Landlord and tenant–Restriction on assignment clause in lease–Whether clause invalid because offending against section 19(1) of Landlord and Tenant Act 1927–Qualified covenant assignment without landlord’s consent, but with provision that if the tenant desired to assign the whole of flat he had first to offer to surrender his lease to landlords without compensation–Clause held to be valid–Adler v Upper Grosvenor Street Investment Ltd followed–Re Smith’s lease criticised–Obiter dicta in Greene v Church Commissioners for England doubting the ‘Adler’ decision not supported–Recent Australian decision approved
This was an
appeal by tenants, S & M Hotels Ltd, defendants in an action for possession
of a flat at 60 Park Lane, Mayfair, London W1, brought by the plaintiff
landlords, Bocardo SA, a company registered in Liechtenstein. Chapman J,
upholding a decision by a master, refused claims by the tenants for relief
against forfeiture and for a declaration that the clause in their lease
restricting assignment and requiring an offer of surrender to be made was void
as contrary to section 19(1) of the Landlord and Tenant Act 1927. The
defendants appealed. As explained by Megaw LJ in his judgment, this was in one
sense an appeal on a preliminary point, since if the defendants succeeded in
their contention that these provisions were invalid the landlords would still
be entitled to consider whether it would be reasonable to refuse consent to the
assignment. In the event, however, the defendants did not succeed in the
appeal. The second defendant in the action, Mr Sidney Winton, was a director of
the defendant company and occupied the flat in question. He took no part in the
appeal.
Benjamin Levy
(instructed by Davidson, Doughty & Co) appeared on behalf of the
appellants; Derek Wood QC and Jonathan Gaunt (instructed by Freshfields)
represented the respondent company.
Giving
judgment, MEGAW LJ said: This is an appeal from an order of Chapman J in
chambers, dismissing an appeal from an order of Master Waldman. The master and
the judge refused to order that the first defendants, S & M Hotels Ltd, the
tenants, should be relieved against forfeiture of a lease, which forfeiture the
plaintiffs, Bocardo SA, the landlords, who are a Liechtenstein company, were
seeking to enforce. The learned judge, as I understand it–and this is not a
criticism of him–gave no reasons except that he regarded the case as
indistinguishable from Adler v Upper Grosvenor Street Investment Ltd
[1957] 1 WLR 227 (for brevity I shall call that case ‘Adler‘). That was
a decision of Hilbery J. Chapman J saw no reason why he should not follow that
decision. Of course, the decision was not binding on him or on us. But its
persuasive authority has been greatly increased by the fact that it has been
approved and followed by the High Court of Australia, in a case arising on a
New South Wales enactment which, so far as is relevant for this purpose, is in
identical terms with section 19(1) of the Landlord and Tenant Act 1927. Hilbery
J’s decision was concerned with section 19(1). The present case depends upon
section 19(1).
The facts, so
far as they are relevant for this appeal, are short and simple and not in
dispute. The issue of law, once one has perused section 19(1) of the 1927 Act
and struggled through the verbosity of clause 2(j) of the lease in the present
case, is also capable of being very shortly stated. The answer is not simple,
because each of the two answers, contradictory of one another, suggested
respectively by the opposing parties can be criticised, and has been criticised
by counsel, as being inconsistent with common sense or the reasoning of decided
cases. Yet we have to choose between the two suggested answers.
First, the
facts.
The landlords
were the owners of flat 48, 60 Park Lane, Mayfair (I dare say they own other
property as well). They are assignees from the original lessors of the relevant
lease. The tenants are (subject to the forfeiture now in question) tenants of
flat 48 under a lease for a term of six years from December 25 1973. The lease
included a covenant entitling the landlords to re-enter, thus determining the
lease, if the tenants should enter into liquidation. On May 16 1977 a
winding-up order of the tenant company was made. A notice under section 146 of
the Law of Property Act 1925 was served on the tenants on June 25 1977. On July
18 the landlords issued a writ claiming possession. On August 5 1977 the
tenants made application for relief against forfeiture. They also, by a later
amendment suggested by Master Waldman, asked, both in their application and in
a counterclaim, for a declaration that a certain portion of the lease,
contained in clause 2(j) thereof, was void. It is the issue raised as to that
declaration which is the issue in this appeal.
