Landlord and tenant — Consent for change of use proposed on terms that lease should include landlord ‘s break clause — Whether a ‘fine’ within section 19(3) of Landlord and Tenant Act 1927 — Whether change of use involved structural alterations and section 19(3) inapplicable
The plaintiff
tenants hold two underleases of premises from the defendant landlords for terms
expiring in 2015 at a combined rent of £4,040. Following negotiations between
the parties, in which the tenants sought consent to use the ground floor of the
premises for any use within class A2 of the Town and Country Planning Use
Classes Order 1987 and the landlords looked for a landlords’ break clause, the
landlords’ agent finally set out the terms in a letter dated December 8 1993,
which he said would be put to the landlords’ board of directors. The letter
stated that consent would be given to a change of use of the ground floor on
terms that: (1) the landlords would have a break clause in 2003 upon payment of
a specified sum; (2) the tenants would pay a rent of £33,040 pa with
five-yearly upwards-only rent reviews, the rent being geared with 50% to the
landlords; (3) payment of a service charge; (4) payment of legal fees and a
surveyor’s fee of £300; and (5) the rent reviews to proceed on certain stated
assumptions. Evidence was given that the tenants and their proposed underlessee
proposed certain alterations to an exterior wall. The tenants, relying on
section 19(3) of the Landlord and Tenant Act 1927 and the authority of West
v Gwynne [1911] 2 Ch 1, sought a declaration that they are entitled to
use the premises for any class A2 use.
requirements of terms 2, 3 and 4 of the letter of December 8 1993 amounted to
requirements for a fine within the meaning of section 19(3) of the 1927 Act;
the requirement of a landlords’ break clause in 2003, unrelated to the consent
in return for which it was demanded, was also a demand for a fine because the
option to break was unlikely to be exercised unless there was some financial
advantage to the landlords. However, the principle in West v Gwynne,
which applies where a landlord refuses to consent to a change of use save on
payment of a fine within the meaning of section 19(3), and the tenant is
thereby relieved from obtaining that consent, must be distinguished. Section
19(3) did not apply because on the evidence the proposed alteration of user
involved structural alterations.
The following
cases are referred to in this report.
Andrew v Bridgman [1908] 1 KB 596
Cohen v Nessdale Ltd [1982] 2 All ER 97; [1982] 1 EGLR 160; [1982]
EGD 1169; (1982) 262 EG 437, CA
Gardner v Cone [1928] 1 Ch 955
Waite v Jennings [1906] 2 KB 11
West v Gwynne [1911] 2 Ch 1
This was an
application by the tenants, Barclays Bank plc, by originating summons for a
declaration that they were entitled to change the use of premises they held
under two leases from the defendants, Daejan Investments (Grove Hall) Ltd.
Kim Lewison QC
and Stephen Jourdan (instructed by Denton Hall, of Milton Keynes) appeared for
the plaintiffs; David Neuberger QC and Timothy Fancourt (instructed by Memery
Crystal) represented the defendants.
Giving
judgment, Judge Rich said:
The plaintiffs are the tenants under two underleases of different parts of
Africa House, Kingsway, which they hold of the defendants for terms expiring in
2015 at a combined rent of £4,040 a year. They seek by originating summons a
declaration that in the events which have happened the premises may lawfully be
used under the leases for any use falling within class A2 of the Town and
Country Planning Use Classes Order 1987 other than use as a betting office.
Class A2 of
the use classes order includes
Use for the
provision of —
(a) financial services, or
(b) professional services other than health or
medical services, or
(c) any other services (including use as a
betting office) which it is appropriate to provide in a shopping area where the
services are provided principally to visiting members of the public.
This therefore
involves the plaintiffs being entitled to use the premises for purposes other
than those limited by clause 2(14) of the underleases, which subclause contains
covenants to use the various parts of the areas demised for different banking
purposes and ‘for no other purposes whatsoever without the consent in writing
of the landlords first being obtained’.
The events
upon which the plaintiffs rely are the requirement by the defendants of a
consideration for permitting such change of use which the plaintiffs claim
entitles them to make such change without consent by reason of section 19(3) of
the Landlord and Tenant Act 1927. That subsection provides:
In all leases
… containing a covenant … against the alteration of the user of the demised
premises, without licence or consent, such covenant … shall, if the alteration
does not involve any structural alteration of the premises, be deemed,
notwithstanding any express provision to the contrary, to be subject to a
proviso that no fine or sum of money in the nature of a fine, whether by way of
increase of rent or otherwise, shall be payable for or in respect of such
licence or consent …
There follows
this first provision a further provision which I shall refer to in this
judgment as the second proviso, which reads as follows:
but this
proviso does not preclude the right of the landlord to require payment of a
reasonable sum in respect of any damage to or diminution in the value of the
premises or any neighbouring premises belonging to him and of any legal or
other expenses incurred in connection with such licence or consent.
