Landlord and Tenant Act 1954, Part II, section 30(1)(f) and section 31A — Landlord’s appeal from decision of county court judge holding that landlord had not established his ground of opposition under section 30(1)(f) as qualified by section 31A to the tenant’s application for a new tenancy of a cafe — Appellant was the freehold reversioner of the subject premises and of certain adjoining premises — Shop occupied by tenant was one of three in a group and landlord’s proposals involved the demolition of the walls of two of the shops, on each side of a central passage, the demolition of the shop fronts, the removal of lavatories and the provision of a staircase leading out of the tenant’s cafe — The proposals in fact involved the complete refurbishment of the three units, making them into one open area — In the view of the Court of Appeal, apart from the possible application of section 31A, it was clear that the ground specified in section 30(1)(f) was made out — It was common ground that for a minimum period of some eight weeks it would be impossible during the proposed works to run the cafe in anything like a reasonable way, if at all, particularly as for part of the period the landlord would require the use of the whole of the premises — For section 31A to apply not only must the tenant agree to giving access and other facilities to the landlord for carrying out the work but it had to be shown that the landlord could carry it out without interfering to a substantial extent or for a substantial time with the use of the premises for the operation of a cafe — In the opinion of the Court of Appeal the interference would, on the contrary, be very substantial — Section 31A was not, therefore, applicable — The appeal would therefore be allowed
expressed the view obiter that there was great force in a submission that
section 31A did not contemplate an agreement which involved the destruction of
the subject-matter of the original holding
jurisdictional points which had been mentioned were held not to require
determination
The following
case is referred to in this report.
Norwich
Corporation v Norwich Electric Tramways Co Ltd
[1906] 2 KB 129
This was an
appeal by the landlord, Ashfaq Ahmed Hussain, from the decision of Judge
Crabtree, at Sheffield County Court, holding that the appellant had not
established his ground of opposition under section 30(1)(f) of the
Landlord and Tenant Act 1954 to the application of the tenant, Ernest
Blackburn, for a new tenancy of premises used as a cafe at 682 Chesterfield
Road, Sheffield.
Christopher
Semken (instructed by Hall Clark, agents for Irwin Mitchell, of Sheffield),
appeared on behalf of the appellant; Michael Coles (instructed by Chester &
Simmerson, of Sheffield), represented the respondent.
Giving
judgment, PARKER LJ said: The respondent in this appeal is the tenant of
premises known as 682 Chesterfield Road, Sheffield. He became such tenant in
1979 by way of assignment of a lease for a period of five years from June 21
1978. That lease therefore expired by effluxion of time on June 20 1983, but
the tenancy, being a business tenancy, continued by virtue of the Landlord and
Tenant Act 1954.
The business
carried on by the tenant was that of running a cafe. The appellant is the
freehold reversioner of the premises, which are situate in the ground floor of
no 682. The appellant is also the freehold reversioner of adjoining premises,
nos 684 and 686, both as to the ground floor and the first floor.
On March 21
1984 the appellant gave notice under section 25 of the 1954 Act to terminate
the tenancy. Such a notice is required to be in the prescribed form, and
section 25(6) provides:
A notice
under this section shall not have effect unless it states whether the landlord
would oppose an application to the court under this Part of this Act for the
grant of a new tenancy and, if so, also states on which of the grounds
mentioned in section thirty of this Act he would do so.
The only
relevant ground in section 30 is that set out in subpara (f), which
reads as follows:
that on the
termination of the current tenancy the landlord intends to demolish or
reconstruct the premises comprised in the holding or a substantial part of
those premises or to carry out substantial work of construction on the holding
or part thereof and that he could not reasonably do so without obtaining
possession of the holding.
The notice to
terminate given by the landlord states as follows:
I would
oppose an application to the court . . . under Part II of the Act for the grant
of a new tenancy on the ground . . . that the Landlord requires the premises in
view of reconstruction of his own premises and cannot reasonably do so without
obtaining possession of the premises.
That is not in
terms or by reference the ground specified in para (f) of section 30(1).
The tenant’s
response to that notice was a letter dated March 26 1984 [from his solicitors
to the landlord’s solicitors] in the following terms:
Our Client,
Ernest Blackburn, telephoned us at approximately noon, on Friday the 23rd . . .
to tell us that he received, by Recorded Delivery, from your firm, what seems
to amount to a Notice to Quit. We always thought it was Courtesy for the
Landlord’s Solicitors to send a copy of such Notice and covering letter,
written direct to [the] Tenant, to the Tenant’s Solicitors. You are aware that
we do act for Mr Blackburn, and we should be pleased to receive your
explanation why you have not observed the usual courtesy to date.
