Landlord and tenant — Arrears of rent — Whether following assignment of term original tenant liable for rent during tenancy continued under Part II of the Landlord and Tenant Act 1954 — Whether liability during continuation tenancy limited to contractual rent
City of
London Corporation v Fell
The appellant
lessors granted a 10-year term to the respondent lessees from March 25 1976.
The respondents assigned the term to Grovebell Group Ltd in June 1979. The
yearly rent was subsequently reviewed to £38,500. Although the contractual term
expired on March 25 1986, the assignee remained in possession pursuant to Part
II of the Landlord and Tenant Act 1954. The assignee surrendered the tenancy to
the appellant on January 23 1987. The assignee was compulsorily wound up on
December 11 1986. No rent was paid after Christmas quarter day 1985. The
appellant’s claim for the arrears of rent against the respondents as original
tenants was dismissed by Mr Desmond Perrett QC (sitting as a deputy judge of
the Chancery Division). The appellants appealed.
Herbert
Duncan Ltd v Cluttons
By an
underlease dated July 9 1985 the respondent demised premises to the appellant
firm for a term commencing December 1 1984 and ending March 25 1990 at a rent
of £70,000 pa. The appellant assigned the term to Warringtons plc on September
27 1988. The respondent gave notice to Warringtons plc under section 25 of the
Landlord and Tenant Act 1954 terminating the tenancy on March 25 1990.
Following a counternotice given by Warringtons plc, and an application to the
High Court for a new tenancy, under Part II of the 1954 Act, the respondent
issued a summons for the determination of an interim rent pursuant to section
24A of the 1954 Act. Warringtons plc served notice discontinuing the
application for a new lease and by reason of section 64 of the Act, the tenancy
terminated on February 5 1991. On February 15 1991 the master made a consent
order determining the interim rent at £200,000 pa. Warringtons plc continued to
pay rent at the contractual rate (£60,794.24), but then went into receivership
leaving a balance of £113,452.05 due at the termination of the tenancy. By
clause 5(g) of the lease the expression ‘the said term’ was stated, where the
context admits, to include not only the term thereby granted but also the
period of any holding over or any extension thereof whether by statute or at
common law. In proceedings under RSC Ords 14A and 14 brought by the respondent
against the appellant to recover the arrears of rent, Tudor Evans J gave
judgment to the respondent. The appellant appealed contending that as original
tenant either it was not liable for any arrears of rent arising after the
expiration of the contract term or its liability was limited to the contract
rent.
dismissed. Where an original tenant has assigned a tenancy before the end of
the contractual term the tenancy which section 24(1) of the 1954 Act provides
shall not come to an end is, and can only be, the tenancy of the assignee.
Since the contractual obligations of the original tenant form no part of the
legal relationship between the landlord and the assignee, and since they are
not independently continued by the subsection, they are in no way affected. If
the original tenant contracted to pay rent only during the contractual term, as
was the case, the landlord cannot recover from him any rent payable in respect
of any period after that date.
Duncan Ltd v Cluttons
allowed. The covenant to pay rent was, by virtue of clause 5(g) of the lease, a
covenant to pay the yearly rent of £70,000 during the contractual term and any
extension of the term by section 24(1) of the 1954 Act. However, the appellant
did not covenant to pay any rent other than the contractual rent of £70,000
during the continuation tenancy: they did not covenant to pay the interim rent
determined pursuant to section 24A of the Act.
The following
cases are referred to in this report.
City of
London Corporation v Fell [1992] 3 All ER
224; [1992] 1 EGLR 95; [1992] 02 EG 172
Cornish v Brook Green Laundry Ltd [1959] 1 QB 394; [1959] 2 WLR 215; [1959]
1 All ER 373; [1959] EGD 116; (1959) 173 EG 307, CA
GMS
Syndicate Ltd v Gary Elliott Ltd [1982] Ch
1; [1981] 2 WLR 478; [1981] 1 All ER 619; (1980) 41 P&CR 124; [1981] EGD
331; 258 EG 251, [1981] 1 EGLR 37
Herbert
Duncan Ltd v Cluttons [1992] 1 EGLR 101;
[1992] 22 EG 110
Junction
Estates Ltd v Cope (1974) 27 P&CR 482;
232 EG 335
Plesser
(A) & Co Ltd v Davis (1983) 267 EG 1039,
[1983] 2 EGLR 70
Weinbergs
Weatherproofs Ltd v Radcliffe Paper Mill Co Ltd
[1958] Ch 437; [1958] 2 WLR 1; [1957] 3 All ER 663
In City of
London Corporation v Fell this was an appeal by the City of
London Corporation from a decision of Mr Desmond Perrett QC (as he then was)
dismissing the appellant’s claim for arrears of rent against the respondents,
John Fell, John Edward James Hayward and Edward Denham Sturmer: [1992] 1 EGLR
95; [1992] 02 EG 172.
