Landlord and tenant — Break clause — Holding over — Election — Common law waiver — Whether landlord entitled to double rent under Distress for Rent Act 1737
The defendant tenant held a lease of industrial
premises from the plaintiff landlord. Pursuant to a break clause in the lease,
allowing the tenant to terminate the tenancy on 24 September 1996, the tenant
served a break notice to terminate the tenancy on 25 September 1996. The break
clause provided that if the landlord could not obtain a new tenant prepared to
pay not less than the rent reserved, the tenant would remain liable to pay, as
a penalty rent, the rent under the lease for 12 months or until a new tenant
was found.
On 23 September 1996 the landlord’s solicitors
wrote indicating that they were treating the notice as defective and invalid;
their letter also warned the tenant that if it continued to maintain the
validity of the notice, but failed to vacate the premises, the landlord would
collect double rent under section 18 of the Distress for Rent Act 1737. The
tenant remained in possession of the premises for just over a year after 24
September 1996. In respect of the rent due under the lease for September 1996,
the landlord sought the contractual rent plus interest and, when the rent was
not paid, issued a writ to recover it. The claim was met by the defence that
the tenancy was at an end. The landlord then amended its statement of claim to
claim in the alternative double rent under the Distress for Rent Act 1737; in
response, the tenant amended its defence and counterclaim to plead waiver by
election of any claim under the 1737 Act. Two summons were then issued by the
landlord under RSC Ord 14A. In May 1998 Judge Rich QC, sitting as a judge of
the High Court, decided that the landlord had not waived its right to claim
double rent under the 1737 Act: see [1998] 3 EGLR 60. In September 1998 Judge
Rich QC decided that the landlord was entitled to double rent under the 1737
Act as well as the penalty rent under the lease. The tenant appealed.
allowed.
principle of elective waiver as this was not a case of common law election at
all. Common law waiver proceeded upon the premise that the party said to be
fixed by the waiver must have possessed two (or more) substantive but
inconsistent rights. In such a case, his choice by overt act, communicated to
the other party, to rely on one such right precluded him from later claiming
the benefit of another. The landlord had no choice of substantive rights
whatever; the tenant’s break notice was good and the landlord had no right to
treat the tenancy as continuing.
plainly and unambiguously make clear that the landlord was entitled to double
rent where the tenant held over in circumstances where the landlord himself
asserted that the tenancy was continuing. In the case of ambiguity, the 1737
Act must be read with the Landlord and Tenant Act 1730, for they were part of a
single code. As with the 1730 Act, section 18 of the 1737 Act was concerned
with the mischief of a tenant wilfully holding over. The right to double rent
conferred by section 18 of the 1737 Act only arose where: (a) the tenant
holding over after his own notice to quit was in fact a trespasser; and (b) the
landlord treated him as such. The landlord did not treat the tenant as a
trespasser and was not entitled to double rent.
The following cases are
referred to in this report.
Attorney-General
v Prince Ernest Augustus of Hanover [1957] AC 436; [1957] 2 WLR 1;
[1957] 1 All ER 49, HL sub nom Ernest (Prince) of Hanover v Attorney-General
[1956] Ch 188; [1955] 3 WLR 868; sub nom HRH Prince Ernest Augustus of
Hanover v Attorney-General [1955] 3 All ER 647, CA
Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048; [1972] 3 All ER 610;
(1972) 24 P&CR 103; [1972] EGD 648; 223 EG 1273, CA
China National Foreign Trade Transportation
Corp v Evlogia Shipping Co SA of Panama (The
Mihalios Xilas) [1979] 1 WLR 1018; [1979] 2 All ER 1044; [1979] 2 Lloyd’s
Rep 303, HL
Cutting v Derby
(1776) 2 WBl 1075; [1775-1802] All ER Rep 520
Dendy v Nicholl
(1858) 4 CBNS 376
Doe d Cheny v Batten
(1775) 1 Cowp 243
Dun & Bradstreet Software Services
(England) Ltd v Provident Mutual Life Assurance
Association [1996] EGCS 62
Express Newspapers plc v News (UK) Ltd [1990] 1 WLR 1320; [1990] 3 All ER 376
Hankey v Clavering
[1942] 2 KB 326; [1942] 2 All ER 311, CA
Johnson v Agnew
[1980] AC 367; [1979] 2 WLR 487; [1979] 1 All ER 883; (1979) 38 P&CR
424; [1979] 2 EGLR 146; [1979] EGD 969; 251 EG 1167, HL
Johnstone v Hudlestone
(1825) 4 B&C 922
Jones v Carter
(1846) 15 M&W 718
Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850; [1970] 3
WLR 287; [1970] 2 All ER 871; (1970) 22 P&CR 74; [1970] EGD 761; 216 EG 31,
HL
Kleinwort Benson Ltd v Lincoln City Council [1998] 3 WLR 1095; [1998] 4 All ER
513; [1998] Lloyd’s Rep Bank 387, HL
Lissenden v CAV
Bosch Ltd [1940] AC 412; [1940] 1 All ER 425; 109 LJKB 350; 162 LT 195; 56
TLR 347
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1995] 1 WLR 1508; [1996]
1 EGLR 69; [1996] 06 EG 140
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749; [1997] 2
WLR 945; [1997] 3 All ER 352; [1997] 1 EGLR 57; [1997] 24 EG 122; 25 EG 138, HL
Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1
Lloyd’s Rep 391
Padfield v Minister
of Agriculture, Fisheries and Food [1968] AC 997; [1968] 2 WLR 924; [1968]
1 All ER 694, CA and HL
Pepper (HMIT) v Hart
[1993] AC 593; [1992] 3 WLR 1032; [1993] 1 All ER 42, HL
Peyman v Lanjani
[1985] Ch 457; [1985] 2 WLR 154; [1984] 3 All ER 703, CA
Tang Man Sit (Personal Representatives of) v Capacious Investments Ltd [1996] AC 514; [1996] 2 WLR 192;
[1996] 1 All ER 193, PC
Timmis v Rowlinson
(1765) 1 WBl 533
United Australia Ltd v Barclays Bank Ltd [1941] AC 1
This was the hearing of
two appeals by the defendant, Oliver Ashworth (Holdings) Ltd, against decisions
of Judge Rich QC, sitting as a judge of the High Court, on two Ord 14A
summonses issued by the plaintiff, Ballard (Kent) Ltd in proceedings for rent
against the defendant.
Jonathan Brock QC and Philip Rainey (instructed by
Rowe & Maw) appeared for the appellants; Paul Morgan QC and Nicholas
Taggart (instructed by Cripps Harries Hall, of Tunbridge Wells) represented the
respondent.
