Landlord and Tenant Act 1954, Part II — Whether tenants were in occupation of the relevant premises for the purpose of a business carried on by them within the meaning of section 23(1) of the Act — Landlords’ appeal from decision of county court judge on a preliminary point in favour of tenants — Land used by tenants for the carrying on of the business of proprietors of lock-up garages — On application for a new tenancy landlords had opposed the grant on the ground inter alia that tenants did not satisfy the occupation requirement of section 23(1) — The facts were that some garages were at any time vacant but the majority were actually sublet — One garage was used by the tenants as a store room — Tenants were in rateable occupation of the whole premises but each subtenant had exclusive possession of his garage — Tenants, although not under any contractual obligation to do so, in fact carried out some maintenance and cleaning of the sites and sometimes, with the consent of the subtenant, would effect internal repairs to a garage — The manager made fortnightly visits to the sites — On the evidence before him the county court judge found that the tenants retained sufficient occupation to support an application for a new tenancy — Court of Appeal considered Bagettes Ltd v GP Estates, Lee-Verhulst (Investments) Ltd v Harwood Trust, William Boyer & Sons Ltd v Adams, Hancock & Willis v GMS Syndicate Ltd, and Linden v Department of Health and Social Security — Held that, although the question raised by this kind of case must always be one of degree, the judge had misdirected himself in purporting to apply the authorities and had placed the present case on the wrong side of the line — There was here no office or living accommodation on the site, no water, no electricity, no security guard, and regular visits by staff were only fortnightly — In the authorities where sufficient occupation had been established the extent of the physical presence, the amount of services rendered to subtenants or licensees, the degree of control exercised and the time spent in connection with the relevant premises were all much greater — Tenants here failed to qualify — Landlords’ appeal allowed
This was an
appeal by the landlords, Darby Properties Ltd, from the decision of Judge
Davison at Northampton County Court on a preliminary point in proceedings under
Part II of the Landlord and Tenant Act 1954. The tenants, in whose favour the
judge had decided the point, plaintiffs in the court below and respondents to
the appeal, were Trans-Britannia Properties Ltd. The premises consisted of land
at Far Cotton, Northampton, on which 46 lock-up garages were at all material
times available for letting.
Jeremy Carey
(instructed by Ray & Vials, of Northampton) appeared on behalf of the
appellants; A Geddes (instructed by Wigram & Co) represented the
respondents.
Giving
judgment, SLADE LJ said: This is an appeal by Darby Properties Ltd, pursuant to
the leave of the judge, from an order of His Honour Judge Davison made in the
Northampton County Court on January 3 1985, whereby he decided a preliminary
point against the appellant landlords in landlord and tenant proceedings.
The history of
the matter is briefly as follows. On October 1 1962, a lease of a piece of land
at Far Cotton, Northampton, was granted by the appellants (‘Darby’) to Banbury
Buildings (Lock-Ups) Ltd for a term of 21 years, expiring on September 30 1983.
Clause 3 of the lease contained, inter alia, the following tenant’s
covenants:
(4) Not to carry on or permit or suffer to be
carried on upon the said land nor to use or occupy the same for the purposes of
any trade or business other than the business of proprietors of lock-up garages
and to use the land only for the garaging of private vehicles.
(6) Not to form any refuse dump or scrap heap on
the land and to keep the same clear of all refuse rubbish and scrap and in a
neat and tidy condition.
(9) Not at any time during the said term to
assign or underlet or part with possession of the demised premises or any part
thereof or of this lease without the written consent of the landlords, such
consent not to be unreasonably withheld Provided Always that the tenants may
without such consent grant periodic tenancies (determinable within the term
hereby granted) of any lock-up garages erected by the tenants upon the said
land but so that any such tenancies shall be granted upon and subject to the
conditions that the same shall not be used or occupied for the purposes of
business.
At the date of
the lease there were no buildings on the land, but, as the lease itself
indicates, it was always understood that the land would be used by the tenants
for the carrying on of the business of proprietors of lock-up garages. The then
tenants erected a number of such garages. It appears that at all material times
there have been 46 of them available for letting.