Where a
dispute as to the reasonableness of any such sum has been determined by a court
of competent jurisdiction, the landlord shall be bound to grant the licence or
consent on payment of the sum so determined to be reasonable.
It has been
decided by the Court of Appeal that the effect of section 3 of the Conveyance
and Law of Property Act 1892, which deemed covenants against alienation without
licence or consent to be subject to a similar proviso, had the effect that if a
lessor refuses to give consent
make a valid assignment or underlease without it, but he is also entitled to
bring an action for a declaration to that effect, in which costs will be given
him though no relief is asked beyond the declaration: see West v Gwynne
[1911] 2 Ch 1. I read from the headnote and with some qualification, to
which I will return, it is accepted before me that this would also be the
result of such refusal of consent, contrary to the proviso deemed by section
19(3) of the 1927 Act.
The
negotiations between the present parties to enable the plaintiffs to dispose of
their underleases began in October 1992. By April 1993 the plaintiffs had an
offer from Woolwich Building Society to take the subunderlease. A rent of
£58,000 a year was in due course agreed upon. By that time the plaintiffs’
agents were aware that the defendants wanted a break clause to be inserted in
their underleases. The plaintiffs’ first application was accordingly not for a
consent under the clause from which I have read but for a deed of variation.
That was set out in a letter dated June 18 1993 headed ‘Subject to contract’,
referring to the premises and to the parties and identifying the proposed
transaction as follows:
4. Transaction.
The tenant wishes to obtain a deed of variation to their leases dated 21st
February 1957 in respect of the main banking hall ground floor strong room
accommodation, basement and part of the ground floor respectively.
5. User. Class
A(2) of the Town and Country Planning Use Classes Order 1987 but excluding its
use as a betting office.
6. Consideration.
In exchange for the relaxation in the user clause, our client is willing to
provide …
Then there is
a reference to a landlord’s option to break which was corrected in a subsequent
letter to read:
Landlord’s
option to break at the tenth year of the term which is to be on a redevelopment
basis only.
(b) On
provision of more details from the landlord, the tenant is willing to extend
the service charge provision to enable full recovery of expenses by the
landlord.
7. Legal
Fees. Our client is prepared to pay a proportion of your legal fees, or all
of them if they are not excessive.
Negotiations
followed that proposal, both orally and by correspondence. On November 2 1993
the plaintiffs’ agent, Mr Hinkley, wrote putting the application on a rather
different basis. He says he referred to
… our
previous correspondence and specifically your letter dated 11th August. I note
that you confirm that Freshwater [ie the landlords] is likely to grant consent
to a change of use providing Barclays provide 50 per cent of their profit rent.
He then went
on to say:
I would be
grateful if you would confirm in writing the terms upon which the landlord
would be prepared to grant consent in order that this matter may be resolved.
To that letter
Mr Fuller, on behalf of the defendant landlords, replied, heading his letter
‘Subject to Contract and Board Approval’. He there set out the terms which he
said he would discuss with the defendants’ board as being the terms upon which:
the landlord
will give consent to a subletting to the Woolwich Building Society and a change
of use from banking to Class A2.
In the end,
after further correspondence, Mr Fuller wrote on December 8 a letter which I
should read in full.
Further to our
telephone conversation on Wednesday 8th December I confirm that my client
company will be prepared to proceed with a change of use of the ground floor in
Africa House on the following terms:
1. The
landlord is to have the ability to break the lease for any purpose on 25th
March 2003 after giving the tenant at least twelve months’ notice in writing.
If the landlord exercises this option, he will pay to Barclays Bank the sum of
£132,000 in full and final settlement of any claim the tenant may have against
the landlord.
2. Barclays
Bank will pay the sum of £33,040 per annum as rent until the first review. The
lease will be varied to include five-yearly upward only rent reviews which are
to be effected on the same date as in the sublease. The future reviews will be
on the basis that the landlord will benefit from 50 per cent of the open market
rental or the rental agreed with the Woolwich Building Society, whichever is
the greater, plus £4,040 per annum.
