Works built during war by defendant’s predecessor in title – Surface entrance to works – Plaintiff’s predecessor entitled to title absolute by virtue of Post Office Works Act 1959, section 1 – Whether title thereby transferred to BT’s predecessor – Whether BT had forfeited tenancy by challenging department’s title – Plaintiff’s claim and defendant’s counterclaim dismissed
During the second world war underground works were constructed in Holborn which were connected to Chancery Lane tube station. After the war the Postmaster General occupied the works and made extensions in order that essential communications could be maintained even in time of nuclear war. One of the four entrances was in Tooks Court, where part of the works were above surface level. The freeholder of the whole surface area was a predecessor of the Department of the Environment which had, since the 1950s, granted a lease to BT’s predecessor, the Postmaster General. In 1981 the department served a notice purporting to determine BT’s predecessor’s tenancy, but stating that they would not oppose an application for a new tenancy, for which BT subsequently applied. By early 1992 a dispute arose as to who was entitled to the freehold.
BT issued proceedings. A hearing of preliminary issues was ordered. The relevant legislation was the Post Office Works Act 1959, section 1 which stated: "Those parts of the London works … in which an estate was not vested in the Postmaster General immediately before the passing of this act shall by virtue of this section .. vest in the Postmaster General for an estate in fee simple …" BT contended that the "the London works" were not limited to works in the subsoil and therefore included the surface works and by virtue of the Act the fee simple had vested in the Postmaster General and was now vested in themselves by way of statutory succession. The department contended that it was necessary to include the preambles to the Act which referred to the plans and, since those plans only referred to underground and subsoil properties and were intended to be definitive descriptions of what was to vest under the Act, the surface works were excluded. The department counterclaimed, that it was an implied condition of the tenancy that BT should not deny the Department’s title to the property, that BT had breached that condition and therefore the tenancy had become forfeited to the department. The department issued a notice under the Law of Property Act 1925, section 146 requiring BT to remedy its breach. The department contended in relation to the counterclaim that BT’s pleadings clearly and expressly asserted that the relevant title was vested in BT and not in the department, and the court should go no further than that record in testing whether the disclaimer entitled the department to possession.
Held The plaintiff’s claim and the defendant’s counterclaim were dismissed.
1. The Act had to be read as a whole including the preambles which referred to the deposited plans and book of reference. The deposited plans defined the extent of the land to be vested in the Postmaster General as only underground and subsoil properties and it had not been intended that it should be enlarged by the more general words of section 1 of the Act. Accordingly, BT was a tenant of the department.
2. The court was not required to take into account the pleadings when considering whether a tenant had forfeited its lease. The notion in contract law, that a reference to the court in good faith where there were properly arguable points at issue did not amount to a sufficient repudiation, was equally applicable to forfeiture or disclaimer in landlord and tenant law. There was nothing to suggest that BT would continue to challenge the department’s title and therefore the disclaimer was not of the character required for forfeiture and accordingly BT had not forfeited its lease.
3. In any event, even if there had been a sufficient dispute of the department’s title, BT would have been entitled to relief from forfeiture. Although it did not matter for the purposes of section 146(1) of the 1925 Act that it was only an implied condition that BT would not deny the department’s title, it would have been an appropriate exercise of the court’s discretion under section 146(2) to give BT relief .
John Martin QC and Thomas Seymour (instructed by Ashurst Morris Crisp) appeared for the plaintiff; Paul Morgan QC and Guy Newey (instructed by the Treasury Solicitor) appeared for the defendant.