Rent review — Express time limits prescribed for various steps — No time limit for landlords’ application for appointment of surveyor — Whether such limit to be implied — Landlords applying after review date — Whether landlords guilty of “neglect”
The schedule to a 58-year lease, granted in 1970, of a foodstore in London W9, provided for a seven-year, upwards-only rent review to take effect from specified rent review dates (RRDs). By paras 2 and 3 of the schedule, the landlords could initiate a review by giving a notice (the trigger notice) during the first nine months of the 12 months immediately preceding the relevant RRD. Following such notice, time limits were set, again by reference to periods before the relevant RRD, for the parties to agree a revised rent or, failing that, to agree in writing upon a surveyor (the appointment agreement) who would determine the rent. In default of an appointment agreement, the surveyor was to be nominated by the president of the RICS, upon the application of the landlords. Although no express time limit was imposed upon the landlords for the making of that application, para 6 declared that the trigger notice would be void should the landlords “neglect to make the application referred to”.
In the instant case, where the relevant RRD was April 2001, the defendant landlords served a trigger notice in May 2001. Having failed to reach any agreement with the claimant tenant, the landlords made their application to the president in July 2001. While accepting that it could not object to the late service of the trigger notice (time not being of the essence), the tenant contended that that notice had been rendered void by para 6. It was submitted that the making of an application to the president of the RICS after the relevant RRD was, necessarily, a “neglect” for the purpose of that clause.
Held: The tenant’s contention was rejected.
There would have been no answer to the tenant’s contention if an express time limit had been placed at the end of para 3: see Lewis v Barnett [1982] 2 EGLR 127. In the present case, the presence of the word “neglect” did not compel the court to imply such a limit. Despite certain logical attractions, a contrary conclusion would require the surprising assumption that the landlords’ right to a review should depend upon compliance with an unexpressed time limit, the implication of which was rendered even more difficult by the insertion of express limits in respect of all the previous steps required by paras 2 and 3. Nor was it sufficiently obvious, even based upon the assumption that some limit was to be implied, that the limit primarily advanced by the tenant was the one that would have been adopted by the parties: see generally, as to implied terms, the authoritative statement of Sir Thomas Bingham MR in Phillips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472 at pp481-482.
On a proper construction of para 6, the tenant could show “neglect” where the landlords had either: (i) failed to apply to the president within such reasonable time as may have been specified in a warning notice from the tenant; or (ii) been guilty, in all the circumstances, of unreasonable delay. Neither had been established in the present case.
Jonathan Gaunt QC (instructed by Bullivant Jones, of Liverpool) appeared for the claimant; Kim Lewison QC (instructed by Davenport Lyons) appeared for the defendants.
Alan Cooklin, barrister