3. Your
clients will make a full service charge contribution as appropriate for the
occupation of the accommodation.
4. Barclays
Bank will be responsible for our reasonable legal costs, together with the
surveyor’s fee of £300 plus VAT.
5. All future
reviews will be on the basis that the premises are fit for banking/building
society use which will include air conditioning, suspended ceilings, integral
lighting, underfloor trunking and double glazing etc.
I shall be
grateful if you will confirm by return that these terms are now agreed when I
will instruct our solicitors accordingly.
There is no
dispute that the requirements in paras 2, 3 and 4 amount to requirements for a
fine. The right to require the payment of legal and other expenses is
specifically preserved by the second proviso to the subsection, and the only
significance of this requirement is in the significance of the surveyor’s fee
of £300 to which I will return.
Mr David
Neuberger QC, for the defendants, denies that the requirements to include an
option to break as proposed in para 1 of this letter is a fine or sum of money
in the nature of a fine, whether by increase of rent or otherwise within the
meaning of section 19(3). Since the only payment it would require would be from
the landlords to the tenants in the event of the break being exercised, unless
it is a fine it is not caught by the subsection.
These
provisions of the 1927 Act follow closely, as I have already observed, earlier
provisions in regard to alienation contained in the 1892 Act and repeated in
section 144 of the Law of Property Act 1925. Both in the 1925 Act and in the
earlier Act there was an enlarged definition of ‘fine’, which is now found in
section 205(1) para (xxiii) of the 1925 Act as follows:
‘fine’
includes a premium or foregift and any payment, consideration, or benefit in
the nature of a fine, premium or foregift
‘Fine’, even as
so defined, was doubted by the majority of the Court of Appeal in Waite
v Jennings [1906] 2 KB 11 to include an obligation by an assignee to pay
rent throughout the term rather than only while he held the lease.
Fletcher-Moulton LJ relied on the extended definition to justify the opposite
view, but the question was not necessary for decision, so the case is in no
sense determinative of the definition of the word as now found in the 1927 Act.
In Gardner v Cone [1928] 1 Ch 955 Maugham J considered whether a
requirement to tie a public house on assignment was a fine within the extended
meaning of the 1925 Act. He, after reciting both section 144 and section
205(1)(xxiii), said at p964:
On the whole,
though with some little doubt, I think the view taken by the Courts in cases of
this kind justifies me in coming to the conclusion that a wide meaning should
be given to the word ‘fine’ and that in this case it includes the benefit
conferred by a stipulation for the giving of a tie in the case of a public
house.
I think in so
saying he was relying on the phrase ‘benefit in the nature of a fine’ in
section 205. One might think that Parliament, in failing to reproduce the
equivalent of section 205 of the 1925 Act in the 1927 Act, was seeking to give
a different and less extensive meaning to ‘fine’ in the 1927 Act than in the
1925 Act. If, however, that was Parliament’s intention, I find it impossible to
understand what ‘or sum of money in the nature of a fine’ was supposed to add
to ‘fine’. If, however, ‘fine’ meant any consideration, and the reference to
‘sum of money’ was merely illustrative, the formula may make more sense and
accord more closely with what I take to have been the intention, namely to
apply to clauses restricting user the same provision as had operated up until
that time in regard to alienation clauses.
The tenant
enjoys under the present underlease a significant profit rent which will be
available until 2015. The proposed right to break in
profit rent for 12 years to themselves. Unless the compensation was less than
the value of the profit rent, or they wanted to determine the underlease
because it would be otherwise advantageous, they would not exercise that
option. I think the requirement of such a right, unrelated to the consent in
return for which it is demanded, is a demand for a fine, and I would regard
this paragraph of the letter of December 8 1993 in this respect in the same
category as paras 2, 3 and 4.
Does then the letter
of December 8 1993 provide such a refusal of consent as, on the authority of West
v Gwynne, relieves the tenant from obtaining consent, entitling
him therefore to the declaration sought? The section does not in terms provide
that that is the result of the requirement for a fine. In case of a dispute as
to the reasonableness of a sum sought under the second proviso, the subsection
provides for its determination by the court, whereupon the landlord ‘shall be
bound to grant the licence on payment of the sum so determined to be
reasonable’.
