Break clause in shop lease — Appeal from decision treating landlord’s intention to demolish and reconstruct as desire to “reoccupy” — Appeal dismissed
This was an appeal by George Francis (Provinces), Ltd, tenants of shop premises on the ground floor of 169, Fleet Street, London, EC, from a judgment of Salmon, J, given on April 6, 1960, holding that notices served by the respondents, Ruxdra Investments, Ltd, of Hammersmith Grove, London, W, to determine the appellants’ lease were valid.
Mr LA Blundell, QC, and Mr G Avgherinos (instructed by Messrs Malcolm Slowe & Co) represented the appellants, and Mr WL Roots, QC and Mr AL Price (instructed by Messrs Bower, Cotton & Bower), appeared for the respondents.
Giving judgment, LORD MORRIS said that the appeal raised a short question of construction. Before 1939, Westminster Press Provincial Newspapers, Ltd, occupied 169 and 170, Fleet Street. The whole ground floor of No 169 was used as a reception office. In 1939 the company also acquired 167 and 168, Fleet Street, and reconstructed the ground floors of the premises, turning them into four lock-up shops. The shop now in question, No 169, was leased in December 1949, to Society Styles, Ltd, for 21 years, and the lease provided: “If the landlords shall, at the end of the 10th year of the term, desire to reoccupy the premises for their own purposes, or if the lessees shall desire to determine the term at the end of the 14th year, then either party may give to the other not less than six months’ previous notice in writing.” The words to be constructed were: “If the landlords shall, at the end of the 10th year… desire to reoccupy… for their own purposes.”
On November 8, 1955, the tenancy became vested in the appellants, and some years later the reversion on the tenancy’s determination became vested in the respondents, a property investment company. Evidence showed that the respondents intended to demolish No 169 and other properties, and on June 23, 1959, they served notices on the appellants under the relevant provision of the lease to end the tenancy on December 25, 1959. It was not in doubt that the notices were correct in form, but the appellants then claimed a declaration that they were invalid. This claim was dismissed by Salmon, J.
It seemed that the question was whether on the facts, which were not really in dispute, the landlords desired to reoccupy the premises for their own purposes. Mr Blundell had submitted that the word “reoccupy” denoted “an occupation of some broad quality” as existed in the past. It seemed to him (his Lordship), however, that in its context, the word was equivalent to entering into occupation. Mr Blundell had said that the respondents intended to demolish, and did not show that they desired to enter into occupation for their own purposes, and counsel claimed that they had to use the premises in a “business sense.” They could relet, but only after a lapse of time, which must not be of “brief duration.” He (Lord Morris) thought that was reading rather more into the words of the clause. It might well be that parts of the lease had future construction in mind or even demolition. The respondents certainly wanted to occupy the premises to put demolition contractors in as soon as possible. They would have to occupy the premises to make arrangements.
Did they desire to occupy the premises for their own use? Again the answer must be yes. They were going to reconstruct a block of property and wanted to occupy No 169 in order to demolish it. They needed the property themselves for the purpose of a property investment company. What they wished to do brought the case within the stipulated intention of the contract, and the judge had come to the correct conclusion.
Agreeing, PEARCE, LJ, said he could see no justification for extending the ordinary meaning of the clause. PILCHER, J, also agreed, and the appeal was dismissed with costs. The appellants’ application for leave to appeal to the House of Lords was refused.
