Landlord and tenant — Landlord and Tenant Act 1954 — Whether a lease which demised two properties to one tenant contained provisions which were sufficient to create two separate tenancies — Whether, if so, a notice by the landlords under section 25 of the 1954 Act purporting to apply to one only of the properties was valid — Appeal by tenant from decision of county court judge holding that the section 25 notice was valid and dismissing tenant’s application for a new tenancy — The lease, which related to two service stations, included in a schedule a provision for apportioning rents as between the two stations — It also included a clause providing that ‘minimum load’ should apply separately to each of the demised premises and that all other covenants, agreements and conditions in the lease ‘shall be read and construed as if separate and independent leases had been entered into in respect of each of the demised premises and not as one demise’ — Held, affirming the decision of the county court judge and distinguishing the cases of Dodson Bull Carpet Co Ltd v City of London Corporation and Southport Old Links Ltd v Naylor, that the section 25 notice was valid — The court did not express a final view on the effect of the apportionment of the rents (which the judge did not regard as sufficient to effect a severance) but agreed that the clause quoted above was sufficient to create two separate tenancies — ‘Within the four corners, so to speak, of one document in the form of one lease the parties have agreed to create two separate demises’, thereby achieving what had not been achieved in the Dodson Bull or Southport cases — Appeal dismissed
The following
cases are referred to in this report.
Dodson
Bull Carpet Co Ltd v City of London Corporation
[1975] 1 WLR 781; [1975] 2 All ER 497; (1974) 29 P&CR 311; 236 EG 484
Southport
Old Links Ltd v Naylor [1985] 1 EGLR 66;
(1984) 273 EG 767, CA
This was an
appeal by the tenant, Gordon Moss, from the decision of Judge Crabtree, at
Rotherham County Court, in favour of the landlords, Mobil Oil Co Ltd, in
respect of a notice under section 25 of the Landlord and Tenant Act 1954
concerning the Fitzwilliam Road Service Station at Rotherham. The other service
station comprised in the lease was the Maltby Service Station at Tickhill Road,
Maltby.
Wayne Clark
(instructed by Penningtons Ward Bowie, agents for Broomheads, of Sheffield)
appeared on behalf of the appellant; W Poulton (instructed by Metson Cross
& Co) represented the respondents. Mr Poulton was not called on.
Giving
judgment, KERR L J said: This appeal raises a new point in the context of
section 25 of the Landlord and Tenant Act 1954. The question is whether a lease
which demised two service stations to one tenant effected a sufficient
severance of the demise by an express provision to create two demises or
tenancies with the result that a section 25 notice which purported to apply to
only one of the service stations had been valid. His Honour Judge Crabtree
upheld the section 25 notice in a brief judgment in the Rotherham County Court
given on July 31 1987. This is an appeal by the tenant.
The issue
arises out of a lease dated September 1 1983 which was headed on the
frontispiece:
LEASE OF
Fitzwilliam
Road Service Station, Fitzwilliam Street, Rotherham, South Yorkshire and Maltby
Service Station, Tickhill Road, Maltby, Rotherham, South Yorkshire.
Until one comes
to clause 13(a), this was indeed on its face one demise of two service staions
as the judge recognised. I must briefly refer to some of the provisions of the
lease which are in common form.
Clause 1
contained various definitions including approved opening hours for the
Fitzwilliam and Maltby Service Stations respectively. It also defined ‘Minimum
Load’ as 27,000 litres ‘or such other quantity as shall from time to time be
specified by Mobil in writing’.
Clause 2,
headed ‘Demise’, was in the following terms:
In
consideration of the rents reserved hereby, and of the Dealer’s covenants
contained in this Lease, Mobil hereby demises unto the Dealer:
First of all
those premises known as ‘Fitzwilliam Service Station’
whose address
I have already given
and ‘Maltby
Service Station’
whose address
I have also stated
more
particularly described in the First Schedule hereto (hereinafter called ‘the
Premises’). And secondly the equipment, furniture and other chattels belonging
to Mobil in and about the Premises, and listed in the Second Schedule hereto
(hereinafter called ‘the Effects’).
The habendum
was as follows:
To hold unto
the Dealer for the term of three years commencing the First day of September
1983 (hereinafter called ‘the Term’), terminable as hereinafter provided,
Yielding and paying during the Term the rents specified in the Sixth Schedule
hereto at the times and in the manner set out therein.