On June 18
1981 the original lessees assigned the lease to Trans-Britannia Properties Ltd
(‘Trans-Britannia’), who are the respondents to this appeal. On September 30
1983 the lease expired. On October 3 1983 Trans-Britannia made a request for a
new tenancy under the provisions of section 26 of the Landlord and Tenant Act
1954. On December 20 1983 they issued an originating application in the
Northampton County Court seeking a new tenancy under the 1954 Act, describing
the nature of the business carried on at the premises as being ‘Lettings of
Lock-up Garages’. This was followed by an answer to the originating
application, dated January 9 1984, in which Darby stated that they opposed the
grant of a new tenancy on three grounds. The first of these grounds was:
You do not
satisfy the conditions of the Landlord and Tenant Act 1954 part II, section
23(1)(2) and (3) because neither you nor any person employed by you occupies
the premises for the purpose of a business carried on by you.
Having regard
to this contention, the registrar ordered the trial of the preliminary issue as
to whether Trans-Britannia were entitled to make an application for a new lease
under the 1954 Act.
The relevant
subsections of section 23 of the 1954 Act state:
(1) Subject to the provisions of this Act, this
Part of this Act applies to any tenancy where the property comprised in the
tenancy is or includes premises which are occupied by the tenant and are so
occupied for the purposes of a business carried on by him or for those and
other purposes.
(2) In this Part of this Act the expression
‘business’ includes a trade, profession or employment and includes any activity
carried on by a body of persons, whether corporate or unincorporate.
(3) In the following provisions of this Part of
this Act the expression ‘the holding’, in relation to a tenancy to which this
Part of this Act applies, means the property comprised in the tenancy, there
being excluded any part thereof which is occupied neither by the tenant nor by
a person employed by the tenant and so employed for the purposes of a business
by reason of which the tenancy is one to which this Part of this Act applies.
At the trial
the learned judge heard oral evidence from one witness on behalf of Darby,
namely Mr Roger Darby, one of its directors, who had sworn an affidavit which
was also before the judge. He also heard evidence from Mr Frederick Potter, who
was employed by Trans-Britannia as manager of their lock-up garages department.
There were in addition before him two affidavits sworn on behalf of
Trans-Britannia, one by their solicitor, Mr Hansom, and one by Mr Dewan, their
managing director.
The learned
judge in his judgment did not refer specifically to the evidence of any of
these witnesses, other than that of Mr Potter, on whose evidence he heavily
relied. Counsel in argument before us did not rely specifically on any such
other evidence, beyond a very few features which are, I think, common ground.
First, Mr Darby, in his affidavit, verified by his oral evidence, stated that
the premises comprise 46 lock-up garages which are available for letting, that
there is no living accommodation on the site and there is no office. Mr Hansom
exhibited to his affidavit three sample agreements providing for occupation of
the garages by sublessees on a monthly basis determinable on one month’s
written notice by either party. They also contain a clause which reads as
follows:
The tenant to
use the premises as a lock-up garage for a motor vehicle only and to be
responsible for repair and maintenance of door and locks.
However, the
evidence of Mr Potter, to which I am about to refer,
the doors and locks of garages on behalf of Trans-Britannia.
We have the
benefit of a very clear and careful note of the oral evidence, taken by the
learned judge. Since the record of Mr Potter’s evidence is important and not
very lengthy, I propose to quote it quite fully. In chief, having explained his
position with Trans-Britannia, he continued:
We have about
100-120 sites. Nationwide. My work involves a visit twice a month to the site
and we have a permanent store there with materials and vans call there to
collect and deposit what they need — to look into any complaints we receive
from the agents Horne & Co. We actually maintain the roofs and doors. We
spent over £1,000 last year on up and over doors. Gutters are replaced but they
are often broken by vandals overnight. The tarmac forecourts are cleared
constantly by local skips. We employ four men to carry out this work but I hire
local labour as necessary. The doors are maintained by the Company and all the
padlocks are bought and supplied by the Company. I have never received any
instructions that we should not pay for the doors and locks. We have spare keys
to all the garages and when a complaint is received we get the key from the
agents and then return it to the agents on completion of the repair. We have
never had a tenant trying to prevent us getting in to do repairs. We keep the
rubbish down and also the weeds. People do use it as a dumping ground — we
clear it up and make the place look tidy constantly. People use the site to
park and turn. We go to the garages when there is a changeover and do repairs
and clean as necessary the agents write to us and say that garages 1, 2 or 3
are void and to go in and prepare for reletting. I have been involved with this
site for over twenty years. I worked for Banbury Buildings.
