounds on which to oppose the grant of a new tenancy, by April 1977, as a result of the passage of time, and (I suppose) the landlords getting themselves organised, the landlords were in a position at least to allege that they had the intention at that time of reconstructing the premises, so that this delay that took place because the tenants were blissfully thinking that they were bound to get a lease and that time was of no importance radically changed the position of the landlords and faced the tenants with an entirely new situation that meant that, if they had known of it originally, they might have taken a very different course of action. .
It seems to me that, in those circumstances, the landlords were estopped from denying the validity of the notice [sic] because they had, innocently, led the tenants to believe that they would not oppose the grant of a new tenancy. Of course, not every delay or every representation will support an estoppal. In the present case, Mr Marder has pointed out that the landlords did nothing – that they knew nothing – and he said that there was very great difficulty in assessing the particular date on which, on this analysis, they became estopped from disputing the validity of the request. In my judgment, however, there is no doubt or difficulty in the present case. The inevitable conclusion from the facts that I have outlined is that the date when the landlords became estopped occurred before April 1977 – certainly not later than March 2, 1977, when they applied for their interim rent. Accordingly, for my part I would hold that the landlords are estopped from disputing the validity of the tenants’ request.
It was urged that the circumstances in the present case are not different from the circumstances in the Kammins case, in which, as I have said, the House of Lords, by a majority, held that the landlords had not been guilty of waiver. There are, how ever, striking differences between the Kammins case and the present. In the first place, the time-span was shorter. Secondly, the time-span was not such, and the circumstances were not such, that it could be seen quite plainly that the tenants would be in a position, when faced with an allegation of the invalidity of the request, different from that in which they would have been a year earlier. Thirdly, in Kammins the landlords had persistently opposed the grant of a new tenancy. They had given grounds for opposition, and the invalidity of the application was a second or altern ative ground that came into operation admittedly at the last minute. The complaint of the tenants in the present case, however, is that the inevitable assumption that they would have made from the landlords’ actions in the negotiations between February 1976 and April 1977 would have been that they need not bother to do anything but negotiate for the terms, and, if necessary, ask the court to decide the terms, of the lease that they were bound to get, whereas in Kammins’ case the landlords made it clear that they would, if possible, resist the grant of a new lease. Accordingly, I do not find that the circumstances in Kammins case, to which Mr Marder pointed,
govern the present.
As an alternative ground, it seems to me that the action of the landlords in the
present case in asking the court to grant an interim rent was an action that plainly waived any defect. On this head of the case, Lord Diplock in the Kammins case, as I have said, analysed the various grounds on which waiver could be put forward, and one ground to which he referred, but which did not apply in the Kammlns case, was
that of waiver that arose:
… ina situation where a person is entitled to alternative rights inconsistent with one another. if he has knowledge of the facts which give rise in law to these alternative rights and acts In a manner which is consistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be the legal consequence of what he did. He is sometimes said to have “waived” the alternative right, as for instancea
right to forfeit a lease or to rescind a contract of sale for wrongful repudiation or breach of condition; but this is better categorised as “election” rather than as “waiver”. It was this type of “waiver” that Parker J. was discussing in Matthews v. Smallwood.
It seems to me that those words describe what happened in the present case. Although the landlords did not know it, they had the choice of affirming the request and application and applying for an interim rent on the basis that that was the course that they elected to take, or, alternatively, arguing that the application was invalid, in which case, of course, they could not apply for an interim rent. The action of applying for an interim rent was, in the words of Lord Diplock, an act inconsistent with their relying on their other choice, viz. to contend that the request was invalid.
Accordingly, on each of those two alternative grounds, I would dismiss the appeal.
W Davis (Spitalfields) Ltd v. Huntley
[1947] 1 All ER 246, Henn Collins J :
Where, however, the tenant is asking for a new tenancy (under section 5(1) of the Act), … he cannot have both the old tenancy and a new one. If he affirms the position that he wants a new tenancy, he can only do so on the footing that the old one is at an end. If and in so far as the tenant claims a new tenancy, he is not thereafter entitled to say that the old one is still subsisting, and he certainly is not entitled to do so any the more if he fails to obtain the new tenancy and eventually claims com pensation.
Mr Goodhart’s submissions, as I understood them, were as follows. The tenant has two alternative rights; one to dispute the validity of the notice, and the other to apply to the court for the grant of a new tenancy. He might, if he wished, waive his right, but any waiver would have to be a voluntary waiver. The alternative claims can properly be combined, and since 1969 have commonly been combined, in a single application to the court notwith standing the alternative nature of the claims. It is not necessary, he said, for a tenant in presenting his application to the court to choo e one of the claims and abandon the other. The view of Henn Collins Jin W Davis (Spitalftelds) Ltd v. Huntley has not been followed in later cases. He referred me to Rhyl Urban District Council v. Rhyl Amusements Ltd [1959] 1 WLR 465. The facts there are altogether differep.t. That was a case in which the plaintiffs had served a notice to quit in respect of a yearly t nancy and the defendants had served a sec tion 26 tenant’s notice asking for a new lease; the notice being accompanied by a letter recording that the notice was served without prejudice to the right to claim that a lease was still subsisting. The plaintiffs then issued their originating summons. The case raised a multiplicity of issues, and Harman J (as he then was) said at pp 471-472:
The first point taken is that the defendants, having asked for a new lease, must be taken to have elected to rely upon their rights under the Act of 1954, and cannot now be heard to say that the 1932 lease is still subsisting. This is a point akin to estoppel and should have been, but it is not, taken in the pleadings, and I was asked to hold that it was not open to the plaintiffs. It would, however, be open to me to allow an amendment, and I propose to consider the merits of this point as if I had done so. In my opinion, there is nothing in it.It is true that in 1954 the defendants did by their notice under section 26 of the Act demand a new lease, but they sent a covering letter on the same date stating that this was a notice made without prejudice. In my judgment this shows that there was no true election. The defendants were alleging the validity of the 1932 lease, but by way of insurance in case that proved wrong, they sought to protect themselves under the Act of 1954, and I do not see why they should not take this course. It was argued that the decision of Henn Collins Jin W Davis (Spitalfields) Ltd v. Huntley was authority which I ought to follow in this respect.
The learned judge then considered the headnote to that case, and continued:
That case went to the Court of Appeal, but that court did not deal with this point. It has, however, been approved in Tennant v. London County Council. In my judgment, it does not apply here.
The tenancy which the defendants here were desirous of retaining was the 1932 lease, which the plaintiffs were alleging to be void, and not the yearly tenancy of which notice to quit had been given under the Act by the plaintiffs. It was, therefore, not a matter of waiving some point about the sufficiency of the notice, but a claim that no notice could be given at all. It is said, further, that by issuing the originating summons on February 21 1956 the defendants once more elected to have a new lease, but it seems to me clear from the form of the summons itself that the defendants did all they could there to preserve their rights, and I am of opinion that, even if the plaintiffs are entitled to take this point, it will not avail them.
Mr Goodhart claims that the tenant has never voluntarily waived his right to challenge the validity of the notice of December 4 1979 and, notwithstanding the dismissal by the Court of Appeal of the claim for a new tenancy, he can still maintain the challenge. That right, he says, would remain unaffected even by the grant of a new tenancy. He says that the contractual tenancy, not having been lawfully terminated, would continue in full force and effect until the new tenancy had infact become vested in the tenant pursuant to section 36 of the Act and upon the vesting being effected the subsisting contractual tenancy would be surrendered by operation of law. He says that so long as he made it perfectly clear to the Court of Appeal on November 251980 that he was reserving his position on the question of the validity of the notice then he could not be taken to have waived his objection to the validity of the notice; he could not, he claims, have been required to “abandon” the claim for a new tenancy in order to preserve the question of the invalidity of the notice. When asked by me why he did not simply ask the Court of Appeal to adjourn the hearing of the appeal until the question of the validity of the notice had been resolved, his answer was that he did not ask for an adjournment because he thought that the Court of Appeal would refuse an adjournment or, to use his own expression, “because there would have been an explosion”. That was not a satisfactory answer, even though “an explosion” might well have been predictable. Mr Goodhart also sought to distinguish the Bristol case on the ground that in that case the landlords had positively indicated that they did not intend to oppose the grant of a new tenancy.
For my part I consider that the Rhyl case does not affect the position at all. One would construe the originating summons in that sense in the light of the terms of the letter which accompanied it and, if it were so construed, the situation would be exactly the same as if there had been a single application raising both a claim that the notice was invalid and the claim for a new tenancy. Such a claim is perfectly proper and would not cause an automatic waiver of the right the tenant may have had to dispute the validity of the notice.
For my part I am doubtful about going so far as to hold that the view of Henn Collins J in W Davis (Spitalfields) Ltd v. Huntley is a view which must be applied with rigidity in all circumstances. Supposing the tenant honestly and reasonably believed the only course open to him in order to obtain security of tenure for his business was to make an application to the court for a new tenancy and, in that belief, he made an application but discovered immediately afterwards that he had strong grounds for disputing the validity of the notice and thereupon sought to amend his application by asking the court additionally to deter mine the question as to the validity of the notice, then I doubt whether leave would or should be refused. Indeed, in the Airports Restaurants case, the High Court proceedings were commenced after the application of a new tenancy and the tenants had gone on with their application for a short time after the application for an adjournment had been
refused.
That being so I prefer to base my judgment on the Bristol case and I hold that whatever may have been the position before the claim for a new tenancy was taken to the hearing before the learned Vice-Chancellor – and I do not decide what any earlier position or posi tions was or were – on that date the tenant must have lost any right it might have had to dispute the validity of the notice, but, if that were not so, then at any rate it must have lost it at the hearing before the Court of Appeal on November 25 1980 when the tenant knew all the material facts and knew also that a new tenancy could be claimed only if there had been a valid notice of termination and he elected to pursue that claim. That conduct was inconsistent with any right it may have had to dispute the validity of the notice. The tenant elected not to take the point and is now estopped from doing so. The fact that Mr Goodhart then declared that he proposed to reserve the point was of no effect. It is rather like the case of a landlord who had a right to forfeit a lease accepting rent arrears due after the right to forfeit had occurred on the basis that he accepted it only without prejudice to this right still to claim forfeiture of the lease.
Finally, it may be convenient to mention the case of Smith v. Draper [1990] 27 E.G. 69 (C.A.), where the landlords’ first section 25 notice was invalid because it named two only out of the three joint landlords. The tenant, however, responded by giving the usual counter-notice and applied within the time-limits to the court for the grant of a new tenancy. The landlords, realising their mistake, then served a fresh notice in the names of all three joint landlords expressly without prejudice to the contention that their first notice was effective. The tenant duly responded by serving a counter-notice but failed to apply to the court in time in respect of this second notice. The landlords then abandoned their reliance on the first notice and sought possession of the premlaea on the ground that the tenant had failed to apply to the court within the time-limits in respect of the second notice. The Court of Appeal held that, on the facts, the landlord• were not estopped from treating the first notice as invalid and, accordingly, they wert
not in any way precluded from relying upon the invalidity of the first notice for the purposes of demonstrating that the tenancy was terminated by the second notice.
Kammins Ballrooms Co Ltd v Zenith Investments (Torquay)
KAMMINS BALLROOMS CO. LTD V. ZENITH INVESTMENTS (TORQUAY) LTD
(House of Lords)
[1971] A.C. 850; [1970] 3 W.L.R. 287; [1970] 2 All E.R. 871; 22 P. & C.R. 74
The tenants of business premises made a request for a new tenancy and the landlords served a notice of opposition indicating that they would oppose an application to the court for a new tenancy. The tenants filed an application for a grant of a new tenancy to which the landlords filed an answer taking no objection to the application being pre mature. Subsequently, the landlords claimed that the tenant’s application was invalid since it had been made less than two months after the request for a new tenancy contrary to section 29(3) of the 1954 Act.
Held: The landlords had not waived their right to object that the application was bad.
Lord Morris: The effect of section 24 of the Act is that a tenancy to which Part II applies does not come to an end unless terminated as provided by the Act. A tenant may apply for a new tenancy if the landlord has given a notice under section 25 to terminate the tenancy or if he (the tenant) has made a request for a new tenancy under section 26. On the making of an application the court must make an order for the grant of a new tenancy (see section 29(1)) unless the landlord successfully opposes the application on grounds on which in accordance with section 30 the land lord is entitled to oppose. In that event the court must not make an order: see section 31(1). The application of the tenant is made under section 24 but it is “subject to the provisions” of section 29. In this way the time limits set out in section 29 are intro duced. In my view they are time limits which regulate procedure. They provide for an orderly sequence of procedural steps. A tenant who fails to keep within the pre scribed time limits will fail at his peril. He may find that his landlord will insist, as insist he may, upon strict observance. But if a landlord agrees to waive the strict observ ance of a time stipulation I do not consider that the language of section 29 makes it obligatory upon the court to hold that in spite of the landlord’s agreement the court cannot and must not proceed.
If someone has an existing claim for money due or for damages he may be met by a plea that some statute has enacted that an action to enforce his claim must be brought within a certain period. Yet it has always been recognised that words such as “no action shall be brought” are generally speaking not words which compel the court to hold that it lacks jurisdiction even if the party sued does not wish to rely on the statutory defence. The position is in my view similar in the case of a tenant who makes an application to the court for a new tenancy. He may be defeated if he has not applied within the statutory time limits. But if the landlord chooses not to insist upon a strict compliance with those limits I do not consider that the court is devoid of jurisdiction.
