Claimant applying for grant of new business tenancy – Landlords objecting – Judge finding claimant in breach of repairing covenant and persistently failing to pay rent on time – Whether judge erring in law – Section 30(1) of Landlord and Tenant Act 1954 – Appeal allowed
The claimant applied for the grant of a new business tenancy under Part II of the Landlord and Tenant Act 1954. The claimant held the premises under a 16-year lease that was due to expire in July 2000. The lease included covenants requiring the claimant to pay the rent in quarterly payments in advance and to maintain the premises in good and substantial repair. The application was opposed by the defendant landlords on the grounds set out in section 30(1) of the Act, namely that “(a) the tenant ought not to be granted a new tenancy in view of the state of the repair of the holding, being a state resulting from the tenant’s failure to comply with the said obligations; and (b) the tenant ought not to be granted a new tenancy in view of his persistent delay in paying rent which has become due”.
The judge said that the power to order a new tenancy was discretionary. He viewed that the whole history of rent payments as evidence of persistent failure, relevant to the consideration of section 30(1)(b) of the Act. He also found that the claimant was in breach of the repairing obligations. Accordingly, he refused the claimant’s application. The claimant appealed.
Held: The appeal was allowed.
Given that the form of payment of rent adopted by the appellant, both as regards method and date of payment, was acceptable to the landlords until the respondents appointed new agents in July 1999, the respondents were estopped from insisting that the appellant should revert to strict compliance with the lease until such time as they gave him clear notice to that effect. The respondents could only rely upon persistent late payment from the time such notice was given. The judge had been wrong to regard a solicitor’s letter in July 1999 as such notice. He had misdirected himself in holding that the whole history of rent payments was evidence of persistent failure. Therefore, the court was entitled to consider the exercise of the judge’s discretion afresh. Taking into account the attitude of the previous landlords to the payment of rent, the fact that the respondents did not give any clear express notice that that previous practice was unacceptable, and the amount of work that the appellant had undertaken to remedy earlier breaches of the repairing covenants, the judge’s decision was unduly harsh.
Geoff Gelbart (instructed by Hallmark Atkinson Wynter) appeared for the appellant; Daniel Pearce-Higgins QC and John Crosfill (instructed by MH Banharally & Co) appeared for the respondents.
Sarah Addenbrooke, barrister