Landlord and tenant — Rent review clause in lease — Landlords’ claim to be entitled to operate rent review machinery despite failure to carry out certain stages of the procedure — Review clause provided, first, for the parties to agree the rent by a fixed date; secondly, on failure to agree rent, for a surveyor to be appointed by agreement by another fixed date; thirdly, if surveyor was not so appointed by agreement, for him to be appointed by the president of the RICS — The first two stages had fixed time-limits, time being expressly made of the essence of the contract — The third stage, involving an application to the president for appointment of a surveyor to determine the rent, had no specified time-limit, nor was a time specified for a determination of the rent by the appointed surveyor — Landlords, without going through the procedures contemplated for the first two stages, claimed to initiate the third stage by applying to the president to appoint a surveyor — Tenants submitted that neither party was entitled to disregard the first two stages, with their strict time-limits, and to initiate the procedure at the third stage — A number of recent rent review cases considered by the judge — Held, applying the principles of Amhert v James Walker Goldsmith & Silversmith Ltd, that landlords should be given the declarations they sought — They were entitled to apply, and require the tenant to concur in applying, to the president of the RICS to appoint a surveyor to determine the rent under the review clause
This was an
originating summons by the plaintiffs, Laing Investment Co Ltd, landlords of
shop premises at 52 King William Street, Blackburn, seeking declarations as to
their entitlement to operate rent review provisions in a lease for a term from
January 1 1968 to March 19 2002. The defendants were the tenants, G A Dunn
& Co.
L C Bromley QC
and Christopher Priday (instructed by George Carter & Co) appeared on
behalf of the plaintiffs; Michael Essayan QC and George A Ward (instructed by
Wright, Johnson & Cheales) represented the defendants.
Giving
judgment, PETER GIBSON J said: This originating summons raises a short but
difficult question of construction of the rent review provisions of a lease. By
a subunderlease made February 18 1971 between the plaintiff, Laing Investment
Co Ltd (‘Laing’) and the defendant G A Dunn & Co (‘Dunn’), Laing let to
Dunn shop premises at 52 King William Street, Blackburn, for a term from
January 1 1968 to March 19 2002. In clause 1 the rent was expressed to be
£2,750 per annum but this was made subject to a proviso in the following form:
PROVIDED
ALWAYS AND IT IS HEREBY AGREED that the yearly rent payable by the Tenant
during the period of seven years next following the nineteenth day of March One
thousand nine hundred and eighty-one (hereinafter called ‘the first review
period’) and during the last fourteen years of the term hereby granted
(hereinafter called ‘the residue’) shall be the sum of Two thousand seven
hundred and fifty pounds aforesaid or such sum whichever shall be the higher as
shall be assessed as the fair market rent for the demised premises for the
first review period or for the residue respectively or (if higher) the previous
period such assessment to be made in the following manner that is to say either
(a) such assessment as shall be agreed between
the parties hereto in writing before the nineteenth day of July One thousand
nine hundred and eighty in respect of the first review period or before the
nineteenth day of July One thousand nine hundred and eighty-seven in respect of
the residue
(b) in the event of the parties failing to reach
such agreement as aforesaid on or before the dates appointed (in respect of
which time is to be deemed to be of the essence of the contract) then the fair
market rent for the first review period and for the residue respectively shall
be fixed or assessed by an independent valuation surveyor appointed for that
purpose by the parties hereto or failing agreement as to such appointment in
respect of the first review period by the nineteenth day of September One
thousand nine hundred and eighty and in respect of the residue by the
nineteenth day of September One thousand nine hundred and eighty-seven (time in
this respect to be deemed to be of the essence of the contract) then by an
independent valuation surveyor appointed for that purpose by the President for
the time being of the Royal Institution of Chartered Surveyors. The assessment
fixed by the independent valuation surveyor shall be communicated to the
parties hereto in writing and immediately upon such communication the rent so
assessed as the fair market rent for the first review period or for the residue
as the case may be or Two thousand seven hundred and fifty pounds or the rent
fixed for the first review period whichever shall be the higher shall be the
respective rents payable for the first review period or for the residue under
the terms hereof And for the purpose of assessing the fair market rent for the
demised premises the assessment shall be based on the fair market rent obtainable
for a lease of the demised premises subject to the same covenants as are herein
contained
(c) the right of re-entry hereinafter reserved
shall be exercisable by the Landlord as well in the case of the non-payment of
the rent payable under paragraph (b) of this Clause as in the case of
non-payment of the rent originally reserved by the Lease or agreed between the
parties hereto under paragraph (a) of this Clause and also in the event of the
Tenant refusing to refer the question of the rent payable hereunder in
accordance with the said paragraph (b)
(d) the Tenant as beneficial owner hereby
declares that the demised premises shall stand charged with the payment of any
rent payable under paragraph (a) or (b) of this Clause at the times and in the
manner provided for the payment of the original rent hereby reserved and this
remedy shall be in addition to and not in derogation of either other remedy in
respect of such rent
(e) the fees payable to the independent surveyor
hereinbefore mentioned in respect of the assessment to be made hereunder shall
be borne by the parties hereto in equal shares.