From the notes
of Mr Potter’s cross-examination, I need only refer to the following extracts:
I don’t give
this site special priority. I visit twice a month. It’s only given priority
because we have stores there and it happens to be eight miles from my home —
but it has no particular attention. I do over a thousand miles every week. I
don’t only go to a site when there is a complaint. I always check the sites in
the area where I am travelling. The stores are used for materials on any site.
We have six storage sites I know of now . . . The agent has a key to keep
control of the sites. They know which is void and let. We respect the tenant’s
property. We never go in unless for maintenance purposes. This is an area where
there are a lot of break ins.
Mr Potter was
not re-examined.
On a first
reading, section 23(1) might be thought to render Part II of the 1954 Act
applicable when the property comprised in the tenancy merely ‘includes’
premises which are occupied by the tenant for the purposes of a business
carried on by him. However, having regard to the provisions of sections 23(3)
and 32 of the 1954 Act, Mr Geddes, on behalf of Trans-Britannia, has accepted
that they must be found to occupy the entire premises for the purposes of a
business carried on by them, if they are to be entitled to apply to the court
for the new lease which they claim.
One obvious
possible hurdle in their way is that while some of the lock-up garages are
vacant, awaiting subletting, many others are actually sublet. At first sight it
might appear difficult for lessees to assert that they are in occupation of the
whole of a site when substantial parts of it are sublet. However, as the
authorities show, the position is not quite as simple as that. Mr Geddes has
pointed out that the business of Trans-Britannia is one of subletting lock-up
garages and, on the basis of the authorities, has submitted that there was
sufficient evidence to justify the learned judge in finding that they were
occupying the whole of the premises for the purposes of that business within
the meaning of section 23(1) of the 1954 Act. I now turn to consider the
authorities which have been cited to us in their chronological order.
The earliest
of them affords no assistance to Trans-Britannia’s case. In Bagettes Ltd
v GP Estates Ltd [1956] Ch 290, the defendants carried on the business
of holders, managers and landlords of real property. One of their assets was a
leasehold interest in premises comprising 13 self-contained flats, 10 of which
were sublet at the material time, halls, passages, landings and stairs in
common use, together with further accommodation in the basement for a
caretaker, boiler rooms, storerooms and fuel stores. They provided hot water
for their tenants and cleaned the common parts of the premises, though not
obliged by the terms of the subleases to do so. They also stored articles for
the tenants in the basement storage rooms. The Court of Appeal held that the
defendants’ tenancy was not one to which Part II of the 1954 Act applied.
Jenkins LJ, with whose judgment Lord Evershed MR and Birkett LJ agreed,
accepted (at p 299) that the subletting of unfurnished residential flats is a
‘business’ within the meaning of section 23 and that the purposes for which the
entire premises there in question (including the flats sublet) were used
by the defendants for the purposes of a business carried on by them within the
meaning of section 23(1). However, he expressed the view (at p 300) that a
building wholly sublet into flats from top to bottom could not qualify for
protection under Part II of the Act of 1954 ‘because the tenant would ex
hypothesi not be in occupation of any part of the premises’. Consistently
with this reasoning he found (at p 302) that the ascertainment of the holding
inevitably involved the extraction from the property involved in the tenancy of
the 10 sublet flats. He continued:
There thus
remain as the potential subject-matter of the new tenancy the caretaker’s
rooms, storerooms and boiler rooms in the basement, the common parts of the
premises, and the three unlet flats. Divorced from the 10 sublet flats, can any
part of these premises be said to be occupied by the tenant for the purposes of
any business carried on by him? That
question must, I think, be answered in the negative. There can be no business
carried on by the tenant of providing hot water for the sublet flats, or of
cleaning the common parts of the premises for the benefit of the tenants of
those flats, or of providing those tenants with means of access to and from
those flats, once the sublet flats are ruled out of consideration as
disqualified from inclusion in the holding to which any new tenancy granted
must be confined. Nor, in my view, can there be any business carried on by the
tenant of serving in any of the ways above mentioned the three unlet flats so
long as they remain unlet, while if let at any time before the ordering of a
new tenancy, they would be subject to the same disqualification as the 10 flats
now let. Finally, I do not think that the three unlet flats (all of which I
treat for the present purposes as in the occupation of the defendants) can
properly be treated as occupied by the defendants for the purposes of any
business carried on by them. The defendants no doubt hope in due course to turn
these three flats to account in their business by subletting them to tenants.
