Landlord and tenant — Assignment — Landlord and Tenant Act 1988 — Whether landlord entitled to rely on reasons not advanced in refusing consent — Whether landlord entitled to request details of assignment including premiums — Whether consent unreasonably withheld
Following the
default of the previous tenant on its mortgage, the receivers appointed by the
second plaintiff bank assigned an underlease dated September 27 1988 of hotel
premises to the first plaintiff, a wholly owned subsidiary of the bank formed
for the purpose of holding the lease. The bank was a party to the licence to
assign, and provided a form of guarantee until a further assignment subject to
an acceptable replacement surety of sufficient financial
September 1991. In November 1992, following an application made in August 1992
by the first plaintiff for consent to assign the lease to R, the defendant
refused consent stating that they were not being offered a guarantee of a
surety with sufficient assets in the country. In proceedings brought by the
plaintiffs under the Landlord and Tenant Act 1988, in which they contended that
the defendant was unreasonably withholding consent to the assignment to R, the
judge held that the defendant had withheld consent unreasonably and that R’s
parent company was an adequate replacement surety. The defendant appealed.
compliance with the obligation under the Landlord and Tenant Act 1988, unless
adequately explained, must at least cast doubt on its importance and may put in
doubt whether it was operating on the landlord’s mind at all. The judge was
well aware that it was not sufficient for the plaintiffs to demonstrate that a
reasonable landlord might have granted consent; what had to be shown was that
no reasonable landlord would have withheld it. The judge was not wrong in
concluding that the defendant was not entitled to particulars of the
assignment, and of the amount of any premium; a landlord who is asked for
consent to an assignment is not concerned with the terms of the assignment but
with the identity and character of the assignee. In terms of the licence to
assign to the first plaintiff, ‘an acceptable replacement surety’ means a
replacement surety which is objectively suitable for acceptance by a reasonable
landlord.
The following
cases are referred to in this report.
British
Bakeries (Midlands) Ltd v Michael Testler &
Co Ltd [1986] 1 EGLR 64; (1986) 277 EG 1245
Tollbench
Ltd v Plymouth City Council [1988] 1 EGLR
79; [1988] 23 EG 132, CA
Venetian
Glass Gallery Ltd v Next Properties Ltd
[1989] 2 EGLR 42; [1989] 30 EG 92
This was an
appeal by the defendant, Connie Investments Ltd, from a decision of John
Mowbray QC (sitting as a deputy judge of the Chancery Division) in proceedings
by the plaintiffs, Kened Ltd and Den Norske Bank plc, under the Landlord and
Tenant Act 1988.
Edward Denehan
(instructed by Hugh Cartwright & Amin) appeared for the appellant;
Christopher Pymont (instructed by Stephenson Harwood) represented the
respondents.
Giving
judgment at the invitation of Nourse LJ, Millet
LJ said: This is an appeal by the defendant, Connie Investments Ltd, from a
judgment of Mr John Mowbray QC, sitting as a deputy judge of the Chancery
Division on November 17 1993, when he declared that the refusal or failure of
the defendant to grant a licence to the first plaintiff, Kened Ltd (‘Kened’),
to assign an underlease to Realco plc (‘Realco’) was unreasonable; that Kened
was entitled, upon the performance of certain specified conditions, to assign
the underlease to Realco without the defendant’s consent; and that Realco’s
parent company, Kuwaiti Algerian Investment Company SA (‘KAIC’) would be an
acceptable replacement surety within the meaning of that expression in a
previous licence to assign granted by the defendant’s predecessor in title.
The case
concerns an underlease of the Kensington Edwardian Hotel in Harrington Gardens,
Kensington. The underlease was dated September 27 1988 and was granted by
Scan-Alfa Ltd to Turpix Ltd. It was for a term of 32 years at an initial rent
of £300,000 pa rising to £375,000 for the year from June 1991 to June 1992,
with upwards-only rent reviews every four years. The rent was not increased at
the rent review in June 1992, and from this and other evidence the judge
inferred that the current market rent of the premises was below the rent
payable under the underlease.
The underlease
was mortgaged to the second plaintiff, Den Norske Bank plc (‘the bank’), an
English subsidiary of a Norwegian bank. There were three original sureties, all
of them individuals. They joined in the underlease to guarantee performance of
the tenant’s covenants and undertook to accept a new lease themselves in
similar terms if the underlease was disclaimed by a liquidator of the tenant or
the tenant was wound up or otherwise ceased to exist.