Giving the first judgment, ROBERT WALKER LJ said: These are
two appeals, both with the leave of the judge, from orders made on 8 May 1998
and 16 September 1998 by Judge Rich QC, sitting as a judge of the High Court of
Justice, Chancery Division. The appeals raise issues of some general interest
concerning double rent under the Distress for Rent Act 1737 (the 1737 Act),
election, waiver and the rule against double recovery.
Both of the judge’s orders were made under RSC
Ord
issues of fact. The basic primary facts of the matter are quite straightforward
and are not in dispute. There are other matters of fact (which might affect the
apparent meritoriousness or unmeritoriousness of the respective parties’
positions) on which the court has no evidence and must resist any temptation to
speculate. But since these proceedings were started, on 1
the litigation has followed a tortuous path and it is very doubtful whether the
two summonses under Ord 14A have achieved what is intended to be achieved by such
summonses, that is the
speedy trial of the whole matter. However, the two summonses have resulted in
two rather elaborately worded declarations and two appeals to this court, which
has to deal with the appeals as it finds them.
By a lease dated 25 March 1986 and made between
EW
Ballard Business Park, Strood, Kent, were demised for a term of 20 years from
25 March 1986 at an initial yearly rent of £43,000, payable by equal quarterly
payments in advance on the usual quarter days. There was a provision for an
upwards-only rent review every five years, under which the yearly rent was
increased to £92,000 from 25 March 1991. The landlord is now Ballard (Kent) Ltd
(the plaintiff below and the respondent in this court) and the tenant is Oliver
Ashworth (Holdings) Ltd (the defendant below and the appellant in this court).
Clause 3(10) of the lease contained a tenant’s covenant,
in standard form, to yield up the demised premises at the expiration or sooner
determination of the term. Clause 12 of the lease contained two provisions of
particular importance in this case. Clause 12(i) contained an option for the
tenant to determine the lease at the expiration of the first 10 years and six
months of the term by giving ‘at least six months’ previous notice in writing
prior to the determination date’ (which was defined as the expiration of the
period of 10 years and six months). The following subclauses of clause 12
provided for the tenant to continue to be liable for rent and service charge
for a period of up to a year if, after the term had been brought to an end
under clause 12(i), the landlord could not relet on satisfactory terms. The
precise terms of clause 12(ii) were as follows:
That in the event that the term hereby granted
shall be determined by the Tenant in the manner aforesaid and if (having used
its best endeavours which the Landlord hereby undertakes so to do) the Landlord
shall be unable to re-let the whole of the demised premises at a commencing
rent of not less than the rent first hereby reserved and otherwise upon terms
no less advantageous to the Landlord than those in this present demise
contained the Tenant shall continue to pay to the Landlord quarterly in advance
on the usual quarter days the rents hereby reserved and the service charges on
the dates when they shall respectively become payable from the determination
date until the date when the lessee under a new Lease of the demised premises
granted by the Landlord shall commence payment of rent or until the date twelve
months from the determination date whichever shall be earlier.
This was followed by some provisos and two further
associated subclauses, which do not call for detailed summary.
By a letter dated 5 March 1996 the tenant’s
solicitors gave notice of the tenant’s intention to determine the lease ‘as at
25 September 1996’. The notice should have specified 24 September 1996. It also
seems to have erred in specifying the wrong company in the Ballard group as the
landlord to whom it was addressed, but that point has disappeared from the case
and I need say no more about it. The error of one day has, however, had
momentous consequences.
On 23 September 1996 — that is, only the day
before the true determination date — the landlord’s solicitors wrote to the
tenant’s solicitors drawing attention to the errors and contending that the
notice was invalid. In connection with the date, the letter cited the decision of
this court in Mannai Investment Co Ltd v Eagle Star Life Assurance Co
Ltd [1995] 1 WLR 1508*. That decision (which was made on 5 July 1995 and,
as it happens, reversed a decision of Judge Rich) followed earlier Court of
Appeal authority (Hankey v Clavering [1942] 2 KB 326), but itself
was reversed by a bare majority of the House of Lords on 21 May 1997: see
[1997] AC 749†. In legal theory, the House of Lords was saying ‘the law was
always thus’ (see the discussion in Kleinwort Benson Ltd v Lincoln
City Council [1998] 3 WLR 1095), but the position is rather different in
terms of the practicalities of advising clients, and the uncertainty as to the
validity of the tenant’s notice under clause 12(i) lies at the heart of these
appeals.
*Editor’s note: Also reported at [1996] 1 EGLR 69
†Editor’s note: Also reported at [1997] 1 EGLR 57
I return to the landlord’s solicitors’ letter of
23 September 1996. It expressed the view that the tenant remained bound for the
full duration of the lease. It continued:
Alternatively, and strictly without prejudice to
our client’s contention that the break notice is defective, if your client
seeks to maintain that the break notice is valid, but fails to vacate the
premises, our client will be entitled to collect double rent from your client
for such period as your client remains in occupation. This arises pursuant to
the Landlord and Tenant Act 1737, section 18. Collection of double rent will be
without prejudice to our client’s contentions that the break notice is
defective and also without prejudice to our client’s contractual right to
collect a sum equivalent to a year’s rent and service charges, pursuant to
Clause 12(ii) of the Lease.
The reference to the Landlord and Tenant Act 1737
should have been to the Distress for Rent Act 1737, which is here referred to
as the 1737 Act. There is also a Landlord and Tenant Act 1730 (the 1730 Act) of
which it will be necessary to make some mention.
The matter was now in the hands of the landlord’s
solicitors’ litigation partner, who on 26 September wrote:
The lease dated 25 March 1986 is continuing and
your client is required to pay the September’s quarter rent payable on 29
September 1996. In the event that your client’s rental payment is late,
interest will be payable under cl 6(ii).
On 18 October 1996 she wrote:
We are instructed to sue your client for the
September quarter’s rent payable under the lease dated 25 March 1986.
The letter demanded £23,000 together with interest
and legal fees of over £2,000. It made no mention of any alternative claim
either under the 1737 Act or under clause 12(ii) of the lease.
Although the tenant’s position was that it had
validly exercised the option to determine the lease, it remained in occupation
of the demised premises (in fact through the medium of a subsidiary company,
but nothing turns on that). The landlord’s counsel (Mr Paul Morgan QC and Mr
Nicholas Taggart) say in their skeleton argument that the tenant does not
suggest that its decision to remain in occupation was based on the landlord’s
stance as to the validity of the notice, but there is no admission to that
effect in the tenant’s pleadings. It would not be surprising if there was a
causal connection, but, again, none is asserted in the tenant’s pleadings. For
the purpose of the Ord 14A summonses those matters are behind the veil.
