Landlord and Tenant Act 1954, Part II — Tenant failing to serve counternotice — Conversation with landlords’ agent — Tenant would get a new tenancy on terms similar to another tenant — Tenant carrying out works — Whether contract to grant tenancy — Whether part performance — Whether proprietary estoppel — Landlords estopped by agent’s promise of new tenancy
Following the service by the appellant landlords’ predecessors in title of a notice under section 25 of the Landlord and Tenant Act 1954, which stated that the landlords would not oppose any application to the court for a new tenancy, the respondent tenants failed to serve a counternotice and thereby lost their right to obtain a new lease by order of the court. In proceedings brought for possession by the appellants, His Honour Judge Smithies in the Bristol County Court (February 21 1990) found that (1) in a telephone conversation in January 1989 an oral agreement was made between the landlords’ agent (“the agent”) and the respondents for the grant of a new lease enforceable by reason of acts of part performance; and, in the alternative, (2) there was promissory estoppel arising from a representation made by the agent and the expenditure of money by the respondents which entitled them to a new lease.
The trial judge found that in the course of the telephone conversation in January 1989 the agent stated that the landlords were prepared to grant the respondents a new lease on terms similar to those of a neighbouring tenant; he also found that following the conversation the respondents carried out improvements to the premises. The landlords appealed.
Held The appeal was dismissed.
1. On the evidence an oral contract was not concluded between the parties; the circumstances did not permit either party to expect that a concluded agreement would be made in the course of the telephone conversation.
2. The respondents were entitled to a new lease by virtue of proprietary estoppel (Glidewell LJ dissenting). The landlords, through their agent at the time of the telephone conversation, stated that the respondents would get a new tenancy on the same terms as a neighbouring tenant; that statement was an assurance capable of providing the basis for estoppel. The statement was more than a mere offer or statement of willingness to negotiate; it was a promise that, unless or until told otherwise, the respondents could rely upon getting a lease on the same terms as their neighbour, but if they did not agree they would have to go. The statement was clear and unequivocal and the landlords should have recognised that they would not have been free to resile from the statement without first telling the respondents. The agent had previously been aware of the respondents’ intention to carry out improvements, and the expenditure thereon after the statement amounted to reliance founding the estoppel.
Attorney-General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] 1 AC 114 considered.
Colin Rimer QC and Adam Chippindall (instructed by Trump & Partners, of Bristol) appeared for the appellants; and Brian Watson (instructed by Osborne Clarke, of Bristol) appeared for the respondents.