Lord Diplock: So it becomes necessary to consider whether the respondents did waive this requirement. “Waiver” is a word which is sometimes used loosely to describe a number of different legal grounds on which a person may be debarred from assert ing a substantive right which he once possessed or from raising a particular defence to a claim against him which would otherwise be available to him. We are not concerned in the instant appeal with the first type of waiver. This arises in a situation where a person is entitled to alternative rights inconsistent with one another. If he has knowledge of the facts which give rise in law to these alternative rights and acts in a manner which is consistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be the legal consequence of what he did. He is sometimes said to have “waived” the altern ative right, as for instance a right to forfeit a lease or to rescind a contract of sale for wrongful repudiation or breach of condition; but this is better categorised as “election” rather than as “waiver”. It was this type of “waiver” that Parker J. was discussing in Matthews v. Sma//wood[1910] 1 Ch. 777.
The second type of waiver which debars a person from raising a particular de fence to a claim against him, arises when he either agrees with the claimant not to raise that particular defence or so conducts himself as to be estopped from raising it. This is the type of waiver which constitutes the exception to a prohibition such as that imposed by section 29(3) of the Landlord and Tenant Act, 1954, and other statutes of limitation. The ordinary principles of estoppel apply to it.
The county court judge was not prepared to find that the landlords were estopped from relying upon their objection that the tenants’ application to the county court was out of time. He would however have been prepared to hold that they had “waived” the objection if he had thought that he had jurisdiction to entertain the application at all. So would the Court of Appeal. He considered that the fact that they had taken a number of steps in the proceedings was in itself sufficient to amount to a “waiver” by the landlords of any objection that the application was not properly brought. He relied upon the practice of the High Court which is. applicable in county court proceedings to matters which are not specifically dealt with in the County Court Rules. No doubt he had in mind, in particular, R.S.C., Ord. 2, r. 2. But Ord. 2 deals only with the effect of non-compliance with the requirements of Rules of Court. It has nothing to do with non-compliance with requirements imposed by a statute, and is in my view of no relevance in determining what constitutes a “waiver” of the requirement contained in section 29(3).
My Lords, I think that the only kinds of “waiver” that could avail the appellants in the instant case are either an estoppal in the strict sense of the term or a quasi estoppel arising under the doctrine of promissory .estoppal laid down in the High Trees case (Central London Property Trust Ltd v. High Trees House Ltd) [1947] K.B. 130 and Combe v. Combe [1951] 2 K.B. 215 or under the older doctrine of “acquies cence” expounded by Fry J. in Willmott v. Barber (1880) 15 Ch.D. 96. I should be only too glad if I could find in the evidence before the county court judge material which would justify a finding of estoppel or quasi-estoppal on any of these grounds, but as to each of them it seems to me that the appellants have failed to establish at least one essential element.
As respects estoppal in the strict sense it is difficult to find in the conduct of the landlords in the proceedings or in the letters which their solicitors wrote any repre sentation of an existing fact. Their answer to the tenants’ application and their letters prior to December 5, 1968, fairly bear the inference, as was the fact, that the only defence on which they then intended to rely was that arising under section 30(1) of the Act. But no inference can be drawn from this that they would not change their minds before the hearing and even if it could this would only operate as a promise which might possibly give rise to a promissory estoppal but not to an estoppel in the strict sense. Treated as a mere statement of the landlords’ present intention it would operate to estop them from denying that they had that intention at the time the letters were written; but that does not help the tenants on this appeal.
Whatever may be the other limits of a High Trees promissory estoppal it cannot arise unless there is a promise intended by the promisor to affect his existing legal relationship with the promisee upon the faith of which the promisee has acted. I cannot spell out of the conduct and correspondence of the parties any promise by the landlords that they would never take the point that the tenants’ application was out of time, nor can I infer from what they did or said any intention on their part to affect their existing legal relationship with the tenants as lessors and lessee. Further more the tenants called no evidence to suggest that they themselves thought that the landlords were making any promise of this kind on which the tenants acted. So the appellants, in my view, also fail to establish the essential elements of any promissory
estoppal.
Finally, as to “acquiescence” it was as a result of agreement between the parties
that the hearing of the tenants’ application was postponed until a date in December when it would be too late for the tenants to correct their error by makinga fresh application. If the landlords had known of their own right to raise the objection that the application was out of time when they agreed to the December date of the hearing they would have been debarred by “acquiescence” from relying upon that right. The essential elements of quasi-estoppal by acquiescence are stated in Willmott v. Barber, 15 Ch.D. 96. As respects the party relying on the acquiescence he must be mistaken as to his legal rights and must have done some act on the faith of his mistaken belief. These conditions are satisfied by the tenants, who agreed to the postponement of the hearing in the mistaken belief that they hada legal right to proceed to an adjudication upon the application they had already made. One of the essential elements as respects the quasi-estoppal by acquiescence is that he must have encouraged the other party to act as he did; and this encourage ment may be active, as in the instant case by agreeing to the postponed date, or passive by refraining from asserting his own inconsistent legal right. But in contrast to estoppel in the strict sense of the term the party estopped by acquiescence must, at the time of his active or passive encouragement, know of the existence of his legal right and of the other party’s mistaken belief in his own inconsistent legal right. It is not enough that he should know of the facts which give rise to his legal right. He must also know that he is entitled to the legal right to which those facts give
rise.
My Lords, the only evidence as to the landlords’ knowledge of the existence of their own legal right to object to the application as being out of time is that they knew of it at the time they wrote their letter of December 5, 1968, by which date the tenants had already lost their own right to make a fresh application. Had there been evidence that the landlords acquired the knowledge of their right to take the objection, at some time before December 2, 1968, which was the last day upon which the tenants could have madea fresh application, the question would have arisen whether their failure to inform the tenants of this constituted such passive encouragement of the tenants’ mistaken reliance on the validity of their existing application as would amount to “acquiescence” in its validity. In view of the active part which the landlords had played in arranging for the date of the hearing to be postponed until after December 2, 1968, I have no doubt that their failure to inform the tenants with reasonable promptitude that their existing application was invalid would constitute passive encouragement of the tenants’ reliance on its validity and provide the necessary ele-
ment for the quasi-estoppal of acquiescence.
So the date upon which the landlords acquired that knowledge is crucial. If, as we have been informed and the letter itself suggests, the point was first appreciated by the landlords’ counsel, the landlords would be prevented from relying on the point unless they drew the attention of the tenants to it as soon as reasonably possible after their solicitors had received counsel’s opinion and had a reasonable opportunity to tain the landlords’ instructions. But the onus lay upon the tenants to establish acquiescence and to prove facts upon which this defence to the preliminary point could be founded. They made no attempt to do so and the county court judge was left in the dark as to the date at which the landlords first became aware of their legal
right to rely upon the preliminary point.
Your Lordships must, I think, resist the temptation to fill this fatal gap in the appel lants’ evidence by speculation. Though I do so with reluctance, I for my part feel compelled to dismiss this appeal.
Stevens & Cutting v Anderson
STEVENS & CUTTING LTD V. ANDERSON
(Court of Appeal) [1990] 11 E.G. 70
Stuart-Smith L.J.: Election
Although not in the forefront of his argument, Mr Cole submitted that the respond ent had waived the irregularity in the application by electing not to rely upon it. A party may be deprived of the right to pursue a certain course of conduct if, when faced with two alternative and inconsistent courses of action, he chooses one rather than the other and his election is communicated to the other party. It is, however, now established that before he can be said to have elected, the party electing must know not only of the facts giving rise to the right but that he has the right. In Peyman v. Lanjani [1985] Ch 457 at p. 487F, Stephenson LJ said:
Knowledge of the facts which give rise to the right to rescind is not enough to prevent the plaintiff from exercising that right, but he must also know that the law gives him that right to
choose with that knowledge not to exercise it.
The respondent himself knew nothing of the defect or any right to rely upon it. Mr Cole submits, however, that Mr Brown knew of the facts, namely the relevant dates, and must be presumed to know the law. The conduct of the proceedings and nego tiations after receipt of the defective application, he argues, amounts to an election. No doubt in the ordinary way a solicitor would be presumed to know the law; but in this case that presumption was rebutted by Mr Brown’s evidence, which the judge accepted. In these circumstances, I do not see how Mr Brown’s actual lack of know ledge of the right can become the respondent’s knowledge of it. Once Mr Brown became aware of the point, he acted promptly. In my judgment, there is no question
of waiver by election here.
Estoppel
Mr Cole’s main submission is that the respondent is estopped from taking the
point that the application is defective. He relies upon the authority of Kammins Ball rooms Co Ltd v. Zenith Investments (Torquay) Ltd [1971] AC 850 and Bristol Cars Ltd v. RKH (Hotels) Ltd (in liquidation) (1979) 38 P&CR 411 for the proposition that in an appropriate case a landlord can be estopped from taking the point that such an application is defective because it does not comply with the statutory requirements as to date. In the former case the landlords had indicated that they opposed the grant ofa new tenancy on grounds open to them under section 30 of the Act. They were not estopped from relying on a defect in the tenant’s application which did not comply with section 29(3) of the Act. In the latter case the landlord did not oppose the grant ofa new tenancy; after protracted negotiations the landlord realised that the tenant’s request fora new tenancy under section 26 of the Act was defective, since it failed to specify the date for commencement of the new tenancy. The landlord was estop-
ped from raising this point.
In order to found an estoppel three things must be established: a representation of fact; reliance upon the representation by the person to whom it is made; and detriment resulting from such reliance.
In the case of promissory estoppel, there must be a promise intended by the promiser to affect his legal relationship with the promisee upon the faith of which the promisee has acted to his detriment.
The representation Mr Cole submits that there was a representation or promise by conduct that the landlord would not rely on any other ground of opposition to the grant of a new lease save those which he had specified under section 30(1) of the Act. No such repre sentation or promise can be spelt out from the landlord’s solicitor’s letter of June 28 1985 giving notice that the tenant’s application would be opposed on the grounds set out in section 30(1), paras (a) and (c) of the 1954 Act, nor In the answer served on October 7 1987, also setting out these grounds of opposition: see Kammlns case
and in particular per Lord Diplock at pp. 883H-884D.
Faced with this difficulty, Mr Cole sought to rely upon the course of dealing with the application to the court, for example by consenting to their adjournment and the negotiations between the parties, and in particular on the judge’s findings to whichI have referred that between June 1985 and October 1987 the appellant would have been led to believe that new leases might well be obtained by negotiation and that there was some prospect of success before the court if negotiations failed. But what is clear is that there was no representation either expressly or by conduct that if negotiations failed the respondent would not oppose the grant of a new lease. In this respect the case differs materially from the Bristol Cars case, where the effect of the landlords’ representation, both express and by conduct, was that they would not oppose the grant of a new tenancy. In these circumstances I find it extremely difficult to spell out of the landlord’s conduct in conducting without prejudice negotiationsa
promise that the only grounds of opposition to a new tenancy would be those already raised under section 30(1).
This difficulty is accentuated by the question, when did the landlord’s conduct amount to such a representation? When asked this question in the course of argument, Mr Cole’s answer was, at the latest by October 7 1987, the date the respondent’s answer was served. This answer is not satisfactory, since it is clearly crucial thata date, even if only approximate, is given, because it is only detriment suffered by the tenant in reliance on the representation or promise that is relevant.
In my opinion, therefore, no sufficient representation or promise can be spelt out of the landlord’s conduct. If I am wrong, it is necessary to consider the two remaining aspects.
Reliance
No evidence was called on behalf of the appellant. The judge said that in the absence of evidence he could not Aresume detriment. He made no specific finding about reliance. Mr Cole relied on the decision of this court in Greasley v. Cooke [1980] 1 WLR 1306. That case was concerned with the question of the burden of proving reliance on a representation. The headnote is misleading in suggesting that it was concerned with the onus of proving detriment. Lord Denning MR at p. 1311,
citing his own judgment in Brikom Investments Ltd v. Carr [1979] QB 467 at p. 483, said:
Once it is shown that a representation was calculated to influence the judgment ofa reasonable man, the presumption is that he was so influenced.
It is then for the representor, if he can, to show that the representee was not so influenced and did not rely upon it. Waller LJ’s judgment is to the same effect. Both these members of the court emphasised that the issue in the appeal concerned pro positions of law enunciated by the county court judge in these terms:
If the defendant is to succeed she has to prove that she acted to her detriment asa result of her belief.
There was no question that she had acted to her detriment. Dunn LJ agreed and added only a very short judgment, but he does say at p. 1314:
The only question before us is as to the burden of proof of the detriment. The judge thought that the onus lay on the claimant to prove it.
With great respect, I do not think this can be correct. There was ample evidence of detriment; it did not need to be presumed and in my judgment could not be pre sumed, though it may be inferred from certain primary facts.
For my part, therefore, if I were satisfied that there was a clear representation or promise to be spelt out of the respondent’s conduct, and that the appellant had suffered detriment by or adopting a course of conduct consistent with the assumption that the representation was true or the promise binding, I would be disposed to
conclude that in the absence of evidence to the contrary the appellant had adopted that course in reliance on the representation or promise.
Detriment
The judge expressed his conclusion on this matter as follows:
I have no specific evidence from the tenants of any detriment suffered by them in reliance upon their application and I am not prepared to assume such detriment in the absence of specific evidence in a case where negotiations albeit over a long period were all conducted against the background of the landlord’s opposition to the grant of new leases which although clearly capable of being abandoned by agreement never was so abandoned.