We have asked
our Client to let us have the communication he has received from you, and we
will then comment on the matter in detail, but we gather from our Client that
the document you have sent states that your Client will oppose the grant of a
new Lease to our Client, for the reason that he requires possession of our
Client’s property, because he wishes to reconstruct his own premises.
Obviously, we
are very sceptical of this ground, and should be pleased to receive copies of
your Client’s plan for reconstruction, together with, of course, copies of the
relevant Planning and Building Regulation Permissions, which he has obtained.
The remainder
of that letter is not presently relevant. It provoked no reply, and on June 19
the tenant’s solicitors reverted to the matter in the following terms:
We refer to
our letter to you dated March 26 last and are somewhat surprised not to have
heard from you, in the past, nearly three months. Please now have the courtesy
to reply, giving us an outline, supported by Planning Permissions, plans etc,
etc, of your client’s proposals for reconstruction of the premises. Our Client,
is, obviously, not prepared to vacate these premises at the end of September,
and we are in the course of preparing his application to the Court for the
Grant of a new Tenancy, because, honestly, it is considered by us that your
Client’s proposals are not really relevant and do not justify the refusal of
the grant of a new Lease.
Again I need
not read the remainder.
I should
mention that in his notice the landlord required possession to be given on
September 29 and not the end of September.
Thereafter the
tenant applied for a new tenancy under section 24 of the Act, and in his
application he stated as follows:
On March 26
1984 I served on the Respondent a counternotice dated March 26 1984 stating
that I would not be willing to give up possession of the premises on the date
of termination.
That statement
was not challenged at any time in the proceedings until the opening of this
appeal.
The tenant
having made his application for a new tenancy, there were directions,
discovery, an answer was filed, and on August 17 1987, some very considerable
time later, a preliminary issue was ordered. The preliminary issue is specified
in these terms:
The
preliminary issue is limited to the sole question of the Landlord’s intention
to redevelop.
On the face of
it, that simply goes to the question whether the landlord’s statement of
intention was or was not valid, but it has been accepted throughout, and is
still accepted, that the intention in the preliminary issue was to determine
the question whether or not the landlord had made out the ground for opposition
in section 30(1)(f) as qualified by section 31A.
The
preliminary issue was heard in the Sheffield County Court by His Honour Judge
Crabtree on August 26 1987 and he concluded that the landlord had not made out
the ground specified in section 30(1)(f). The landlord now appeals.
At a late
stage a question has been raised by the landlord as to the jurisdiction, it
being contended that the tenant had not served a counternotice and that as a
result, and by virtue of section 29(2) of the Act, the court had no
jurisdiction to entertain his application. It is clear that a point on
jurisdiction can be taken as late as a hearing before this court, albeit it has
not been taken at an earlier stage in the proceedings. That stems from the
decision in Norwich Corporation v Norwich Electric Tramways Co Ltd
[1906] 2 KB 129. There also arises, incidentally and as a result of the
jurisdictional point having been raised by the landlord, a further possible
jurisdictional point, namely, whether the landlord’s notice to terminate the
tenancy was itself invalid. I will leave both jurisdictional points until the
end of this judgment and deal first with the question of the merits. By way of
preliminary, it is necessary shortly to describe both the premises themselves,
the adjoining premises and the landlord’s proposals.
The premises
consist of a group of three shops in an old building in Chesterfield Street. If
one faces the premises, the tenant’s premises are on the right and consist of a
cafe called ‘The Cherry Pie’. They are enclosed premises and between them and
the next-door premises, which are of a similar size and also self-contained,
there is a corridor or passage which leads to a third shop at the rear of the
building. The three shops, consisting of the tenant’s shop, the premises at the
rear and the premises to the left of the passage, are at present separate
premises, separately numbered and separately entered. There are apparently no
toilet facilities in the cafe which the tenant occupies, but it is common
ground that he had a right under his lease, imported probably by virtue of the
Law of the Property Act, to the use of certain lavatories which lie behind the
neighbouring shop.
The proposals
which the landlord has made and which the judge has accepted he does intend to
carry out involve the demolition of the walls which contain the two shops on
either side of the central passage and the making of the three premises into
one open area. They involve also the demolition and replacement of the shop
fronts, the removal of the lavatories and the provision of a staircase which,
as originally planned, would not have led out of the tenant’s cafe, but which
did, as the plans stood at the date of the hearing of the preliminary issue,
lead out of the cafe or was intended to do so.
There are
other works involved in the landlord’s proposals, but they need not be
mentioned other than to say that they come under a general description of the
complete refurbishment of the three premises as a whole.