Mr Sidney
Winton, who was named as the second defendant in the action, is, in theory, not
concerned in this appeal. In reality, he is intimately concerned; for if this
appeal is decided against the tenant, Mr Winton will lose any right to continue
in occupation of flat 48, where he has been living for many years. He was a
director of the tenant company and
occupied the
flat as their subtenant or licensee. The lease is not within the Rent Act. Mr
Winton was made a defendant because he was a guarantor of the tenant company’s
obligations under the lease. No question, however, arises in this appeal as to
any failure or inability to pay the proper rent, whatever it may be. (There are
other proceedings, of no relevance to the issue in this appeal, as to the proper
amount of the rent).
It is agreed
between the parties that, if the tenants fail in their attack on the legal
validity of certain of the provisions of clause 2(j) of the lease, then they
cannot obtain relief against forfeiture. If, on the other hand, they are right
in their submission that those provisions are invalid because of section 19(1)
of the Landlord and Tenant Act 1927, and cases decided with regard thereto,
then the landlords would
consent to the assignment by the tenants of the remainder of the lease to Mr
Winton. If the landlords were to refuse consent, the tenants could then have
the question of reasonableness determined by the courts. So, in one sense, this
appeal is on a preliminary issue; but there seems to me to be no good reason
why we should refuse to decide the preliminary issue. It is, I think, wrongly
listed as a final appeal. But that does not now matter. The issue, as I say,
depends on the provisions of section 19(1) of the Landlord and Tenant Act 1927
and their application to the terms set out in clause 2(j) of the lease.
I shall set
out the relevant words of section 19(1). I should however mention that, while
the present case is concerned with assignment, the subsection applies also to
‘underletting charging or parting with possession.’
Section 19(1):
In all leases
. . . containing a covenant condition or agreement against assigning . . .
demised premises . . . without licence or consent, such covenant, condition or
agreement shall, notwithstanding any express provision to the contrary, be
deemed to be subject–(a) to a proviso to the effect that such licence or
consent is not to be unreasonably withheld. . . .
It is better
that, despite its length, I should set out clause 2(j) of the lease in full. It
reads:
2(j)(i) Not
to assign part only of the flat or charge or underlet or take in paying guests
or share or (subject to the provisions of paragraph (ii) of this sub-clause)
part with possession of the whole or any part of the flat.
(ii) Not to assign the whole of the flat without
the previous consent in writing of the Landlord such consent not to be
unreasonably withheld in the case of a respectable and responsible assignee but
the Landlord shall not be required to consent to an assignment to a Limited
Company unless two directors thereof (being persons acceptable to the Landlord
in its absolute discretion) join in the licence or the assignment as sureties
for the company and jointly and severally covenant with the Landlord to pay the
rents reserved by and other sums of money made payable by this lease and any
damages accruing to the Landlord by reason of the failure of the company to
observe and perform the Tenant’s covenants and conditions herein contained.
Provided
Always that every licence for an assignment relating to the flat shall if
required by the Landlord contain a covenant by the assignee directly with the
Landlord to observe and perform the covenants and conditions in this Lease
contained And Further Provided Always that if the Tenant desires to assign the
whole of the flat as aforesaid he shall first by irrevocable notice in writing
to the Landlord offer to surrender this Lease by deed absolutely without any
consideration on the next subsequent quarter day or if that be within
twenty-eight days of the said notice then upon the second subsequent quarter
day (such surrender to be prepared by the Landlord’s Solicitors at the Tenant’s
expense) and the Landlord may within twenty-one days of the service of such
notice upon it accept such offer such acceptance to be in writing and without
prejudice to all rights and remedies of the Landlord in respect of rent or
breach of covenants. If the said offer is not accepted by the Landlord or on
its behalf within the said twenty-one days it shall be deemed to have been rejected
and if the Tenant assigns or parts with possession of the flat without first
making the said offer to surrender he shall be deemed to have made it and the
Landlord shall be entitled to accept it within seven days of becoming aware of
the said assignment or parting with possession in breach of this covenant.
The only other
provision of the lease to which I need refer is clause 6, which entitles the
tenants, on one month’s notice, to terminate the lease on December 24 1976:
that is, half-way through the term provided in the ‘habendum.’ No corresponding right of shortening the
habendum term at their will is given to the landlords.
We have had
interesting and elaborate argument by counsel on either side, analysing section
19(1) with cross-references to subsections (2) and (3) and to other statutory
provisions, including section 127 of the Rent Act 1977; analysing in detail the
words of clause 2(j); and discussing numerous decided cases, before and after
1927. I hope that it will not be regarded as being in any way disrespectful of
those powerfully reasoned submissions if I do not specifically set them all out
in expressing my conclusion.