In Herbert
Duncan Ltd v Cluttons this was an appeal by Cluttons from orders
made by Tudor Evans J giving judgment for the respondent, Herbert Duncan Ltd,
on a summons under RSC Ords 14A and 14: [1992] 1 EGLR 101; [1992] 22 EG 110.
Andrew Arden
QC and Noah Weiniger (instructed by the solicitor to the City of London
Corporation) appeared for the City of London Corporation; David Neuberger QC
and Erica Foggin (instructed by Wilde Sapte) appeared for John Fell, John
Edward James Hayward and Edward Denham Sturmer; Barry Denyer-Green (instructed
by Wray Smith & Co) appeared for Cluttons; Jonathan Brock (instructed by
Forsyte Kerman) appeared for Herbert Duncan Ltd.
Giving the
first judgment, LORD JUSTICE NOURSE said: Section 24(1) of the Landlord
and Tenant Act 1954 provides:
A tenancy to
which this Part of this Act applies shall not come to an end unless terminated
in accordance with the provisions of this Part of this Act . . .
The
well-recognised effect of that provision is to continue a tenancy of business
premises after the end of the contractual term. The principal question arising
on these appeals is whether it also has the effect of continuing the
contractual obligations, in particular the obligation to pay rent, of an original
tenant who has assigned the tenancy before that date. In City of London
Corporation v Fell [1992] 3 All ER 224 Mr Desmond Perrett QC (as he
then was) has answered the question in the negative. In Herbert Duncan Ltd v
Cluttons [1992] 1 EGLR 101 Tudor Evans J has answered it in the
affirmative. Now we have to say which of them was right.
It may be
thought curious that this question, seemingly so fundamental to the working of
Part II of the 1954 Act, has not arisen earlier for decision. A possible
explanation is that the answer cannot before have been doubted. More probably,
it has taken the effects of a serious recession on the solvency of assignees to
make the question a live one.
Although both
appeals were called on together, they were argued consecutively. It is
convenient to follow the course adopted in argument by dealing first with City
of London Corporation v Fell, where the facts are simple and no
subsidiary questions arise.
City of
London Corporation v Fell
By a lease
dated July 15 1977 and made between the plaintiffs, the City of London
Corporation, as lessors, of the one part and the defendants and another,
partners in the solicitors’ firm of Wilde Sapte, as lessees, of the other part,
the plaintiffs demised business premises at Boston House, 63-64 New Broad
Street in the City of London to the lessees for a term of 10 years from March
25 1976 (defined as ‘the term’), ‘YIELDING AND PAYING therefor during the term
unto the Lessors’ the yearly rent of £27,500 in advance, subject to review as
at the expiration of the fifth year of the term. Clause 2(1) of the lease
contained a covenant by the lessees that they:
Will pay the
said yearly rents on the days and in the manner hereinbefore appointed for
payment thereof.
From these
provisions it is clear that the contractual liability of the lessees for rent
was coterminous with the contractual term.
On June 15
1979 the then lessees, with the licence of the plaintiffs, assigned the lease
to a company called Grovebell Group Ltd (‘Grovebell’). The yearly rent was
subsequently reviewed and increased to £38,500 with effect from March 25 1981.
After the expiration of the contractual term on March 24 1986, Grovebell
continued in occupation of the premises under the 1954 Act. There can be no
doubt that the effect of section 24(1) was to continue the tenancy as between
the plaintiffs and Grovebell. But on December 1 1986 an order for its
compulsory winding up was made in the companies court. The judge found that
Grovebell remained in occupation of the premises until January 23 1987, when
the lease was surrendered by its joint liquidators to the plaintiffs, who
thereupon retook possession.