The Greasley case does not assist the appellant on this aspect. Mr Cole submits that the judge should have inferred detriment and he relied upon the judgment of Temple man LJ in the Bristol Cars case. It is not clear whether evidence was called in that case of detriment. I am prepared to accept that it was not. At p. 420 Templeman LJ said:
The lapse of time between February 1976, when the tenants served their request, and April 1977, when the landlords sought to assert the invalidity of the request, is a long time in the life of businessmen. The tenants were faced with an entirely new situation – the danger of losing their premises in 1977 at a time when, possibly, the property market had altered or the position as to alternative accommodation had altered: any plans that they had made dur ing that year, on the assumption that they were going to stay, would be frustrated. Worse than that, however, the position was that, whereas, as I have indicated, it seems highly
likely, to put it at its lowest, that the landlords and their predecessors in title had had no grounds on which to oppose the grant of a new tenancy, by April 1977, as a result of the passage of time, and (I suppose) the landlords getting themselves organised, the landlords were in a position at least to allege that they had the intention at that time of reconstructing the premises, so that this delay that took place because the tenants were blissfully thinking that they were bound to get a lease and that time was of no importance radically changed the position of the landlords and faced the tenants with an entirely new situation that meant that, if they had known of it originally, they might have taken a very different course of action.
The last reason was peculiar to that case. But Mr Cole urges that the others apply equally to this case, with the added comment that here negotiations continued for over two years. I do not agree. The crucial difference is that in that case throughout the tenants expected to get a new lease because there was no opposition to it. Here that is not so.
Moreover, because it is impossible to say at what time any representation or promise can be said to have been made, it seems to me to be equally impossible to infer that any detriment was suffered from that time and as a result of the representa tion or promise. If the representation was not made till October 1987, it cannot pos sibly be suggested that any detriment was caused between then and mid-December when the respondent’s solicitors took the point. For these reasons I would dismiss the appeal.
Lyons v Central Commercial Properties Limited
LYONS V. CENTRAL COMMERCIAL PROPERTIES
(Court of Appeal)
[1958] 1 W.L.R. 869; [1958] 2 All E.R. 767
Ormerod L.J.: The applicant in this case applied to the court for the grant of a new lease under the Landlord and Tenant Act, 1954. The landlords, in view of section 30(1)(a) of the Act, opposed the grant on the ground that the tenant had been guilty of a breach of his covenant to repair, and the county court judge has upheld the objection, and refused to make an order for a new lease. The question at issue in the appeal is whether the judge has taken into account extraneous matters in coming to his decision; and it is necessary to consider what, if any, discretion is vested in the judge in considering objections which fall within section 30(1)(a). The first three para graphs of section 30(1) have already been read, and I do not propose to repeat them here.
It is clear from the words of the section that there is a measure of discretion as regards the state of disrepair. The words are “ought not to be granted a new tenancy in view of the state of repair of the holding”. Paragraphs (b) and (c) respectively refer to the “persistent delay” of the tenant in paying rent, and “other substantial breaches” by the tenant of his contractual obligations. These provisions seem to indicate that the neglect to repair to which the section refers should be substantial. But the word “ought” in the section in my judgment implies that the discretion of the judge Is not confined to the consideration of the state of repair. Without attempting to define tht precise limits of that discretion, the judge, as I see it, may have regard to the conduct of the tenant in relation to his obligations, and the reasons for any breach of thl covenant to repair which has arisen.
I
For example, in the present case there were negotiations proceeding at one time for the sale of the premises to Littlewoods, which if successful would have resulted in the premises being demolished. It might well be regarded as unreasonable to ex pect the tenant to expend money on repairs during such negotiations. On the other hand, there would appear to be no reason for failing to carry out the repairs after the
negotiations were terminated. The object of paragraphs (a), (b) and (c) of section 30, as I see it, is to enable the judge to refuse to grant a new lease to a tenant who has shown himself to be unsatisfactory in the performance of his obligations under the contract of tenancy.
It is clear from his judgment that the judge considered the lack of repair to be serious, but he took into consideration the fact that the tenant had contracted to assign his interests in the premises to Littlewoods. He said: “I have come to the con clusion that this action is brought not to secure the sitting tenant but to secure the premises for Littlewoods.” It was argued that in spite of this passage in his judgment, the facts as found by him were such that there could be no proper exercise of his discretion other than to refuse to make an order for a new lease.
The contract with Littlewoods had, in my view, no bearing on the case. The ques tion was one to be tried between the landlords and the existing tenant, and it was his breaches and his conduct which were material. It remains to be decided whether the case should be sent back for reconsideration by the judge, or whether on the material before this court an order should be made. It is true that the judge said: “If this were a case of a small man who would lose his livelihood, I would have said despite the breaches I would grant a new lease.” It may be said that this is an indi cation that he might, if the case were sent back to him, exercise his discretion in favour of the tenant, although it may very well be that in saying this the judge was regarding himself, as he indicateq early in his judgment, as having an overall dis cretion similar to that given by the Rent Acts. On the other hand, he found that there were severe breaches of covenant; that although the tenant had had nearly a year to remedy the breaches, he did not do so, and his final observation was: “The applicant is not the sort of person who is likely to be a tenant to whom I should give relief.”
In these circumstances, in my judgment, this court can and should deal with the application and confirm the judge’s refusal to make an order for a new lease. I would dismiss the appeal.
Eichner v Midland Bank Executor and Trustee Co Ltd
EICHNER v. MIDLAND BANK EXECUTOR AND TRUSTEE CO. LTD
(Court of Appeal)
[1970] 1 W.L.R. 1120; [1970] 2 All E.R. 597; 21 P. & C.R. 503
Lord Denning M.R.: The tenant applied for a new lease, and the landlords opposed it on those grounds which they had put in their notice of opposition. The county court judge found that the dilapidation had been remedied. He said that the parting of possession toa subtenant was not serious, and that the manufacturing of plastic foam was not serious enough for the court to refuse a new lease. But the thing which he did find was a substantial breach was this:
The Interlingua Translation organisation was set up without telling the landlord, which I consider is an extraordinary user of a landlord by a tenant and goes far beyond the normal limits of a landlord and tenant relationship.
If the judge had refused a new lease on that ground, there could be no possible ground of appeal to this court. But Mr Rich says that the judge did not put it only on that ground. He put other grounds into the scale. The judge said:
What I do consider very important is the relationship between the landlord and the tenant. This has been very unhappy for at least 11 years, and this is admitted by Eichner. Thia unhappy relationship has therefore existed since 1958. There is evidence ofa great deal of litigation in the past, in 1958, 1959, 1961, 1965 and the present year … It must be con• sidered very carefully whether it is fair to saddle the landlord with a tenant with whom h in constant litigation.
The judge also referred to the payment of rent. He said: “In considering the picture as a whole, I must consider Mr Eichner’s history of paying rent and ability to pay the rent in the future.”
Mr Rich submits that the judge ought not to have taken those other grounds into consideration, because they were not stated in the notice. He refers to section 30(1) of the Act of 1954 which says that the landlord may oppose the new tenancy on the grounds stated in the notice: and, inferentially, not on any other grounds. If the land lord had wished to include those other grounds he should have specified them in his notice as “any other reasons connected with the tenant’s use or management of the holding” under section 30(1)(c). The landlord not having put them in the notice, Mr Rich submitted that they should not be taken into account. For this he relied on a sentence of Harman J. in Lyons v. Central Commercial Properties Ltd [1958] 1 W.L.R. 869, 880, in which he said:
In my judgment, the discretion vested in the court under section 30(1)(a), (b) and (c) is a narrow one; it is limited to the question whether, having regard only to the grounds set out, a new tenancy “ought not” to be granted.
But Ormerod L.J. did not restrict the discretion so narrowly. He said, at p. 878: Without attempting to define the•precise limits of that discretion, the judge, as I see it, may
have regard to the conduct of the tenant in relation to his obligations.
I prefer the view of Ormerod L.J. I think the judge here was not confined to the breach of the tenant in carrying· on the translation business of the Interlingua organ isation. It was, I think, open to him to look at all the circumstances in connection with that breach: also, I may add, to look at the conduct of the tenant as a whole in regard to his obligations under the tenancy. The judge was not limited to the various grounds stated in the notice.
In any case, it seems to me that, if the judge had limited himself to this one sub stantial breach in connection with Interlingua Translations, he would have held that the tenant ought not to be granted a new tenancy.
I see no reason for interfering with the judgment of the county court judge, and I would dismiss the appeal.
Betty;s Cafe Limited Phillips Furnishing Stores Limited
BETTY’S CAFES LTD V. PHILLIPS FURNISHING STORES LTD
(House of Lords)
[1959] A.C. 20; [1958] 2 W.L.R. 513; [1958] 1 All E.R. 607
Viscount Simonds: My Lords, as a preliminary to determining the date when the requisite intention must be proved to have been formed, there was much discussion upon the meaning of the word “intends” in section 30(1)(f). (… ) In this context your Lordships have the advantage of a judgment delivered by Lord Asquith (then Asquith L.J.), than whom there have been few greater masters of the English language in judicial interpretation or exposition, in Cunliffe v. Goodman. I will content myself with a single short passage, though much more might be usefully cited: “An ‘intention’,” said the learned Lord Justice, “to my mind connotes a state of affairs which the party ‘intending’ – I will call him X – does more than merely contemplate: it connotes a state of affairs which, on the contrary, he decides, so far as in him lies, to bring about, and which, in point of possibility, he has a reasonable prospect of being able to bring about, by his own act of volition.” I do not think that anything is to be gained by trying to elaborate these words, but I m4st fairly add that I do not at all dissent from the explanation of them which the learned Master of the Rolls has given in this case. It is a question of fact what intention;a man has at a given time, difficult, it may be, to ascertain, but still a question of fac:t, and I think that a jury directed in such words as these could come to a fair concluslon.
Having said so much, I doubt whether I have got much help on my way to a solution of the question of construction. But perhaps it may be said that it would, in many cases, place an unfair burden on the lan<illord if within a short space of two months he had to attain the fixity of intention which I have indicated. Content perhaps to await the time when he can resume possession under ground (g), he is suddenly faced with an application compelling him to form an intention, which can only be formed after a consideration of a number of factors not easily ponderable. If I felt any real difficulty in construction, I should, I think, find in this consideration an impulse to regard the date of hearing as the relevant and only relevant date for the ascertainment of intention.
Equally from the point of view of the tenant it seems essential that the court should find the intention subsisting at the date of the hearing. As I listened to the argument for the appellants and studied their formal case, it appeared to me that they regarded the date of notice of opposition as the only relevant date. But I have not been able to understand what advantage the tenants could gain from the fact of the landlords’ intention at that date or from the proof of it, if at a later stage it had been abandoned. Upon this part of the case I respectfully adopt the reasoning of Romer L.J. upon which I cannot hope to improve.
I return, then, to the short question of construction. Under section 26(6) a landlord giving notice that he will oppose an application must state in his notice on which of the grounds mentioned in section 30 he will oppose the application. This is the langu age of futurity. The landlord “will” oppose the application and he “will” oppose it on such and such a ground. If the matter rested there, I should not find it possible to regard the ground of opposition as referring to anything but a state of affairs existing at the date of the hearing when its validity could be tested. It might, no doubt, be relevant for the purpose of testing its validity to know something of the precedent state of affairs: that would depend on the nature of the ground of opposition. But in regard to ground (f), which we are immediately considering, nothing more is required of the landlord than that he should state that he will oppose the application on the ground that on the termination of the current tenancy he intends to do certain work and so on. All is still in the future and, except for the purpose of challenging his bona fides, which is not here in question, nothing that has happened in the past has any relevance. At the hearing he will oppose and prove his avowed intention. This seems to me, with all deference to those who take a different view, to be the plain English of section 26(6) and section 30(1)(f). I have already pointed out that it appears to accord also with the general purpose of the Act. It harmonizes also with the language of section 31(1) which contemplates the landlord satisfying the court upon any of the grounds upon which he is entitled to oppose the application.
Cunliffe v. Goodman
[1950] 2 K.B. 237 (C.A.) Asquith L.J. s
The question to be answered is whether the defendant (on whom the onus lies) has proved that the plaintiff, on November 30, 1945 “intended” to pull down the premises on this site. This question is in my view one of fact. If the plaintiff did no more than entertain the idea of this demolition, if she got no further than to contemplate it as a (perhaps attractive) possibility, then one would have to say (and it matters not which way it is put) either that there was no evidence of a positive “intention”, or that the word “intention” was incapable as a matter of construction of applying to anything so tentative, and so indefinite. An “intention” to my mind connotes a state of affairs which the party “intending” – I will call him X – does more than merely contemplate: it connotes a state of affairs which, on the contrary, he decides, so far as in him lies, to bring about, and which, in point of possibility, he has a reasonable prospect of being able to bring about, by his own act of volition.
X cannot, with any due regard to the English language, be said to “intend” a result which is wholly beyond the control of his will. He cannot “intend” that it shall be a fine day tomorrow: at most he can hope or desire or pray that it will. Nor, short of this, can X be said to “intend” a particular result if its occurrence, though it may be not wholly uninfluenced by X’s will, is dependent on so many other influences, accidents and cross-currents of circumstance that, not merely is it quite likely not to be achieved at all, but, if it is achieved, X’s volition will have been no more than a minor agency collaborating with, or not thwarted by, the factors which predominately determine its occurrence. If there is a sufficiently formidable succession of fences to be surmounted before the result at which X aims can be achieved, it may well be unmeaning to say that X “intended” that result.
Here there were a number of such fences. The approval of the London County Council, as the town-planning authority for London, had to be obtained, and was refused in respect of the first rebuilding plan. A building licence had to be obtained from Hammersmith Borough Council. The first plan never reached the stage at which such a licence could USl’ fully be applied for. As to either plan, a licence, if forthcoming, might have been granted on terms, and those terms might have deprived the project of all commercial attraction- deprived it of the character of a “business proposition”. Such licences are often granted conditionally on a maximum selling price for the structure as rebuilt, or – If it be not ,mid, but let-conditionally on a maximum rent: and in respect of the second scheme a maximum rent of an unattractive level was in fact proposed by the local authority.