Clause 5(23)
of the underlease contained a covenant by the tenant not to assign the
underlease without the previous written consent of the landlord, such consent
not to be unreasonably withheld. Para (c) of that clause was as follows:
Assignees
If so
required by the Landlord on any assignment of the Demised Premises to procure
that the Assignee enters into a covenant with the Landlord to pay the rents
reserved by and perform and observe the covenants on the part of the Tenant
contained in this Deed and further if the Landlord shall reasonably so require
to obtain acceptable Guarantors for any assignee or proposed assignee to whom
this Lease has been or is about to be assigned.
By way of anticipation,
it should be said that it was common ground before the deputy judge and before
us that it was reasonable for the defendant to require a direct covenant to be
given to it by Realco and that it was also reasonable for the defendant to
insist upon a guarantor joining in the licence to assign.
Turpix Ltd
defaulted on its mortgage. The bank appointed receivers, and in April 1991 the
receivers assigned the underlease to Kened. Kened was a wholly owned subsidiary
of the bank which was formed or obtained by the bank for the purpose of
acquiring the underlease. The object of the transaction was to crystallise the
bank’s loss and avoid the need to run the business of the hotel in
receivership. A formal licence to assign was obtained from the landlord on April
2 1991. The bank joined in the licence to guarantee performance of the tenant’s
covenants. Clause 9 of the licence to assign, however, qualified the bank’s
liability as a surety. It read as follows:
It is hereby agreed and declared by the
parties hereto that on an assignment of the Lease by the Assignee in accordance
with the terms of the Lease the liabilities of the Surety herein contained
shall cease and determine absolutely (but without prejudice to any liability of
the Surety in respect of any antecedent breaches of the covenants and
conditions on the part of the Assignee or Surety herein contained) provided nevertheless that prior to any
such assignment the Assignee or the Surety shall if required by the Lessor
provide an acceptable replacement surety who shall be of sufficient financial
status and standing as shall be able to comply with the covenants on the part
of the Assignee herein contained and who shall enter into direct covenants with
the Lessor in the form of clause 6 hereof.
The defendant
acquired the reversion on the underlease on September 13 1991. It is the
present landlord.
On August 19
1992 Kened applied to the defendant for its consent to assign the underlease to
Realco. Realco offered direct covenants with the defendant and the covenants of
its parent, KAIC, as replacement surety in substitution for the Bank. The
defendant refused its consent on November 11 1992 in a letter written by the
defendant’s solicitors which contained the following passage:
… so far as
the prospective assignee is concerned the covenant is of little or no value.
What effectively is being offered therefore is the guarantee … [of KAIC]. …
[KAIC] is a company incorporated in Luxembourg, apparently mainly concerned
with the promotion of projects in Algeria … our clients are concerned that they
are not being offered the guarantee for the remainder of the term of the lease
of a surety with adequate assets in this country visibly being of sufficient
financial status and standing able to comply with the covenants required of an
assignee in accordance with the leasehold documentation governing this
property. For these reasons our clients do not feel able to accept … the
prospective [assignee].
Kened renewed
its application and attempted to meet the various stated objections of the
defendant. The deputy judge found that there was a continuing request by Kened
for the defendant’s consent to the proposed assignment and a continuing
withholding of consent by the defendant down to the date on which the
originating summons was issued on March 15 1993. He also found that the factors
which were relied upon by the defendant on November 11 1992 were still
operating on its mind on March 15 1993. There is no appeal from that part of
the judge’s decision.
There were two
issues before the judge:
1. whether the
defendant’s withholding of consent to the proposed assignment of the underlease
to Realco was reasonable; and
2. whether
KAIC was ‘an acceptable replacement surety’ for the bank within the meaning of
clause 9 of the 1991 licence to assign.
The judge
found:
1. that the
defendant’s withholding of its consent to the proposed assignment to Realco was
unreasonable; and
2. that KAIC
was ‘an acceptable replacement surety’ for the bank within the meaning of the
licence to assign.
The defendant
now appeals against both decisions.
The relevant
principles of law are not in dispute, with one possible exception:
1. By virtue
of clause 5.23(c) of the underlease it was reasonable for the defendant to
require a direct covenant from the proposed assignee and the defendant
reasonably required the provision of an acceptable guarantor for Realco.
