Tenancy granted to company – Company dissolved – Directors of company remaining in premises – Landlord applying for summary possession – Directors claiming proprietary estoppel – Whether expenditure incurred by respondents sufficient to amount to more than minimal detriment – Judge making order for possession – Appeal dismissed
The applicant was the freehold owner of 28 Upper Montagu Street, London W1 (the premises). The two respondents, the shareholders and directors of a company, Graeme Wood Law Consultancy Ltd, occupied the premises under a lease granted by the plaintiff to the company for a term of one year less one day commencing on October 5 1995. An option contained in the lease to renew that tenancy was exercised and the tenancy continued from October 4 1996.
On June 24 1997 the company was dissolved, deliberately and on the advice of its accountant, pursuant to section 652 of the Companies Act 1985. The tenancy ended by effluxion of time on October 3 1997. The applicant made a summary application under CCR Ord 24 for an order for possession. The respondents maintained that they were entitled to remain in possession by reason of a proprietary estoppel, in that the applicant had promised to sell the premises to them in reliance upon which they had suffered detriment, or that they were entitled to remain in possession by virtue of the provisions of Part II of the Landlord and Tenant Act 1954. The judge rejected both submissions and the respondents appealed contending that the judge had erred in holding that: (1) there was no triable issue; (2) the respondents had suffered no detriment to support their claim to a proprietary estoppel other than minimal detriment; and (3) he should not have taken into account the area in which the premises were situated when deciding whether detriment had been suffered.
Held The appeal was dismissed.
1. CCR Ord 24 was generally used where there were squatters or trespassers, and there was no question but that that had been the appropriate procedure in the instant case and that a warrant for possession would follow unless it was shown that there was a serious issue to be tried. In deciding whether the defence that the applicant was estopped from proceeding by the promise deposed to by the second respondent amounted to a serious issue to be tried, the judge’s finding that it was arguable that the promise had been made, even though the promise relied upon was vague and amounted merely to a right of first refusal, had not been challenged.
2. The judge had correctly rejected the submission that reliance had been placed on the promise to the detriment of the respondents. The expenditure undertaken in respect of the premises amounted to very minor alterations, which would have been necessary in any event even in the context of a one- or two-year tenancy. It was expenditure which did not amount to more than minor detriment and was not sufficent to found a proprietary estoppel and the expenditure on furniture and other removable items did not constitute detriment. The one item of expenditure specific to the particular premises, namely the sum of £300 spent on blinds, could not found a proprietary estoppel. Accordingly, the judge had not erred in making the order that the respondents deliver up possession of the premises forthwith to the applicant.
Edwin Prince (instructed by the Rosling Partnership) appeared for the appellants; Nicholas Taggart (instructed by Farrers) appeared for the respondent.