There was no
attempt by Laing or Dunn to invoke the rent review procedure until December 17
1980, when Laing wrote informing Dunn that Laing had instructed a firm of
chartered surveyors to negotiate and agree a revised rent due on March 19 1981.
Dunn replied that it was too late to agree a rent in view of the provisions of
proviso (a) to the reddendum that the rent had to be agreed before July 19 1980
and that time was of the essence in respect thereof. Subsequently, on December
24 1980, Laing by letter to Dunn claimed that as there was no time-limit
stipulated in the lease in respect of a reference to the president of the Royal
Institution of Chartered Surveyors it was still open to either party to apply
to the president. Dunn denied that claim and accordingly on May 14 1981 the
originating summons that is before me was taken out by Laing. By it Laing seeks
a declaration that on the true construction of clause 1 Laing is entitled to
apply, alternatively to require Dunn to concur in applying, to the president to
appoint an independent valuation surveyor to assess the fair market rent for
the period of seven years from March 19 1981, and it also claims a
consequential declaration relating to that rent as so determined.
At first blush
the broad effect of the provisions for assessing the rent for the first review
period might seem straightforward enough. First, there is to be an opportunity
for the parties themselves to agree the rent provided that they do so in
writing by July 19 1980. Second, if the parties fail to agree this, then the
rent is to be determined by an independent valuation surveyor. Such surveyor is
to be agreed between the parties by September 19 1980, but, if not so agreed,
the surveyor is to be such person as is nominated by the president of the Royal
Institution of Chartered Surveyors. Effectively, therefore, there are three
successive stages provided for the assessment of the rent, the first two stages
having strict time-limits and those times must pass before the third stage can
be commenced. But on a closer acquaintance with the provisions, and when one
attempts to marry the facts of the present case with the language of the lease,
the difficulties become apparent. Is it permissible for either party at any
time after September 19 1980 to initiate the third stage procedure without
having attempted to agree the rent or the surveyor within the strict
time-limits laid down? What is the
effect of the words making time of the essence in respect of the first two
stages? I must revert to these questions
later, but first let me set out certain matters relating to the provisions in
question in respect of which Mr Bromley, appearing for Laing, and Mr Essayan,
appearing for Dunn, are not in dispute.
