Five-year lease of office premises — Tenant ceasing business occupation some months before term date — Whether tenancy continuing to be tenancy under Landlord and Tenant Act 1954 Part II — Whether tenancy expiring on contractual term date despite delayed service of tenant’s notice under section 27 of Act — Court of Appeal departing from its own recent decision favouring continuation
The defendants held substantial office premises under a five-year lease expiring on February 14 1993, but ceased to occupy them for business purposes on or about December 6 1992. In correspondence in early January 1993 the plaintiff landlords intimated that regardless of the contractual date of termination they would not treat the tenancy as coming to an end (and would continue to claim rent accordingly) until such date as might be specified in a tenant’s notice complying with section 27(2) of Part II of the Landlord and Tenant Act 1954, the requisite date being any quarter day falling not less than three months after service of such notice. The defendants maintained that since they had ceased to occupy as business tenants, the tenancy was no longer one to which the 1954 Act applied, thus no notice otherwise prescribed by the Act needed to be served and the tenancy would accordingly determine, by effluxion of time, on February 14.
On January 16 1993 the defendants took the precautionary step of serving a notice specifying the earliest date permissible under section 27, namely June 24 1993. In the court below ([1995] 2 EGLR 61) the judge considered himself bound by the Court of Appeal decision in Long Acre Securities Ltd v Electro Acoustic Industries Ltd [1990] 1 EGLR 91 to accept the plaintiffs’ contention that the Act continued to apply notwithstanding the prior cesser of business occupation and that accordingly the tenancy remained in force until June 24 1993. The defendants appealed and on the question whether the expression “a tenancy to which this Part of this Act applies” as used in section 27 referred only to the present or whether it should be construed as if concluding “…applies or has applied”.
Held The appeal was allowed.
1. It was clear elsewhere in the Act, notably in section 24(3), that the question whether the Act applied or not has to be answered in the light of current events. Furthermore the Court of Appeal in Long Acre Securities Ltd v Electro Acoustic Industries Ltd [1990] 1 EGLR 91 had not had the opportunity to consider various authorities in the defendant’s favour, in particular Morrison Holdings Ltd v Manders Property (Wolverhampton) Ltd [1976] 1 EGLR 70 and Cheryl Investments Ltd v Saldanha [1978] 2 EGLR 54 where the reasoning of the same court was inconsistent with the conclusion reached in Longacre.
2. Given that it was faced with conflicting authorities at the same level, the court was entitled to exercise a preference and choose not to follow Longacre, which might well have been differently decided on a fuller citation of relevant authority.
Paul Morgan QC and Wayne Clark (instructed by Geoffrey Delaney, of Peterborough) appeared for the appellants; Jonathan Brock (instructed by Theodore Goddard) appeared for respondents.