On 1 November 1996 the landlord issued a writ and
statement of claim in the Chancery Division of the High Court. In its original
form it was a simple claim for arrears of rent, interest and costs. There was
no reference to the tenant’s notice under clause 12(i), or to any sum claimed
under clause 12(ii), or to the 1737 Act. However, the landlord’s claims, and
the issues between the parties, have since become a good deal more complex, and
it will save time in the long run to set out the course of the litigation in a
little detail, noting also relevant events outside the course of the
litigation.
On 9 December 1996 the tenant put in a defence and
counterclaim pleading the notice under clause 12(i) and seeking a declaration
that the lease terminated on 24 September 1996. The original defence pleaded an
estoppel, but that was in relation to the point on the landlord’s name, which
is no longer a live issue.
On 20 December 1996 the landlord put in a reply
and defence to counterclaim challenging the validity of the clause 12(i) notice
on the ground of the incorrect date and, on 10 January 1997, having obtained
leave from the master, the landlord amended its statement of claim to add
alternative claims put forward on the basis:
If, which is denied, the lease was determined by
the defendant, as alleged or at all.
These claims were that the tenant had wrongfully
failed to give up possession of the premises, was a trespasser and was liable
to pay:
(i) mesne profits at double the passing rent
under the 1737 Act; or
(ii) simple mesne profits; and in addition, in
either case
(iii) rent under clause 12(ii) for twelve months
or until earlier reletting.
On 9 January 1997 the tenant amended the defence
and counterclaim to plead waiver by election of any claim under the 1737 Act.
On 20 January 1997 the House of Lords heard
argument in the Mannai case and reserved judgment. On 24 April there was
a master’s order by consent, but without prejudice to the parties’ pleadings,
for immediate payment by the tenant to the landlord of £52,000 and interest ‘by
way of interim payment calculated at the annual rate of £70,000 and on account
of its liability in respect of use and occupation’ by the tenant of the
premises. The order also provided for further quarterly payments at the same
annual rate and for payment of insurance outgoings, in each case with interest.
On 21 May 1997 came the decision of the House of
Lords in Mannai. This did not produce any immediate reaction either in
the pleadings or in the occupation of the premises, but on 13 October 1997 the
tenant further amended the defence and counterclaim so as to add further
particulars of the pleaded waiver of any claim under the 1737 Act and so as to
plead a more elaborate defence to the claim under clause 12(ii). On 3 November
1997 the tenant’s subsidiary company vacated the premises. On 20 November 1997
the landlord made further amendments to the reply and defence to counterclaim.
On 17 December 1997 there was a master’s order
declaring that the lease was determined on 24 September 1996, and awarding the
tenant its costs of the counterclaim and the relevant parts of its defence. So
by that stage the eventual issues were beginning to emerge, although there were
still further amendments of pleadings to come.
On 3 March 1998 the landlord issued a summons for
judgment for ‘interest on the sum of £23,000 claimed by [the landlord] in this
action and now paid by [the tenant]’. That summons (which Mr Jonathan Brock QC,
appearing with Mr Philip Rainey, for the tenant, described as entirely
inconsistent with a claim for double rent under the 1737 Act) was twice listed
and adjourned and remains unresolved.
The two summonses under Ord 14A were both issued
by the landlord (but in the case of the first summons, at the invitation of the
tenant). The first, issued on 22 April 1998, posed the following question of
law:
In circumstances where:
(a) a lease contains a break clause,
(b) and also a clause requiring the payment of
rent for the period of 12 months after any operation of the break notice by the
tenant,
(c) which the tenancy purports to operate by
service of a notice,
(d) but the validity of the notice is disputed by
the landlord and
(e) the tenant remains in occupation of the
demised premises after the lease has been determined by the service of the
break notice;
do any of the following events amount to a waiver
of the landlord’s right to demand and receive double rent, pursuant to The
Distress for Rent Act 1737, without proof of any fact beyond that one or more
of the events specified occurred:
(f) demanding and/or accepting rent prior to the
expiry of the Lease, pursuant to the break clause;
(g) demanding and/or accepting rent due after the
expiry of the Lease, pursuant to the break clause;
(h) commencing proceedings for the recovery of
rent due prior to the expiry of the Lease, pursuant to the break clause; and
(i) commencing proceedings for the recovery of
rent due after the expiry of the Lease, pursuant to the break clause.
On 8 May 1998 the judge decided that question in
favour of the landlord. That decision is the subject of the first appeal.
The second Ord 14A summons was issued on 25 June
1998 and posed the following questions of law, on the true construction of the
lease and the 1737 Act:
(a) whether the Plaintiff is entitled to receive
both rent payable pursuant to clause 12 of the Lease (‘Penalty Rent’) and
double rent pursuant to the [1737] Act;
(b) whether on the true construction of the
clause 12(ii) of the Lease, Penalty Rent is payable where there is an
alternative claim for, inter alia, double rent pursuant to the [1737]
Act;
(c) whether it is an implied term of clause
12(ii) of the Lease (necessary to give clause 12(ii) commercial efficacy) that
where the tenant does not vacate the demised premises following the service of
a break notice pursuant to the Lease, and consequently the landlord becomes
entitled to double rent, penalty rent is not payable in addition to double
rent;
(d) whether the obligation to pay double rent
pursuant to the [1737] Act subsumes the obligation to pay penalty rent pursuant
to the Lease;
(e) whether double rent, while deemed by statute
to be a sum double to the previous passing rent and recoverable as rent, is a
species of mesne profits or remedy for the tort of trespass, and is not payable
where so to order would lead to double recovery.
On 16 September 1998 the judge decided all those
questions in favour of the landlord, in particular declaring that double rent
under the 1737 Act:
is a remedy for the tort of trespass, but is not
a species of mesne profits and is not damages for the tort of trespass.
That decision is the subject of the second appeal.
At this point it is appropriate to say a little
more about the 1730 Act and the 1737 Act. They have long titles in similar
terms indicating a general legislative purpose of discouraging fraud on the
part of tenants and improving landlords’ remedies. There is authority that they
should be construed together as statutes dealing with the same subject-matter
(see especially Lord Mansfield CJ in Timmis v Rowlinson (1765) 1
WBl 533 at p534), but it is not easy to see precisely how they fit together.
The 1737 Act as a whole was concerned with distress for rent, but section 18
plainly gave landlords new substantive rights as well as providing for them to
be able to distrain for sums to which they became entitled under that section
as if those sums were rent. The section is in the following terms:
And whereas great inconveniences have happened
and may happen to landlords whose tenants have power to determine their leases,
by giving notice to quit the premises by them holden, and yet refusing to
deliver up the possession when the landlord hath agreed with another tenant for
the same: Be it further enacted by the authority aforesaid, that from and after
the said twenty fourth day of June one thousand seven hundred and thirty eight,
in case any tenant or tenants shall give notice of his, her, or their intention
to quit the premises by him, her, or them holden, at a time mentioned in such
notice, and shall not accordingly deliver up the possession thereof at the time
in such notice contained, that then the said tenant or tenants, his, her, or
their executors or administrators, shall from thenceforward pay to the landlord
or landlords, lessor or lessors, double the rent or sum which he, she, or they
should otherwise have paid, to be levied, sued for, and recovered at the same
times and in the same manner as the single rent or sum, before the giving such
notice, could be levied, sued for, or recovered; and such double rent or sum
shall continue to be paid during all the time such tenant or tenants shall
continue in possession as aforesaid.