2. Under
clause 9 of the 1991 licence to assign the bank’s liabilities would only cease
and determine if the proposed replacement surety was both:
(a) acceptable
to the defendant, and
(b) of
sufficient financial status and standing to be able to comply with the
covenants on the part of the proposed assignee.
3. The
sufficiency of the proposed surety’s financial status and standing has to be
considered with reference to the residue of the term granted by the underlease.
4. By virtue
of section 1(3) of the Landlord and Tenant Act 1988, when withholding its
consent to the proposed assignment the defendant was under a statutory duty to
state its reasons for withholding its consent.
5. By virtue
of section 1(6) of the 1988 Act the burden lay on the defendant to show that it
was reasonable for it to withhold its consent.
6. Whether a
landlord’s decision to withhold consent to a proposed assignment is reasonable
can only be decided by reference to the circumstances existing and known to the
landlord at the time the decision to withhold the consent is made.
7. A landlord
can only rely upon reasons which actually influenced him at the time that he
withheld his consent to the proposed assignment: see Tollbench Ltd v Plymouth
City Council [1988] 1 EGLR 79*, at p81F.
*Editor’s
note: Also reported at [1988] 23 EG 132
8. It is not
necessary for a landlord to prove that the conclusions which led him to refuse
consent were justified, if they were conclusions which might be reached by a
reasonable man in the circumstances.
9. It is only
if no reasonable landlord could have withheld consent for the reasons stated by
the landlord that a decision to withhold consent will be held to be
unreasonable; the court is not entitled to substitute its own view for that of
the landlord: see British Bakeries (Midlands) Ltd v Michael Testler
& Co Ltd [1986] 1 EGLR 64* and Venetian Glass Gallery v Next
Properties Ltd [1989] 2 EGLR 42†.
*Editor’s
note: Also reported at (1986) 277 EG 1245
†Editor’s
note: Also reported at [1989] 30 EG 92
Before the
passing of the Landlord and Tenant Act 1988, the burden lay on the tenant to
show, first, what reason the landlord actually had for withholding his consent,
and, second, that that reason was unreasonable: see Tollbench Ltd v Plymouth
City Council (supra). The Landlord and Tenant Act 1988 has made two
material changes to the law in this respect: (1) it has required the landlord
to state his reasons in writing if he decides to withhold his consent; and (2)
it has reversed the burden of proof, so that it is now for the landlord to show
that his reasons for withholding consent were reasonable. The 1988 Act gives
the tenant a right to damages for breach of the landlord’s obligations,
including his obligation to state his reasons. I desire to leave open for
future consideration the question whether, since the passing of the 1988 Act, a
landlord can rely upon reasons which, although operating on his mind, he failed
to state in writing in breach of his statutory duty. It is sufficient, for the
purposes of the present case, to say that a failure to state a reason in
compliance with the obligation under the Act, unless adequately explained, must
at least cast doubt on its importance, and may put in doubt whether it was
operating on the landlord’s mind at all.
Before us, the
defendant analysed its reasons for withholding consent as follows:
1. Realco’s
covenant was of little or no value, so that in reality what was being offered
was the covenant of KAIC.
2. KAIC was a
company registered in Luxembourg.
3. Its
activities were for the most part carried on outside the United Kingdom
(although not, in fact, in Algeria, as the letter of November 11 1992 stated).
4. It did not
have adequate assets in the United Kingdom and was not of sufficient financial
status and standing to satisfy a reasonable landlord that it would be able to
comply with the tenant’s obligations in the underlease.
5. Kened had
refused to provide the defendant with details of the proposed assignment to
Realco, and in particular of the amount of the premium or reverse premium, if
any, which was payable.
That last
reason is not mentioned at all in the letter of November 11 1992, even though
by that date the defendant had asked to be supplied with details of the
proposed assignment to Realco and had been told that that information was
confidential and would not be supplied.
The defendant
criticised the judge’s conclusions on three grounds:
1. There was
no evidence to support the judge’s conclusion that no reasonable landlord could
properly have withheld his consent to the proposed assignment; he must
therefore have applied the wrong test or substituted his own view for that of
the defendant.
2. The judge
was wrong to hold that the landlord was not entitled to be informed of the
details of the proposed assignment, and in particular of the amount of any
premium or reverse premium.
3. The judge
misconstrued clause 9 of the 1991 licence to assign and was in error in holding
that KAIC was an acceptable replacement surety for the bank within the meaning
of that clause.
