Landlord and Tenant Act 1954, Part II — Application for new tenancy of snack-bar restaurant — Terms agreed except as to rent — Appeal from decision of assistant recorder fixing rent at £16,500 per annum, with an interim rent of £13,200 per annum — Assistant recorder preferred evidence of landlords’ surveyor, who put forward the figure of £16,500, to that of the tenant’s surveyor, whose figure was £9,100 — Appellant tenant had been a tenant of the subject premises for 23 years and could not afford to pay the higher rent from the profits of his restaurant business — The judge had considered the rents of various properties but was particularly influenced by the one next door, which was let as a take-away pizza bar run by a subsidiary of Pizzaland International — The reliance on this property was criticised on appeal, on the ground that a take-away business was not really comparable, but the court pointed out that the user clause for the subject premises was wide enough to cover take-away food — Held that there was no justification for interfering with the assistant recorder’s decision, which was essentially on a question of fact and based on the evidence — The court had sympathy with the appellant — The case was one of those where the area had become more fashionable and moved up-market, so that the potential take of the premises had become higher than the old-established businesses would yield — Thus a rent properly fixed in accordance with the 1954 Act could be more than the tenant’s business could afford — Appeal dismissed
No cases are
referred to in this report.
This was an
appeal by the plaintiff tenant, Christos Giannoukakis, from the decision of Mr
Assistant Recorder Simpson, at Wandsworth County Court, fixing the rent of
premises at 244 Lavender Hill, London SW11, where the appellant carried on a
snack-bar restaurant. The defendant landlords, the present respondents, were
Saltfleet Ltd.
John Speed
(instructed by Leon Kaye & Collin) appeared on behalf of the appellant;
David Hodge (instructed by Travers Smith Braithwaite) represented the
respondents.
Giving
judgment, DILLON LJ said: This is an appeal by the plaintiff, Mr Christos
Giannoukakis, against an order made by Mr Assistant Recorder Simpson, in the
Wandsworth County Court, on July 17 1987. The appellant has been the tenant for
some 23 years of premises known as 244 Lavender Hill, London SW 11, which he
runs as a snack-bar restaurant, with the assistance of his family; and we were
told that he has an old-established clientele of people who know and like his
restaurant.
The proceeding
which came before the learned assistant recorder was a proceeding to fix the
new rent for those premises on an application for a new tenancy under Part II
of the Landlord and Tenant Act 1954. The landlords had duly given notice in
January 1986 terminating the previous tenancy as at July 18 1986, but intimated
that they would not oppose an application to the court under Part II of the Act
for the grant of a new tenancy. The application was, therefore, duly made, and
substantially the terms were agreed, except for the rent. The assistant
recorder fixed the rent at £16,500 per year, with an interim rent to be paid
from July 18 1986 at the rate of £13,200 per year. The notice of appeal asks
that the new lease should be granted at a rent of £9,100 per year, and that the
interim rent should be decreased accordingly.
Both parties
called evidence at the trial. On the one side there was a Mr Peter B Gaston, a
surveyor, who was very familiar with the neighbourhood; he had prepared a
report, he gave evidence for the present appellant and came out at the figure
of £9,100 a year. On the other side there was a Mr D H Adamson [FRICS], a
chartered surveyor and a partner in the firm of Allsop & Co; he came out at
the figure which I have mentioned, and his evidence was the evidence preferred
by the learned judge.
It is put in
the notice of appeal and also in the skeleton argument for the appellant that
the learned judge misdirected himself in law. I cannot for my part see that he
misdirected himself in law at all. What happened was that he was given evidence
of various comparables; he considered them, and he guided himself in particular
by the landlords’ comparable, which happened to be the premises immediately
next door, 242 Lavender Hill, with which Mr Adamson had himself been previously
concerned.
No 242 had
been recently let as a take-away pizza bar to a subsidiary of Pizzaland
International. It is suggested that that was not really comparable to the user
of no 244 as a snack-bar restaurant, because no 242 was being used for
take-away food only. But the user clause for no 244 was amply wide enough to
include use for take-away food and I cannot myself see any reason why no 242
should have been disregarded by the judge. He did not regard no 242 only; he
looked at the other comparables to which Mr Gaston had referred; they were a
little further away in the same general area and part of the same area. They
were essentially retail premises, and the judge’s view was that they were not as
valuable qua user as the premises with which he was concerned, no 244.
It has been suggested that the letting of no 242 was a one-off which must have
been due to special factors, but no evidence to that effect was put before the
judge at the trial, nor was there any application for an adjournment to enable
someone to attend and give such evidence. It seems to me that the judge’s
judgment is based generally on the evidence which he had heard on a question
which is essentially a question of fact, namely what is the correct rent for
these particular premises in accordance with the formula under the Act.
It is pointed
out to us that it is very sad indeed for the appellant, who has been a good
tenant of the premises for a very long time, that a rent should be fixed which
is higher than he can afford for the sort of business that he has been running
in the premises for so many years. This, unfortunately, is capable of happening
with business premises. If you have long-established premises where the
business has a fairly low profit element it may well be that a rent fixed in
accordance with the formula of the Act will be more than the tenant can afford.
Fortunately, it does not happen all that often, but I do not think there is
anything in the Act which enables the rent to be fixed at a lower rate because
the tenant cannot afford a rent which the formula in the Act would produce. It
is perhaps particularly likely to happen where an area has, as it were, become
more fashionable and moved up-market, where the potential take of premises in
the area has become much higher than the old-established businesses would
yield. But I see no means, in accordance with the Act, under which that can be
alleviated.
We have been
referred to a factor that the premises no 242, were better premises than no
244, because they had a return frontage down one side, and it is suggested that
the surveyor for the landlords, Mr Adamson, though saying that he had taken a
15% uplift in respect of no 242 because of that benefit, has not clearly indicated
how he has done that. Therefore, it is suggested, possibly the rental ought to
have been further reduced to no 244. The difficulty about dealing with that in
this court is that, first, Mr Hodge, for the landlords, has produced an
explanation of how Mr Adamson has arrived at his figures; and, second, that if
the figures produced to the judge, and which the judge accepted, were not
satisfactory, they ought to have been further probed in cross-examination to
make Mr Adamson explain more clearly and in simpler terms exactly what he has
done with each figure so as to produce his computation for no 244.
I feel great
sympathy for the appellant in the situation in which he now finds himself after
so long, but I am unable to see, despite all the help that Mr Speed has been
able to give us on the appellant’s behalf, that there is any way in which this
court can interfere with the decision of the learned assistant recorder.
Accordingly for my part I would dismiss this appeal.
Agreeing,
NEILL LJ said: Like Dillon LJ, I feel great sympathy for the appellant and his
family. He has been in these premises for nearly a quarter of a century, but I
can find no ground whatever on which it is possible to find fault with the
decision of the learned judge. Mr Speed has put before us all the
considerations which can properly be put forward on behalf of the appellant,
but, for the reasons Dillon LJ has given, I, too, would dismiss this appeal.
The appeal
was dismissed with costs.