In his first judgment, the judge considered the
old case of Doe d Cheny v Batten (1775) 1 Cowp 243, and the
recent discussion of it by Knox J in Dun & Bradstreet Software Services
(England) Ltd v Provident Mutual Life Assurance Association, 2 April
1996*. But before any detailed consideration of those cases, it is necessary to
make some general observations about estoppel, election and waiver. All share a
common foundation in a simple instinct of fairness, and in particular the
perception that as between two parties to a transaction or a legal relationship
it is or may be unfair for one party (A) to adopt inconsistent positions in his
dealings with the other (B). As Lord Wilberforce said in Johnson v Agnew
[1980] AC 367† at p398E:
Election, though the subject of much learning and
refinement, is in the end a doctrine based on simple considerations of common
sense and equity.
*Editor’s note: Reported at [1996] EGCS 62
†Editor’s note: Also reported at [1979] 2 EGLR
146
Equitable (or promissory) estoppel applies only
where there is an unequivocal representation (in words or conduct) by A and it
is relied on by B. That does not arise here (the tenant’s original pleading of
estoppel was concerned with the identity of the landlord to which the notice
was addressed, a point that is no longer live). In election, by contrast, A’s
words or conduct unequivocally evince a choice by A between inconsistent
alternatives. In such a situation reliance by B on A’s unequivocal words or
conduct (as opposed to B’s knowledge of
part of A that there is a choice to be made is a necessary ingredient. He must
make an informed choice. But as Stephenson LJ said in Peyman v Lanjani
[1985] Ch 457 at p487D:
When a party has legal advice, he will be more
easily presumed to know the law and evidence or special circumstances may be
required to rebut the presumption…
Before the judge there was a preliminary
difference between counsel (which the judge described as an equivocation) as to
whether the relevant principle should be described as election between rights
(which was Mr Morgan’s submission) or as election between courses of action
(which was Mr Brock’s submission, framed, as I understand it, so as to bring
election between rights and election between remedies under the umbrella of the
same principle). This preliminary difference was soon overtaken by a more
fundamental difference, that is whether a choice between what Mr Morgan called
‘inconsistent assertions’ can properly be characterised as a case of common law
election at all. That was the principal ground on which the judge decided the
first Ord 14A summons. Nevertheless, it is helpful to consider the preliminary
point of difference because it provides a foundation for assessing some of the
wide-ranging submissions in the written skeleton argument prepared by Mr Brock
and Mr Rainey.
Election between ‘courses of action’ is an
expression used in expositions of the principle by some very eminent judges:
see, for instance, Lord Scarman in China National Foreign Trade
Transportation Corp v Evlogia Shipping Co SA of Panama (The Mihalios
Xilas) [1979] 1 WLR 1018 at p1034, and Lord Goff in Motor Oil Hellas
(Corinth) Refineries SA v Shipping Corporation of India (The
Kanchenjunga) [1990] 1 Lloyd’s Rep 391 at p398. But there is a volume of
binding authority showing that for many purposes (including determining the
time at which an election must be made), it is necessary to distinguish
election between remedies from election between rights: see especially Lord
Atkin in United Australia Ltd v Barclays Bank Ltd [1941] AC 1 at
pp29-30; Lord Wilberforce in Johnson v Agnew [1980] AC 367 at
p396; and Lord Nicholls in Personal Representatives of Tang Man Sit v Capacious
Investments Ltd [1996] AC 514 at pp521‑522.
The distinction can of course be obscured by
terminology: every remedy is in one sense a right (even if its grant is
discretionary), but not every right is a remedy. The distinction is clear if
‘right’ is used to indicate a substantive right such as entitlement to a
leasehold interest or to the benefit of a contract. If a would-be purchaser is
induced by a misrepresentation to enter into a contract, he has a choice
(exercisable subject to familiar constraints) whether to treat himself as no
longer bound by the contract, or to affirm it (in either case he will usually
also be entitled to claim damages for any loss caused by the
misrepresentation). That is an election between rights. If he chooses to affirm
the contract and the other party defaults, the purchaser may sue for specific
performance or for damages. That is an election between remedies. Normally,
election between remedies need not be made until judgment, and even then the
election need not be final if specific performance is not in the event
feasible. Sometimes, however, election between substantive rights and between
procedural remedies will necessarily coincide. The most obvious example is in
the law of landlord and tenant when a landlord decides not to claim that a
lease has been determined by forfeiture; by that decision he necessarily also
elects not to seek an order for possession of the demised premises.
Waiver is not at all a precise term of art: see,
for instance, Lord Diplock in Kammins Ballrooms Co Ltd v Zenith
Investments (Torquay) Ltd [1971] AC 850 at p882 and Lord Goff in Motor
Oil Hellas at pp397-398; also Spencer Bower and Turner, Estoppel
by Representation, 2nd ed pp291-292, quoted by Viscount Dilhorne in Kammins
at pp872-873. It can be used to describe the effect of an election, especially
in the old expression ‘waiver of forfeiture’, which, in the law of landlord and
tenant, is apt to describe a landlord’s decision not to terminate a lease by
re-entry for breach of covenant and not to seek the remedy of an order for
possession; he may still be able to seek some other remedy, usually damages for
breach of covenant. However, the expression ‘waiver’ is often used in a wider
sense of any deliberate decision by a party not to stand on his strict rights,
for instance, as in Kammins, not to take a technical point as to the
validity of a notice. In that case (at p883), Lord Diplock regarded this second
type of waiver as being a form of estoppel, and said that ordinary principles
of estoppel apply to it.
Mr Brock relied strongly on the cases of Doe d
Cheny v Batten (1775) 1 Cowp 243 and Dendy v Nicholl
(1858) 4
notice to quit but failed to leave the premises by the due date (Michaelmas).
The landlord sued for ejectment, but then accepted a quarter’s rent (due at
Christmas). The issue was whether this created a new tenancy. Lord Mansfield
said that the issue depended on the intention of the parties. Several members
of the court made observations about the 1730 Act (not the 1737 Act). Lord
Mansfield referred to the landlord accepting a single rent and said at p246:
The taking half, when he is entitled to an action
for the whole, is an act of lenity; but it does not import a consent that the
tenant shall continue in possession, or a waiver by the landlord, of his remedy
by ejectment.