What was
section 19(1) of the 1927 Act intended to achieve? I think, in the end, that it must be taken to
have had a very limited objective. Apart from legislation, a landlord and a
tenant had freedom of contract, in agreeing the terms of their lease, to permit
or to limit or to abrogate the right of either or both of them to assign their
respective interests. Section 19(1) did not purport to destroy that freedom of
contract of the parties to agree to forbid assignment by the tenant. That
proposition is accepted by both parties before us, though counsel were unable
to identify any decided case to that effect, such as Hilbery J appears to have
had in mind in his judgment in Adler [1957] 1 WLR 227 at p 230 when he
says: ‘It is clear and has been decided. . . .’
Neither of the parties before us asks us to give effect to the doubts on
that point expressed by Danckwerts LJ in Property and Bloodstock Ltd v Emerton
[1967] 3 All ER 321 at p 330. It is hard to see how the words of section 19(1),
‘In all leases . . . containing a covenant . . . against assigning . . .
demised premises . . . without licence or consent,’ could fairly be construed
as applying to leases which contain a simple covenant against assigning, with
no reference whatever to ‘without licence or consent.’ I do not pursue that question because it is
accepted before us that clause 19(1) has no application where there is a
prohibition of assignment.
It follows
that the deemed proviso, ‘such consent is not to be unreasonably withheld,’
applies only if and to the extent that the covenant or agreement in the lease,
by its terms, provides for assignment with consent. Such a provision would, in
strict law, be meaningless or ineffective unless it were to have implied in it
some such term as ‘such consent not to be unreasonably withheld.’ For if the landlord was entitled to refuse
consent at his own entirely unrestricted discretion, the provision for
assignment with consent would add nothing to, and subtract nothing from, the
effect in law of the contract as it would be without those words being
included. For a contracting party is entirely free to agree to a variation of the
contract at the request of the other party. That applies equally where, as
here, the variation of the contract would constitute a novation. It seems to me
to follow that the effect of section 19(1) of the 1927 Act, on its true
analysis, was merely to make statutory an implied term which must already have
been implied, if the express words were to have any sensible purpose.
The nature of
the implied term has in some degree been expounded by decisions of the courts
subsequent to the 1927 Act. Such cases as Re Smith’s Lease: Smith v Richards
[1951] 1 All ER 346, a decision of Roxburgh J, hold that as a result of section
19(1) the parties cannot by the terms of their contract abrogate the right and
duty of the court, in the event of a dispute as to the reasonableness of the
withholding of consent where consent is required by the terms of the lease, to
decide by an objective standard whether or not the refusal is reasonable. Thus,
if the parties by their contract purport to say that in such and such
circumstances the landlord may withhold his consent, that term of the contract
is invalid and is to be disregarded. The court itself decides whether in the
circumstances which actually existed the refusal of consent is reasonable.
In Re
Smith’s Lease the provision of the contract which Roxburgh J held to be
invalid in the light of section 19(1) was a term which provided expressly that
a refusal of consent ‘shall not be deemed to be an unreasonable withholding of
consent . . .’: and then the clause went on to provide, as not being
unreasonable, an elaborate formulation of a transaction in which the landlord,
when he gave his refusal, offered to the tenant to accept surrender of the
tenancy. If that decision be right, the distinction between it and the present
case depends, not in any way on the realities of what would be achieved by
the respective provisions of the leases, but simply on the fact that a
different verbal formula is used. That is not a satisfactory distinction.
After the
decision in Re Smith’s Lease, a different formula was evolved which it
was hoped, at least by those who evolved it, would produce a different legal
result. That new formula was tested in Adler; and Hilbery J held,
distinguishing Re Smith’s Lease, that the new formula achieved its
object. Although the wording is in various respects different, there is, in my
view, no material difference from the point of view of legal effect between the
Adler formula and the formula used in the present lease in clause
2(j)(ii) and the second of the two provisos. If anything, the Adler
formula was more vulnerable than the present formula, because, after the words
‘such consent,’ it contained the parenthesis which the opening words of clause
2(j)(ii) do not contain, ‘(subject as hereinafter provided).’ The Adler formula avoided the
inclusion of any provision as to deeming anything not to be unreasonable. It
stipulated, by a proviso, that before the tenant applied for consent to assign
(literally, it said before he ‘desired’ to assign), he should make an offer to the
landlord to surrender the lease. If the offer of surrender were accepted, the
question of consent to assignment would not arise. If it were refused, then the
tenant would, if he wished, make his application to assign; and, if the
landlord were to refuse consent, the tenant could invite the court to apply the
objective test of reasonableness under section 19(1) of the 1927 Act.