But this, in my view, is not occupation of these three flats by the defendants
for the purposes of a business carried on by them. On the contrary, it is occupation
until such time as the defendants may be able, for reward in the shape of rent,
to exclude themselves from occupation by subletting.
On facts
superficially somewhat similar to those in the Bagettes case, this court
reached a different conclusion in Lee-Verhulst (Investments) Ltd v Harwood
Trust [1973] QB 204. I take the facts from the headnote:
The tenant
company of a house carried on there the business of letting furnished rooms
with services. L, the sole director of the company, lived in the basement and
devoted all his time to running the business. In the basement there was a
boiler which provided hot water throughout the house, a store for luggage and a
telephone on which L received incoming calls which would be taken by the room
occupants on extensions on the landings. In the hall there was a coin operated
telephone on which the room occupants could make calls. L was the subscriber
and liable for rental and all calls made. There were 20 rooms. Most had
bathrooms and gas rings but L controlled the extent to which cooking took place
and was willing to provide light meals if required. The rooms were supplied
with linen and towels. Maids with pass keys cleaned the rooms and changed the
linen. Each occupant had a rent book and paid a weekly rent.
On these
facts, having regard to the degree of control and extent of the services
provided by the tenant company, this court concluded that the tenant occupied
the entire premises for the purposes of its business within the meaning of
section 23 of the 1954 Act. Sachs LJ, with whose judgment Karminski LJ agreed,
said this (at p 213):
Thus one
comes to the critical issue — were the premises ‘occupied’ by the tenant for
the purpose of that business? The tenant
company must of course be taken, when considering this question, as being
represented on the premises by Mr Lee and the staff he engaged: the position in
practice being no different than if Mr Lee had himself been the tenant. By Mr
Lee and the staff the tenant company were present in the premises for the purpose
of the business day and night; in the course of their services to the occupants
they pervaded every room there; control was exercised by Mr Lee over the manner
in which the occupancies were conducted — a control (eg by limitations over the
cooking that was permitted and over who could stay in each apartment) of a
degree much beyond that usual when a flat is let to a tenant on a normal lease:
and in addition the tenant company’s furniture was in every room. Is there
anything in the Act of 1954 which precludes the court from giving to the word
‘occupied’ in section 23 its natural and ordinary meaning in the context of the
subject matter of that Act — a meaning which would in the set of circumstances
above described clearly lead to it being held that the tenant did occupy the
premises for the purpose of the business?
Being unable to find anything in the Act which so precludes the court, I
have come to the conclusion that this tenant did so occupy the whole of the premises.
Sachs LJ (at p
214) went on to explain that his approach to the issue, looking at the
substance of the position, involved:
much
diminishing — in most cases eliminating — the weight to be attached to the form
of the agreement between the tenant and an occupant (eg whether in law it constitutes
a subtenancy or is only a licence . . .).
At pp 214 and
215 he distinguished the Bagettes case on the grounds that:
it was
conceded by the tenant that the subtenancies of the flats put the premises
outside the Act of 1954 — so the relevant point was never argued,
and on the
further ground that:
nothing in
the report of that case shows the length of the subtenancies and in addition it
is to be noted that the tenant was apparently under no obligation to provide
the subtenants with any services.
Summing up the
position (at p 215) Sachs LJ said:
the court
must look at the substance of the position as a whole, taking into account the
various elements which have been discussed and then come to a common sense
conclusion as to whether the tenant ‘occupies’ the premises for the purposes of
his business . . .