Grovebell
failed to pay the quarterly instalment of rent due on March 25 1986 and it paid
no rent thereafter. It also failed to pay other sums payable as additional rent
in respect of insurance and service charge. Having been informed by the
liquidators of Grovebell that no significant assets had been recovered in the
liquidation and that it was unlikely that there would be any dividend to
unsecured creditors, the plaintiffs wrote to the defendants on September 7 1989
stating that they would look to them, as original lessees, for payment of the
amount outstanding. The defendants denied that they were liable for any sums
due in respect of any period after the expiration of the contractual term. On
July 6 1990 the plaintiffs issued the writ in the action claiming payment of
£33,460.64, together with interest amounting to £4,166.54. The action came on
for trial before Mr Desmond Perrett QC on June 19 and 20 1991, when he reserved
judgment. On July 10 1991 he gave judgment for the defendants. The plaintiffs
now appeal to this court.
Principal
question
Section 24(1)
of the 1954 Act provides that the ‘tenancy’ shall not come to an end unless
terminated in accordance with the statutory provisions. That word is not
defined in the Act. It must therefore be given its ordinary legal meaning. To
what does it refer in a case where the original tenant has assigned the tenancy
before the end of the contractual term?
In order that the question may be answered, some elementary propositions
in the law of landlord and tenant must be restated.
A lease of
land, because it originates in a contract, gives rise to obligations
enforceable between the original landlord and the original tenant in contract.
But because it also gives the tenant an estate in the land, assignable, like
the reversion, to others, the obligations, so far as they touch and concern the
land, assume a wider influence, becoming, as it were, imprinted on the term or
the reversion as the case may be, enforceable between the owners thereof for
the time being as conditions of the enjoyment of their respective estates. Thus
landlord and tenant stand together in one or other of two distinct legal relationships.
In the first it is said that there is privity of contract between them, in the
second privity of estate.
To what, in
ordinary legal parlance, do we refer when we speak of a ‘tenancy’? I think that we refer to a particular legal
relationship between tenant and landlord under which land is held by the one of
the other. A ‘tenant’, both by derivation and by usage, is someone who ‘holds’
land of another, for which purpose it is immaterial whether he does so by
contract or by estate. Although he may remain contractually liable to the
landlord, an original tenant who has assigned the tenancy, equally with an
assignee who has himself assigned, cannot properly be described as the tenant.
He no longer holds the land. It is the assignee who now holds the land. It is
he who has the tenancy.
It follows
that where an original tenant has assigned the tenancy before the end of the
contractual term the tenancy which section 24(1) provides shall not come to an
end is, and can only be, the tenancy of the assignee. Since the contractual
obligations of the original tenant form no part of the legal relationship
between the landlord and the assignee, and since they are not independently
continued by the subsection, they are in no way affected. If, as here, the
original tenant has covenanted to pay rent only during the contractual term,
the landlord cannot recover from him any rent payable in respect of a period
after that date. Further elaboration of the principal question could only
obscure the clarity of the answer. The defendants are entitled to succeed on
this appeal.
The basic
submission of Mr Arden QC, for the plaintiffs, was that because a tenancy can
only originate in contract its continued existence is dependent on continued
contractual support. Accordingly, the effect of section 24(1) must be to
continue not only the obligations arising by privity of estate between the
landlord and the assignee but also those arising by privity of contract between
the original landlord and the original tenant. For the reasons already stated,
that submission, afflicted as it is by a confusion between the creation and the
continuation of a tenancy, must be rejected. A tenancy needs a contract to
create it. It does not need one to continue it. The contractual obligations
which touch and concern the land having become imprinted on the estate, the
tenancy is capable of existence as a species of property independently of the
contract.
Mr Arden
helpfully referred us to many other provisions of the 1954 Act. None of them
provides any support for the view that ‘tenancy’ in section 24(1) is to be
given any other than its ordinary meaning. Indeed, by their exclusive concern
with the tenant in occupation they affirm the contrary. Mr Arden also took us
to all the previous authorities on section 24(1). They establish that the
effect of the subsection is to continue the common law tenancy with a statutory
variation as to the mode of its determination: see, for example, Cornish v
Brook Green Laundry Ltd [1959] 1 QB 394, at p409. In some of them reference
has been made to the continuation, not of the tenancy, but of the ‘term’: see,
for example, Weinbergs Weatherproofs Ltd v Radcliffe Paper Mill Co
Ltd [1958] Ch 437, at p446. There is no significance in this distinction in
language. The term is an integral part of the tenancy and, if the one is
continued, so is the other.
