Underlease — Construction — Rent-review clause providing for first rent review after 40 years — Commencement date earlier than date of signature of underlease — Issue as to date of first rent-review period — Whether arbitrator correct to find that earlier date was correct commencement date for rent-review purposes
By an underlease dated 30 March 1962, the respondent granted to the appellant, “from the date hereof”, the residue of a term of 125 years from 21 December 1960, less the last 20 days “thereof… during the first forty years of the said term”, at a rent of £6,650 pa. The underlease provided for rent reviews thereafter at 21-year intervals.
In determining the date of the first rent review, an issue arose as to “the first forty years of the said term” during which the yearly rent was payable. This made it necessary to identify the commencement date of the “said term”. The appellant argued that the commencement date was 30 March 1962, while the respondent said that the correct date was 21 December 1960. The matter went to arbitration and the arbitrator found that the words “from the date hereof” referred to 21 December 1960. The appellant appealed.
Held: The appeal was allowed.
On the proper construction of the underlease, the commencement date was 30 March 1962, as the appellant contended. The rent payable was to run only from the date when the lease were signed. If the respondent’s construction were correct, it would mean that the words “the said term” referred to different dates in different parts of the lease. The only logical reading of the words in the rent review clause was that it meant 40 years of the “said term” from the date when the first payment of rent was due, namely 30 March 1962.
John Furber QC (instructed by Ford & Warren, of Leeds) appeared for the appellant; Jonathan Brock QC (instructed by Brooke North, of Leeds) appeared for the respondent.
Eileen O’Grady, barrister
