Landlord and tenant — Construction of lease — Date of rent review — Rent review to be delayed if certain road works not completed by a certain date — Building agreement and lease terms differed — Tenant’s construction accepted
In February 1971 a building agreement was entered into between the defendant city council, as the owner of a site, and now the lessor; English & Overseas Hotels Ltd, the present tenant; and the first plaintiff as surety. Under the building agreement the tenant was granted a licence to enter and construct on the site a development of offices and an hotel, and the council undertook to grant a 125-year lease on certain terms when the works were completed. The first review date for the rent was to be July 5 1980. At the time it was contemplated that the council would carry out certain road improvements, and the draft lease to the building agreement provided “that if the re-alignment of Redcliffe Way and the landscaping of the lands south thereof to the site has not been carried out by March 31 1973 then the first rent review date…shall be delayed by one year for every year or part of a year until such re-alignment and landscaping shall have been completed or the Corporation declares by notice in writing to the Tenants that Redcliffe Way will not be re-aligned whichever is the earlier”.
In the event the road improvement was not carried out by the date of March 31 1973, and the lease was executed on April 30 1974 with an amendment recognising this, the proviso in the rent review clause being altered to read: “that as the re-alignment of Redcliffe Way and the landscaping of the lands south thereof to the site has not been carried out by March 31 1973 …”. The landlord council gave notice on February 10 1981 that the road works were not to be carried out. In the court below ([1987] 2 EGLR 139), the landlord’s contention that the first review date was delayed only by the period from the first review date of July 5 1980 to the notice was accepted.
Held In allowing the tenant’s appeal, it was permissible and relevant to look at the draft lease for the purpose of discovering the parties’ intentions in including a reference to March 31 1973 in the lease as executed. That date was intended to designate the date upon which a period of delay was to be treated as beginning to run. No change was made to it even though the parties at the time the lease was granted knew the road works had not been carried out. As the road works had not been carried out by March 31 1973, the first review date must be postponed by one year for every year or part of a year elapsing between March 31 1973 and the council’s notice of February 10 1981. The first review date therefore was July 5 1980.
Nicholas Dowding (instructed by the Simkins Partnership) appeared for the appellants; and David Fletcher (instructed by solicitor to the council) appeared for the respondent.