As I have
said, the distinction between the Adler formula and Re Smith’s Lease
formula is semantic. The practical result is the same. If the latter is not
permissible or effective in the light of section 19(1), why should the former
escape the ban?
On the other
hand, if one is to assume, as for the reasons which I have given it seems to me
right for us to assume, that section 19(1) does not prevent or limit freedom of
contract to ban assignments altogether by agreement in the lease, why should
the subsection be treated as having the effect of preventing, or limiting
freedom of contract to ban, assignments during a part of the lease? Counsel for the landlords, I think rightly,
submitted that the courts could not treat section 19(1) as invalidating a
contractual proviso that no assignment should be made–that no question of
assignment by consent should arise–during, say, the first, or the last, seven
years of a 14-year lease. Why, then, as a matter of policy or practical sense
or logic should the courts hold that section 19(1) invalidates a proviso that,
before the tenant’s right of assignment with consent shall arise, a condition
precedent shall be fulfilled: namely, the tenant’s obligation first to offer a
surrender? If by agreement an assignment
by consent can be precluded altogether, what logical reason or policy can be
invoked to preclude a limited right of the tenant to assign with consent; the
limitation being that the landlord, if he wishes, can insist on a surrender?
In Adler,
as I have said, Hilbery J upheld the new formula. Thereafter, so far as
counsel’s researches go, there was no criticism or adverse comment on that
decision or its reasoning in any reported, or, so far as is known, any
unreported, case until 1974. The decision has been cited by text-book writers,
almost without criticism. The Adler formula, no doubt with variation,
has been set out in widely used books of forms and precedents. It has, we are
told, I have no doubt correctly, been used in thousands of leases agreed
between landlords and tenants. So far as is known, this present case is one of
only two cases in which the Adler decision and reasoning have been challenged
in the courts of this country. The other challenge was in Greene v Church
Commissioners for England [1974] Ch 467. Although the section 19(1)
question had been raised in the county court from which that appeal was
brought, it had not been there decided, because another issue, under the Land
Charges Act, decided in favour of the tenant, rendered a decision on the
section 19(1) issue unnecessary. So, also, when the appeal in Greene
came to this court, the decision of Judge Leslie in the county court was upheld
by this court. Counsel for the landlords in this case relies on the decision in
that case on that issue as supporting his submissions in the present case. He
may be right, but I do not find it necessary to go into that submission. That
particular point clearly cannot have been argued in Greene’s case.
However, in Greene’s case, there were observations by members of the
court, obiter, expressing doubt as to the correctness of Adler:
see per Lord Denning MR at p 477C and Sir Eric Sachs at p 479E.
What does seem
clear is that the members of the court who expressed those dicta of doubt as to
Adler in Greene’s case did not have the advantage, which we have
had, of having had cited the judgments given in the High Court of Australia in Creer
v P & O Lines of Australia Pty Ltd [1971] 45 ALJR 697. That case
involved, directly and indistinguishably, the correctness of Hilbery J’s
decision in Adler. The case arose on section 133B(1) of the Conveyancing
Act 1919-1969 (New South Wales). The statutory terms are identical with section
19(1). The High Court, with closely reasoned judgments by Sir Garfield Barwick
CJ, Menzies J and Windeyer J, approved and followed Adler.
I would do the
same. In the balance of conflicting arguments, I reach that conclusion
substantially for three reasons. First, the respect due to the decision of the
High Court of Australia, and to the reasoning of the judgments therein;
secondly (as is, indeed, a ground which clearly strongly influenced Menzies J
in that case) the fact that the Adler decision has stood, and has been
acted on, for so many years; and thirdly (a ground which makes me feel able to
place much greater reliance on the second ground than I should otherwise have
done), the fact that I cannot see any good argument of policy for interfering,
more than is essentially required by the words of the statute or by binding
authority, with freedom of contract in respect of an agreement between the
parties that the landlord should be entitled to the option of requiring a
surrender of the lease, where the tenant desires to be freed from his
obligation under the lease; bearing in mind that the legislature did not in
1927 consider, and has not since considered, that policy requires infringement
of freedom of contract between a potential landlord and a potential tenant
validly and effectively to agree that there shall be no right of assignment at
all, however reasonable the tenant’s subsequent desire to assign might be.
