User clause — Construction — Clause restricting use of garage to car parking for customers and staff of adjoining store — Whether clause prohibiting parking for residential purposes — Whether application to vary clause possible under section 84(12) of the Law of Property Act 1925 — Claim dismissed
The claimant owned the freehold of a Nottingham department store that had previously been occupied by a co-operative society. The defendant held a 175-year headlease of an adjacent garage that was joined to the claimant’s building by a pedestrian walkway at second-floor level. The society, and subsequently the claimant, held an underlease of the second floor of the garage and of the walkway. The underlease contained a user clause in which the lessee covenanted “not to use the demised premises for any purpose of trade or business but as a private car-park only for the use of customers or staff of the Lessee’s adjoining store”.
After the claimant ceased to use the building as a department store, it sought to redevelop it, in part for residential use. An issue arose, namely: (i) whether the user clause permitted use of the second floor of the garage as parking for the benefit of the residential development; and (ii) if not, whether the claimant could apply under section 84(12) of the Law of Property Act 1925 to discharge or vary the user clause. Section 84(12) allowed such an application where a term of more than 40 years had been created in land and 25 years or more of that term had expired. The claimant contended, inter alia, that the reference in the user clause to the “store” was, upon a true construction, simply a reference to the building, and was not use-specific, and that the reference to “customers or staff” should properly be interpreted as “visitors or occupiers”. It claimed that such a wide construction was supported by an application of the contra proferentem rule.
Held: The claim was dismissed.
1. The user clause was a composite expression that fell to be read as a whole. It was not correct to take one part of it, analyse that part in the abstract, and feed the result back into the entire phrase in order to change the apparent meaning of other words. The meaning apparent from the choice of words in the whole expression was that car park users should be either customers or staff of a retail business conducted on the adjoining site. The contra proferentem rule had no independent role to play in such circumstances, and did not dictate a forcibly enlarged meaning. Interpreting the user clause did not require the court to jettison all reference to “the Lessee’s adjoining store” and to substitute a reference to “adjoining building”, nor did it require the court to jettison the reference to “customers and staff” and substitute “visitors or occupiers”. A resident in a flat converted from, or constructed within, the claimant’s building would not fall within the description of customer or member of staff. Accordingly, the car park could not be used as parking for the benefit of the residential development.
2. For the purposes of section 84(12) of the 1925 Act, the “term” of a lease began with the execution of the lease and not with any earlier commencement date stated in the lease itself: Cadogan v Guinness [1936] Ch 515 applied. Accordingly, the section came into play only 25 years after the actual grant. In the present case, the underlease had been granted in 1991, only 11 years before the start of the present proceedings. Therefore, the claimant could not make an application to vary the user clause under section 84(12). The word “term” in section 84(12), construed consistently with other provisions of the 1925 Act, was a shorthand reference to “term of years absolute”; namely, a legal interest. Given that the word had a sufficient and natural reference to an estate at law, there was no compelling reason to extend it to cover equitable leases. Accordingly, even supposing that, in the instant case, the prior agreement for lease had given rise to an equitable tenancy (which was doubtful on the facts), the outcome of the case would be the same: Colton v Becollda Property Investments Ltd [1950] 1 KB 216 and Roberts v Church Comissioners for England [1972] 1 QB 278 considered.
Jonathan Brock QC (instructed by Burges Salmon) appeared for the claimant; Mark Warwick (instructed by Kanter Jules) appeared for the defendant.
Sally Dobson, barrister