This leads me to the second point bearing on the existence in this case of “Intention” 1111
opposed to mere contemplation. Not merely is the term “intention” unsatisfied If thl• person professing it has too many hurdles to overcome, or too little control of event•: It I• l.!qually inappropriate if at the material date that person is in effect not deciding to proceed but feeling his way and reserving his decision until he shall be in posse1111lon of financial data sufficient to enable him to determine whether the project will be commercially worth while.
A purpose so qualified and suspended does not in my view amount to an “lntl.!ntion” or “decision” within the principle. It is mere contemplation until the materiah, necessary toa decision on the commercial merits are available and have resulted In such • dt.’Cision. In the present case it seems to me that (assuming that the plaintiff w,1, both before and after November 30, 1945, disposed to demolish and rebuild if she could do so on remunerative terms) she never reached, in respect of the first scheme, a stage at which she could decide on its commercial merits; nor, in respect of the second scheme, the stage of actually deciding that that scheme was commercially eligible – unless indeed she must be taken not merely to have repudiated her architect’s authority but to have decided that it was commercially
ineligible. In the case of neither scheme did she form a settled intention to proceed. Neither project moved out of the zone of contemplation – out of the sphere of the tentative, the provisional and the exploratory – into the valley of decision.
The dicta of Asquith L.J. in Cunliffe were applied in Reohorn v. Barry Corporation [1956] 1 W.L.R. 845 (C.A.), where the tenants of land used as a car park applied for a new tenancy under the 1954 Act. The town corporation, the landlords, resisted the application on the ground set out in section 30(1)(£). At the hearing, the corporation produced resolutions for a proposed comprehensive development scheme on the land, an outline plan, evidence of consultations with an architect and a letter from a development company stating that the company was agreed “in principle” to start work at a certain date “subject to the approval of the council” and the conclusion of satisfactory building arrangement. No plans had been prepared or agreed, nor any terms as to a building lease, nor was any proof produced that the proposed developers, who did not give evidence, were financially in a position to carry out the work. The Court of Appeal held that the landlords had failed to establish the quality
of intention required by the 1954 Act. Denning L.J. said (at pages 849-850):
Such being the facts, the question is whether the intention required by the Act is satisfied. In the recent case of Fisher v. Taylors Furnishing Stores Ltd, I pointed out that the intention must be “a firm and settled intention, not likely to be changed; … It must be remembered that if the landlord, having got pi:>ssession, honestly changes his mind and does not do any work of reconstruction, the tenant has no remedy.” In considering whether the court should be satisfied of the landlord’s intention, I think that it may readily be satisfied when the premises are old and worn out or are ripe for development, the proposed work is obviously desirable, plans and arrangements are well in hand, and the landlord has the present means and ability to carry out the work. Such was the position in Fisher’s case, and in several other cases which have come before this court. But the court will not be so readily satisfied when the premises are comparatively new or the desirability of the project is open to doubt, when there are many difficulties still t’o be surmounted, such as the preparation and approval of plans or the obtaining of finance, or when the landlord has in the past fluctuated in his mind as to what to do with the premises. In those circumstances, even though he should assert at the hearing that he has a firm and settled intention, the court is not bound to accept it because of the likelihood that he may change his mind once he gets possession. Such was the position in Herbert v. Blakey (Bradford) Ltd (under section 30(l)(g)).
In the present case, the premises are”ripe for development and the proposed work is obviously desirable: but the difficulty is to be satisfied that the corporation have the present means and ability to carry out the work. “Intention” connotes an ability to carry it into effect. A man cannot properly be said to “intend” to do a work of reconstruction when he has not got the means to carry it out. He may hope to do so: he will not have the intention to do so. In this case the corporation contemplate turning this land into a splendid estate by the sea. They are exploring the possibilities of it; they are discussing the ways and means, in the shape of a building lease; but that is as far as they have got. Their ability to do the work, or to cause it to be done, is, I think, open to question.
I desire to say at once that there is no objection to their doing it by way of a building lease. Indeed, as I have indicated, it is the only way in which the corporation can develop this land; and no one would wish to hold up development because a building lease was chosen as a means of doing it rather than doing it through independent contractors. The decision of this court a little while ago in Gilmour Caterers Ltd v. St. Bartholomew’s Hospital Governors shows that it is permissible for a landlord to cause the work to be done by way of a building lease. But in that case the building lease was already executed; the premises were old and ripe for development; the landlords had complete control of the work to be done: it was all specified and ready to be done at once. In this case, however, it is very different. There is no building lease, no lessee in existence at the moment, no plans with any details, no know ledge of any financial backing. There is so much still to be explored and discussed, there are so many factors outside the control of the corporation altogether, that I do not think that there is here that “intention not likely to be changed” which is required before the tenant is to be deprived of a new lease. I can well see that in the course of the next few months difficulties may arise which might lead to the abandonment of this plan, or, at all events, to its suspension for an indefinite period. It would not be right that the tenant should be
turned out by the landlords on such an uncertain and unsettled intention. It seems to me that, to apply Asquith L.J.’s words in Cunliffe v. Goodman, the matter is still in the region of “the tentative, the provisional and the exploratory”, and has not yet reached “the valley of decision”.
Atkinson v Bettison
ATKINSON V. BETTISON
(Court of Appeal)
[1955] 1 W.L.R. 1127; [1955] 3 All E.R. 340
Denning L.J.: Assuming that the landlord was able to overcome that difficulty the next question is whether the proposed work is the reconstruction of a substantial part of the premises. The question what is “substantial” is one of degree, and therefore of fact. If a judge went wrong in that he came to a conclusion which was clearly wrong or to which no reasonable man could come, then this court would interfere. But when it is a matter on which two minds can quite reasonably come to differing conclusions, then it is essentially a question for the county court judge. This seems to me to be such a case. It is a building on three floors. Nothing is proposed to be done with the first and second floors. All that is intended is the fitting of a new shop front, and a new floor. The judge said that if Mr Sime’s construction of the Act was right, any landlord could buy premises, and by means of merely altering the shop front get the tenant out and go in himself. That shows what the judge felt about the case. He thought that this was not the reconstruction of a “substantial part” of the premises. I think that that was a dec;ision to which he could properly come, and that this court cannot and should not interfere with his view on the matter. The appeal must be dismissed.
Hodson L.J.: So far as the second point is concerned I think that the respondents in this appeal are right on that also, because this appeal raises the question on which the county court judge did, I think, hope to get some guidance as to how the word “substantial” was to be approached. But I am afraid that nothing more can be said by this court than was said by the House of Lords in Palser v. Grinling in connexion with a rent case, the question there being whether the substantial portion of the rent was attributable to furniture. In that class of case, as in this class of case, the onus is on the landlord, and Lord Simon’s words are applicable. He said:
One of the primary meanings of the word is equivalent to considerable, solid, or big. It is in this sense that we speak of a substantial fortune, a substantial meal, a substantial man, a substantial argument or ground of defence. Applying the word in this sense, it must be left to the discretion of the judge of fact to decide as best he can according to the circumstances in each case, the onus being on the landlord.
Joel v. Swaddle
[1957] 1 W.L.R. 1095 (C.A.),
I think that in cases of this kind it is apt to be dangerous to take each individual item entirely in isolation, and then to say that each item so taken cannot itself be a work of reconstruction or a substantial work of reconstruction. One must look at the whole work which is pro posed, and then say, in regard to it: Does it amount to a substantial work of reconstruction? I think that what is here proposed – and there is no question as to the facts – does, when you view it in that way, amount, within the meaning of the paragraph, to a work of reconstruction of a substantial part of the premises. I lay considerable emphasis on that part of the work which consists of the substitution of the transverse walls by the proposed girders resting on pillars; I also think, with respect to the county court judge, that he also gave somewhat too little emphasis to the floor; because what is proposed is not merely the making ofa new floor, but the sinking of the floor, not a great deal, but by a distance of some eight inches, which produces an appreciable increase in the total space of what was, and is at present, the tenant’s holding.
I come back now to the citations which the county court judge made from Percy E. Cadle v. Jacmarch Properties Ltd. That was a case in which the work the landlord intended to carry out consisted substantially of making internal staircases where previously there had been external means of access only, to the basement on the one hand and to the upper floor or floors on the other. The view that the county court judge had taken was that the putting in of an internal staircase was rather a matter of improvement than of reconstruction – than of interference, that is to say, with the structure, as such, of the
building.
It is in that context that Denning L.J. and Hodson L.J., in the course of their judgments, used the phrases which the county court judge quotes – “the word ‘reconstruct’ here is best expressed … by the synonym ‘rebuild'”.
When the facts of Percy E. Cadle v. Jacmarch Properties Ltd are considered, what the county
court judge was intending to express will be apparent; the putting in of a staircase did not amount in any ordinary use of the phrase to any “rebuilding” of the premises. On the other hand,I think, with respect to the county court judge, that you do not fail to rebuild in the structural sense because you do not substitute for a wall another and different wall, but leavea space, if you substitute girders resting on pillars for the wall, performing the structural function which the wall previously performed.
So far as the earlier case is concerned, I would respectfully adopt as being helpful in this
case the rather more extensive exposition used by Ormerod L.J., which was also quoted by the county court judge in this case. Ormerod L.J. said:
the word “reconstruction” must mean … in the first place, a substantial interference with the structure of the premises and then a rebuilding, probably in a different form, of such part of the premises as has been demolished by reason of the interference with the structure.
I have not in the present case said anything about demolition, or what the county court judge said about demolition, because I am content for my part to rest my conclusion upon the other words in the paragraph, namely, that “the landlord intends to reconstructa substantial part of the premises”. In construing those words I adopt the languagel have cited from Ormerod L.J.’s judgment. I think that what is here intended to be done does ina real sense involve an interference with the structure of the whole, or of a substantial part, of the premises, and involves a “rebuilding”, in the ordinary sense of the word, of the pre mises ora substantial part, by substituting structurally something different from that which
was there before.
Heath v Drown
HEATH v. DROWN
(House of Lords)
[1973] AC. 498; [1972] 2 W.L.R. 1306; [1972] 2 All E.R. 561; 23 P.& C.R. 351
Lord Kilbrandon: The “holding” referred to in section 30(1)(f) is ex hypothesi one in respect of which there is a subsisting tenancy, since section 24(1) extends the current tenancy until the tenant’s application for a new lease has been finally dis posed of. “Obtaining possession of the holding” (s.c. by the landlord) must, in my view, mean putting an end to such rights of possession of the holding as are vested in the tenant under the terms of his current tenancy. This is the ordinary meaning of “obtaining possession” in the context of the relationship of landlord and tenant. More over, an examination of the Act shows that when the word “possession” is used it means the legal right to possession of land.
In the present case it was not reasonably necessary for the landlord to put an end to such rights of possession of the holding as were vested in the tenant under her current tenancies, since it is conceded that he could carry out his intended work of construction on the holding under the reservations in her current tenancies. So he could not bring himself within the terms of section 30(1)(f).
Price v Esso Petroleum Co Ltd
PRICE V. ESSO PETROLEUM COMPANY LTD
(Court of Appeal) (1980) 255 E.G. 243
Megaw L.J.: It has been held by the House of Lords, in Heath v. Drown [1973] AC 498, that if the terms of the existing contract between the parties – here the tenancy agreement – entitle the landlords to carry out the works in question, then the landlord cannot successfully oppose the tenant’s application for a new tenancy by reliance on paragraph (f): for the word “possession” in this paragraph means not mere physical occupation but the legal right of possession. The fact that the landlord may reason ably have to deprive the tenant of physical occupation for a time, when the landlord enters upon the premises in order to carry out the works, does not destroy the ten ant’s “possession”: the landlord can do the works without obtaining possession, though he may have dispossessed the tenant of occupation. Hence, as a matter of law, the landlord fails to satisfy the requirement of the concluding 14 words of paragraph (f), if the contract entitles him to carry out the works.
So the simply-stated question, by the answer to which this issue falls to be decided, is: on the terms of the tenancy agreement, would the landlords have been
entitled to enter upon the Whitgift Service Station in order to carry out the Intended works?
I now come to the terms of the tenancy agreement of June 24 1976. In that agree ment the landlords are described as “Essa” and the tenant as “the Dealer”. Clause 1, so far as is relevant, provides: “1. The Letting. Essa agrees to let and the Dealer agrees to take: (a) the service station premises described In the Schedule hereto (which together with all buildings and erections now or at any time erected thereon are hereinafter called ‘the Service Station’).” Then there Is subparagraph (b), which I need not read. Then the clause goes on: “but Essa reserves the right to enter the Service Station at any time with workmen and others for the purpose of carrying out such improvements, additions and alterations to the Service Station as Esso may consider reasonable, after consultation with the Dealer.”
The schedule referred to in subparagraph (a), so far as is relevant, reads: ”The Schedule. The Service Station. All that piece or parcel of land situate at Brighton Road, South Croydon” – and then there is a description of what that piece of land is
– ”together with all buildings erected thereon and known as Whitgift Service Station”. The vital words in the latter part of the clause, which have been referred to in argu ment in this appeal as ”the reservation clause”, are “improvements, additions and alterations”. Of course, those words have to be read in the context of the surrounding words and of any other of the contractual provisions which may shed light on them. Are the planned works “improvements”, “additions” or “alterations” or all three of them? If so, the landlords cannot rely on paragraph (f), because, if so, the landlords can reasonably do the works without obtaining possession of the holding, on the interpretation of “possession” in Heath v. Drown. I can see no valid reason, with great respect to the sustained submissions for the landlords, why it should be said that the intended works are not, at least, improvements, and it may well be also, in whole or in part, alterations and additions. The landlords would not lose their right of entry if each of the items of the planned works fell within one or other of those heads, merely because they did not fall within one d the same head. But, as I see it, the tenant does not need to rely on that proposition here, for the totality of the planned works are property within the word “improvements”.