It is
contended further for the tenants that, even if Adler be right, clause
2(j) is materially different from the Adler clause. The chief ground for
that submission is that the last few lines of the second proviso to clause
2(j)(ii) do not make provision for anything that could be called a condition
precedent to the tenant’s right to such consent for an assignment, but made
provision for what is to happen after the stage to which the preceding
provisions of the proviso relate. I do not know what the effect, if any, in law
of these last few lines of the proviso would be. I doubt if they would have any
effect. But if and in so far as they might be thought to be inconsistent with
what is required by section 19(1), they would, as I understand the authorities,
simply fall to be ignored. They would not, as it were, carry through their infection
into the rest of the clause, so as to invalidate the rest of the proviso.
I would
dismiss the appeal.
Agreeing,
LAWTON LJ said: At common law there were no fetters on what a landlord could
put in a lease, if his tenant agreed, to restrain or control its assignment. He
might insert a covenant prohibiting assignment; or he might give the tenant a
right to assign with his consent; or he might allow the tenant to assign with
his consent, undertaking that his consent would not be unreasonably withheld; or
he might omit any covenant against assignment.
In 1927
Parliament by the Landlord and Tenant Act of that year provided for the payment
of compensation for improvements and goodwill to the tenants of premises used
for business purposes, or the grant of new leases, and for the amendment of the
law of landlord and tenant: see the long
goodwill, Part II with amendments of the law. Three topics were dealt with in
Part II: provisions as to covenants to repair; ‘provisions as to covenants not
to assign etc without licence or consent’ (I quote from the marginal note to
section 19); and apportionment of rents.
What was the
intention of Parliament in enacting section 19 in the terms it did? Was it intended to confer a jurisdiction upon
courts to relieve lessees from covenants or to modify them? In F W Woolworth & Co Ltd v Lambert
[1937] Ch 37 Greene LJ referred to this question at p 60 in relation to section
19(2), which was concerned with covenants against the making of improvements
without licence or consent, and answered it in these terms: ‘It is a statutory
addition to the terms of a particular type of covenant and the proviso which
the subsection mentions is to be read into the covenant.’ The same can be said about the proviso
mentioned in subsection (1) with which this appeal is concerned. This being so,
the landlords submit that there is nothing in section 19(1) which fetters a
landlord’s right, save in the terms of the proviso, to insert in a lease a
covenant requiring his tenant to act in a specified way before asking for
consent to assign and making his acting in that way a condition precedent to
his acquiring any right to assign. This is what the landlords say they have
done in the second proviso to covenant 2(j)(ii) of the lease under
consideration in this appeal. They rely on the decision of Hilbery J in Adler
v Upper Grosvenor Street Investment Ltd [1957] 1 WLR 227, a case in
which there was a proviso in broadly similar terms to the one with which we are
concerned. The judge decided that a tenant’s right to assign under this kind of
proviso arises only when his landlord refuses the proffered surrender: see p
230.
The decision
in Adler’s case does not seem to have surprised conveyancers, and
although, as counsel informed us, it was discussed in articles in specialist
legal journals, there was virtually no criticism of it. This form of covenant
found its way into a number of precedent books (see for example Prideaux’s
Precedents in Conveyancing, 25th ed (1966), vol 2 p 321). The probabilities
are, as Mr Levy accepted, that this kind of proviso is now to be found in many
leases.
The decision
of the High Court of Australia in Creer v P & O Lines of
Australia Pty Ltd [1971] 45 ALJR 697 shows that this form of proviso was in
use in the Commonwealth. That distinguished court had to consider its effect
having regard to Australian legislation in much the same terms as section 19(1)
of the Landlord and Tenant Act 1927. Two members of that court, Barwick CJ and
Windeyer J, decided that Adler’s case had been rightly decided. Menzies
J was not as certain about the correctness of that decision as his brethren,
but decided in the end to accept it. For my part I found the reasoning of
Barwick CJ and Windeyer J most convincing.
As Megaw LJ
has pointed out in his judgment, the Adler form of proviso was queried obiter
in Greene v Church Commissioners for England [1974] Ch 467. I
adopt his comments on that case.