The remedy
sought by the plaintiffs in this case was suggested obiter by the Court
of Appeal in Andrew v Bridgman [1908] 1 KB 596. That was a claim
for the repayment of £45 paid in consideration of the grant of a licence to
assign, contrary to section 3 of the Act of 1892. Cozens-Hardy MR said at p598:
A sum of £45
was asked for by the defendant and paid by the plaintiff, according to the
terms of the receipt, as a payment for a licence to assign. If that had been an
illegal payment, different considerations would have arisen, but it has been
held by the Court of Appeal in Waite v Jennings that the Act does
not make the payment illegal. Stirling LJ said in his judgment in that case:
‘It does not seem to me that the taking of the fine would be illegal so that
the assignee who paid it could recover it back’. And, though that is the
observation of Stirling LJ alone, it met with no dissent from the other members
of the Court of Appeal. If that be so, we must read the words of the proviso in
the Act into the covenant in the lease. When that is done we get a covenant
with a proviso analogous to the very usual proviso in a covenant not to assign
without licence, that such licence shall not be unreasonably withheld; and by a
series of authorities which I should be very sorry to disturb … it has long
been settled that the effect of a proviso of that kind is not to impose an
obligation on the lessor to give a consent, but, in case it is unreasonably
withheld, to release the lessee from the obligation of the covenant and to
enable him to assign without obtaining any licence. That is the view expressed
by Vaughan Williams LJ in Waite v Jennings, where he said:
‘It may well be that, as between the parties to the lease, the lessee would have
been entitled to disregard the absence of a licence, if the lessor refused to
grant one unless and except upon the condition of a covenant for the payment of
rent during the term.’ It is true that that is a dictum only, but it is,
in my opinion, in accordance with the law. I do not therefore regard this
decision, as the judge in the Court below seems to have done, as in any way
rendering this most useful and valuable provision of s3 of the Conveyancing and
Law of Property Act, 1892, a nullity. On the contrary, the refusal by the
lessor to give his consent, except on payment of a fine, relieves the lessee
from the necessity of obtaining the lessor’s consent, and enables him to ignore
the restriction on assignment contained in the lease. On this one ground, that
the payment was not illegal and was not made under protest, I agree that the
claim to recover the money must fail.
The other
members of the Court of Appeal agreed and in the case of West v Gwynne,
to which I have already referred, Joyce J followed the course indicated in Andrew
v Bridgman. The case was primarily concerned with whether the 1892 Act
did or did not apply to leases granted before its commencement. The result if,
as was held, it did apply was less amply argued or reported. The law report sets
out the facts which gave rise to the remedy in the following way:
In February,
1909, the plaintiffs applied to the defendant for his consent to a proposed
underlease of part of the premises for the term of twenty-one years at a rent
of £340, but the defendant replied that he was only prepared to grant the
plaintiffs a licence to underlet the said premises on condition that the
defendant should thenceforth receive for himself one half of the surplus rental
to be obtained by the plaintiffs in respect of the demised premises over and
above the rent of £640 payable under the lease.
The Law
Journal Report sets out the facts somewhat differently: [1911] Law
Journal New Series Chancery at p579:
In the early
part of February, 1909, the assignees, being desirous of granting an
under-lease of a portion of the demised premises to a certain firm of
manufacturing chemists at a rent of £340 per annum, applied to JEA Gwynne for
his consent to such proposed under-lease; and after considerable correspondence
he on September 29, 1909, wrote a letter to the solicitors of the assignees
stating that he was prepared to grant the assignees a licence to under-let such
portion of the premises to the named firm for the term of twenty-one years at
the rent of £340 on condition that he should thenceforth receive for himself
one-half of the surplus rental to be obtained by the assignees in respect of
the demised premises over and above the rent of £640 payable by them under the
lease.
It appears
therefore that the form of the letter was an offer to consent, but only on
terms of an increase in rent. Joyce J said at p6 of the law report:
I do not
hesitate to follow the course indicated by Cozens-Hardy MR in Andrew v Bridgman,
where he says: ‘On the contrary, the refusal by the lessor to give his
consent, except on payment of a fine, relieves the lessee from the necessity of
obtaining the lessor’s consent, and enables him to ignore the restriction on
assignment contained in the lease.’ Here, on the correspondence, he does refuse
his consent, except on payment of a fine, without any other objection. The
result of it is that he refuses his consent, except on payment of a fine, and,
therefore, in my opinion the plaintiffs are entitled to the declaratory
judgment claimed, and the defendant must pay the costs.