For the landlords, it is said that the words “The Service Station”, where capitals are given to the words “Service” rid “Station”, are a definition which relates the service station to the particular superstructures which are upon the surface of the land at the time when the application of the clause comes to have to be considered: the time when the landlords would ,be entering, if they have a right to enter. For myself, I do not see any magic in the use of the capitals, in the use of the words “Service Station”, or anything particular in the form of the definition which helps here.
For the landlords, it is said that, to come within the clause, the word “improve ments” must be improvements to existing buildings and structures, not the creation of new ones; “additions” must be additions t6 existing buildings; “alterations” must be alterations to existing buildings. The clause does not, it is said, permit Esso to enter in order to carry out works which are, in effect, the demolition of all the existing struc tures above the surface of the land covered by the tenancy agreement and the replacement of those demolished buildings by other, fresh, buildings.
For the tenant, it is pointed out that, if and in so far as any help is to be gained by consideration of the extent to which the planned works involved demolition and new structures, the essential part of the petrol service station, as distinct from an ordinary shop or an ordinary factory, is the forecourt, with its petrol pumps and with its underground tanks and supply lines from tanks to pumps. The structures at the back of the forecourt may be important but are ancillary to the essential part of the pre mises for the retail petrol supply business, that is, the tanks, the lines and the pumps on the forecourt, where the customers’ cars come in and station themselves in order to draw petrol from the pumps. Those essential parts will not be materially changed. The tanks will remain, the lines from the tanks to the pumps may, at any rate in some degree, be capable of being retained. The pumps themselves will change in number and location. But essentially it is the same; there will not be a material change.
For myself, apart from any help which one may gain from the context of the vital words and from the agreement as a whole, I find it impossible to regard the planned works as not falling within the ordinary, commonsense meaning of “improvements to the Service Station”. I am glad to find what I regard as being complete confirmation of that view from the high authority of the judgment of Morton J in National Electric Theatres Ltd v. Hudge/1 [1939] 1 Ch 553. The headnote, in its holding no 1, at p. 554,says ”that the proposed works would be an improvement on the holding in any ordinary use of the word ‘improvement'”. The works in question there, which Morton J held were an improvement in the ordinary sense of the word, involved the demoli tion of what had been a theatre, and the building in its place of a row of buildings, which, when built, would be used for shops and offices. It is perfectly true that Morton J’s decision was a decision, not on the words of a particular covenant nor on the words of any section of Part II of the Landlord and Tenant Act 1954, but related to provisions of the Landlord and Tenant Act 1927. There were statutory provisions there which Morton J, in his judgment, referred to as supporting his view that the planned works (in that case works to be carried out by the tenant) were properly to be regarded as being improvements. But that does not in any way affect the fact that Morton J, without reference to the consideration of the particular statutory context, expressed the view, at the outset of his judgment, in these words:
It seems to me that these works – that is, the works I have briefly described- would bl 1n improvement on the holding in any ordinary use of the word “improvement”. When the workl have been carried out, the plaintiffs can say: “We have pulled down the cln1m1togr1ph theatre which was no longer of any use. We have substituted for thata row of 1hop1 with residential flats over them. The result is that the letting value of the holding has been greatly increased, both immediately and at the end of the term.” It would surely bea natural UH of
words if the plaintiffs went on to say: “We have carried out an improvement of our holdlng.”
In my opinion, on the true construction of this tenancy agreement, the landlord• were entitled, under the tenancy agreement, to carry out the contemplated workl. Hence, on the doctrine of Heath v. Drown, section 30(1)(f) of the 1954 Act Is not available to the landlords.
Leathwoods Ltd v Total Oil (GB) Ltd
LEATHWOODS LTD V. TOTAL OIL (GREAT BRITAIN) LTD
(1985) 51 P. & C.R. 20; [1985] 2 E.G.L.R. 237; (1984) 270 E.G. 1083
Mr Vivian Price QC: Mr Connell referred me to the remarkable coincidence of fact between the circumstances in the Price v. Esso case and the present case. In both there is the requirement to demolish and reconstruct. In both there is the increase in the number of petrol pumps. In both there is to be a different pump layout. In both the work will take about 16 weeks. In both it is necessary to close down the premises while the work is being carried out. In the light of all these coincidences, Mr Connell submits that the present application turns, so far as paragraph (f) is concerned, on the proper construction of clause 2.16(a) of the lease, which I have read, and he sub mits that on the proper construction of that paragraph it is clearly to allow Total to
enter and carry out all the necessary works.
To all of this Mr Porten, on behalf of Total, makes essentially a short and simple answer. He submits that what is intended by Total goes beyond their entitlement under clause 2.16(a) because in place of the old service station will be a petrol filling station with no facilities for the sale and repair of motor vehicles. Total will, so Mr Porten submits, need more than the physical occupation of the premises contem plated by clause 2.16{a). It will need legal possession. The user covenant by Leath woods contained in clause 2(10) provides:
That the premises shall not without Total’s consent … be used for any purpose other than that of a filling and service station [together with the sale and repair of motor vehicles]
Mr Porten points out that this covenant is not only restrictive but also permissive and it seems to me that he must be correct in that submission. If, after the works are carried out, Leathwoods would not be able to carry on its business in the sale and repair of motor vehicles because the facilities for so doing would no longer be available, then, if the lease is still in force, this circumstance would constitutea derogation from Total’s grant and a breach for which Leathwoods would be entitled to claim a remedy. It does not seem to me that the words of clause 2.16(a) provide any answer and in this respect I, of course, bear in mind the words of Lord Morton of Henryton in the National Electric Theatre case quoted in Megaw LJ’s judgment in the Price v. Esso case which I have just read. In my judgment, the circumstances in Price v. Esso were essentially different, while the teaching of Heath v. Drown and National Electric Theatre v. Hudge/1 provides no answer to the consequences that flow from the inclusion in the present le1;1.se of clause 2.10.
In my judgment, Total have estabfished their second pleaded objection based upon para (f) of section 30(1).
Redfeern V Reevers
REDFERN v. REEVES
(Court of Appeal)
(1979) 37 P. & C.R. 364; (1978) 247 E.G. 991
Lawton L.J.: Now, once it is accepted that the landlord could not, under the lease, go in to do the new works, the question has to be asked: what right had he to go in? He had a right given to him by the consent of the tenant. It follows that that brings into operation section 31A(1)(a) of the Act of 1954. The relevant parts of that section are these:
(1) Where the landlord opposes an application under section 24(1) of this Act on the ground specified in paragraph (f) of section 30(1) of this Act the court shall not hold that the landlord could not reasonably carry out the demolition, reconstruction or work of construction intended without obtaining possession of the holding if – (a) the tenant agrees to the inclusion in the terms of the new tenancy of terms giving the landlord access and other facilities for carrying out the work intended and, given that access and those facilities, the landlord could reason ably carry out the work without obtaining possession of the holding and without interfering to a substantial extent or for a substantial time with the use of the holding for the purposes of the business carried on by the tenant …
The first problem that arises is: what is meant by the words “the work intended”? Now, the “work intended” is the work that cannot be done by the landlord without obtaining possession of the holding, and, in the context of this case, this means the new work and not the work that is covered by clause 2(9) of the lease.
Mr Stewart-Smith’s submission is that these words, in the context of section 31A, mean the whole of the proposed works. I do not accept this view. The next problem is, however, “the’ work, that is to say, the new works: could this reasonably be done without obtaining possession of the holding and without interfering to a substantial extent or for a substantial time with the use of the holding for the purposes of the business carried on by the tenant?
The position, on the evidence, is not all that clear, but, having regard to the nature of the new works and what the defendant’s [sic] architect said about them, it seems to me that the deputy judge must have taken the view (although he did not say so in terms) that the new works would interfere to a substantial extent and for a substantial period of time over and above the extent to which and the period of time for which the works that were covered by clause 2(9) of the lease would do so.
Mr Stewart-Smith says that, if that is the right construction of the judgment, his client has established that he requires lawful possession within the meaning of section 30(1)(f) and that, therefore, he is entitled to resist the grant of a new tenancy. Mr Edwards, on the other hand, says that that is not so, for two reasons. One is that the whole object of section 31A is to safeguard the tenant’s business. If, there fore, on the facts it can be shown that the tenant’s business will be safeguarded notwithstanding having to give up occupation of the premises while the proposed work is being done, then she is entitled to the protection that is given to her by section 31A. Mr Edwards argued (and rightly argued) that section 31A was brought into the Act of 1954 in 1969 to give tenants further protection. He pointed out that, on the evidence that there was, the deputy judge found that, by transferring her business to nearby premises temporarily, the tenant would be able to safeguard her
business.
Mr Stewart-Smith, on the other hand, submitted that that did not come within the wording of section 31A(1)(a) at all, and the reason that he gave was this. The words are that, if the works are to be carried out, they must be carried out without interfer ing to a substantial extent or for a substantial time with the use of the holding.
Mr Stewart-Smith submitted that the court must look to the physical effects of the work and not to the consequence of it from a business point of view. He submitted that that must be so by reason of the words ”with the use of the holding”.
In my judgment, that submission is well-founded, and, as the deputy judge, by necessary implication, found that there would have been an interference toa sub stantial extent and for a substantial time with the use of the building- with the
holding- because of the new work, it follows that the tenant is not entitled to the protection given by section 31A(1)(a).
Cerex Jewels Ltd v Peachey Property Corp
CEREX JEWELS LTD v. PEACHEY PROPERTY CORPORATION PLC
(Court of Appeal)
(1986) 52 P. & C.R. 127; [1?86) 279 E.G. 971; [1986) 2 E.G.L.R. 65
Slade L.J.: However, in many cases, such as the present, though the landlord has reserved certain powers of entry by the current lease, such powers will be wide enough to empower him to effect part only of those works of demolition, reconstruc tion or work of construction which he intends to carry out on the termination of the current tenancy. In these circumstances, if and when the tenant invokes section 31A(1)(a), the court, in the light of the decision in Heath v. Drown, will be faced with the task of identifying (a) those works which the landlord can reasonably carry out by exercising the powers of entry conferred on him by the current lease (so that while the works may involve his going into temporary physical occupation of the premises, they will not involve his taking legal possession of them), and (b) those additional works which the landlord cannot reasonably carry out without obtaining legal posses sion of the premises.
Only those additional works falling within category (b) will constitute “the work in tended” for the purpose of applying section 31A(1)(a): see Redfern v. Reeves (1978) 37 P & CR 364 at p. 372, per Lawton LJ. In some cases, such as the present, the process of dividing the work which the landlord intends to do into the two relevant categories will be an awkward and difficult one. The process, however, has got to be gone through, since, if the tenant is successfully to invoke section 31A(1)(a), the court has to be satisfied that, given the inclusion in the new tenancy of terms affording the landlord access and other facilities for carrying out the additional works falling within category (b) above, the landlord could reasonably carry out those works ”without interfering to a substantial extent or for a substantial time with the use of the holding for the purpose of the business carried on by the tenant”.
The phrase just quoted itself gives rise to problems of construction which are of crucial importance in this present case. Answers to some, but not all of them, have been afforded by two decisions of this court in which section 31A has been con sidered, that is to say Redfern v. Reeves (supra) and Price v. Esso Petroleum Co. Ltd (1980) 255 EG 243. From these decisions at least the following principles can be derived:
First, the question whether the contemplated works in any given case can reason ably be carried out “without interfering to a substantial extent or for a substantial time with the use of the holding for the purposes of the business carried on by the tenant” is a question of fact and degree: see Price v. Esso Petroleum Co. Ltd (supra) at
p. 245, per Megaw LJ.
Second, in approaching that question, the court must look simply to the physical effects of the work on the use of the holding for the purposes of the business carried on by the tenant. It must consider whether the work will physically interfere with the use of the holding for the purposes of the business carried on by the tenant rather than any potential interference with the business itself or with the goodwill of the business: see Price v. Esso Petroleum Co. Ltd (supra) at p. 245 perMegaw LJ, who, with apparent reluctance, followed what had been said on this point in Redfern v. Reeves (supra) at p. 373 per Lawton LJ, at p. 374 per Geoffrey Lane LJ and at
p. 375 per Stephenson LJ.
Thus, third, it must assess the time and extent of the interference by reference only to the period during which the works are actually to be carried out, not by refer ence to the future of the business after the works would be completed: see Price v. Esso Petroleum Co Ltd (supra) at p. 245, per Megaw LJ.
However, none of the decisions cited to this court dealt with a further point on which the learned judge heard argument. In the context of section 31A(1)(a), are the two constituent parts of the phrase “to a substantial extent or for a substantial time” to be read conjunctively or disjunctively? The learned judge held that the word “or” in the particular context of this subsection is to be read conjunctively. This conclu sion has been challenged by the respondents in para 1(e) of their respondents’ notice, and it is convenient to deal with this point now. Mr Morgan, on their behalf, has submitted in effect that a tenant who agrees to the inclusion in the terms of his new tenancy of a term giving the landlord the appropriate facilities for carrying out the work intended will be deprived of the protection of section 31A(1)(a) if either the physical interference with the use of the holding, albeit insubstantial, would continue for a substantial time or such interference, albeit substantial, would continue for an insubstantial time. I cannot believe that such was the intention of the legislature.
I respectfully agree with the comment of Lord Kilbrandon in Heath v. Drown supra) at p. 516, that the inclusion in the new lease of a term which substantially and the emphasis is mine
for a substantial time interfered with the use of the holding by the tenant would be in appropriate, since that interference would have been inconsistent with the very security of tenure which it is the policy of the statutory code to promote.