Unfortunately,
as it now appears, the insignificance of judicial references to the
continuation of the term or the contractual term was not fully grasped in the
courts below, where counsel for the respective landlords invoked them as
authority for the proposition that the contractual obligations of the original
tenant are also continued by section 24(1). That line of argument involves a
clear non sequitur. Although the term is created by contract, it is
continued by statute. Accordingly, while it is usual to speak of the
continuation of the contractual term, it does not follow that the contractual
obligations of the original tenant are continued. The true view is that none of
the references in the previous authorities to the continuation of the tenancy
or the term has illuminated the meaning of ‘tenancy’ in its application to a
case such as the present. A decision of my own at first instance, GMS
Syndicate Ltd v Gary Elliott Ltd [1982] Ch 1, which
more helpful, although by analogy only, are Junction Estates Ltd v Cope
(1974) 27 P&CR 482* and A Plesser & Co Ltd v Davis (1983)
267 EG 1039, [1983] 2 EGLR 70, in each of which it was held that a covenant
guaranteeing the tenant’s payment of rent and performance of his covenants was
limited to the contractual term of the lease and did not extend to the period
of a continuation tenancy under section 24(1).
*Editor’s
note: Also reported at (1974) 232 EG 355.
A further
point must be mentioned. Mr Neuberger QC, for the defendants, argued that even
if there had been no assignment of the lease, so that the defendants remained
the tenants, their contractual obligations would not have been continued by
section 24(1). If the views already expressed are correct, it would seem that
argument ought to be rejected. The ‘tenancy’, the particular legal relationship
between landlord and tenant, would have been that created by the original
contract. It would have been that relationship which was continued by section
24(1). However, this is not a question which arises for decision in the present
case. It was not fully argued. It could be of practical significance only in
relation to an obligation which did not touch and concern the land. In all the
circumstances it is neither necessary nor desirable to express a concluded opinion
on it.
The learned
deputy judge in this case came to a correct decision. I would affirm it and
dismiss the appeal accordingly.
Herbert
Duncan Ltd v Cluttons
This case has
two additional features. First, the landlord claims that the covenant in the
lease for payment of rent obliges the original tenants to pay it, not only
during the contractual term but also during any continuation tenancy under
section 24(1). Second, the landlord claims that the original tenants are liable
during that period, not simply for the contractual rent, but for an interim
rent determined pursuant to section 24A of the 1954 Act by a consent order made
in proceedings between the assignee and the landlord.
By a lease
dated July 9 1985 and made between the plaintiff, then called Herbert Duncan
(Furs) Ltd, as lessor, of the one part and four partners in the chartered
surveying firm of Cluttons, the defendants, as lessees, of the other part, the
plaintiff demised business premises at 74 Grosvenor Street, London WI, to the
defendants for a term commencing on December 1 1984 and expiring on March 25
1990 (defined as ‘the said term’) ‘YIELDING AND PAYING therefor unto the Lessor
during the said term’ the yearly rent of £70,000 in advance. Clause 2(1)(a) of
the lease contained a covenant by the defendants that they:
will pay the
yearly rent hereinbefore reserved . . .
Clause 5(g)
provided:
The
expression ‘the said term’ shall where the context admits include not only the
term hereby granted but also the period of any holding over or of any extension
thereof whether by statute or at common law.
On September
27 1988 the defendants, with the licence of the plaintiff, assigned the lease
to a company called Warringtons plc (‘Warringtons’). On August 4 1989 the
plaintiff served a notice under section 25 of the 1954 Act on Warringtons
terminating its tenancy at the end of the contractual term on March 25 1990. On
November 23 1989 Warringtons, having duly notified the plaintiff that it was
not willing to give up possession of the premises, issued an application in the
Chancery Division for a new tenancy. On December 18 1989, by summons issued in
those proceedings, the plaintiff applied for an interim rent to be determined
pursuant to section 24A of the Act. On November 6 1990 Warringtons served on the
plaintiff notice of discontinuance of its application for a new tenancy. That
meant that, by virtue of section 64 of the Act, the continuation tenancy was
terminated on February 5 1991. On February 15 1991 the master made a consent
order on the plaintiff’s summons under section 24A determining the interim rent
at £200,000 pa.
The admitted
effect of the determination was that Warringtons became liable to pay rent for
the period between March 25 1990 and February 5 1991 at the yearly rate of
£200,000, the apportioned amount for that period being £174,246.57. However, it
continued to pay at the contractual rate and no more (£60,794.52), leaving a
balance of £113,452.05. Warringtons having since gone into administrative
receivership, the plaintiff may be assumed to have little hope of recovering
the balance from it. In any event, it commenced the present action against the
defendants by a writ issued in the Queen’s Bench Division on August 9 1991. It
claimed payment of £113,452.05, together with interest of £8,065.97 to date. It
also claimed damages for dilapidations.