1. Value of Realco’s covenant
Realco was a
company incorporated in England in April 1992. It was a newly formed company
with no trading history. It was formed for the purpose of investing in hotels,
including the hotel with which the present case is concerned and a nearby hotel
called the Albany Hotel. The two hotels together have over 300 rooms; the plan
was to try to attract a major international tour operator called Contiki
(Europe) Ltd to enter into a contract to use the rooms for tourists coming to
London. Realco proposed to spend £100,000 on improving the hotel, mainly the
bathrooms, in order to make it more attractive to tourists.
By March 15
1993 Realco had acquired the Albany Hotel for £2.3m and had not mortgaged or
charged it. The inference must be that its parent company had provided it with
the purchase price, either by way of an unsecured loan or in exchange for
shares. If the latter, of course, this would provide Realco with substantial
net assets; but the defendant was given no information whether this was the
case or not. Accordingly, the fact that Realco had not mortgaged or charged the
Albany Hotel was not necessarily evidence that it had anything of substance in
the way of net assets. In the circumstances I consider that the contention that
Realco’s covenant was of little or no value was made out.
2. KAIC’s covenant
Realco was
owned 85% by KAIC and 15% by a Swiss company of which no information was
provided. KAIC itself is equally owned by the Kuwaiti Investment Authority and
the Algerian Treasury. It has substantial assets. The judge had before him, as
did the defendant, the audited accounts of KAIC for 1990 and 1991 and the
unaudited accounts for 1992. Each of them showed very substantial net assets
and a substantial amount of cash at bank. In 1990, for example, the amount of
cash at bank was £5.5m. That had increased by up to £6.5m by 1991 and to nearly
£7m according to the 1992 unaudited accounts. Moreover, those accounts showed
an improving position.
KAIC offered
to deposit the amount of a year’s rent (that is to say, £375,000) with the defendant
as security for Realco’s obligations under the underlease. That offer was
volunteered by KAIC as a means of overcoming the defendant’s objections and the
judge made it a condition of his order.
3. KAIC’s country of
registration
KAIC is
registered in Luxembourg. The plaintiff attempted to meet the concerns which
the defendant may have felt by reason of that fact. First, KAIC had a limited
life of 30 years under the terms of its incorporation. This apparently is
normal in Luxembourg. There was expert evidence that this is the way in which
companies are normally incorporated in Luxembourg but that it is also normal
for the life of a company to be subsequently extended. Kened volunteered KAIC’s
undertaking to extend its life for a period which would cover the residue of
the term granted by the underlease, and the judge imposed that as a condition
of the order.
Second, Kened
volunteered that KAIC would provide its address for service in England, and
again the judge made that a condition of the order. The judge took it that the
address for service would be provided in the licence to assign and would
therefore become irrevocable.
Third, Kened
put expert evidence before the court concerning the enforcement of judgments
obtained in Luxembourg to show that English judgments could easily be enforced
in that country. The judge found that a judgment in England could be enforced
in Luxembourg with little more difficulty than it could in England. Luxembourg
is of course a signatory of the Brussels Convention. This finding of the judge
was strongly criticised before us. It was submitted that even if the
inconvenience was only a minor one, there remained an inconvenience; it was not
as easy to enforce a judgment in Luxembourg as in England. Accordingly, it was
submitted, in dismissing this as a reasonable ground of objection the judge was
necessarily substituting his own view for that of the defendant. I do not
accept that criticism. The test is an objective one, and the fact that the
defendant himself wants to avoid a minor inconvenience is irrelevant. The
question is whether a reasonable landlord would regard this minor inconvenience
as sufficient to justify withholding consent. The judge found that he would
not, and I can see no error in his conclusion.
4. KAIC’s main activities
KAIC’s main
activities were conducted abroad. That is another aspect of enforcement and of
no separate significance in itself.
5. KAIC’s assets in England
The defendant
objected that KAIC did not have adequate assets in this country and was not
visibly of sufficient financial status and standing to be able to comply with
covenants required of the assignee. I have already described the circumstances
and the evidence of the financial status of KAIC. The judge’s conclusion was
that while KAIC was not a bank or a subsidiary of a bank, nevertheless it was a
substantial company owned equally by the Kuwaiti and Algerian Governments, both
heavily engaged in international trade and unlikely to wish to allow their
subsidiaries to default on their commercial undertakings. In my judgment, that
was a conclusion which the judge was entitled to reach, and it cannot be
criticised.
6. Particulars of the
assignment
I will deal
with this later as a separate matter.