The history of
the Adler form of proviso has had an odd twist which was made by the
Rent Act 1977. Section 127(1) of that Act excluded the statutory prohibition on
premiums on grants of protected tenancies when a tenancy was both a long-term
tenancy within the meaning of Part I of the Landlord and Tenant Act 1954 and a
protected tenancy provided the conditions specified in subsection (2) were
fulfilled. The third of those conditions, which is set out in paragraph (c),
was that assignment or underletting was precluded by the terms of the tenancy
‘and, if it is subject to any consent, there is neither a term excluding
section 144 of the Law of Property Act 1925’ (I omit the words which are not
necessary for this purpose) ‘nor a term requiring in connection with a request
for consent the making of an offer to surrender the tenancy.’ Parliament in 1977 seems to have assumed that
the Adler form of covenant was valid. This assumption does not make it
valid; but it is a statutory reflection of what is in the precedent books.
I am satisfied
that the judgment of Hilbery J in Adler was correct, for the reasons
given by Barwick CJ and Windeyer J in the High Court of Australia case. As I
can find no significant difference between the Adler form of proviso and
that under consideration in this case, I would dismiss the appeal.
Agreeing,
BROWNE LJ said: I have found this a very difficult case, but in the end I agree
that the appeal should be dismissed.
According to
the law as it stood immediately before the passing of the 1927 Act (which the
draftsmen must be assumed to have had in mind) a lease could validly contain a
covenant absolutely prohibiting assignment or subletting; on the other hand, if
there was a covenant not to assign or sublet without the landlord’s consent,
such consent not to be unreasonably withheld, the wish of the landlord to
regain possession for himself was not a reasonable ground for refusing consent:
see Rates v Donaldson [1896] 2 QB 241; Houlder Brothers &
Co Ltd v Gibbs [1925] Ch 575. As Megaw LJ has said, neither party
asked us to give effect to the doubts of Danckwerts LJ to which he has
referred, and I accept that section 19(1) of the 1927 Act does not affect an
absolute covenant against assignment. The primary purpose of section 19(1)
seems to be to add a statutory proviso to a covenant not to assign without
consent. The problem in this case is its application where there is already in
the lease a contractual proviso that consent is not to be unreasonably withheld
in the case of a respectable and responsible assignee, followed by further
provisions which, if valid, limit the tenant’s liberty to assign. I think that
a possible view of the effect of section 19(1) is that the lease must be read
as if it simply contained the statutory proviso–‘Such licence or consent is not
to be unreasonably withheld’–and no more, and what follows must be disregarded.
If so, on the law as it stood in 1927 a refusal of consent on the ground that
the landlord wanted possession for himself would be unreasonable. Further, as
Megaw LJ has said, the practical object and effect of the clause which was held
invalid in Re Smith’s Lease [1951] 1 All ER 346 and the clause which was
held valid in Adler [1957] 1 WLR 227 and by the High Court of Australia
in Creer v P & O Lines of Australia Pty Ltd [1971] 45 ALJR
697 was the same (that is, to give the benefit of any increase in the value of
the lease to the landlord and not the tenant), and the difference between the
clauses was simply that the object and purpose was wrapped up in a different
verbal formula. For these reasons I have shared the doubts expressed (obiter)
by Lord Denning MR and Sir Eric Sachs in Greene v Church
Commissioners [1974] Ch 467 at pp 477 and 479-480 and by Menzies J in Creer
v P & O Lines of Australia Pty Ltd at p 699.
But after a
good deal of hesitation I have come to the conclusion that this appeal should
be dismissed, for the three reasons given by Megaw LJ. I will not try to
paraphrase them or repeat them at length. In substance they are:
1. The respect
due to the decision of the High Court of Australia.
2. The fact
that Adler has stood for more than 20 years and has, we are told by Mr
Wood, been acted on in thousands of leases, without criticism except in Greene’s
case (which was followed by a guarded note in the Law Quarterly Review
for January 1975, vol 91 p 3), and by Menzies J. As Windeyer J pointed out in Creer’s
case, it had previously been noted, with apparent approval, by Mr Megarry (as
he then was) in 73 Law Quarterly Review p 157, and Mr Wood provided us
with a number of extracts from textbooks and precedent books which generally
treat it as good law.
3. Since
Parliament has not thought it necessary or desirable to prohibit or limit
absolute covenants against assignment, I cannot discern any reason for
invalidating a covenant which in effect prohibits assignment unless a condition
precedent has been fulfilled–namely, the offer and re-
against assignment during (say) the first seven years or the last seven years
of a 14-year lease.
I would only
add that I cannot myself rely on the argument based on section 127 of the Rent
Act 1977–see Kirkness v John Hudson & Co Ltd [1955] AC 696,
especially per Lord Reid at p 735.
The appeal
was dismissed with costs