Similarly, Aston J (at p246) and Ashhurst J (at
p247) said that the acceptance of a single rent was only a waiver of the
landlord’s right to double rent under the 1730 Act, and not of the right to
possession. These observations (which Knox J followed, without any extensive
analysis, in Dun & Bradstreet Software Services v Provident
Mutual Life Assurance, 2 April 1996) were not necessary to the decision in
the case. Nevertheless, as Mr Brock pointed out, they have often been regarded
as authority for the proposition that a demand for rent operates as a waiver of
the right to double rent: see, for instance, Woodfall’s Law of Landlord and
Tenant para 19.028.
In Dendy v Nicholl (1858) 4 CBNS 376
(which has often been cited and followed) it was held that for a landlord to
demand and sue for rent, when he knew of facts entitling him to forfeit the
lease, amounted to waiver of forfeiture and prevented him from bringing a later
action for ejectment. Crowder J (at p385) cited Parke B in Jones v Carter
(1846) 15 M&W 718:
‘After such an act, by which the lessor treats
the lessee as a trespasser, the lessee would know that he was no longer to
consider himself as holding under the lease, and bound to perform the covenants
contained in it; and it would be unjust to permit the landlord again to change
his mind, and hold the tenant responsible for the breach of duty after that
time.’ The act there relied on as determining the landlord’s option was
bringing an ejection. How does that apply here? Here, the landlord, by bringing
an action for rent accruing subsequently to the accrual of the forfeiture, and
obtaining payment of the rent by means of that action, has clearly made his
election to treat the lessee as still being his tenant.
After referring to some other authorities, Crowder
J continued at p386:
Here, there has been not merely a demand of the
rent, but an action brought to enforce it. That seems to me to be an
unqualified and conclusive act on the part of the landlord, shewing a
determination on his part to treat the lessee as still continuing his tenant… I
think the authorities abundantly shew, that, by such a demand as has been made
here, the plaintiff has elected conclusively to treat the defendant as his
tenant, and cannot afterwards turn round and make him a trespasser.
Willes J and Byles J gave judgments to the same
effect.
Mr Morgan submitted that neither of these cases
assisted the resolution of the appeals. He said, correctly, that the report of Cheny
is devoid of analysis or reasoning. As to Dendy v Nicholl,
without in any way questioning the principle in that case, he said that it had
nothing to do with the 1737 Act or with the situation where a landlord (so far
from having any right to forfeit a lease) was challenging the validity of a
tenant’s notice to quit, and was ultimately unsuccessful in that challenge. In
such a situation the landlord may think that he is in a position to decide
whether or not to stand on his strict rights (and if he decided not to there
would be a waiver by estoppel, once the tenant had
waiver.
This is not an area of the law where any rigid or
precise taxonomy of principles is possible. In the field of landlord and
tenant, the common law has — since before the modern period when many tenants
are entitled to statutory protection of some sort — attached particular
importance to the notion that a tenant should know where he stands, and should
not be faced with the dilemma of uncertainty as to whether he has the
obligations of a tenant or is subject to the liabilities of a trespasser. That
seems to have produced some attenuation, in this field of the law, in the
requirement for elective waiver to be a matter of informed choice. The
consequences of waiver of this type are a question of law, not fact, in the
sense that if a landlord, knowing of a tenant’s breach of covenant, demands
rent (even through a clerical error), he cannot avoid the consequences even by
an express reservation of his rights: see Central Estates (Belgravia) Ltd v
Woolgar (No 2) [1972] 1 WLR 1048 at pp1052, 1054, 1056 and the older
authorities there referred to. Moreover (as appears from the division of
opinion in the House of Lords on the second point in Kammins), there may
also be some attenuation in the requirements for unequivocal communication and
substantial reliance as ingredients in waiver by estoppel, where the alleged
waiver is no more than a failure to take a technical point at the earliest
moment.
Mr Morgan did not accept that there was any such
blurring at the edges. He submitted that, apart from issues as to the
construction of the 1737 Act (raised for the first time in this court), the
position was perfectly clear. On the one hand, he said, there was the principle
of equitable estoppel (or waiver by estoppel); that did not help the tenant
because it was not pleaded (for the good reason, Mr Morgan suggested, that
there was no evidential basis for such a pleading). On the other hand, there
was the principle of common law election between rights (or elective waiver);
that did not help the tenant because the landlord did not have a choice between
two valid substantive rights. The tenant had no third route to success by
making a vague and unprincipled appeal to unfairness. Dendy v Nicholl
was distinguishable. So was Johnstone v Hudlestone (1825) 4
B&C 922, since in that case the tenant’s parol notice to quit really was
invalid and did not have the effect of bringing the tenancy to an end.
For my part, I am not wholly satisfied that there
is no third route that the tenant could have taken. The principle that a party
to litigation cannot ‘approbate and reprobate’ (or ‘blow hot and cold’) does
sometimes curtail that party’s theoretical freedom to plead wholly inconsistent
cases as alternatives. The principle is an importation into English law from
Scotland, and although it covers much the same ground as elective waiver and
waiver by estoppel, it may be rather more flexible: there is a fairly recent
example in the decision of Sir Nicolas Browne-Wilkinson V-C in Express
Newspapers plc v News (UK) Ltd [1990] 1 WLR 1320. No authorities are
cited in the relevant passage of the judgment (at p1329), but the principle
(and its limits) were considered by the House of Lords in Lissenden v CAV
Bosch Ltd [1940] AC 412, especially in the speech of Viscount Maugham at
pp429-430. It seems to me at least arguable that by demanding and suing for
rent the landlord was unequivocally treating the tenant as not being a
trespasser, and that the subsequent amendment of the statement of claim to
plead an alternative and inconsistent case should not be allowed to operate
retrospectively so as to make the tenant’s occupation unlawful.
However, in a case in which the court has had the
benefit of submissions from experienced leading counsel specialising in this
field of the law, I do not think it would be right to come to a conclusion by a
route that neither side supported (and which was not therefore explored in
argument), especially where there is another path to the same result.
Throughout his submissions, Mr
colours to the mast of elective waiver, and that he was not relying on any
other principle. In my judgment, Mr Morgan is right in submitting that the
tenant cannot succeed on the principle of elective waiver, because this case is
not really a case of common law election at all. That was essentially the
judge’s ground of decision on the first Ord 14A summons.
In this case, the landlord appears to have left
its challenge to the tenant’s notice until the last moment. It then pursued its
claim for arrears of rent with great vigour. Although this court does not know
all the facts as to why the tenant remained in occupation, I would regard it as
an unfair result if, in the circumstances of this case, the tenant were liable
to pay double rent under the 1737 Act as a trespasser in respect of a period
when the landlord was, in correspondence and in pleadings, vigorously
contending that the tenant was not a trespasser.