First, the
rent review procedures can be initiated by either Laing or Dunn. While the
practical reality must be that Laing, as landlord, would be most likely to wish
to initiate a rent review which can only raise the rent upwards, Mr Essayan
accepted that there were circumstances (such as if an assignment were
contemplated) when the tenant might wish to take steps to have the rent for the
first review period ascertained. Second, there is no starting date for the rent
review procedures to be initiated nor any particular form (such as a lessor’s
notice) for such initiation laid down expressly in the lease. Third, the
phrases ‘in the event of the parties failing to reach such agreement’ and
‘failing agreement’ mean no more than ‘if there is no such agreement’. At one
point it seemed at least possible that the main battle in this case would be
waged in respect of those words, and that Dunn might seek to resurrect the
unsuccessful argument of the tenant in Re Essoldo (Bingo) Ltd’s underlease,
Essoldo Ltd v Elcresta Ltd (1971) 23 P&CR 1. In the Essoldo case
the rent review clause contained a provision that the rent should be agreed
before a specified date, and in default of such agreement the rent should be
determined by a surveyor to be appointed by the president of the Royal
Institution of Chartered Surveyors. The specified date having passed without
any attempt at agreeing the rent, it was argued on behalf of the tenant that
the rent could only be determined by the surveyor when an attempt had been made
to reach agreement before the specified date. That argument was rejected by the
then Vice-Chancellor, Sir John Pennycuick, who saw no reason to write in any
words to qualify what he considered to be the plain meaning of ‘in default of
agreement’. Mr Essayan accepted that there were insuperable difficulties in
writing in such words to the phrases that I have referred to. Fourth, whereas
time is made of the essence in respect of the times specified for the first two
stages, no time is specified in respect of the third stage, the application to
the president for the appointment of the independent surveyor, or for the
determination by the surveyor of the rent.
Mr Bromley
accepts that there can be no application to the president made before September
19 1980. The determination itself may not be concluded before the first review
period has begun, but in that event any rent so assessed by the surveyor would
be applied retrospectively to the start of the first review period. In the
absence of a time-limit for the third stage time was not made of the essence in
respect thereof.
Fifth, the
application to the president would have to be a joint application by both the
tenant and the landlord. This is implicit in the forfeiture provision in
proviso (c) with its reference to a forfeiture arising if the Tenant refused to
refer the question of a rent payable under the lease in accordance with proviso
(d).
Mr Bromley’s
argument, in its essentials, relies on the literal language of the lease. There
was no agreement in writing or at all before July 19 1980; there was no
appointment of an agreed surveyor by September 19 1980. Accordingly, the
express condition precedent to having a surveyor appointed by the president
being satisfied and no time-limit being prescribed for such appointment or for
the assessment by such surveyor, it is open, he submits, to either party to
obtain such appointments and the concurrence therein of the other party.
The
significance of the provisions as to time being of the essence is explained by
Mr Bromley as being intended to prevent either party from delaying the fixing
of the rent by the independent surveyor. Each party, he says, would know that
it could not extend negotiations for an agreed rent beyond July 19 1980 and it
could not extend negotiations for an agreed surveyor beyond September 19 1980.
Mr Essayan, on
the other hand, contends that the words in the proviso that the rent should be
assessed ‘in the following manner’, coupled with the three successive stages
and the provision that time should be of the essence in the first two stages
have the effect that neither party is entitled to ignore the first two stages
and its strict time-limits by initiating the rent review procedure only at the
third stage after, and possibly long after, September 19 1980. Moreover, he
relies on the forfeiture provision in proviso (c) which might be invoked in the
event of the tenant failing to concur in an application to the president. He
says that if the landlord were free to apply at any time to the president, the
lessee could be prejudiced by the effect of that forfeiture provision, and he
says it would be very surprising in those circumstances if in fact it were open
to the landlord to initiate the rent review procedures at the third stage at
any time. Mr Essayan further points out that the provisions as to time being of
the essence really achieve no practical effect if they were intended to do what
Mr Bromley contends. He relies in particular on the remarks of Walton J in C
Bradley & Sons Ltd v Telefusion Ltd (1981) 259 EG 337, [1981] 2
EGLR 94. In that case Walton J was concerned with a stipulation that time
should be of the essence, and he had to determine whether that applied back to
a provision that the parties should agree the rent by a certain date, or
forward to another provision that an arbitrator should determine the rent by a
particular date. At p 338 he said this:
That,
however, by itself, of course, does not solve the question whether one goes
backwards or forwards. But I think one may be able to get some assistance from
this general consideration, namely: What on earth would it mean to make time of
the essence of the provision that the amount had to be agreed between the
landlord and the tenant by a date not later than six months prior to the
commencement of the second rent period?
It seems to me that it would be meaningless to make time of the essence
of that provision, and for this very simple reason, that the landlord and the
tenant might one day later than the six months agree upon the rent which was
properly payable, and if they wanted so to agree, why on earth should they
not? They could do so, notwithstanding
any prior agreements that they had made. So that it seems to me that to make
time of the essence of that particular provision would be totally nonsensical.
