Construction — Arbitration provided for in event of failure to agree — Landlord or tenant having to apply “at any time before the said next review date or expiration of the term” — Landlord failing to apply for appointment until after first rent review date passed — Tenant contending landlord was too late — Whether reference to expiration of term giving landlord time to apply for appointment at any time within the period during which reviewed rent would apply — Judgment for landlord at first instance — Tenant’s appeal dismissed
The lease concerned restaurant premises, The Brunswick, 149 King Street, Great Yarmouth, for a term from November 15 1979 to March 31 2006. The rent originally reserved was for £15,000 and there was provision for the rent to be reviewed on April 1 1981 and every five years thereafter.
The rent review clause, clause 4(2), provided: “The rent shall be reviewed as at the April 1 1981 and every fifth anniversary of that date … [the review date] … unless the landlord and tenant shall agree by not later than three months prior to the review date the market rent payable shall be determined … by … an expert … on the application of either the landlord or the tenant made at any time before the said next review date or the expiration of term as the case may be, time being of the essence …”.
The landlord missed the rent review date on April 1 1991 in the sense that he had not initiated the procedure for review before April 1. In having to decide whether the landlord was too late to initiate the rent review for the five years from April 1 1991 or whether, as the landlord contended, he had until March 31 1996 to have the rent reviewed for the current five-year period, the judge at first instance found in the landlord’s favour. He stated that there was an inherent conflict between the “said” and “next” in the context of clause 4(2), but that the inclusion of the words “or the expiration of the term as the case may be” indicated that, in construing the clause, it was to be taken as meaning the date from which the review was to end. The tenant appealed.
Held The appeal was dismissed.
1. The difficulty arose from the combined use of the words “said” and “next”. If the draftsman meant the date in respect of the rent had to be determined, ie the same review date as had been mentioned with the three-month deadline, he could simply have said “the said review date” or even “the review date”. On the other hand, if he meant the review date next following that in respect of which the rent had to be determined the word “said” was out of place. The judge had chosen to discard “said”. It seemed to him that the words “or the expiration of the term as the case may be” were used to allow for the fact that in the last rent review period of the term there would have been no “next review date”.
2. Against that construction, the tenant submitted that there was no need to discard either the “said” or the “next”. With regard to the reference to the expiration of term, the lease would not necessarily expire in 2006 as there might be a statutory continuation under the Landlord and Tenant Act 1954.
3. While accepting that April 1 2006 could be a review date and for that matter, April 1 2011, the phrase meant the expiration of whatever turned out to be the last rent review period. It followed that in that period the landlord had until then to apply for the appointment of a surveyor. By parity of that reasoning, the landlord must have been intended to have until the expiration of each earlier rent review period, ie until the date of commencement of the next term.
4. The “next” rent review date had therefore to be taken as meaning the date immediately following the end of each rent review period other than the last. It followed that the word “said” had to be rejected as meaningless. The word seldom served any purpose and the case showed that its indiscriminate use could confuse what otherwise would be clear.
Anthony de Freitas (instructed by Dunne & Crome, of Lowestoft) appeared for the tenant; John Furber (instructed by Davis Hanson) appeared for the landlord.