During the course of argument, Laws LJ raised the
question of whether the 1737 Act itself does not, on its true construction,
apply only when the landlord has been treating the tenant as a trespasser. That
point was not raised in the Ord 14A summonses, or before the judge, or in the
notices of appeal. Nevertheless, Mr Morgan realistically and helpfully accepted
that it was a point that, once raised, ought to be dealt with, since it would
otherwise have to be dealt with at a later stage in what is already very
protracted litigation. This court heard submissions from both sides as to the
construction of the 1737 Act.
I have had the advantage of reading in draft the
judgment of Laws
agree with his judgment. I would therefore allow the first appeal on the issue
of statutory construction. Both sides agree that in that event the second
appeal must also be allowed, since it is expressly predicated on the landlord’s
success on the first summons.
Agreeing, LAWS
LJ said: I have had the advantage of reading in draft the judgment
of Robert Walker LJ, and I gratefully adopt the account there given of the
facts of this case and the course of the litigation that has led to the two
appeals before this court.
For the reasons given by Robert Walker LJ, I
consider that the argument of Mr Brock QC, for the appellant, to the effect
that the respondent waived its right to double rent by election, cannot
succeed. Common law waiver, or waiver by election as Mr Brock described it,
proceeds upon the premise that the party said to be fixed by the waiver must
have possessed two (or more) substantive but inconsistent rights. In such a
case, his choice by overt act, communicated to the other party to rely on one
such right, precludes him from later claiming the benefit of another. Here, the
respondent had no choice of substantive rights whatever. The appellant’s break
notice was good. Accordingly, the respondent possessed no right to treat the
tenancy as continuing. Robert Walker LJ canvasses the possibility that a
different case might have been open to the appellant, based upon a somewhat
broader principle that a party may not ‘approbate and reprobate’ or ‘blow hot
and cold’; whether or not such a claim might have been made (as to which I
express no view), in fact it was not, and, in common with Robert Walker LJ, I
would decline to conclude the first appeal by reference to a point not explored
by counsel in the course of argument.
However, in my judgment, the question of whether
the respondent is entitled to double rent under section 18 of the Distress for
Rent Act 1737 turns, not on any question of waiver, but on the correct
interpretation of that statute. There is a gulf of principle between the
respective contentions of counsel. Mr Brock adopts what may loosely be called a
purposive construction of section 18 of the 1737 statute. Mr
for the respondent, adopts what may be called a literal construction. Mr Brock
says that an examination of the whole statute, not least read with the Landlord
and Tenant Act 1730, shows that the remedy of double rent provided for by
section 18 is only available where the tenant holds over (after giving notice
to quit) against the landlord’s interest; or, as it was put in the course of
argument, in circumstances where the landlord treats the tenant as a
trespasser. Mr
clear and unambiguous, and, if that is right, no appeal to the statutory
context, whether exemplified by the Act of 1730, the preamble to the Act of
1737, or the recital to section 18, can avail to restrict their scope.
Before addressing the principles by reference to
which these respective contentions must be judged, it is necessary to set out
the material statutory provisions. The long title of the Act of 1730 reads: ‘An
Act for the more effectual preventing Frauds committed by tenants,
and for the more easy Recovery of Rents, and Renewal of Leases‘. There is
no preamble. So far as material, section 1 provides:
In case any tenant… for any term… shall wilfully
hold over any lands… after the determination of such term… and after demand
made and notice in writing given for delivering the possession thereof by his…
landlords… then and in such case, such person… so holding over shall, for and
during the time he… shall so hold over or keep the person… entitled out of
possession of the said lands… pay to the person… so kept out of possession… at
the rate of double the yearly value of the lands… for so long time as the same
are detained, to be recovered in any of his Majesty’s courts of record by
action of debt…
The long title of the Act of 1737 is: ‘An Act
for the more effectual securing the Payment of Rents, and preventing Frauds by
Tenants‘. The preamble is in these terms:
Whereas the several laws heretofore made for the
better security of rents, and to prevent frauds committed by tenants, [sc
plainly including the Act of 1730] have not proved sufficient to obtain the
good ends and purposes designed thereby, but rather the fraudulent practices of
tenants, and the mischief intended by the said Acts to be prevented have of
late years increased, to the great loss and damage of their lessors or
landlords: For remedy whereof, may it please your most excellent Majesty that
it may be enacted…
The surviving sections before section 18 are
generally concerned with distress for rent. It is unnecessary to set them out,
save to notice that sections 10 and 16 contain their own preambles, or recitals
as Mr
section 18 has figured large in the course of argument, I think it helpful to
refer to the recitals to these earlier sections. Section 10 (which makes
provision for distress to be secured and its fruits sold on the relevant
premises, where that was not previously allowed) opens with the words:
And whereas great difficulties and inconveniences
frequently arise to landlords… taking distresses for rent, in removing the
goods and chattels or stock distrained off the premisses, in cases where by law
they may not be impounded and secured thereupon…
Section 16 makes provision for the landlord to be
put back into possession where the tenant abandons the premises without
quitting the tenancy. It opens:
And whereas landlords are often great sufferers
by tenants running away in arrear, and not only suffering the demised premises
to lie uncultivated without any distress thereon, whereby their landlords…
might be satisfied for the rent-arrear, but also refusing to deliver up the
possession of the demised premisses, whereby the landlords are put to the
expence and delay of recovering in ejectment…
Now I may come to section 18. Its material words,
including the recital, are as follows:
And whereas great inconveniences have happened
and may happen to landlords whose tenants have power to determine their leases,
by giving notice to quit the premisses by them holden, and yet refusing to
deliver up the possession when the landlord hath agreed with another tenant for
the same: Be it further enacted… that… in case any tenant… shall give notice of
his… intention to quit the premises… at a time mentioned in such notice, and
shall not accordingly deliver up the possession thereof at the time in such
notice contained, that then the said tenant… shall from thenceforward pay to
the landlord… double the rent… which he… should otherwise have paid, to be
levied, sued for, and recovered at the same times and in the same manner as the
single rent… before the giving such notice, could be levied, sued for, or
recovered; and such double rent… shall continue to be paid during all the time
such tenant… shall continue in possession as aforesaid.