Apart from the
qualifications in section 31A, it is abundantly clear that the ground specified
in section 30(1)(f) is made out. The proposals of the landlord are so
extensive that in ordinary parlance he could not have reasonably carried them
out without obtaining possession of the holding. To suggest that, without
having legal possession of the tenant’s holding, he could demolish his
containing walls, remove his lavatories and insert a staircase into the
premises appears to me to be wholly unreal, and indeed the judge proceeded on
the basis that it was by virtue of the provisions of section 31A that the
landlord failed to make out the section 30(1)(f) ground. It is therefore
necessary to examine the terms of section 31A(1). That reads as follows:
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 reasonably 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;
There are thus
the following conditions: first, that the tenant agrees to the provision of
access and facilities; second, that, given those facilities, the landlord could
reasonably carry out the work without, first, obtaining possession and without,
second, interfering to a substantial extent or for a substantial time with the
use of the holding. The tenant in this case indicated that he would be prepared
to afford the landlord all facilities and access which he required for carrying
out the work which he intended to do. I will assume for the moment that
agreement to the extent required to enable the landlord to carry out these
works falls within the terms of section 31A(1)(a); but that is of course
not enough, because it has to be shown that, given the facilities, the landlord
could carry out the work without interfering to a substantial extent or for a
substantial time with the use of the premises for the operation of a cafe.
It is common
ground that for a minimum period of some 12 weeks it would be impossible to run
this cafe in anything like a reasonable way, if at all. It is common ground
that for part of the period the landlord would require the use of the whole of
the premises, albeit it might be possible, indeed probably would be possible,
for the cafe equipment to be shifted around and not actually moved out of the
premises themselves.
It is rightly
pointed out on behalf of the tenant that the question is a question of fact and
degree, and accordingly that this court should be slow to interfere with the
decision of the learned judge in the court below. It is, however, clear that
this court can and must consider the question whether on the admitted facts the
interference can be regarded as being otherwise than substantial within the
meaning of the section. For my part, I have no hesitation in saying that, with
all respect to the learned judge, I cannot come to the conclusion that
interference for this time and to this extent within the business of running a
cafe is otherwise than substantial, and indeed in my view very substantial.
That is
sufficient to dispose of the issue arising on this appeal, but it was also
submitted on behalf of the appellant that section 31A did not really arise at
all, because it cannot have contemplated an agreement which involved the
destruction of the subject-matter of the original holding. Were it otherwise it
would involve a tenant’s being able to say: ‘I agree to the destruction of my
holding, but I demand that, it having been destroyed, I am granted a tenancy,
not of my holding, but of some entirely different entity.’
Without
finally deciding the matter, I should say that I accept that there is great
force in that contention and that for my part I do not, as presently advised,
accept that it is possible for a tenant by any such agreement to avoid the
plain meaning of section 30(1)(f).
There remains
to be considered the two jurisdictional points. I say ‘remains to be
considered’, for in truth, in view of what I have already said, they do not any
longer arise. The point taken by the appellant does not arise because he
succeeds in his appeal on the merits. The other point, which was adumbrated by
the court, is not relied upon by the respondent, save to the extent that the
court might
facie valid. Since it has not been necessary to deal with the one, it
remains unnecessary to deal with the other.
I would add that
I regard the jurisdictional point taken on behalf of the appellant as being
wholly without merit and that, were it necessary to go into it, I would have
been inclined to conclude, either (a) that the letter of March 26 should be
construed as a notification of unwillingness or (b) that the subsequent letter,
albeit out of time, had been the subject of a time waiver. It is accepted that
it is a procedural matter. The suggestions which were made to avoid the time
waiver appeared to me to be not only without merit but without substance. As to
the other jurisdictional point, it was raised only by the court, and no doubt
it was a matter of wisdom on the part of the respondent not to leap upon it
with joy, for it might have had consequences which would have been undesirable.
Accordingly, I
would allow this appeal.
Agreeing,
TAYLOR LJ said: It seems to me that the learned judge allowed himself to be
influenced in two respects by what might have been, rather than confining
himself to the facts before him. First, he dealt with the case on the basis
that, had the landlord so wished, he could have reconstructed the premises in
such a way as to enable the tenant to resume his cafe business on the floor
area where it was before, albeit without walls. Second, he was influenced by
evidence that the landlord had discussed with the tenant the possibility of the
cafe being relocated upstairs. These matters were not relevant.
The landlord
put before the court evidence of what he actually intended to do. There was no
suggestion that he did not have a genuine intention to carry out the works as
described by his expert and shown on his plans. In those circumstances the
issue was whether in regard to that work section 31A applied. That issue
involved two questions. First, could the landlord reasonably carry out that
work without obtaining legal possession of the holding? Second, could he carry out that work without
interfering to a substantial extent or for a substantial time with the use of the
holding by the tenant as a cafe? In my
judgment, for the reasons which have been given by Parker LJ, the evidence
admitted only of a negative answer to each of those questions. Accordingly, I
agree that this appeal should be allowed.
The appeal
was allowed with costs in the Court of Appeal and below (below on Scale 2).