The plaintiff
issued a summons for the determination of a point of construction and/or law
under RSC Ord 14A and, if successful, for final judgment under Ord 14. It also
issued a summons for final judgment under Ord 14 in respect of the claim for
dilapidations. The summonses came on for hearing before Tudor Evans J in
chambers in December 1991. On December 20 he gave judgment in open court for
the plaintiff in the sum of £113,452.05, together with £14,313.08 in respect of
interest. He granted the defendants leave to appeal and a stay of execution on
terms which have been duly complied with. He also gave judgment for the
plaintiff on its dilapidations claim for damages, interest and costs to be
assessed and made an order for an interim payment of £30,000. No appeal is
brought against the judge’s decision so far as it related to the dilapidations
claim.
The first
question raised by the defendants’ appeal was the principal question, on which
Mr Denyer-Green, for the defendants, and Mr Brock, for the plaintiff, were
content to adopt the arguments advanced by Mr Neuberger QC and Mr Arden QC
respectively. For the reasons already stated, that question must be resolved in
favour of the defendants. It then becomes necessary to consider two subsidiary
questions.
Subsidiary
questions
The first
subsidiary question is whether, by virtue of the particular provisions of the
lease, the defendants were liable to pay the contractual rent of £70,000 pa,
not only during the contractual term but also during the continuation tenancy
under section 24(1). This is a very simple question. The combined effect of the
reddendum and clause 2(1)(a) of the lease was that the defendants covenanted to
pay the yearly rent of £70,000 during ‘the said term’ which, by clause 5(g),
was defined to include not only the contractual term but also ‘the period of .
. . any extension thereof whether by statute or at common law’. In other words,
there was a covenant to pay the rent during the period of any statutory
extension of the contractual term, ie by section 24(1) of the 1954 Act. The
first subsidiary question must be decided in favour of the plaintiff.
The plaintiff,
by its success on that question alone, cannot acquire any financial benefit as
against the defendants. That is because it has already received the full amount
of the contractual rent during the continuation tenancy from Warringtons.
However, its success is a necessary preliminary to the second subsidiary
question, which is whether the defendants are liable, not for the contractual
rent, but for the interim rent instead. This question is almost as simple as
its predecessor.
So far as
material, section 24A provides:
(1) The landlord of a tenancy to which this Part
of this Act applies may —
(a) if he has given notice under section 25 of
this Act to terminate the tenancy;
. . . apply to
the court to determine a rent which it would be reasonable for the tenant to
pay while the tenancy continues by virtue of section 24 of this Act, and the court
may determine a rent accordingly.
(2) A rent determined in proceedings under this
section shall be deemed to be the rent payable under the tenancy . . .
Mr
Denyer-Green submitted, correctly, that in a case such as the present ‘the
tenant’ referred to in subsection (1) can only be the assignee. He added that
Parliament cannot have intended that an original tenant should be liable for
payment of a rent which, although it might be reasonable for the assignee to
pay, might be unreasonable for the original tenant to pay, especially when it
fell to be determined in proceedings to which he would not be a party.
Although I see
great force in that submission, it is unnecessary to resort to it in this case,
where everything depends on the contract between the parties. All that the
defendants covenanted to pay was the yearly rent of £70,000. True it is that
they covenanted to pay it during the continuation tenancy. But they did not
covenant to pay any other rent. They certainly did not covenant to pay an
interim rent determined pursuant to section 24A and, the principal question
having been decided as it has, they cannot be fastened with any liability to do
so. I cannot accept Mr Brock’s submission that the deeming provision in
subsection (2) in some way translated the contract into one for payment of the
interim rent. For these reasons the second subsidiary question must be decided
in favour of the defendants. They are entitled to succeed on this appeal.
Tudor Evans J
decided the principal question and both subsidiary questions in favour of the
plaintiff. He dealt very briefly with the second subsidiary question. Having
referred to Mr Denyer-Green’s
acknowledged its attraction, the judge rejected it, saying that section 24A was
in the nature of a statutory rent review. That is no doubt correct as between
the landlord and the assignee. With respect to the judge, it could be correct
as between the landlord and the original tenant only if the terms of their
contract allowed it. They did not allow it in the present case.