In the course
of his judgment the judge dealt with what might have been a separate point of
objection altogether, and one which was not directly concerned with the
financial standing of either Realco or KAIC. He pointed out that Realco was not
an ideal tenant of an hotel. It was a newly formed company with no trading
history; its directors had no experience in running hotels. The judge found
that it was not proposed that Realco or KAIC should engage an hotel management
company to manage the hotel on Realco’s behalf. The judge pointed out,
correctly, that it would be a concern of the landlord of an hotel to ensure
that the hotel was well run, as the success of the hotel would affect goodwill
and would reflect on the value of the reversion. But he was wrong to make that
finding. There was no evidence one way or the other whether Realco intended to
engage a management company.
The judge said
that there was evidence that Contiki, a company partly-owned by the owner of a
substantial American hotel chain and a large tour company, was prepared to
enter into a contract to take rooms in the two hotels for tourists producing a
profit of approximately £800,000 for the two hotels per year. The judge
discounted this evidence because it was not clear whether the proposed contract
would require Contiki to take the rooms or merely give Contiki an option to do
so. The evidence as to the prospects of occupancy levels at either hotel was
unclear; nothing like a business plan had been produced, and the landlord was
not given any information as to how the profit figure of £800,000 was
calculated. In my view, the judge was entitled to discount the evidence about
Contiki. Perhaps more to the point, the evidence did not begin to meet the
possible criticism that, even if KAIC and Realco were of sufficient financial
standing to meet their obligations under the underlease, there was no evidence
that the hotel would be properly managed. Contiki was not proposing to manage
the hotel; it would be a wholesale customer.
But this
ground of objection was not mentioned in the letter of November 11 1992, and
there was no evidence before the judge that it had operated on the defendant’s
mind at all. The whole thrust of the defendant’s case throughout was that
Realco and KAIC were not of sufficient financial standing to be able to comply
with the obligations under the underlease. Even before us counsel for the
defendant, in dealing with the evidence about Contiki, prayed it in aid as
throwing doubt upon KAIC’s ability to make a success of the hotel and therefore
to be in a position to comply with the covenants under the underlease, rather
than as evidence that Realco was insufficiently experienced to preserve the
goodwill of the hotel.
Accordingly,
the point was not one on which the judge could properly have found in favour of
the defendant. Had the matter been properly raised the defendant might well
have been able to deal with it. They could have given evidence, if such
evidence was available, as to their plans for running the hotel and whether or
not they did intend to employ a management company, or how otherwise they could
overcome the difficulty that their own directors were not experienced in the
hotel trade. There was evidence before the judge from which he could infer that
KAIC, which was an international investment vehicle for two overseas governments,
would act sensibly when venturing into the hotel business. Realco had already
embarked on the hotel business by the acquisition of the Albany Hotel; the two
hotels evidently had sufficient potential at least to be offered to a major
tour operator; and Realco had been put in funds to modernise and improve the
present hotel.
I turn to the
three grounds upon which the defendant criticise the judge’s conclusions.
First, they complain that the judge misdirected himself and applied the wrong
test or, alternatively, that he substituted his own view for that of the
defendant. He stated the test correctly in his judgment. The defendant submits
that, although he stated the test correctly, in fact he applied a slightly
different test. The defendant relies upon a passage in the judgment in which
the judge is dealing with an argument by counsel for Kened that the comparison
should be made between what was proposed and the original position under the
lease when originally granted, when there was a £100 company as tenant which
had only £2 paid up share capital and three individuals as guarantors all of
whom proved worthless. The judge dealt with that argument as follows:
I do not
consider that to be correct, though it shows what a previous landlord was
prepared to accept. I consider that the correct comparison is between the
landlord’s present position and the position that it will be in if the
assignment goes through.
Counsel for
the defendant correctly pointed out that this also is not the correct test. The
proposal has to be considered on its own merits or demerits; whether it leaves
a landlord better off or worse off than immediately before the assignment is
neither here nor there. But, in my judgment, the judge was not applying a
different test. He was dealing with a particular argument that he should
compare the proposals with the original position, and he rightly rejected it.
In my view, he was doing no more than saying that if a comparison had to be
made, the correct comparison was between the present position and the proposal;
but he dealt with the proposals on their own merits.