Of course, on a clause differently framed one might come to the conclusion
nevertheless that time had been made of the essence of that provision so as to
ensure that upon that breaking down, as it were, the landlord was then free to
appoint the arbitrator. But I find nothing in this clause which would tie the
landlord down to any particular time as to when the arbitrator is in fact
appointed. Even if time were not of the essence of the six months’ period (for
the reasons which I have already given) it seems to me that the tenant could
not possibly complain if, when that six months’ period had expired, the
landlord applied to the president for the appointment of an arbitrator. It
would be quite idle for the tenant to say ‘Oh, but time is not of the essence
of that six months’ period, therefore you must wait before applying to the
president of the Royal Institution of Chartered Surveyors.’ The doctrine that time is not of the essence
does not work that way round at all. If somebody wishes to stick to the
time-limit and it is within his power to make the next move, of course then he
is entitled to.
Mr Bromley
sought to rely on the sentence in that passage where the learned judge said
that on a differently framed clause one might come to the conclusion that time
had been made of the essence so as to ensure that the landlord was free to
appoint the arbitrator. But Walton J is demonstrating the oddity of a provision
making time of the essence in respect of something to be mutually agreed by a
particular date such as in the first two stages of the present case, and also
he is pointing out that, even if time is not made of the essence in respect of
an earlier stage but a time-limit is specified, the party wishing to get on
with a later stage is in fact free to do so without hindrance from the party
who might otherwise wish to delay. I do not think that passage really assists
Mr Bromley.
Mr Bromley
accepted, I think, that the provisions as to time being of the essence were, on
his construction, strictly unnecessary, but he said that they had the
commercial merit of making the position clear to the parties that there could
be no delays beyond the stipulated dates. It is, of course, plain that where
time is made of the essence the courts must give effect to such a provision
(see United Scientific Holdings Ltd v Burnley Borough Council
[1978] AC 904, at p 923G per Lord Diplock). Accordingly, when a procedure is
laid down providing successive stages in respect of each of which time is made
of the essence, the court will give effect to that procedure (see Weller
v Akehurst [1981] 3 All ER 411).
Mr Essayan
submitted that the only way to make sense of the provisions was to imply a term
that either party wishing to have the rent assessed in accordance with the rent
review provisions must serve a notice to that effect on the other party before
July 19 1980 and
essence in respect thereof. On this point he placed some, but cautious,
reliance on the approach of the Court of Appeal in Stylo Shoes Ltd v Weatherall
Bond St WI Ltd (1974) 237 EG 343, [1976] 1 EGLR 86. In that case the court
was concerned with a rent review clause under which the landlords were entitled
to require the rent to be reviewed, and the rent was to be of such amount as
might be agreed in writing, or, in the absence of agreement, as determined by
an arbitrator to be nominated by the president of the Royal Institution of
Chartered Surveyors on the application of the landlords made within a specified
period ending three months before a specified date. Lord Salmon, at p 345,
explaining the effect of the clause, said:
Secondly, if
the landlords require a revision of the rent, although the clause does not
expressly oblige them to give any notice, it is to be implied that they can
show that they require the rent to be revised only by giving the tenants notice
of that fact.
The Court of
Appeal held that time was of the essence of the time-limit for the application
by the landlords for an arbitrator, and the notice that was implied was one
that had to be served before the expiration of the three months’ period. The
actual decision in the Stylo case is no longer good law, as Lord Salmon
himself said in the United Scientific Holdings case at p 953F. Mr
Bromley rightly pointed out that it was a simple matter in that case to imply a
term as to notice from the express provision in the relevant lease entitling
the landlord to require a revision. The limited assistance I get from that case
is merely that it is possible in appropriate circumstances in a rent review
clause to imply a term as to giving notice. In the light of the actual decision
in the United Scientific Holdings case it is very doubtful whether the
court should have implied that time was of the essence of a time-limit in
respect of such a notice.