Stamp LJ,
agreeing in the result, distinguished the Bagettes case on its facts,
pointing out (at p 217) that in that case:
the tenant
did not by his servants enter the flats which had been let to carry on the
business which one finds here of providing services to the tenants.
In William
Boyer & Sons Ltd v Adams [1975] 32 P&CR 89 the defendant,
who owned a farmhouse and outbuildings, lived in the farmhouse and sublet the
outbuildings in a number of units for the purposes of a business. He claimed
that he occupied the whole of the premises, including the units, for the
purpose of carrying on the business of subletting and providing facilities and
services to enable his subtenants to engage in light industry. Though he did
not devote the whole of his time to the business, he was always on the premises
between 10 and 11 in the morning, his wife was generally there when he was not
and when they went away on holiday they arranged for someone to be there. The
defendant provided a number of services for the occupants of the units, for
which he had to enter, and did enter, the units. Templeman J upheld his claim,
saying (at pp 92-93):
The
activities of the defendant are sufficient to show that he is not so much
acting as a landlord passively receiving rent but as the manager of a business
actively earning profits by providing accommodation, facilities and services
and by devoting time for this purpose. Some degree of presence by the defendant
in the units is provided by his central heating and other fixtures, by the need
for him to enter the units to maintain the services and facilities which he
provides for an inclusive rent and by his nightly visits. The organisation of
the complex which enables the tenants of the units to carry on their work
requires a manager and not only a landlord.
Neither of the
two last-mentioned decisions appears to have been cited to this court in Hancock
& Willis v GMS Syndicate Ltd (1982) 265 Estates Gazette 473. It
is not necessary to refer to the facts of this case, which were far removed
from those of the present case. It will suffice to refer to the following
statement of principle by Eveleigh LJ, who delivered the leading judgment.
Having referred to the relevant words of section 23(1) of the 1954 Act, he said
(at p 474):
The words
with which we are concerned import, in my judgment, an element of control and
user and they involve the notion of physical occupation. That does not mean
physical occupation every minute of the day, provided the right to occupy
continues. But it is necessary for the judge trying the case to assess the
whole situation where the element of control and use may exist in variable degrees.
At the end of the day it is a question of fact for the tribunal to decide,
treating the words as ordinary words in the way in which I have referred to
them.
Finally, we
were referred to Linden v Department of Health and Social Security
[1986] 1 WLR 164*. In that case Scott J, though he thought it was ‘on the
borderline’, held that the flats sublet to employees in the Health Service were
‘occupied’ by the health authority for ‘purposes of a Government department’
within the meaning of section 56(3) of the 1954 Act. He said (at pp 174-175):
The features
of the case which lead me to that conclusion are, particularly, that one or
more of the flats will usually be found to be vacant and under the control of
the authority; that the authority retains keys to all flats and visits them
regularly; that under the agreements exclusive possession is not given to the
occupants; that the authority provides not simply furniture, but crockery and
blankets at the premises; that the authority’s maintenance of the flats includes
decorating and the carrying out of quite trivial repairs. The evidence shows,
in my view, that 40, Nottingham Place, like the units with which Templeman J
was concerned, needs not just a landlord but a manager. On the evidence that is
the function discharged by the authority.
*Editors
note: Also reported at p 108 ante and
(1985) 277 EG 543.
In the present
case the learned judge, having summarised the issues and having stated that
some of the garages were let out and some were not, said this:
I have no
evidence of the turnover of the tenant’s clientele but it is clear that the
applicants have from time to time experienced letting problems. The applicants
are undoubtedly in rateable occupation of the whole site and I find that not
totally irrelevant. They are responsible for the whole site. They are factually
in occupation of one garage which they use as a store room for this and some
100 to 120 similar sites around the country. It is one of six such store rooms.
That is the tenant’s business: the hiring out of lock-up garage space. I accept
the evidence of Mr Potter called on behalf of the applicants. He seemed to me
to be an honest, sincere and efficient manager. I accept that the services he
and his labour force provide are as he said. There is no doubt that the
applicants are carrying on a business on the site, but are they in occupation
within the meaning of section 23 of the Landlord and Tenant Act 1954?