This aspect of
his decision was upheld by the Court of Appeal, as indeed was the first, but
was dealt with by the Court of Appeal much more shortly than the other matters
which it had had to decide. What, however, Cozens-Hardy MR says imports into
his judgment in West v Gwynne what he had said in Andrew v
Bridgman. At p11 he says:
Another point
was raised which I shall deal with very shortly. It was conceded that the
landlord has declined to give his consent to underletting, except on payment of
a fine. It was said by each of the three members of this Court who decided Andrew
v Bridgman that the effect of such refusal was to relieve the lessee
from the necessity of obtaining the lessor’s consent. Those observations were
not necessary for the decision and may be regarded as mere dicta. But
the question now arises for decision, and I adhere to my former view, which was
adopted by Joyce J, and I decide accordingly.
Buckley and
Kennedy LJJ agreed. I note only that Buckley LJ treated the case as one of
refusal of consent and he said at p14:
It is not in
dispute between the parties that the defendant refused to give the licence
except upon the terms of receiving pecuniary consideration for it.
I therefore
hold that the headnote in West v Gwynne, to which I
referred some time ago, namely that the lessee is relieved from obtaining his
consent if the lessor refuses to give a consent except upon payment, correctly
sets out the effect of the judgment and, further, that the case decides that
the offer of a consent, but only upon terms of payment of a fine, does not
differ from a refusal unless a fine is paid, at least unless the answer in
terms of an offer is not, in the light of the question which it answers to be
construed as such refusal.
That was, I
think, the position considered by Maugham J in Gardner v Cone [1928]
1 Ch 955. That is the case in which, as I have already noted, the judge decided
that the requirement of a brewer’s tie would amount to a fine. In doing so,
however, he added to the passage which I have already read at pp964–5:
But I do not,
having regard to my finding of fact, come to the conclusion that the conduct or
action of the plaintiffs was such as to enable the defendants to say that there
has been a refusal by the plaintiffs to consent to the assignment, except upon
terms of payment of the fine, including in that term for the present purpose
the giving of the tie with regard to the public house.
Mr Neuberger
for the defendants says that there cannot in the present case be such a refusal
because the parties were merely in the stage of negotiation, as indeed Maugham
J held to have been the case in Gardner v Cone. So indeed
the parties in the present case were, so far as the making of any binding
agreement is concerned. All the correspondence, including the letter of
December 8 1993, was marked
indicating the intention to refer to solicitors. It was not an offer which,
even if accepted, would have produced a concluded contract: see Cohen v Nessdale
Ltd [1982] 2 All ER 97*. But, in my judgment, it does not need an offer
capable of such acceptance to demonstrate a refusal of consent. Consent was
certainly sought on November 2 1989. The letter of December 8 is a reply to the
request to ‘confirm in writing the terms upon which the landlord would be
prepared to grant consent’. That is indeed what it says it is. Mr Fuller writes
on December 8: ‘I confirm that my client company will be prepared to proceed
with a change of use on the following terms’. I construe that as meaning, these
are the only terms upon which the client company would be prepared to proceed.
If the terms included a demand for a fine, and not merely an excessive
requirement of compensation or costs, then, in my judgment, where section 19(3)
applies, the tenant can change the use without consent.
*Editor’s
note: Also reported at [1982] 1 EGLR 160.
Mr Neuberger
for the defendants sought to distinguish West v Gwynne on the
ground that the declaration granted in that case was a declaration that in the
events which had happened the plaintiffs were entitled without any further
consent on the part of the defendant to grant the proposed underlease upon the
terms approved by the defendant except the said condition.
Joyce J, as I
have already recited, specifically said: ‘Here on the correspondence he [that
is the defendant] does refuse his consent except on payment of a fine without
any other objection’. Mr Neuberger says, therefore, that the right to expenses
as asked in para 4 remains. In my judgment, however, if no consent is required,
then there are no expenses incurred in connection with such consent, and so at
least in this case no such claim does survive.
I do not think
that section 19(3) can operate as a proviso to the lease covenant and yet
entitle a landlord who requires a fine to insist on matters which he could
lawfully have required. That halfway house arises only if a landlord’s
requirement is within the second proviso and its machinery then becomes
operative.
