Plaintiff’s predecessor in title entering into negotiations for sale of property – Property subject to tenancy – Demand for rent for quarter following expiry of lease – Defendant paying rent – Plaintiff purchasing property – Plaintiff obtaining possession – Whether new tenancy created by implication after expiry of lease – Judgment for plaintiff – Defendant’s appeal dismissed
The property 128 Fellows Road, London NW3, was subject to a series of tenancies granted by Eton College, the plaintiff’s predecessor in title. The last lease dated May 20 1983 was granted to the defendant for a term of 12 years from September 29 1981 expiring on September 29 1983 at a rent, after review in 1990, of £8,000 pa paid quarterly in arrears on the usual quarter days. Following the expiry of the 1983 tenancy, the defendant sought negotiations with Eton College either for a new tenancy, or the purchase of the freehold. Before the plaintiff contracted to purchase the freehold from Eton College, the college demanded rent from the defendant in arrears for the quarter ending December 29 1993.
The freehold of the property was sold by Eton College to the plaintiff on January 14 1994. Two weeks after completion the plaintiff demanded entry pursuant to certain covenants in the lease and two days later notice to quit was served by the plaintiff. In October 1994 the plaintiff successfully issued proceedings seeking possession and executed the order before the defendant had obtained leave to appeal. There were three issues before the judge which were determined as preliminary issues without hearing evidence as to whether the defendant satisfied the residence requirement which would entitle him to enfranchise the property under the Leasehold Reform Act 1967. The judge found for the plaintiff and the defendant appealed, the only remaining issue on appeal being the decision of the judge that no new tenancy had been created by implication following the expiry of the lease.
Held The appeal was dismissed.
1. The question for the court was whether it was right and proper to infer from all the circumstances of the case, including the payments, that the parties had reached an agreement for the creation of a new periodic tenancy: see Longrigg, Burrough & Trounson v Smith [1979] 2 EGLR 42 per Ormerod LJ at p 53. The burden was upon the tenant to make good his claim. The judge had taken into account , inter alia, that the demand for rent had been computer generated and was not the result of a conscious decision, that the tenant gave no evidence of an agreement between himself and Eton College, and that both before and after December 25 1993 the college had been in negotiation with the plaintiff, the defendant and others to grant a further tenancy or sale of the freehold. The judge had been entitled to find, as he did, that the contra-indications as to the making of an agreement for a new tenancy were clear.
2. Leaving aside whether there were subjective factors which might have been relevant considerations in determining the intention of the parties, the present case could be, and was, solved on the basis of the objective test and the judge had not erred in his conclusion.
David Iwi (instructed by Moss Beachley & Mullem) appeared for the appellant; Stephen Jourdan (instructed by Kosky Seal & Co, of Harrow) appeared for the respondent.
