Application for renewal of business lease — Judge ordering break clause — Fresh evidence admitted on appeal by landlord — Whether permissible to take account of fresh evidence — Whether appeal court’s task limited to determining whether judge’s decision wrong on evidence before him — Appeal allowed in part
The respondent tenant held a lease of wine bar premises for a 25-year term from March 1977. In August 2001, it served a request for a new tenancy on the first appellant landlord pursuant to section 26 of the Landlord and Tenant Act 1954. The landlord did not oppose the request, and it was common ground that the term of the new tenancy should be 14 years. However, the parties failed to agree upon whether the tenancy should contain a redevelopment break clause and, if so, when and upon what terms it should be exercisable. Accordingly, the matter came before the court for determination pursuant to section 35 of the 1954 Act.
The judge ordered the grant of a new tenancy for 14 years, which would contain a rolling break clause, operable after five years on 11 months’ notice. In reaching that decision, he took into account redevelopment plans proposed for the site and its surrounding area. The landlord appealed on the ground, inter alia, that, in the light of fresh evidence as to events occurring since the earlier hearing with regard to the proposed development, the judge’s order relating to the break clause should be varied to permit its earlier exercise at shorter notice.
The appeal court gave permission to adduce the fresh evidence, and an issue arose as to how it should be approached. The landlord contended that, since section 35 required the court to have regard to “all the relevant circumstances”, those circumstances included those that had arisen after the trial date, where evidence of them was before the court. The tenant submitted that: (i) under CPR 52.11(3), the court was limited to a review of the judge’s decision; (ii) the judge’s decision could not be characterised as wrong if he had come to a permissible conclusion based upon the evidence before him; and (iii) unless the judge could be shown to have been wrong without any consideration of the new evidence, that evidence was irrelevant to the appeal.
Held: The appeal was allowed in part.
Although the judge had applied the correct legal test, his decision was wrong in the light of the new evidence. Once it was decided that fresh evidence should be admitted, it would be unjust not to take it into account, whether the appeal took the form of a rehearing or a review: Asiansky Television Ltd v Bayer-Rosin [2001] EWCA Civ 1792 applied. The judge’s order would be varied to include in the new tenancy a break clause enabling the landlord to terminate the tenancy at an earlier date, although on the same notice.
Joseph Harper QC (instructed by Nabarro Nathanson, of Sheffield) appeared for the appellants; Timothy Fancourt QC (instructed by Halliwells LLP) appeared for the respondent.
Sally Dobson, barrister