The learned
judge then referred to the four decisions of this court mentioned earlier in
this judgment, and concluded:
All those
cases are binding on me. It seems to me that I have to put myself in the
position of a jury, and say ‘Here are the facts. What is the proper conclusion
from the facts?’ The facts here are very
different from the Bagettes case. That was a residential property with
all sorts of covenants affecting the situation. This is a straightforward case
where the applicants let out the garage space and they undertake to clean,
maintain and service the site as a whole. I have to look at the totality of the
operation. They do what is required by the nature of the business. They have
access keys to all the garages. They appear to maintain a fairly close watch on
the garages through themselves and their agents whilst seeking to maintain a
measure of privacy for the occupants. It seems to me that when you stand back
and look at this this is garage space with a measure of security. The
applicants maintain an active maintenance and control as Mr Potter has said;
not a passive role, the mere collection of rent. On the totality of the
evidence, I would be wrong to say that they have parted with possession of the
site. Bearing in mind the purpose for which the land was let — it is a matter
of fact and degree — and trying to balance, as I must, the case, I find the
applicants have retained a sufficient measure of occupation to justify an
application under the Landlord and Tenant Act 1954.
The learned
judge thus accepted the evidence of Mr Potter in its entirety.
If the Bagettes
decision had stood alone, I think that Trans-Britannia’s claim that it was in
occupation of the whole premises would have been almost unarguable. However, in
the light of the subsequent decisions in the Lee-Verhulst and William
Boyer cases, I accept that the mere fact that a majority of the garages
were sublet would not by itself inevitably prevent Trans-Britannia from being
in occupation of the whole of the premises for the purposes of their business.
I further accept Mr Geddes’ submission, on behalf of Trans-Britannia, that in
the light of the guidance given by this court in the Lee-Verhulst case,
the court has to look at all the facts, including the time and attention
devoted by Trans-Britannia to running their business, so far as it affects
those premises, to the services rendered to occupants and to the control
exercised over the occupancies (see ibid at p 215 F, per Sachs LJ), and
then has to come to a ‘commonsense’ conclusion, having regard to the natural
and ordinary meaning of the word ‘occupied’ in section 23, in the context of
the subject-matter of the 1954 Act (see ibid at pp 213 E and 215 E).
In the
forefront of his argument, Mr Geddes contended that the nature of the services
provided by a tenant to his subtenants or licensees must be looked at in the
light of the nature of the particular business which he conducts. True it is
that the nature of the services provided by Trans-Britannia to their subtenants
are less extensive than those which were provided by the tenants to the
subtenants in the William Boyer case and much less extensive than those
provided to the subtenants in the Lee-Verhulst case. However, in his
submission, this is inherent in the nature of the relevant business. All
reasonable services, he contended, are provided by Trans-Britannia to the
subtenants of their garages, most particularly by way of repair and
maintenance, to which work, on the evidence, none of the tenants ever objects.
In his submission, there is no reason to suppose that there was insufficient
evidence to support the learned judge’s decision or that he misdirected himself
either as to law or as to fact.
This court
would be slow to interfere with the finding of the learned judge on a pure
finding of fact. However, his conclusion in this case was one of mixed fact and
law. With all respect to him and to Mr Geddes’ well-presented argument in
support of it, I think this conclusion was erroneous.
I turn to
consider the facts upon which it was based. The learned judge made the
following express findings of primary fact:
(1) Trans-Britannia are in rateable occupation of
the whole site.
(2) They are factually in occupation of one
garage which they use as a store.
(3) They let out the garage space and undertake
to clean, maintain and service the site.
(4) They have access keys to all the garages.
(5) They appear to maintain ‘a fairly close
watch’ on the garages through themselves and their agents.
Since he also
accepted the evidence of Mr Potter in totality, he must also be taken to have
accepted the further facts stated by Mr Potter in the material passages of his
evidence quoted above.