By way of introduction to the issue of statutory
construction, I should say that, in my judgment, it is nowadays misleading —
and perhaps it always was — to seek to draw a rigid distinction between literal
and purposive approaches to the interpretation of Acts of Parliament. The
difference between purposive and literal construction is in truth one of degree
only. On received doctrine we spend our professional lives construing
legislation purposively, inasmuch as we are enjoined at every turn to ascertain
the intention of parliament. The real distinction lies in the balance to be
struck, in the particular case, between the literal meaning of the words, on
the one hand, and the context and purpose of the measure in which they appear,
on the other. Frequently there will be no opposition between the two, and then
no difficulty arises. Where there is a potential clash, the conventional
English approach has been to give at least very great and often decisive weight
to the literal meaning of the enacting words. This is a tradition that I think
is weakening, in the face of the more purposive approach enjoined for the
interpretation of legislative measures of the European Union and in light of
the House of Lords’ decision in Pepper (HMIT) v Hart [1993] AC
593. I will not here go into the details or merits of this shift of emphasis;
save broadly to recognise its virtue and its vice. Its virtue is that the
legislator’s true purpose may be more accurately ascertained. Its vice is that
the certainty and accessibility of the law may be reduced or compromised. The
common law, which regulates the interpretation of legislation, has to balance
these considerations.
With this introduction, I may turn to the
argument. Mr Morgan laid much emphasis on statements of their lordships in Attorney-General
v Prince Ernest Augustus of Hanover [1957] AC 436, to the effect that
words in a preamble cannot of themselves restrict the scope of enacting words,
where the latter are wider or more general than the former; and so the enacting
words of section 18 of the Act of 1737 must be given the full reach that their
language demands. He relies in particular on what was said by Viscount Simonds
at pp462-463:
But where it is in the preamble that the reason
for restriction is to be found, the difficulty is far greater. For, as so often
has been said, Parliament may well intend the remedy to extend beyond the
immediate mischief: the single fact therefore that the enacting words are more
general than the preamble would suggest is not enough. Something more is
needed, and here lies the heart of the problem.
However, immediately following this passage
Viscount Simonds continued at p463:
On the one hand, the proposition can be accepted
that ‘it is a settled rule that the preamble cannot be made use of to control
the enactments themselves where they are expressed in clear and unambiguous
terms’. I quote the words of Chitty
be difficult to say that any terms are clear and unambiguous until they have
been studied in their context. That is not to say that the warning is to be
disregarded against creating or imagining an ambiguity in order to bring in the
aid of the preamble. It means only that the elementary rule must be observed
that no one should profess to understand any part of a statute or of any other
document before he had read the whole of it. Until he has done so he is not
entitled to say that it or any part of it is clear and unambiguous. To say,
then, that you may not call in aid the preamble in order to create an ambiguity
in effect means very little, and… I would suggest that [the rule] is better
stated by saying that the context of the preamble is not to influence the
meaning otherwise ascribable to the enacting part unless there is a compelling
reason for it. And I do not propose to define that expression except negatively
by saying… that it is not to be found merely in the fact that the enacting
words go further than the preamble has indicated.
At p467 Lord Normand said:
When there is a preamble it is generally in its
recitals that the mischief to be remedied and the scope of the Act are
described. It is therefore clearly permissible to have recourse to it as an aid
to constructing the enacting provisions. The preamble is not, however, of the
same weight as an aid to construction of a section of the Act as are other
relevant enacting words to be found elsewhere in the Act or even in related
Acts… It is only when it conveys a clear and definite meaning in comparison
with relatively obscure or indefinite enacting words that the preamble may
legitimately prevail.
Last, Lord Somervell said at p473:
The title and the general scope of the Act
constitute the background of the contest. When a court comes to the Act itself,
bearing in mind any relevant extraneous matters, there is, in my opinion, one
compelling rule. The whole or any part of the Act may be referred to and relied
on. It is, I hope, not disrespectful to regret that the subject was not left
where Sir John Nicholl left it in 1826. ‘The key to the opening of every law is
the reason and spirit of the law — it is the ‘animus imponentis‘, the
intention of the law-maker, expressed in the law itself, taken as a whole.
Hence, to arrive at the true meaning of any particular phrase in a statute,
that particular phrase is not to be viewed, detached from its context in the
statute: it is to be viewed in connexion with its whole
enacting part of the statute.’
In my judgment, the first principle that this
authority vouchsafes is that in construing any enacting provision in statute
regard must be had to the whole of the Act; and (as I take Lord Normand to
intend by his reference to ‘related Acts’) in a case where the Act is to be
read with another as constituting a code devised by parliament to achieve a
distinct purpose, regard must be had to the other Act as well. The dicta
relied upon by Mr
more prevail over enacting words where the latter are taken to be unambiguous.
However, this concept of ambiguity is not, to my
mind, free of difficulty. An expression is strictly ambiguous when, entirely
shorn of their context, the words in question are equally capable as a matter
of language of meaning at least two different things. In Marlowe’s Edward II
there is the message ‘Edward to kill fear not to do the deed is good’. With a
comma after ‘fear’, it tells the recipient not to kill the King; if the comma
is after ‘not’, it commends his murder. With no comma at all, it is in the true
sense ambiguous. But this kind of strict ambiguity cannot be the whole reach of
what their lordships meant in Prince Ernest’s case, since they
considered that it is always necessary to look at the context of the Act in
every case; and it is by no means in every case that such a strict or internal
ambiguity arises. There is, however, a different sense of ambiguity, which, in
my judgment, is what is really involved here. It arises where, although the
words as a matter of language are clear enough, there may be a question as to
the scope or subject-matter of their intended reference. In the sixth century
BC Croesus, King of Lydia, sent to the oracle at Delphi to divine his likely
fortunes if he crossed the river Halys, the boundary of his own kingdom, and
attacked the Persian Empire. Herodotus in Book I of the Histories tells
us that the oracle sent back the answer, ‘If you cross the Halys you will
destroy a great realm’. Thinking this a good portent, Croesus crossed it. But
the realm he destroyed was his own; he was utterly defeated by Cyrus, King of
Persia, and his capital, Sardis, was taken.
Cases where a question arises as to the intended
scope of enacting words may, in particular, be found in the public law field,
where statute confers a discretionary power upon a minister or other public
authority. The discretion may be given in apparently unqualified terms: ‘The
minister may, if he thinks fit…’. But it is trite law that the grantee of a
statutory discretion may only use the power given him so as to further the
policy and the objects of the Act, and their objective ascertainment is always
a matter of law for the court: Padfield v Minister of Agriculture,
Fisheries and Food [1968] AC 997. Sometimes the statute’s policy and
objects are expressed in terms; sometimes the minister’s power is made subject
to the existence of a precedent fact or facts, whose nature plainly shows the
purpose for which the power is to be exercised. But it may be that neither of
these features is present. In that case, the court will gather the statute’s
policy and objects from a consideration of the Act’s whole subject-matter, and
will by judicial review hold the minister to account if he exceeds them. It is
not a matter of implying words into the enacting provision that confers the
discretion. The underlying principle rests on the rule of law; it is that the
exercise of statutory power given by the legislature must be condemned as
arbitrary and capricious if it is done for a purpose that the legislature did
not intend, and for that reason must be taken to be unauthorised.
