Business tenancy — Landlord company’s intention to occupy premises for purposes of own business may be proved by evidence of regional manager to whom appropriate authority has been delegated by the board of directors
This was an appeal by Manchester Garages Ltd, tenants of premises known as the Clayton Service Station, Ashton New Road, Clayton, Manchester, from an order of Judge Bailey at Manchester County Court dated March 6 1974 rejecting an application for a new lease of the property on the ground that the respondent landlords, Petrofina (UK) Ltd, formerly Petrofina (Great Britain) Ltd, had established their intention to go into occupation for the purposes of their own business.
Mr B C Maddocks (instructed by Lickfolds, Wiley & Powles, agents for Taylor, Hindle & Rhodes, of Manchester) appeared for the appellants, and Mr G C Spafford (instructed by Isadore Goldman & Son, agents for Joseph Norton & Co, of Liverpool) represented the respondents.
Giving judgment, BUCKLEY LJ said that the landlords let the property in question to the tenants in 1960 for 21 years with certain powers to determine. They exercised these powers in such a way that the contractual term came to an end on March 1 1974. They gave a proper notice of termination under the Landlord and Tenant Act 1954, intimating that they would oppose a grant of a new tenancy. They gave as their reason for opposing a grant of a new tenancy the reason which was contained in section 30 (1) (g) of the Act, namely, that they intended to occupy the holding for the purpose of a business to be carried on by themselves. The ground of the appeal was that there was insufficient evidence before the court to justify the finding of the judge that the landlords had the requisite intention.
The memorandum of association of the landlord company clearly empowered it to carry on a retail trade of serving petroleum and other associated products, and there was no question that the intention, if the company had the intention, was one which was within its powers. No resolution of the board of the company was passed relevant to this matter at all, no evidence was given in the court below by any director of the landlord company, and there was no evidence from anybody informing the court of what the intentions of the board as a board were. The only evidence before the court having a bearing on the matter was the evidence of Mr Victor John Moodie, who was north-west regional manager of the landlords’ business. The landlords were a company who carried on business through many outlets throughout the country. Mr Moodie said that he was totally responsible for the landlords’ affairs in the north-west. He had held that office for 10 years, and his decisions had never been reversed. In cross-examination he said: ‘I have made decisions like this before and have full authority to do so.’ The decision which he did make was that the landlord company should itself go into occupation of the service station and should carry on the business there of running the station, retailing petrol and other like products to the public. Judge Bailey in his judgment said that Mr Moodie had full authority and that he was impressed with Mr Moodie’s evidence on the issue of the company’s intention to do what the company alleged in their opposition to the application. He came to the conclusion that the intention was a genuine intention and that accordingly the landlords had made out their case under section 30 (1) (g).
The contention in support of the appeal had been that since the landlords were an incorporated body, their intention must be found either in the form of a decision of the board, or of an intention in the minds of the members of the board, or, it was said, an intention formed by an authorised agent of the board provided he was what counsel described as ‘a head-office mind representing the mind or will of the company.’ Counsel argued that Mr Moodie was a regional manager, that he was not at the nerve centre of the company, and that his decision could not be regarded as establishing the intention of the company, because it could be over-ridden by the board. He (counsel) submitted that the intention of an agent of the company, acting within his authority, was not the intention of the company so long as his decision could be over-ridden. Reference was made to a number of authorities bearing upon the way in which an intention of a corporate body could be established in evidence. Those authorities showed that the question to be decided in such a case as this was whether the landlord at the date of his notice of opposition and at the date of the hearing had a firm and settled intention to carry out whatever particular activity it was said that he did intend to carry out, whether it be occupying premises for the purpose of his own business, demolishing them, or whatever it might be. Particular mention might be made of the decision of the Court of Appeal in H L Bolton (Engineering)Co Ltd v T J Graham & Sons Ltd [1957] 1 QB 159, in which, Mr Maddocks submitted, the agents of the company, whose minds were said to constitute the mind of the company, were agents at a directorial level.
He (his Lordship) thought that the agents in that case were acting not as directors in what they did, but as managers. Denning LJ in his judgment appeared to be considering their actions and their states of mind in their managerial capacity. There certainly was evidence before the court in the present case that Mr Moodie had complete responsibility for the conduct of the company’s business within his region, and the question of what should be done with the Clayton Service Station was a matter which arose within his region and was within the ambit of his authority. The judge proceeded, quite properly, on that basis; indeed, it did not appear that that view of the matter was at all disputed before him. In his (Buckley LJ’s) opinion, if some act which was contemplated was one which was within the authority of an agent of a company whose decision was said to evidence the intention of the company, if it was a matter within his authority to carry out without any further authority of any superior authority in the company,|page:63| such as the managing director or the board of directors, then his intention was the intention of the company for the relevant purpose, at any rate if it was not shown to be inconsistent with some concurrent contrary intention in some superior authority who could gainsay him in respect of the particular act. If the intention of the agent was shown to be a firm and settled intention–which was not, as he (his Lordship) thought, by any means the same as an irrevocable intention or one which could not be overruled–then it was the firm and settled intention of the company. In the present case, the evidence indicated that it was Mr Moodie’s firm and settled intention that the company should recover possession of this service station and should carry on trade there itself. There was no indication that the decision of Mr Moodie was contrary to any policy or any project of any higher authority in the company so that he would be likely to have been over-ruled in the matter. In these circumstances, in his (Buckley LJ’s) judgment, the judge was fully justified in treating that evidence as being evidence of a firm and settled intention on the part of the landlord company to use the premises, when possession of them was recovered, for the purpose of the landlord’s own business. For these reasons he would dismiss the appeal.
Agreeing, BROWNE LJ said that it seemed to him undesirable to lay down fixed categories of who could and who could not be an agent whose intentions could be treated as the intentions of the company. One of the factors which the county court judge was entitled to take into account in this case was the fact that the landlord company had in fact applied for and got planning permission for what was called ‘reorganisation’ of the existing petrol service station. The evidence of Mr Moodie, coupled with that fact, was ample evidence on which the judge was entitled to find that the landlord company had the necessary intention.
BRIGHTMAN J agreed, and the appeal was dismissed with cost.