The same observation, however, would not apply to the inclusion in a new lease of a term permitting the carrying out of work which, though necessitating the com plete exclusion of the tenant from the premises while it was being done (ie interfering to a “substantial extent”) would only last (say) a couple of days (ie not ”for a sub stantial period of time”). To deprive the tenant of the protection of section 31A(1)(a) in such circumstances surely could not have been Parliament’s intention. If it bore this construction, the protection which the subsection gave him would have been little more than minimal.
There is ample authority for the proposition that the word “or”, when appearing in a statute, is capable of being read conjunctively in an appropriate context (see, for example, R v. Federal Steam Navigation Co Ltd [1974] 1 WLR 505 and the cases there cited). I agree with the learned judge that the word “or” in the particular context of section 31A(1)(a) should be read conjunctively, because to read it disjunctively would lead to a capricious and absurd result,which Parliament cannot have intended. I agree with his observation that the general•purpose of the draftsman was to enable the tenant to invoke section 31A(1)(a) if, though only if, the landlord could reasonably carry out that relevant new work for which he has to obtain legal possession of the holding without substantial interference with the use of the holding for purposes of the business carried on by the tenant, having regard to the extent and length of time of such interference.
I would, however, add this comment. The phrase “to a substantial extent or for a substantial time” is one of somewhat unce’rtain import. The court, when applying it, should, in my opinion, regard the two limbs of the phrase as closely interrelated. In other words, the probable duration of interference should not be disregarded in considering whether it will be “to a substantial extent” and the probable extent of the interference should not be disregarded in considering whether the duration will be “for a substantial time”. The phrase should be read and applied as a whole, and in the course of its application, as I have already said, must involve questions of fact and degree.
Gregson v Cyril Lord Limited
GREGSON V. CYRIL LORD LTD
(Court of Appeal)
[1963] 1 W.L.R. 41; [1963] 2 All E.R. 907
Upjohn L.J. (read by Diplock L.J.): The question whether the landlords Intend to occupy the premises is primarily one of fact, but the authorities establish that to prove such intention, the landlords must prove two things. First,a genuine bona tldt intention on the part of the landlords that they intend to occupy the premises for his own purposes. So far as this head is concerned, it is not in dispute that the landlords are genuinely intending to occupy the premises for their own purposes. The land lords already occupy 70 per cent. to 80 per cent. of the whole building and obviously, on the evidence, genuinely require to occupy this extra half floor to house some of their senior executives and their staff. Secondly, the landlords must prove that in point of possibility they have a reasonable prospect of being able to bring about this occupation by their own act of volition. This is established by Asquith L.J.’s well known observations in Cunliffe v. Goodman, where he said:
An “intention” to my mind connotes a state of affairs which the party “intending” – I will call him X – does more than merely contemplate: it connotes a state of affairs which, on the contrary, he decides, so far as in him lies, to bring about, and which, in point of possibility, he has a reasonable prospect of being able to bring about by his own act of volition.
Now it being established and, indeed, admitted, that there is a genuine intention on the part of the respondents to occupy the premises for their own offices, the whole question that the county court judge had to determine was whether or not the re spondents established a reasonable prospect of being able to bring about their occu pation of the premises by their own act of volition. In this case no question arises as to difficulties of finance or anything of that sort, and the sole point that is made against the landlords is that they hav not established a reasonable prospect of being able to obtain possession because they have not obtained planning permission and, furthermore, have not established a reasonable probability of obtaining planning permission; therefore, they fail to establish the requisite intention for the purposes of section 30(1)(g).,Upon this question the county court judge had before him the evidence of an expert for the landlords, who called their evidence first, the onus admittedly being upon them, an experienced surveyor, who testified that in his view, first, that planning permission would not be required in all the peculiar circumstances of this case; secondly, if, contrary to his view, planning permission was necessary, there was a reasonable prospect that it would be obtained. This witness was perfectly candid and, of course, took into account the fact that the tenants’ suite of rooms on the third floor in question was not an isolated hereditament but that the landlords were already in occupation for their office purposes of some thing over 70 per cent. of the house and they merely required this extra accommo dation for the same purpose.
For the applicants, the tenants, a chartered surveyor was called. He testified to the view that the proposed change in occupation from that of medical practitioners to office use, which was not ancillary to use by the landlords of the whole building, would be a material change of use, for it involved a change from Class XV to Class II of the Town and Country Planning (Use Classes) Order, 1950. He said he would advise the landlords that planning permission was necessary, and he expressed the view that the prospects were that planning permission would not be obtained.
Mr Ross-Munro, for the landlords, argued before us with great persuasiveness that the sole question was whether the landlords had a bona fide intention to occupy and if it could be established that a reputable firm, such as that to which the surveyor who gave evidence on behalf of the landlords belongs, advised them that planning permission was not required or that, if it was, it could probably be obtained and that they accepted that advice (as I am sure they did), that was an end of the matter, for such evidence alone established a genuine intention, for the purposes of the Act, to occupy the premises.
For my part, I am not able to accept this argument. It seems to me that the test under the second heading mentioned at the beginning of this judgment is not sub jective, that is to say, purely a matter of the state of mind of the respondents, no doubt acting on the bona fide advice of their experts. In my judgment it is essentially an objective test, that is to say, would a reasonable man, on the evidence before him, believe that he had a reasonable prospect of being able to bring about his occupation by his own act of volition? This, of course, is a question of fact to be determined on all the evidence that is before the court.
The county court judge, in his judgment, rightly eschewed the idea that he should
endeavour to sit in the seat of judgment as though he was either the planning author ity deciding whether to give permission or not, or, on the other hand, the Minister of Housing who might be asked to rule under section 17 of the Town and Country Planning Act, 1947, whether planning permission was required, or, secondly, who might on appeal have to decide whether the planning authority was correct in its decision. For my part I entirely assent to the county court judge’s view upon this matter. The Court of Appeal pointed out in a recent case, Simpsons Motor Sales (London) Ltd v. Hendon Corporation, though dealing with a different subject-matter, that it is quite impossible for a court to decide what a planning authority or the Min ister would decide, for the court has not before it the materials, such as, for example, the advice or reports of inspectors who have held inquiries and inspected the locus in quo, nor the expert knowledge nor knowledge of the general or local background or the relevant national or local policies, all of which matters properly affect the deci sion of the planning authority or of the Minister, as the case may be. I, therefore, so far, agree entirely with the county court judge. The test to my mind is entirely differ ent. It is an objective test upon the evidence before the court: have the landlords established, not what the planning authority or the Minister would determine, but the different and practical question: would the reasonable man think he hada reason able prospect of giving effect to his intention to occupy? On the facts of this case, and subject to one further point mentioned below, this amounts to an inquiry whether the landlords on the evidence have established a reasonable prospect either that planning permission is not required or, if it is, that they would obtain it. This does not necessitate the determination by the court of any of the questions which may one day be submitted to the planning authority or to the Minister; it is the practical ap praisal upon the evidence before the court as to whether the landlords, upon whom, let me stress, the onus lies, have established a reasonable prospect of success. In many cases, no doubt, proof of this may be so doubtful that the wise landlord will
buttress his case by previously testing the matter in the sense that he will have obtaineda decision of the Minister whether planning permission is necessary, and if that decision is against him, he will have then applied for and obtained planning permission and so put an end to the question.
For my part, however,I reject the argument of counsel for the tenants that this is the necessary and proper course in all cases. Each case must depend on its own facts, anda landlord is perfectly entitled to come before the court and endeavour to establish by his own evidence that on the balance of probabilities planning permision is not necessary or that if it is, he will probably obtain it.
Westminister City Council v British Waterways Board
WESTMINSTER CITY COUNCIL V. BRITISH WATERWAYS BOARD
(House of Lords)
[1985] A.C. 676; [1984] 3 W.L.R. 1047; [1984] 3 All E.R. 737; 49 P.& C.R. 117;
(1984) 272 E.G. 1279
·’
Lord Bridge of Harwich: In these circumstances the test to be applied by the court trying the issue raised by the landlord’s opposition to the grant of a new tenancy is not in doubt. As it was put in the judgment of Upjohn L.J., read and agreed to by Diplock L.J., in Gregson v. Cyril Lord Ltd[1,963] 1 W.L.R. 41, 48:
It is an objective test upon the evidence before the court: have the landlords established, not what the planning authority or the Minister would determine, but the different and practical question: would the reasonable man think he had a reasonable prospect of giving effect to his intention to occupy? On the facts of this case … this amounts to an inquiry whether the landlords on the evidence have established a reasonable prospect either that planning permission is not required or, if it is, that they would obtain it. This does not neces sitate the determination by the court of any of the questions which may one day be sub mitted to the planning authority or to the Minister; it is the practical appraisal upon the evidence before the court as to whether the landlords, upon whom, let me stress, the onus lies, have established a reasonable prospect of success.
My Lords, I believe this test has been consistently applied ever since and it is, if I may respectfully say so, clearly right. The essence of the argument for the appel lants, which was accepted by Walton J. but rejected by the Court of Appeal, may be summarised in the following propositions: (1) the established existing use of the premises is as a street cleansing depot; (2) the desirability of preserving an existing use of land may by itself afford a valid planning reason for refusing permission for a change of use; (3) there is no suitable alternative site for use as a street cleansing depot, which serves a vital public purpose; (4) therefore it is desirable to preserve the existing use of the premises; (5) these considerations afford a sufficiently weighty planning objection to the respondents’ proposal to change the use of the premises to prevent them discharging the onus of proving a reasonable prospect of success In obtaining the planning permission necessary to the implementation of their inten tion to use the premises for their own business purposes.
For my part, I find it difficult to see how this argument can be sustained at all, once It Is appreciated that the respondents’ prospects of success in a notional planning appeal must be considered on the assumption that they, not the appellants, are in po11eeslon. The appellants have given no indication of an intention to exercise any power they possess to acquire the premises compulsorily for a necessary publicpurpose. As it seems to me, the preservation of an existing use (which is temporarily suspended) cannot afford a ground to refuse permission for an otherwise acceptable change of use, unless it can be shown that the refusal may reasonably be expected to lead toa resumption of the suspended use. This raises questions as to the true scope, for planning purposes, of the established existing use of the premises to which
I must shortly revert.
First, however, I should advert to the second of the five propositions, as I have
summarised them above, on which the appellants rely. This isa proposition of law whichI fully acc:ept. It is supported by the decision of the Court of Appeal in Clyde& Co. v. Secretary of State for the Environment [1977] 1 W.L.R. 926. In that case it was held that the desirability of preserving for residential use, in an area suffering froma shortage of residential accommodation, part of a new block of flats, hitherto unoccu pied, wasa valid ground for refusing permission for a change of use to offices. The correctness of the decision is, in my respectful opinion, beyond argument. Counsel for the appellants in the instant case much relied on a passage from the judgment of
Sir David Cairns where he said, at p. 936:
The fact that the refusal of planning permission for a change of use cannot ensure thata current use which isa permitted use will continue was as already indicated the ground of the refusal of planning permission in the case of the Dartford cinema. It is equally true that whereas in the present case the permitted use has not been started, the refusal of an appli cation to change of use cannot ensure that permitted use will ever be started. This wasa point strongly relied on.I do not find it a compelling argument. The need for housing is cer tainlya planning consideration. If permission is given for office use, the permission will almost certainly be implemented and the buildings will be unavailable for housing. If permis sion for office use is refused, there is at least a fair chance that the building will be used for
housing rather than being allowed to stand empty.
I respectfully agree with this passage in substance, thoughI do not accept every nuance of its language as expressing the law with perfect accuracy. The refusal of planning permission for office use of part of an unoccupied block of purpose-built flats in an area suffering a shortage of residential accommodation must,I should have thought, asa matter of overwhelming probability, lead to the consequence that the accommodation would in due course be put to use for its designed residential purpose. Thus, in the concluding sentence of the passage quoted, the phrase “at least a fair chance”, on which counsel in this appeal particularly relies, suggests, in my respectful opinion, an unduly and, on the facts, unnecessarily lax criterion. Ina con test between the planning merits of two competing uses, to justify refusal of per mission for useB on the sole ground that use A ought to be preserved, it must, in my view, be necessary at least to show a balance of probability that, if permission is refused for use 8, the land in dispute will be effectively put to use A. But, this apart, Clyde’s case [1977]1 W .LR. 926, was concerned with a contest between two of the broadest classes of use, residential use versus office use. It is so far removed from the character of the present dispute that I doubt whether we can derive much assist-
ancTeo fdroemterimt. ine the scope, for planning purposes, of an existing use of land estab- lished by de facto user for a sufficient period to put it beyond the reach of enforce ment procedures (as opposed to a use commenced pursuant to an express grant of planning permission), it is necessary to answer two questions which are primarily questions of fact. First, what is the precise character of the established use? Sec ondly, what is the range of uses sufficiently similar in character to the established use to be capable of replacing the established use without involvinga material change? Behind this second question lies a potential question of law in that there may be some uses of sucha character that a reasonable tribunal of fact, directing itself cor rectly in law, must necessarily conclude that they lie within that range, or beyond it, as the case may be.
The evidence bearing upon the issue of the scope of the appellants’ use of the premises was again given by their area planning officer, in his affidavit, immediately following the passage I have quoted earlier. He added:
But I submit the (appellants] may use the premises for any of their departments provided the existing use is not materially changed. In planning terms, the identity of the occupier who carries on such use is irrelevant. Accordingly the expression ”local government depor’ is not intended to imply that there is any relevance in the fact that the occupier is a local authority. It is the activities which it carries on at the depot which are relevant and it is merely a matter of convenience and brevity that these can be described as “use as local government depot”.