But if such a principle applies to statutory powers
in the public law field, I do not see why a like principle should not also
apply to statutory rights in the private law field, not least if the
right is in its nature penal or confiscatory. The question always is, what is
the scope of the right? Where the enacting words express the scope intended, so
as to leave no doubt upon the question, that will be the end of the matter;
there is no ‘ambiguity’ in the second sense I have described, and no appeal to
preambles will avail to deny the right. But where the enacting words, though
not internally ambiguous (that is, ambiguous in the first sense), do not define
the scope intended, then it falls to be ascertained by the court by reference to
the purpose for which the right is granted. This, I conceive, is conformable
with their lordships’ speeches in Prince Ernest, and perhaps in
particular with Lord Somervell’s citation of Sir
I turn to apply this approach to the present case.
The first question must be whether the enacting words in section 18 plainly and
unambiguously express the scope of the right to double rent. Do they make it
clear that the right arises even where the tenant holds over in circumstances
where the landlord himself asserts that the tenancy is continuing? I do not
think that they do. Looking, for immediate purposes, at the enacting words in
isolation, as it seems to me the expression, to which Mr Brock drew attention,
‘and [the tenant] shall not accordingly deliver up the possession
thereof at the time in such notice contained’ (my emphasis) seems to me to
contemplate a situation in which the tenant declines to quit in defiance of his
own notice, upon which, therefore, the landlord is impliedly taken to place reliance.
And the provision for the double rent to be collected ‘at the same times… as
the single rent…, before the giving such notice, could be levied…’ taken with
the following words ‘…and such double rent… shall continue to be paid during
all the time such tenant… shall continue in occupation as aforesaid’
demonstrate that the double rent is to be claimed and paid while the
tenant occupies after his own notice to quit; this also suggests that the
section is dealing with the case where the landlord relies on the notice from
the inception of the tenant’s continued occupation after delivery of the
notice. At the very least, such points as these raise a question as to the
right’s intended scope.
It follows, in my judgment, that the court must
ascertain its true scope from the statute as a whole; or rather, the statute
read with the Act of 1730, for they are to be treated as a single code. This, I
think, was common ground. It is anyway vouched in two of the early cases. In Timmis
v Rowlinson (1765) 1 WBl 533, Lord Mansfield CJ said at p534:
Statutes in pari materia are to be all
taken as one system to suppress the mischief… The Legislature, in [the Act of
1730] made a provision where the landlord gives notice; and afterwards, in [the
Act of 1737] this additional provision in case the notice comes from the
tenant. The two laws are only parts of the same provision.
And in Cutting v Derby (1776) 2 WBl
1075, Blackstone J said at p1077:
The statutes of [1730] and [1737] being in
pari materia ought to have the same construction…
In my judgment, this connection between the two
statutes assists Mr
with the case where the landlord treats the tenant (or rather, ex-tenant) as a
trespasser. The Act of 1730 addresses specifically the situation where a
landlord has given notice to quit, and the tenant ‘wilfully’ holds over.
Nothing is more obvious than the statute’s concern to redress the wrong to a
landlord arising where his tenant continues in occupation as a trespasser, and
where that is the very fact of which the landlord complains.
It seems to me to be plain that section 18 of the
Act of 1737 is concerned with the same mischief. This view is, moreover, much
supported by authority. In Timmis v Rowlinson, to which I have
already referred, Lord Mansfield CJ (referring to section 18) said at p534:
The mischief is an act of vexation,
inconvenience, and injustice, by the tenant after notice given by himself,
after the landlord has another tenant ready, to stop short and say ‘I won’t
quit’.
In Johnstone v Hudlestone (1825) 4
B&C 922 it was held that where a tenant gave an invalid notice to quit,
which accordingly did not have effect to determine the tenancy, upon his
holding over after the notice was given, the landlord was not entitled to
double rent under section 18. Bayley J said at pp936-937:
I think that the Legislature did not intend to
punish the tenant for his caprice, but to reimburse the landlord for any injury
he might sustain by losing his bargain with a new tenant. [Then he sets out the
recital to section 18]… It is true that the enacting words are carried beyond
the recital, but I think that effect
be construed with reference to the mischief intended to be remedied. [The
enacting words are then set out]… The fair construction of that clause appears
to be, that it shall only apply in case the tenant shall give the notice
contemplated in the preamble… so as to make it binding on the landlord to
accept possession of the premises.
Holroyd J said at p938:
Here the landlord claims rent under the statute,
and treats the tenant as a tortfeasor…
In fact the tenant was no tortfeasor; but their
lordships were plainly of the view that the statute would only bite if he was.
That is, in truth, the end of the matter. The
appeal should, in my judgment, be concluded in the appellants’ favour, on the
distinct basis that the right to double rent conferred by section 18 of the Act
of 1737 only arises where: (a) the tenant holding over after his own notice to
quit is in fact a trespasser (thus, the notice must be valid); and (b) the
landlord treats him as such. Any other case departs from what I regard as the
plain purpose of the section. I would, with respect, have arrived at this
conclusion without the benefit of authority. Reading the Acts of 1730 and 1737
as a whole including the latter’s preamble and recitals, it is, to my mind,
entirely clear that the legislature was concerned only to compensate landlords
for the potential loss of rent arising where a tenant holds over against the
landlord’s insistence that he should comply with his own notice to quit. I do
not say that the section applies only where the landlord has a new tenant ready
and waiting; the recital gives the thrust, but not necessarily the focus, of
the section’s reach.
I have not so far mentioned Doe d Cheny v Batten
(1775) 1 Cowp 243, which was much pressed by Mr Brock to support his argument
as to waiver; but I should refer to it in this context of the statute’s
construction. The landlord had accepted a quarter’s rent after he had given
notice to quit. The issue was whether that acceptance waived the notice, so
that the tenancy continued. Lord Mansfield CJ held that it depended upon the
answer to the question, quo animo the rent was accepted. Aston J said at
pp246-247:
The only act which appears is, the acceptance of
a single quarter’s rent accrued since. I think that is only a waiver of his
right to double rent under [the Act of 1730], and does not necessarily imply a
consent that the tenancy should continue… For here the acceptance of single
rent, is only a waiver of his right to double.
In that case the 1737 Act was not in play, and
that of 1730 only indirectly. It may be that, despite the language of waiver
used by the judges, the underlying reasoning, in the obiter references
to the Act of 1730, simply supports the conclusion that double rent (or more
accurately double value) was not on that statute’s true construction available
to a landlord who, by accepting single rent, acquiesced in his erstwhile
tenant’s remaining on the premises. If so, the case supports the conclusion I
have reached. In any event, it is nothing against it.
On the undisputed facts, the claim for double rent
in this case lies, in my judgment, outwith the right conferred by section 18.
For all the reasons I have given, I would allow the first appeal.
STUART-SMITH
LJ agreed and did not add anything.
Appeal allowed.