Occupation for
the purposes of rating is a legal concept all on its own, so that I do not
think that (1) above lends Trans-Britannia’s case any significant support. As
to (3) above, the terms of their lease (clause 2 (6)) place Trans-Britannia
under an obligation to Darby to keep the site ‘neat and tidy’. Mr Potter’s
evidence showed that they clean and maintain the area around the garages,
including the access roads. However, I have been able to find no evidence that
they ever expressly agreed with their subtenants to clean, maintain and service
the site. Mr Potter’s evidence showed that from time to time they repair and
maintain garages following complaints from subtenants and that they clean out,
and if necessary repair, garages before they are relet. However, so far as can
be discovered from the notes of his evidence, he gave no evidence, or no clear
evidence, that Trans-Britannia ever claimed or exercised any right to enter
lock-up garages during the subsistence of subtenancies, save with the consent
of the subtenants, either for the purpose of effecting repairs or for any other
purpose. In other words, it would appear from the evidence that each subtenant enjoyed
exclusive possession of his garage. As to (5) above, the extent of any regular
‘close watch’ on the site by Trans-Britannia appears from Mr Potter’s evidence
to have been limited to a visit by their employees about once a fortnight.
I believe I
have mentioned all the primary facts relied on by Trans-Britannia in supporting
the learned judge’s conclusion. They certainly support the conclusion that if
the premises are occupied by Trans-Britannia, they are occupied ‘for the
purposes of their business’. This much is accepted by Mr Carey on behalf of
Darby. The burden of his argument has, of course, been that they do not
‘occupy’ the premises in the relevant sense.
Against these
facts, which are said to support Trans-Britannia’s case, have to be set (inter
alia) the following. There is no living accommodation on the site. So far
as the evidence shows, there is no office, no water and no electricity. There
is no security guard. Regular visits to the premises occur no more than once a
fortnight. Mr Geddes stressed that Trans-Britannia provide all the services for
their subtenants which it is reasonable for them to provide, having regard to
the nature of their business. This may well be so. However, respectfully
differing from his submissions and the views of the learned judge on this
point, I do not think it lends much assistance to Trans-Britannia’s case to
say, in the judge’s words, ‘they do what is required by the nature of their
business’. The very nature of some businesses involves the owner parting with the
occupation of his land (see the Bagettes case (supra) at p 302,
per Jenkins LJ). Though the learned judge referred to Trans-Britannia as
maintaining ‘active control’ of the premises, I think that the very nature of
their business and the manner in which they conducted it meant that this
control was of a very limited nature.
I have
referred above to the facts of the Lee-Verhulst and William Boyer
cases in some detail if only, in the end, to show how far removed they were
from those of the present case. Without thinking it necessary to list the many
points of distinction, I merely say that in both cases the physical presence of
the tenants on the premises, the services they rendered to their subtenants or
licensees, the degree of control which they exercised over their occupancies
and the time which they spent in connection with the relevant premises were
each incomparably more extensive than the equivalent factors in the present
case. In both those cases, the tenants were regularly and frequently entering upon
every part of the premises in question. In the present case, as I have already
indicated, there is no clear evidence that Trans-Britannia ever enter lock-up
garages during the substance of subtenancies, save with the consent of the
subtenants. For by far the greater part of any year, they themselves maintain
no physical presence on the premises at all.
Mr Geddes, as
I have indicated, has accepted that Trans-Britannia must establish ‘occupation’
of the whole premises in order to succeed in their claim.
In all the
circumstances, with all respect to the learned judge, I think he misdirected
himself in the course of purporting to apply the principles established by the
four decisions to which he referred. The question raised by cases such as this
must always be one of degree, but I for my part feel no doubt that
Trans-Britannia’s case falls on the wrong side of the line. In my judgment,
applying the natural and ordinary meaning of the word ‘occupied’ to the
construction of section 23(1), the evidence points inexorably to one
conclusion. This conclusion is that Trans-Britannia are not in occupation of
the relevant land and garages within the meaning of section 23(1) of the 1954
Act and that accordingly they are not entitled to apply for a new business
tenancy thereof. I would therefore allow this appeal and make a declaration to
that effect.
CAULFIELD J
agreed and did not add anything.
The appeal
was allowed with costs in the Court of Appeal and below and declaration made as
mentioned at the end of Slade LJ’s judgment.