It is always
an easy criticism to make of a judge that he has substituted his own view for
that of the proper party, but, reading the judgment as a whole, I am unable to
see any basis upon which that criticism can properly be levelled in the present
case. The judge was well aware that the test was an objective one. The question
was what a reasonable landlord would do. The judge was well aware, because he
expressly stated, that it was not sufficient for Kened to demonstrate that a
reasonable landlord might have granted consent; what had to be shown was that
no reasonable landlord would have withheld it.
I can see no
basis for saying that the judge was wrong in concluding that the defendant was
not entitled to particulars of the assignment and of the amount of any premium
or reverse premium paid for the assignment. Of course the landlord is entitled
to be informed of anything which bears upon the giving of his consent. If there
was anything in the assignment which would affect him, then the tenant was
obliged to provide that information to him. But I can see no reason why the
landlord would be interested in the details of the assignment. There have been
cases in which the court has held that a landlord who is asked for consent to a
subletting is entitled to know the terms of a proposed underlease. That is
obviously correct. A landlord must be entitled to know what it is to which his
consent is being sought. A landlord who is asked to consent to the grant of an
underlease is concerned with the terms of the underlease. But a landlord who is
asked for consent to an assignment is not concerned with the terms of the
assignment but with the identity and character of the assignee. The
relationship between the landlord and the assignee will be governed by the
terms of the underlease and not by the terms of the assignment. In an ordinary
case where the assignment is made at a premium the landlord is not normally
told, and does not normally inquire, as to the amount of the premium, even
though the payment of the premium by the assignee will to that extent diminish
the assignee’s financial resources and hence his ability to comply with the
covenants in the lease.
In the present
case the judge inferred that there was a reverse premium, and the case has been
argued before us on the basis that there was a reverse premium, the existence
and amount of which were concealed from the landlord. Counsel for the defendant
submitted that if there was a reverse premium then that would assist the
assignee to comply with the obligations of the underlease, and that the
landlord was therefore interested and concerned to know the amount of that
reverse premium so that he could calculate how long it would take before it was
exhausted in complying with the covenants in the underlease. But since Kened
did not inform the landlord of the existence or amount of any reverse premium,
Kened cannot rely upon the existence of its receipt by Realco to satisfy the
defendant that it has the means to comply with its covenants in the underlease.
Having failed to provide the landlord with that information, Kened must seek to
establish the ability of Realco and KAIC to comply with their covenants without
reliance on any reverse premium. It has done so; and that is an end of the
point.
The third
criticism made of the judge is that he misconstrued clause 9 of the licence to
assign and wrongly found that KAIC was an acceptable replacement surety for the
bank. Counsel submitted that the word ‘acceptable’ was subjective and meant
‘acceptable to the landlord’. The judge held that it was objective and meant
‘reasonably suitable for acceptance by a landlord’. I agree with the judge. It
appears to me plain beyond argument that in the context in which the expression
is found ‘an acceptable replacement surety’ means a replacement surety which is
objectively suitable for acceptance by a reasonable landlord. The landlord was
not seeking the right to refuse an offer of a replacement surety arbitrarily.
It must be borne in mind that the licence to assign was entered into between
the landlord and the assignee and the bank. It was an agreement for novation in
certain circumstances. If the landlord was intending to reserve the right
arbitrarily to refuse an offer of a substitute surety, then there was no point
in including the clause; it would be otiose. A landlord is always entitled,
even in the absence of such a clause, to agree to the substitution of a new
surety. The whole purpose of clause 9 of the licence to assign was to give the
bank a right to offer a replacement surety and to commit the landlord to accept
a substitute surety provided that certain objective criteria were met. The
objective criteria were that the replacement surety should be suitable for
acceptance by a reasonable landlord.
So far as the
word ‘replacement’ is concerned, there is nothing in the submission that this
means that the substitute surety should be in every respect as good as, or
better than, the bank. The word merely means that it should be reasonably
acceptable as a substitute for the bank. If the landlord had intended to insist
that the substitute surety should be in every respect as good as, or better
than, the bank, there would have been nothing easier than to include such a
requirement in the licence to assign.
Despite the
careful arguments put before us by the defendant, I remain entirely unpersuaded
that the deputy judge made any discernible error in the course of his judgment.
He came to a decision on the facts. It was a decision to which he was entitled
to come. I can find no error of law in reaching his decision. He took into
account nothing which he ought not to have taken into account, and he omitted
nothing which he ought to have taken into account. For my part, I would dismiss
the appeal.
Nourse and Otton LJJ agreed and did not add
anything.
Appeal
dismissed with costs.
