Landlord and tenant — Rent review clause made time of the essence — Independent surveyor to be appointed by a certain date — Effect of “without prejudice” correspondence — Effect of correspondence “subject to council approval” — Review procedure not properly invoked — Current rent remained payable
The defendant held a lease of premises for a term commencing on June 19 1978 from the plaintiff council. The lease provided for upwards-only rent reviews at 5-yearly intervals, the rent to be determined in accordance with the provisions of a schedule to the lease. The schedule contained a timetable that required the rent for the next 5-year period to be agreed within the 6 months before the next such period commenced and, in the absence of agreement, by an independent surveyor, “time being of the essence” for the purposes of appointing the independent surveyor.
The parties failed to agree the first rent review and did not appoint an independent surveyor until July 6 1984. Although he determined the rent for the review period, the tenant did not accept the validity of his appointment as it alleged it was out of time. The landlord contended that the appointment of the independent surveyor was valid, as certain correspondence in March 1983 between the parties, and before the time-limit for appointment had expired, had the effect of calling for his appointment. The landlord also contended that even if the review procedure had failed, it could still have the rent increased.
Held That the landlord’s right to appoint an independent surveyor expired by August 1983 and that no agreement to appoint a surveyor could be construed from correspondence between the parties prior to that date. The correspondence sent from the plaintiff landlord which purported to be an agreement to appoint the surveyor was headed “subject to council approval”, “without prejudice” and even “subject to contract”. These terms negate any contractual intention and the review procedure was not properly invoked. The landlord “missed the bus”, and on the construction of the rent review clause, where the review procedure fails the current rent remains payable.
Shirlcar Properties Ltd v Heinitz
(1983) 268 EG 362 followed.
Harry Sale (instructed by the solicitor to the council) appeared for the plaintiff; and Kim Lewison (instructed by Lipkin Gorman) appeared for the defendant.