Clause 7 was a
printed proviso for re-entry in common form.
Before turning
to clause 13(a) it is convenient to refer to some of the schedules. There was a
schedule which identified and described each of the service stations together
with its effects. There was another containing dealer’s covenants in printed
form, to which I need not refer. The Fourth Schedule comprised the landlords’
covenants. The Fifth Schedule dealt with the supply of motor fuel and so forth
and the Sixth Schedule dealt with rents. That provided different rents for the
first, second and third rental years respectively and then apportioned each of
those rentals differently and separately as between the Fitzwilliam Service
Station and the Maltby Service Station.
That is all I
need to mention in the main body of the lease. I agree, as the judge accepted,
that, despite the severance of the rents (though it is unnecessary to express a
final view on this), on the authorities everything up to this point makes this
one demise only of both service stations. Accordingly a section 25 notice would
be valid only if it purported to apply to both of them.
However, one
then comes to clause 13(a). This was typed and preceded by ‘Take in attached
Rider’. The rider itself was in the following terms:
In this Lease
Minimum Load shall apply separately to each of the demised premises and all
other covenants agreements and conditions contained herein and in the Schedules
hereto shall be read and construed as if separate and independent Leases had
been entered into in respect of each of the demised premises and not as one
demise.
On July 24
1986 a notice to terminate was served which purported to expire on January 29
1987. Accordingly, so far as the time was concerned, this was a good notice for
the purposes of section 25. The notice applied only to the Fitzwilliam Service
Station. A counter-notice was served on August 18 1986 asking for a new
tenancy. But the application for this was not made until December 12 1986,
which was out of time, being more than four months after service of the section
25 notice. The time for the application had expired on November 24 1986.
It is somewhat
ironic that by the time the section 25 notice expired on January 29 1987 it had
been agreed that the Maltby Service Station would be sold by the landlords to
the tenant dealer. It is therefore not surprising, since the negotiations for
that sale had presumably already started, that the section 25 notice had
related only to the Fitzwilliam Service Station. That, however, is neither here
nor there. The fact that by the time when the notice expired the Maltby Service
Station had already been transferred, or had been agreed to be transferred,
forms the subject-matter of a cross-appeal with which we have found it
unnecessary to deal.
Mr Clark
argued the issues with great clarity on behalf of the tenant, but we found it
unnecessary to call on Mr Poulton on behalf of the landlord.
What happened,
inevitably in the light of the history, was that having appreciated that the
application for a new tenancy was out of time, the tenant took the point that
this had been a bad section 25 notice because it applied only to the
Fitzwilliam Service Station and not to both of them. Accordingly, he amended
his notice of application on March 30 1987 and the question whether the section
25 notice was good was treated as a preliminary issue. In effect, of course, if
the issue raised on behalf of the tenant was bad in law, that was the end of
the matter, as it proved to be. In the light of clause 13(a) the judge took the
view that this section 25 notice was good. Accordingly, he dismissed the
application for the new tenancy. Although he subsequently gave leave to appeal
it seems clear that no leave was necessary, since the order had been final. The
question is whether the judge’s conclusion was correct.
We were
referred to two cases. Both rest on the principle, which is common ground
between the parties and settled law, that a section 25 notice which purports to
apply only to part of the demised premises is invalid. They are Dodson Bull
Carpet Co Ltd v City of London Corporation [1975] 1 WLR 781, a
decision of Goff J as he then was, which has frequently been followed; and the
most recent decision in this area of the law in Southport Old Links Ltd
v Naylor [1985] 1 EGLR 66 (CA).*
*Editor’s
note: Also reported at (1984) 273 EG 767.
In the Dodson
Bull case Goff J considered at p 784, but without reaching any final
conclusion, whether it might be possible, because of sufficiently clear terms,
in particular a severance of rents, for one lease or demise to comprise what
would effectively be two or more demises for the purposes of section 25.
This point
arose in a more acute form in the Southport case. One lease, albeit with
one unapportioned rent, comprised a golf course (the red land) on the one hand
and the clubhouse (the blue land) on the other, with an express provision
giving the landlord the right to give 12 months’ notice so far as the golf
course was concerned, but not so far as the clubhouse was concerned. In those
circumstances the landlord gave a contractual notice as well as a section 25
notice, as is frequently done, which were both applicable only to the golf
course. The issue was whether, on the construction of that lease, it was
possible to treat it as two demises. That was accepted by the county court
judge but rejected by this court, partly because there was only one rent. And
of course there was nothing equivalent to clause 13(a) as in the present case.