In this case I
would allow the appeal and discharge para 1 of Tudor Evans J’s order dated
December 20 1991.
Agreeing, EVANS
LJ said: In cases where the assignee is in occupation of the premises at
the expiry of the contractual term, the ‘tenancy’ referred to in section 24(1)
of the Landlord and Tenant Act 1954 is, in my judgment, the legal relationship
which exists between the landlord and his tenant, the assignee. The period of
that tenancy was the period of the original contractual term, but it does not
follow that the statute has the effect of extending the original contract
between the parties to it. Where, on the other hand, the original tenant and
assignor has covenanted to pay rent during the contractual term and ‘the period
of . . . any extension thereof whether by statute or at common law’, as in
clause 5(g) of the lease in the second of these cases, then the landlord can
enforce that covenant as a matter of contract against the original tenant
during a statutory extension of the contractual term. This liability of the
original tenant is not qualified, in my judgment, by the fact that the
statutory extension would give the landlord no right against him, in the
absence of contract.
Also agreeing,
SIR MICHAEL KERR said: I agree, for the reasons stated in the judgment
of Nourse LJ, that the appeal in City of London Corporation v Fell should
be dismissed and that the appeal in Herbert Duncan Ltd v Cluttons
should be allowed. I only wish to add a few remarks, principally with reference
to the relevant provisions of the Landlord and Tenant Act 1954.
As Nourse LJ
has pointed out, when a tenancy has been assigned, the assignee becomes the
tenant and the assignor ceases to be the tenant. If he is the person to whom
the tenancy has been granted originally, or an intermediate assignee who has
concluded a direct contract with the landlord, then their contracts will
continue in the absence of any contrary provision. But they will no longer have
any estate or interest in the land as tenants of it. The only tenant will be
the assignee.
This state of
affairs is clearly reflected in the Act. Leaving aside subleases, which are
irrelevant for present purposes, the references in the Act to ‘the tenant’
designate only the tenant in occupation, not the original or any prior tenants
who have parted with their interests by assignment. It is the tenant in
occupation who can request a new tenancy under section 26 and it is his request
which may be opposed by the landlord under section 30. It is his tenancy which
is continued until the fate of his application is resolved pursuant to section
29 et seq, and it is in relation to his tenancy that an interim rent may
meanwhile be determined pursuant to section 24A. The Act makes no reference to
the continuation of any contract, only to the continuation of tenancies. Mr
Arden QC submitted that there can be no tenancy without an underlying contract
and that in continuing tenancies the Act must impliedly also have the effect of
continuing these underlying contracts. But this is clearly incorrect. Where an
assignee of a tenancy does not enter into a direct contract with his landlord
the relationship between them will rest on privity of estate alone, without any
privity of contract. Depending on the contractual terms, privity of contract
with the landlord may continue in relation to the original tenant and any
intermediate assignee who has entered into a direct contract with him. But the
Act does not continue these contracts and has no effect upon them.
In this
context it is interesting, and at first sight perhaps surprising, to note that
the Act makes no reference to the assignment of leases in the ordinary way. The
only direct reference to assignment is to be found in section 42(2)(c)
which deals with groups of companies and provides that ‘an assignment of the
tenancy from one member of the group to another shall not be treated as a
change in the person of the tenant’. It therefore follows that in that case,
but in that case alone, an assignor is treated as though he continued to be the
tenant, which he would not be otherwise.
Since the
contract contained in the lease granted by the City of London Corporation contained
no provision for the payment of rent after the expiry of the contractual term,
and, since the Act has no effect upon this contract, it must follow that the
claim for rent after its expiry must fail against the original tenant. On the
other hand, clause 5(g) of the lease granted by Herbert Duncan contained
such a provision. This was clearly directed, at least in part, to the effect of
section 24 of the Act, with the result that there would be a liability in the
original tenant for the original rent during any statutory continuation of the
tenancy under the Act if the rent is not paid by the tenant in occupation. But
nothing in the lease is directed to section 24A. The term or period of the
lease is continued, together with the contractual rights and obligations for
which the lease provides. These obviously include payment of the contractual
rent. But they do not include payment of any increased rent which may be
payable by the tenant in occupation pursuant to section 24A.
Appeal in City of London Corporation v Fell dismissed with costs; appeal in Herbert Duncan Ltd v Cluttons allowed
with costs; applications in both cases for leave to appeal to the House of
Lords refused.