In this passage I have italicised the words which seem to me of importance. Even though the witness may have strayed from his proper province of fact into an area of law, what he said was clearly correct. So long as the mixture of uses on the premises, which the judge held to be the relevant planning unit, remain substantially un changed, there would be no material change of use. Those uses, as already indicated, included workshops, offices, stores, messing facilities and parking for a variety of vehicles both under cover and in the open. This is just such a mixture of uses as would be required by a wide variety of undertakings whose business was the opera tion of some kind of vehicular transport and who required a base from which to operate.
.Whether, in any particular case, tlile proposed use of the premises by such an under taking would involve a material ch!:l.nge of use would depend on the detailed nature of the proposal. But it would be of no relevance to the use of the premises to inquire for what purpose the vehicles parked there were to be used when they left their base. It seems to me to follow from this that the appellants cannot sustain the first proposition on which their contentions ess’entially depend, viz. that the established use of the premises is properly defined, in planning terms, as use as a street cleansing depot. Walton J., in discussing the q4estion (now no longer in issue) as to whether plan ning permission was required for the respondents’ proposed use of the premises, ex pressed himself in terms which disclosed a misapprehension on this point. He said:
In the existing state of affairs, those uses [sc. the various uses presently being made of the premises by the appellants] are ancillary to the cleansing of the highways in the City of Westminster, and the maintenance of the highways in that city.
The concept of a single planning unit used for one main purpose to which other uses carried on within the unit are ancillary is a familiar one in planning law. But is it a mis application of this concept to treat the use or uses of a single planning unit as ancillary to activities carried on outside the unit altogether.
These considerations lead to the conclusion that, whatever be the correct descrip tion of the established existing use of the premises in planning terms, use as a street cleansing depot is only one of a substantial range of uses which could properly be carried on without involving a material change of use. It follows that in the notional planning appeal which your Lordships must contemplate the respondents have established, by the test laid down in Gregson v. Cyril Lord Ltd [1963] 1 W.L.R. 41, 48, at least a reasonable prospect of success for two substantial reasons. The first is that the objection to the respondents’ proposed use of the premises, in itself a perfectly acceptable use, is not based on the desirability of preserving the existing planning use of the premises, which would be a legitimate planning ground of objec tion, but on the desirability of protecting the occupation of the present occupier, which is not a legitimate planning ground of objection. The second is that, on the assumption that the respondents were in possession of the premises, refusal of planning permission for their proposed use would leave the premises available for a range of uses not requiring planning permission, and there is no evidence to estab lish the probability that, in these circumstances, the appellants would be able to resume possession of the premises for use as a street cleansing depot.
Accordingly, I propose that the appeal be dismissed with costs.
Chez Gerard Ltd v Greene Ltd
CHEZ GERARD LTD V. GREENE LTD
(Court of Appeal) (1983) 268 E.G. 575
Sir John Arnold P.: That it is necessary for a fixed intention to be shown in order thata landlord may bring himself into a situation in which he can justly claim an intention to occupy premises himself so as successfully to resist what would other wise be the right toa new tenancy is amply established by authority. I take as the leading authority on this, because it recites the relevant part of the early authority, Betty’s Cates Ltd v. Phillips Furnishing Stores Ltd [1959] AC 20, where in the leading speech Lord Simonds deals with the matter thus. He says at the bottom of p. 33: “My Lords, asa preliminary to determining the date”, which was the point in that case, “when the requisite intention must be proved to have been formed, there was much discussion upon the meaning of the word ‘intends’ in section 30(1)(f)”. I should interpolate at this point that there is ample authority not in contest in this appeal that the intention under section 30(1)(f) and the intention under section 30(1)(g) require
a common fixity of purpose.
He goes on:
It might be regarded as somewhat academic in this case: for it is conceded that, whatever the meaning of the word, an intention had not been formed at the date of notice of opposition but had been formed on April 23 1956 which was the hearing date.
But the question has this degree of relevance, that the greater the fixity of intention and the less the mental reservation, the greater the difficulty in supposing that the landlord Is to form that intention within two months of receiving the tenant’s request or for ever hold his peace that being of course the period within which the counternotice of the landlord must be lodged.
In this context your lordships have the advantage of a judgment delivered by Lord Asquith
(then Asquith LJ), than whom there have been few greater masters of the Engllah language in judicial interpretation or exposition, in Cunliffe v. Goodman [1950]2 KB 237.I will content myself witha single short passage, though much more might be usefully cited: ‘An “Inten tion”‘, said the learned lord justice, ‘to my mind connotesa state of affairs which the party “intending” … does more than merely contemplate; it connotesa state of affairs which, on
the contrary, he decides, so far as in him lies, to bring about, and which, In point of possi bility, he hasa reasonable prospect of being able to bring about, by hla own act of volition.’ I do not think that anything is to be gained by trying to elaborate these words, but I must fairly add thatI do not at all dissent from the explanation of them which the learned Master
of the Rolls has given in this case.
That wasa reference to an exposition on this topic of Lord Evershed, which is reported in [1957] Ch7 but is not relied upon in the present appeal as differing from the conclusions of Asquith LJ, and it is not necessary therefore, I think, to cite it.
…..
Generally dealing with any other matter which might arise in connection with the resolutions to opena restaurant on the premises and the legal involvement so required.
ft is not questioned on this appeal that that resolution was duly passed. It is not questioned on this appeal that that resolution embodied within it the honest intention of the company. But what is said is that too much was left uncertain and too little had been done to ensure that it is demonstrated that, to quote again the language of Asquith LJ, they hada reasonable prospect of being able to bring that intention about. The learned judge cited in that context that the freehold was unencumbered, that there was money available in the bank, no planning permission would be needed, the restaurateur with whom they had negotiated had got to the point ofa full draft agreement, which, as the learned judge said, the restaurateur was willing to sign subject to approval by his solicitor of the form in which it was set forth, and the gen ienrtaol pwoidliecry foiefltdhse. company to diversify from, broadly speaking,a shipping connection
Those were the other aspects, to which he adds: “Mr Kolstoe”, who was the duly authorised plenipotentiary for the respondents, “has offered to give an undertaking on behalf of his company that the company would enter into and run the business”. He weighs all those factors, or perhaps – and I shall come to this in a moment – all those factors less the one concerning the undertaking, against the factors on the other side: that the resolution was dated as recently as March 6, that is to say three weeks before the hearing, that the company’s inquiries and investigations had been carried out in an unbusinesslike way, that the costings of Mr Betti, the restaurateur, were vague and that Mr Betti had put nothing in writing to back those up. He came to the conclusion that the positive factors outweighed the negative factors and th& requisite fixity of intention was shown and that there was a reasonable prospect that the intention would be carried out.
For my part, I should be disposed to think that even without the factor of the
undertaking those matters had been effectively demonstrated. The recent date of the resolution might of course have been the subject matter of an investigation designed to negative its good faith. It might have been suggested that it would be credulous to regard a piece of evidence so ben trovato in relation to the date of the hearing as being reliably undertaken in good faith. No suggestion of that sort is made. Once that aspect is to be ignored, as it must be, then there is no more than the date, and it is fair to say that the date was a better date from the point of view of the landlords than the date in the Betty’s Cates case. It does not seem to me that the recent date by itself is a potent factor.
I do not think it is right to say that the company’s inquiries and investigations had
been carried out in an unbusinesslike way. What had they done? They had shown the proposition to their expert, Mr Betti, who was more than an expert; he was a would-be participant. He had expressed from a lifetime of experience the view that the restaurant was a “go”, that it would generate a substantial, although exactly how substantial he could not at that stage say, trading profit, which, after deducting his own take, would be likely to leave what the company was fully entitled to regard as a sufficient surplus before one comes to net profit to take account of other non trading profit deductions. The costing of Mr Betti was certainly vague, in the sense that he put the trading profit at the worst at £8,000 or so and at best at about
£15,000. But it does not seem to me that it was demonstrated that that was too vague, having regard to the stage at which the project had got, to be a reliable factor in coming to the conclusion that the prospects of the intention being put into effect were perfectly feasible. As to the proposition that Mr Betti had put nothing in writing to back these up, that really seems to me to be a matter of choice. The conclusions which Mr Betti had reached, whether orally as he remembered or partly orally and partly in writing as Mr Kolstoe remembered, were in the judge’s judgment perfectly clear conclusions, and the form in which they were enshrined seems to me to be quite inessential. So, even without the factor of the undertaking, I would think that the learned judge must have come to the conclusion in this case that the fixed intention and the necessary prospect of success in carrying it out were established.
But there was in addition the factor of the undertaking. An undertaking in these cases is a perfectly permissible element to consider along with the other factors in relation to whether a fixed intention has been made out. It is put thus by Harman J (as he then was) when deciding at first instance the case of Espresso Coffee Machine Co. Ltd v. Guardian Assurance Co. Ltd, reported in the Court of Appeal [1959] 1 All ER 458, where in the course of the judgment of Lord Evershed MR, at p. 462 the learned trial judge is quoted thus:
If these landlords give an undertaking, there is no question but that they have the power to honour it, and I think that there is no doubt that they will honour it. They are not the 1011 of company whose undertakings in a suitable case the court would hesitate to accept. It is suggested that they could not carry out the undertaking. Therefore, as counsel at the Bar today is still authorised to make this offer to me and to the tenants, I must take the offer at its face value. If that is the case, I do not see how I can any longer doubt that the intention today exists. Whether by the end of the year it will exist any longer, I do not know. The tenants may so harass the landlords that they will change their mind …
That plainly shows that the way that the learned judge was using the offer of an undertaking was an element in the evidence, and that it was a legitimate use of it is demonstrated by the fact that the appeal against the learned judge’s conclusion did not succeed.
In the present case, having listed under numbered heads what the learned judge calls a number of aspects to show in the case of the respondents that it had moved from the tentative to the settled and under numbered heads a number of matters to which counsel for the appellants (applicants) referred, he then (unnumbered) offers this paragraph:
Mr Kolstoe has offered to give an undertaking on behalf of his company that the company would enter into and run the business. In my judgment, weighing up all the factors, Greene Ltd has moved from the tentative to the settled and I find it has a settled intention to run a restaurant there, and then he refers to some of the particular features.
Had the matter stopped there, there really could not have been any construction available for that judgment, save on.e which indicated that he had taken the num bered factors on the one side into account, the numbered factors on the other side into account and the offer of an undertaking all as relevant evidential factors from which he had derived his judgment. But having finished with the balancing exercise, he then went on thus:
In order to ensure justice I find in favour of the landlords only if an appropriate undertaking is given by Mr Kolstoe and Mr Ashton. It is essential for the protection of the tenant that this should be
and by that he means that his decision should be
only on the undertaking that has been proferred.
The presence of that paragraph at that stage gives rise to three possible construc tions. One is that all the way through – in the first paragraph to which I have referred and in that last paragraph – what he is really saying is: “This is one of the matters which I have taken into account for its evidential value in reaching my conclusion as to a settled intention.” The second is that the first paragraph to which I have referred is to be treated thus in an analysis of the judgment, while the last paragraph is using the same factor again to demonstrate that added justice and protection is afforded by the circumstance that the landlords are placed in a degree of peril which the giving of an undertaking necessarily imports. The third is that it is the latter only which is the niche which should be afforded to both references to the undertaking in that part of the judgment.
For my part, I favour the first of those interpretations. In the first place that would be in accordance with the law, and it does not seem to me to be necessarily the consequence of the circumstance that such cases as Espresso Coffee Machine Co. Ltd v. Guardian Assurance Co. Ltd were not mentioned in the judgment or, for that matter, cited at the hearing that the learned judge was unaware of the law on the subject. Secondly, it is desirable to give consistency to the different parts of the judg ment if one can, and it does not seem to me to be extravagant to construe the words “in order to ensure justice” as indicating an intention on the part of the learned judge to show that finding in favour of the landlords if an appropriate undertaking is given is a way of making sure that his judgment on that point is correct and if it is correct that ensures justice to the defeated party. Comparably, the second sentence of that paragraph, “It is essential for the protection of the tenant …” can be regarded asa view that it is the protection of the tenant against a possibly unjust decision which is being afforded by the learned judge on the giving of the undertaking, without which its evidential value would be diminished. If that is right then there is nothing in that part of the judgment to affect its validity. But even if that is wrong and it is the second of the suggested interpretations which is right, all that it means is that that last paragraph isa piece of unwarranted surplusage, indicating, if one will, an imperfect understanding of the law, but not detracting from the correct evaluation and use of the ottering of the undertaking at the earlier stage. It is only if the third interpretation is right that this would carry the judgment down, or might carry the judgment down.
For my part, I reject that interpretation.
Hunt v Decca Navigator Co Ltd
HUNT v. DECCA NAVIGATOR CO. LTD
(1972) 222 E.G. 625
Plowman J.: The defendants opposed the plaintiff’s application tora new lease under the Landlord and Tenant Act 1954, on the ground in section 30(1)(g) of the Act. They said that they required the site for the purposes ofa business carried on by them, which in this case was a car-park for employees and visitors to companies in the Decca group, whose premises adjoined the site. The Decca group had between 80 and 90 subsidiaries, the radar, record and navigator companies being among them. The only issue was whether section 30(1)(g) applied. The plaintiff said first that assuming the defendants intended to occupy the site, nevertheless they did not intend to do so for the purposes of their business “to be carried on by them therein”. He conceded that “therein” included “thereon”, but submitted that the proposed car-park was auxiliary to a business which was not carried on ”therein”, or ”thereon”, but elsewhere. The court was unable to accept that submission. The business in question need not be independent – the storage or the holding of equipment manufactured elsewhere would fall within paragraph (g), for example. Any large business concern was expected as part of its general business operation to provide reasonable facilities for its employees. A staff canteen or other building for staff would come within paragraph (g), and there was no reason why that should not be equally true ofa staff car-park. That was not using a car-park fora business carried on elsewhere, but using a car-park for a business carried on on the site and elsewhere as well. On the evidence, there was at present space for 225 cars, but no doubt that would more than double with the number of persons employed.