It seems to me
that I am faced with the invidious choice in the present case of having to
prefer either a literal construction, with the consequence that provisions as
to time being of the essence serve little practical purpose and are strictly
unnecessary, or a construction which involves writing words into a lease. As I
have already stated, the court refused to do this in the Essoldo case,
but the wording of the lease in that case differs from the present; in
particular that case lacked the feature of the present case that time was made
of the essence in respect of no less than two stages of the rent review
procedure, and in that case what was sought to be implied differed from what is
now suggested by Mr Essayan. It is, of course, trite law that the court should
be slow to imply a term and should only do so if it considers it necessary in a
business sense to give efficacy to what parties have agreed, and it is not
enough that the court should think that the implied term was a reasonable one
(see Liverpool City Council v Irwin [1977] AC 239).
At the
conclusion of the arguments of counsel when this matter first came on for
hearing, it appeared to me that in the absence of compelling authority I should
accept Mr Essayan’s argument that a term was to be implied in order to give
proper effect to what the parties had agreed. However, a few days later in
another case involving a rent review clause* my attention was drawn to the
decision of the Court of Appeal in Amherst v James Walker Goldsmith
& Silversmith Ltd (1980) 254 EG 123, [1980] 1 EGLR 86, an authority
which had not been cited to me previously. I gave the parties an opportunity to
address me on the relevance (if any) of that decision to the present case and I
have heard further argument from both Mr Bromley and Mr Essayan.
*London
& Manchester Assurance Co Ltd v G A Dunn & Co (1981) 262 EG
143, [1982] 1 EGLR 117.
The Amherst
case also concerned the construction of a rent review clause. The lease was for
a term of 28 years. The rent for the first 14 years was fixed at £2,500 per
annum, but for the second period of 14 years beginning on June 24 1975 it was
provided that the annual rent should be either £2,500 or such higher yearly
rent as should be ascertained in accordance with a proviso which provided for
an assessment to be made in the following manner, that is to say:
(a) Such assessment shall be made in the first
instance by the lessor and submitted to the lessee for approval in writing on
or before the twenty-fifth day of December one thousand nine hundred and
seventy-four; (b) In the event of the parties hereto failing to reach such
agreement as aforesaid on or before the date appointed (in respect of which
time is to be deemed to be of the essence of the contract) then the yearly rent
for the second period shall be fixed or assessed by an independent surveyor
appointed for that purpose by the parties hereto failing agreement as to such
appointment by the twenty-fifth day of January one thousand nine hundred and
seventy-five (time in this respect to be deemed to be of the essence of the
contract) then the yearly rent for the second period shall be fixed or assessed
by an independent surveyor appointed for that purpose by the President for the
time being of the Royal Institution of Chartered Surveyors.
The second
sentence in proviso (b) was similar to the second sentence in proviso (b) of
the lease before me. The report in the Amherst case does not show what
was proviso (c) in that clause. So it is not clear whether it contained a
forfeiture provision as in proviso (c) in the present case. But proviso (d) was
similar to proviso (e) in the present case.
As is
apparent, the rent review provisions in the Amherst case differed from
those in the present case in that there was an express provision that the rent
review was to be initiated by the lessor submitting an assessment to the lessee
and that that submission was to be by a particular date which the court held
was the same date as ‘the date appointed’, that is to say December 25 1974. The
lessor on June 25 1975 wrote to the lessee asking for agreement as to the
surveyor but indicating that he was applying to the president for the
nomination of a surveyor and the lessor also suggested negotiating the rent.
The question in that case was whether time was of the essence of the time-limit
for the submission by the lessee of his assessment.
The provisions
of that lease resembled those of the present case in that (1) the assessment
provisions are introduced by the prefatory words ‘in the following manner’ as
with the present lease, (2) a three-stage procedure is laid down, in respect of
two of which stages time is expressly made of the essence, and in the last
stage of which no time-limit is prescribed. Again these exactly match the
present case. Again time is made of the essence of two matters to be agreed
between the parties by a particular time.