Oliver LJ, as
he then was, put the issue as follows on p 68:
Since the
section 25 notice in this case relates, and could only relate, to the red land,
the argument before the learned judge was based, as it had to be, on the
contention that it was possible to spell out of the demise two separate and
distinct tenancies, one of the blue land and one of the red land, and thus to
validate the notice given only in relation to the red land as a notice given in
respect of the whole of the land comprised in a relevant tenancy.
Then he
considered certain provisions of the lease and said:
So that
unless one can find some separate tenancy of the red land to which, as a whole,
a section 25 notice can relate, one is up against the difficulty that it is, on
its face, a notice purporting to terminate the tenancy only of part of the
holding.
He went on to
examine the lease and was unable to overcome that difficulty.
In the present
case, however, one does have a provision, in the form of clause 13(a), which
has the effect which was absent both in Dodson Bull and in the Southport
case. The judge put it quite shortly as follows:
On the face
of it, this was one Lease of two separate premises. The fact that rent was
apportioned in Schedule 6 would not make it two separate Leases; and apart from
Clause 13(a) everything else points to this being one Lease; but in my view
page 15 of the bundle which includes the rider 13(a) and the Lease is the
crucial point. Clause 13(a) is incorporated into the Lease and it splits this
one Lease into two. This is a contractual clause which says in the plainest
possible English that these are two separate Leases. It is my view that this is
the plainest possible language. It is putting all these covenants and
conditions and so on into one document for convenience’s sake, almost for ease
of typing one might say as the terms of the two Leases are identical but these
are clearly two Leases.
The only point
that can be made on that language is that he is not quite accurate when he says
that the terms of the two leases are identical, since he himself had rightly
mentioned earlier that there were separate rents which were not identical. But
subject to that I entirely agree with this construction of clause 13(a).
Mr Clark
sought to overcome that point by saying that when one considers the wording of
clause 13(a) it does not achieve this purpose. As I followed his argument, he
put it on two grounds. First, he appeared to be saying that the words
‘covenants, agreements and conditions’ did not apply to every provision of this
lease. In particular I think he was saying that it did not apply to the proviso
for re-entry and — of greater importance — to clause 2, which defines the
demise.
I do not
accept that construction. It seems to me, exactly as the judge said, that no
language could express more plainly that this was intended to split this lease
into two. Every provision of it was to be read distributively, as applicable to
each of the demised service stations severally.
The second and
more substantial point on which Mr Clark relied — and in this connection he
referred to a later part of the judgment of Goff J in the Dodson Bull
case at pp 785 and 786 — was that there is nothing in clause 13(a) which
enables that clause to be applicable, as he put it, for the purposes of a
section 25 notice. He said that, even assuming that it applies to everything in
the lease — to every single provision or term of the lease — nevertheless it
does not apply to section 25, or to a notice given under section 25, which is
not in the lease but arises by operation of law. In my view, that submission is
misconceived. The question is not whether the wording of clause 13(a) applies, expressly
or by implication, to a notice under section 25 but simply whether or not it
has the effect of splitting what, apart from that clause, would be one demise
of two service stations into two demises of one service station each. On my
view, on its true construction it has precisely that effect, and that was of
course the effect intended.
That being the
construction of the clause, it must follow that in this case there has been
achieved what was not achieved in either Dodson Bull or the Southport
case. Within the four corners, so to speak, of one document in the form of one
lease the parties have agreed to create two separate demises. The consequence
is that it was open to the landlord to give a valid notice in relation to only
one service station pursuant to section 25.
In these
circumstances I consider that the judge came to the correct conclusion in
deciding the preliminary issue against the tenant and in dismissing the
application for a new tenancy. It follows that it is unnecessary to consider
what would have been the effect of this notice in relation to the cross-notice,
bearing in mind that by the time
station left in this lease, the other one having been sold to the tenant.
For these
reasons I would dismiss this appeal.
EASTHAM J
agreed and did not add anything.
The appeal
was dismissed with costs.