JW Thornton v Blacks Leisure Group
(1986) 279 EG 588
Slade LJ
I have said on the first ground of appeal, that the landlords have shown an intention to occupy the property comprised in the tenancy. Under the revised scheme they will be occupying, for the purposes of their business, the entirety of the premises now comprised in the tenants’ demise, the only difference being that the partition walls now separating the tenants’ property from the rest of the ground-floor property will have been demolished. These partition walls, as I understand the position, are non-loadbearing. I would have no doubt, in the absence of authority compelling a contrary conclusion, that the landlords have shown an intention to occupy “the holding” within the requisite sense.
However, the decision of this court in Nursey’s case, to which I have already referred,
presents certain problems.
Wynn-Parry J gave the leading judgment. Though the ratio of his judgment is not entirely clear to me, it would appear to have been embodied in the following passage (at p. 277):
It seems to me that that language
that is, the language of paragraph (g)
circumscribes the use of the phrase “the holding” in that paragraph, and makes it necessary to concentrate the whole of one’s attention on the particular piece of land, whether it has buildings on it or not, which is the subject-matter of the tenancy in question. So viewed, it appears to me that the contention for the landlords in the present case is too wide, and that when one is looking at the material time at “the holding” under paragraph (g), it is not permissible to take into account the wider scheme which the landlords had in mind, and merely to treat the land comprised in the holding as land which, in one way or another, will be used for the purpose of the wider undertaking. In my view, for those reasons this case could only come within paragraph (f), but, unfortunately, there is no right of amendment and the matter had to go forward on the basis of the notice, and in
the events which have happened, the landlords do not bring themselves within paragraph (g).
Willmer LJ decided the case in favour of the tenants on very different grounds. He said, at p. 278:
The only ground put forward in the notice which they served was the ground that: “on the termination of the current tenancy we intend to occupy the premises for the purposes, or partly for the purposes, of a business to be carried on by us therein”.
Willmer LJ continued:
The words there used follow approximately, although not exactly, the wording used in paragraph
(g) of the same subsection of the Act. It was contended on behalf of the landlords, and was held by the judge, that in addition to proving a case, as they admittedly had, under paragraph (f), they had, in the circumstances, also proved a case under paragraph (g), in the sense that they proved an intention, prevailing at the time of the hearing, to occupy the holding for the purposes of a bu11nnl to be carried on by them therein. It seems to me, however, that so to hold does violence to tht wording of the paragraph. I have said that the words used in the landlords’ notice do not t11actly correspond to the words used in paragraph (g)
and then he quoted the words in the paragraph and continued:
The important word for the purposes of the present case is the word “holding”, and that is defined by section 23(3) of the Act of 1954 as mean_mg “the property comprised in the tenancy”.
It appears to me, therefore, that in applymg paragraph (g) of section 30(1), one must look at the
particular holding comprised in the particular tenancy which is before the court in the particular case. Here the building is described in the tenancy agreement as
and then Willmer LJ quoted the description in the parcels and continued:
In relation to this case, therefore, paragraph (g) must be construed as though, instead of the word p”haoraldgirnagp”h,. those words, which I have read from the tenancy agreement, were set out in the
The question to be determined, then, is whether the landlords proved that on the termination of the current tenancy they intended to occupy “the buildings forming part of the premises known as No 248, Broadway, Bexley Heath in the County of Kent and, comprising the drivers’ room, can store, pump and the spirit store” for the purposes, or partly for the purposes, ofa business to be carried on
by them therein. To that there can be only one answer. The only intention proved was an intention to demolish and reconstruct.
It will thus be seen that Willmer LJ was deciding the case on a much narrower ground than that on which Wynn-Parry J appears to have decided it.
The third member of the court, odson LJ, simply said that he agreed. He therefore daepcpideeanrdsi.to have agreed with bo•th Judgments, even though they had different rationes
Not surprisingl-y and this has·teen the foundation of her argument in this contex-t Miss Swindells has relied strongly on yVynn-Parry J’s judgment in Nurse-y’s case. On reliance on it she has submitted that since, on the pr sent facts, the lan l_ords, if and when they obtain possession of the premises, will be knockmg down the partition between the demised pre mises and the adjoining premises an w_ill be_coalescing them into their own premises, the
former holding will entirely have lost its identity and the landlords cannot bring themselves within para {g).
The decision in Nurse-y has had what can fairly be described as a chequered subsequent history. In the case of Method Developments Ltd v. Jones [1971] 1 WLR 168, Salmon LJ, at
p. 172, said this about it:
The basis of the decision seems to me to be that, if you are going to demolish buildings which stand on the demised premises, the buildings being part of the holding, you are not, therefore, intending
to occupy the holding.I have som doubt ab ut the correctness of the decision, particularly having regard to an unreported case in this court which preceded 11.
The Nurse-y decision was also strongly criticised by this court in Cam Gears Ltd v. Cunningham [1981]1 WLR 1011. Oliver LJ, in giving the leading judgment, quoted at p. 1014 the passage from Wynn-Parry J’s judgment which I have already quoted, and said this:
I cannot think that the judge can have intended to do more than to answer the question, which is: is the holding which the landlord intends t oc upy e same holding as that comprised in the tenancy? Construed in the wide sense that I have indicated, It would follow that a landlord who carried ona business next door to the demised premises and who wanted to occupy those premises as one with
his existing shop for an expanding b sines , would be able torely upon section 30(1)(g) … For my part,I cannot ascribe so eccentric an intention to the legislature.
I pause to say that of course those observations if correct are entirely apt to cover the present case and that they support the landlords’ contentions.
Templeman LJ, in referring to the Nurse-y decision, said this:
We were pressed by the decision of this court in Nursey v. P Currie (Dartford) Ltd … of whichI make
the melancholy observation that two bad reasons do not make one good reason, although both may be binding on this court.
He then proceeded to distinguish the case on its facts from that which was before him. More recently still, the Nursey decision was referred to by this court in Leathwoods Ltd v.
Total Oil Great Britain Ltd (1985) 51 P & <;=R 20. In that case, once again the Court of Appeal doubted the correctness of the decision Nurse-y, and distinguished it. Oliver LJ, at p. 33, described it asa decision which was confmed very much to the peculiar facts of that case,
and he continued:
… it wasa case in which the only thing t!’at was left of the premises was the buildings without any of the surrounding land, simply witha nght of access to those buildings between particular hours, and it seems to me that the highest that it can be put is that at least that case may be applicable in any other case where one is concerned simply with premises which consists of nothing but a building.
On that state of the authorities my approach to this problem is a fairly simple one. First, I respectfully agree with the observation of Salmon LJ in the Method case that the basis of the Nurse-y decision is that if you are going to demolish buildings which stand on the demised premises, the building being part of the holding, you are not therefore intending to occupy the holding. Though of course the Nurse-y decision is binding on us, it seems to me that we should not regard the ratio of that case as going further than that. This, I think, was the view of the learned judge himself, who distinguished the Nurse-y case, rightly in my view, on the grounds that in that case “… the whole of the former building was to be demolished and was to be reconstructed”. In a case where there is to be total demolition of the building in question, one can see that it is at least very much easier for the tenant to argue that the landlord does not intend to occupy “the holding” within the meaning of the Act.
If, however, contrary to my view, it were not permissible to distinguish the Nurse-y decision on that narrow ground, I think that we in this court must at least be at liberty to choose between the two divergent ratios of Willmer LJ and Wynn-Parry J which, as Oliver LJ pointed out in the Leathwoods case (at p. 31), are entirely different from one another. I confess that neither of the two tests adumbrated by those learned judges, with the greatest respect to them, seems to me entirely satisfactory. But if we are bound to choose, I for my
part would have no hesitation in preferring the course set for us by Willmer LJ.
I therefore proceed to apply his test to the facts of the present case. In applying section 30(l){g), I look at the particular holding comprised in the particular tenancy which is now before the court. The subject-matter of the holding is described in the lease as being:
All that ground floor shop and premises being part of the Lessors’ building known as Bradburn House Northumberland Street in the said City and County of Newcastle upon Tyne and known as Number 68 Northumberland Street aforesaid …
In relation to this case, therefore, para (g), according to Willmer LJ’s test, must be construed as though, instead of the word “holding”, these words from the lease were set out in para (g). The question to be determined, then, according to this test, is whether the landlords have proved that on the termination of the current tenancy they intended to occupy the ground-floor shop and premises, being part of this building, for the purposes, or partly for the purposes, of a business to be carried on by them therein. It seems to me that, just as there was only one answer to this question in the Nursey case, so there is only one answer on the facts of the present case. The landlords have proved that they intend to occupy these premises for the purpose of their business. It would seem to me quite unrealistic to suggest that they did not intend to do so simply because the partition walls of the demised premises will no longer be present when they resume possession of the property and have carried out the work which they intend to carry out.
O’May v City of London Real Property Co Limited
O’MAY V. CITY OF LONDON REAL PROPERTY CO. LTD
(House of Lords)
[1983]2 A.C. 726; [1982] 2 W.L.R. 407; [1982] 1 All E.R. 660; 43 P.& C.R. 351;
(1982) 261 E.G. 1185
Lord Hailsham of St Marylebone L.C.: A certain amount of discussion took place in argument as to the meaning of “having regard to” in section 35. Despite the fact that the phrase has only just been used by the draftsman of section 34 in an almost mandatory sense, I do not in any way suggest that the court is intended, or should in any way attempt to bind the parties to the terms of the current tenancy in any permanent form. But I do believe that the court must begin by considering the terms of the current tenancy, that the burden of persuading the court to impose a change in those terms against the will of either party must rest on the party proposing the change, and that the change proposed must, in the circumstances of the case, be fair and reasonable, and should take into account, amongst other things, the com paratively weak negotiating position of a sitting tenant requiring renewal, particularly in conditions of scarcity, and the general purpose of the Act which is to protect the business interests of the tenant so far as they are affected by the approaching ter mination of the current lease, in particular as regards his security of tenure. I derive this view from the structure, purpose, and words of the Act itself. But, if I required confirmation of it, I would find it in the passages cited to us in argument from the judgment of Denning L.J. in Gold v. Brighton Corporation[1956] 1 W.L.R. 1291, 1294 and of Widgery L.J. in Cardshops Ltd v. Davies [1971] 1 W.L.R. 591,596 (also cited with approval by Shaw L.J. in the instant case). The point is also emphasised by the decision in Charles Clements (London) Ltd v. Rank City Wall Ltd (1978) 246 E.G. 739, where the court rejected an attempt by the landlord as a means of raising the rent to force on a tenant a relaxation of a covenant limiting user which would have been of no value to the particular tenant, and Aldwych Club Ltd v. Coptha/1 Property Co. Ltd (1962) 185 E.G. 219 where the court rejected an attempt by the tenant to narrow the permitted user with a view to reducing the rent.
A further point which was canvassed in argument, and with which I agree, is that the discretion of the court to accept or reject terms not in the current lease is not limited to the security of tenure of the tenant even in the extended sense referred to by Denning L.J. in Gold v. Brighton Corporation [1956] 1 W.L.R. 1291. There must, in my view, be a good reason based in the absence of agreement on essential fair ness for the court to impose a new term not in the current lease by either party on the other against his will. Any other conclusion would in my view be inconsistent with the terms of the section. But, subject to this, the discretion of the court is of the widest possible kind, having regard to the almost infinitely varying circumstances of individual leases, properties, businesses and parties involved in business tenancies all over the country.
It is obvious that in the case of an office block in multiple occupation by different tenants the actual management of the exterior parts, common parts, lifts, boilers, and ancillary services will ordinarily rest in the hands of the landlords who will ordinarlly covenant to provide them. Some of these items are very readily calculable or may readily be made the subject of insurance. Some may fluctuate enormously and tht extent of fluctuation will, as the tenants’ witness said, only ultimately be ascertain• able at the end of a lease. Obviously it is to the advantage of the landlord to tran1ttr the financial risk of fluctuation to the tenant, and there can be no posslble reason why, if the tenant agrees (and the evidence was that many do), he should not do so. But the crucial question is, if the current lease does not so provide and the tenant does not agree, by what possible reasoning the court should impose the burden on the tenant against his will as a condition of his receiving a new tenancy under Part II of the Landlord and Tenant Act 1954. It may be granted that the transfer of the risk from the landlord to the tenant is a perfectly legitimate negotiating aim for the landlord to entertain. But the argument is two edged. It is equally a legitimate negotiating aim of the tenant to resist the change. Granted that a reduction in the rent of 50p from £10.50 per foot to £10.00 per foot is, in the limited sense described, an adequate estimate of the compensation which a landlord will offer if the risk is to be transferred. But the argument is again two edged. It may equally be argued that an additional 50p is the adequate estimate of the rent rightly payable to the landlord if the risk is to be kept where it is under the current lease. But neither of the two statements assists to answer the question where, in the new lease, is the risk of fluctuation to lie. If I am correct that the inference from the authorities is that the language of section 35 requires that the party (whether landlord or tenant) requiring a change must justify as reasonable a departure from the current lease in case of dispute about its terms, the answer must be that prima facie it must lie where the current lease provides, and that a mere agreement about figures based on either or both of two rival hypotheses does not shlft the burden in any way.