Mr Neuberger
raises however a further objection to the application of section 19(3) in this
particular case. Subsection (3) applies only if the alteration, by which must
be meant the alteration of the user in respect of which consent is sought,
‘does not involve any structural alteration of the premises’. This condition
was not dealt with by Mr Hinkley’s first affidavit in support of the
originating summons. In a second affidavit, however, he stated:
Based on my
own knowledge, the current application to alter the permitted use of the
premises to any use falling within Class A2 of the Town and Country Planning
Use Classes Order 1987, other than use as a betting office, does not involve
any structural alteration to those premises. Furthermore, on the basis of my
knowledge and experience, it is my professional view that the premises are
capable of beneficial occupation by a tenant for any reason falling within
Class A2 of the Town and Country Planning Use Classes Order 1987 other than use
as a betting shop, and in particular without prejudice to the generality of the
foregoing for use as a building society without the need for that tenant to
make such alterations to the premises.
In
cross-examination, however, Mr Hinkley accepted that Woolwich Building Society,
to whom the plaintiffs proposed at the time of their application to sublet if
consent was given, did propose alterations shown on the plans which he
produced. Those plans included cutting down the exterior wall in order to
enlarge the windows in the front elevation, which proposal, if no other, was
accepted as being a proposal for structural alterations.
The bank’s own
use would have been within the use as proposed to be altered. The extended use
therefore contemplated, even although it did not necessarily require, a change
of occupier. The application of section 19(3) to the application for consent to
alter the user depends therefore upon whether the proposed extension of the
user provision involved either the particular structural alterations proposed
by the Woolwich Building Society or some other. It is for the plaintiffs,
wishing to avail themselves of the subsection, to show as a matter of fact that
they did not.
Mr Kim Lewison
QC, for the plaintiffs, invites me to say that ‘involve’ means that the
disqualifying structural alterations are the necessary result of a change from
banking purposes to class A2 purposes. Since the latter includes the former,
there is clearly no such necessity, but if it was not intended to alter the use
to some other use within the proposed extended permitted user, there would be
no point in the application, and nothing upon which section 19(3) could bite. I
think therefore that I must ask myself whether the proposal for change actually
made did on the facts proved mean that a structural alteration would be made if
permissible. I would formulate the question: Is such structural alteration
included in the proposed alteration of user?
I am supported
in this formulation of the question not only because I do not think that
‘involves’ in its ordinary meaning denotes absolute necessity rather than being
part and parcel of the proposal, but also by the context of the word found in
subsection (3) of the Act of 1927, in the wider context of that Act. By virtue
of Part I of that Act, any improvement appropriate to the newly authorised user
could be imposed on the landlords, even if the covenant against alterations had
not been, as it is in these underleases, qualified. That gives, in my judgment,
a pointer to the reason why the case of proposals of which a structural
alteration formed a part were excluded from the provisions of section 19(3) of
the Act.
Until November
2 1993 the parties had been negotiating not for a consent under clause 2(14) of
the sublease, but for a deed of variation of the underleases themselves. That
is, in my judgment, different from an application for consent to which section
19(3) could apply.
I do not
think, even in a case to which it applies, section 19(3) prevents a landlord
refusing consent and offering to accept a surrender and regrant incorporating a
change of user clause as sought by the tenant as well as incorporating some
more advantageous terms for the benefit of the landlord. No doubt this is why
in practice over the 60 or more years since section 19(3) was enacted it has
been of but little effect, although I would observe that, if an application for
consent is once made, the terms of any refusal would have to be examined after
the manner in which I have sought to examine the correspondence in this case to
see whether or not there could be spelled out a refusal except upon terms of
the payment of a premium.
In this case,
however, as I have observed, it was only on November 2 that the plaintiffs’
request was put in terms of seeking a consent under the user clause. That
letter of November 2 referred in terms to Woolwich Building Society as being
the proposed occupier. In the light of previous negotiation, the landlords’
reply on November 4 included a condition (4), which read:
Barclays Bank
will pay our reasonable legal costs plus a contribution to our surveyor’s costs
for considering and approving plans for any licence to alteration which will be
£300 plus VAT.
That then was
the justification for the £300 demanded at para (4) of the letter of December 8
which read merely: ‘Barclays Bank will be responsible for our reasonable legal
costs together with the surveyor’s fee of £300 plus VAT’. It is clear to me
that the parties accepted that the alterations shown on the plans produced by
Mr Hinkley were part and parcel of the proposal to alter the use. That means,
in my judgment, that that alteration of user, at least in regard to the main
premises, involved a structural alteration and thus section 19(3) does not
apply and I must dismiss this originating summons.
It is possible
that my reasoning properly leads to a different result in regard to the other
underlease. If desired, I will hear argument as to the form of my order
accordingly.