Judge Mervyn
Davies QC (sitting as a deputy High Court judge) held that time was not of the
essence of the time-limit for the submission of the lessor’s notice. On appeal
the Court of Appeal agreed with him. Sir David Cairns, giving the leading
judgment, first found significance in the fact that time had been made of the
essence of some provisions but not of others. Second he rejected as
inconsistent with the speeches of the majority of the House of Lords in the United
Scientific Holdings case a submission by the tenants advanced by their
counsel, Mr Moshi, that the fact that the trigger notice could be operated by
the landlord alone made time of the essence of the time-limit in respect
thereof. He then continued thus, at p 125:
So far as
other matters are concerned, I think that the most effective part of Mr Moshi’s
argument before us was to this effect, that, unless we hold that the taking of
the first step was one which had to be taken by a specified date, the lessee
was put in difficulty in relation to the later steps, because there was a fixed
date which could not be departed from, because it was provided to be of the
essence of the contract, up to which he was entitled to agree either as to the
amount put forward by the landlord for the rent or as to the surveyor who was
to be appointed to fix that rent. The difficulty of that argument appears to me
to be this, that, putting it at its highest, assuming that it could be said
that the period for the ‘trigger’ notice was subject to an absolute limit of
December 25, there is certainly nothing in the agreement to say that it must be
given before December 25. If the date is to be of the essence of the contract
at all, it is on or before December 25; it is quite impossible to put it at a
reasonable time before December 25. So that, in effect, even if it were
regarded as being of the essence of the contract, the position is that, if the
notice were given by the landlord at the last moment, one would immediately be
into what may be called the second stage.
It seems to
me that the true meaning of this lease is that, if the notice is not given by
December 25, it can still be given at a later date. It may well be that the
later date would have to be within a reasonable time, but as to that I express
no more than a tentative opinion. But if notice is given thereafter and if it
is not given so late that it can be said it was not given within a reasonable
time and that that makes it invalid, then the position would be that, indeed,
in effect, the second and third stages are concertinaed and we come straight on
to the position where either party can go straight to the president of the RICS
and ask for the appointment of an independent surveyor.
That I think
is the meaning and effect of the agreement between the parties . . . .
Eveleigh LJ
agreed, saying that he found some difficulty in seeing that in a case like the
one before him a trigger notice had any real part to play, certainly once the
date specified in the lease had passed. Megaw LJ also agreed. He said, at p
129:
I should have
expected that, if the intention had been that for which Mr Moshi contends, the
latest date by which the lessor was required to give his assessment would have
been expressly stated and not left to be, by implication, a reasonable time
before December 25; and the clause would, by its express terms, have made it
clear that, if that action was not taken within that time, the lessor would
lose his rights.
Thus in the Amherst
case, although the parties had expressly agreed that the initiating step should
be taken by December 25 1974 and all that was being asked of the court was to
imply a term that time should be of the essence in respect of that time-limit,
the court refused to do so. In the present case, as I have said, Mr Essayan is
asking the court to imply not only that the initiating step should be taken by
July 19 1980 but also that time is of the essence thereof.
Mr Essayan
distinguishes the Amherst case by saying that it was simply an
application of the principle of expressio unius exclusio alterius. In
effect, he says, the lease in the Amherst case spelt out that there was
to be a trigger provision exercisable by the lessor at any time and he says
that is very different from a case such as the present where no trigger notice
at all is provided. He says that the justification for implying a term for an
initiating step, that is to say that otherwise the stipulations as to time
would be pointless and the forfeiture provision could cause severe hardship on
the tenant, is also the justification for implying a term that time should be
of the essence thereof. The two go together. He cited Beer v Bowden
[1981] 1 WLR 522 as an illustration of the court’s approach to implying terms
in a rent review clause. In that case the relevant provision of the lease was
‘such rent as shall thereupon be agreed between the landlords and the tenant’.
The court implied the word ‘fair’ between the words ‘such’ and ‘rent’.
As Buckley LJ
put it at p 528 D:
If some such
implication is not made, it seems to me that this would be a completely
inoperative rent review provision, because it is not to be expected that the
tenant would agree to an increase in the rent if the rent to be agreed was
absolutely at large. Clearly the parties contemplated that at the end of five
years some adjustment might be necessary to make the position with regard to
the rent a fair one, and the rent review provision with which we are concerned
was inserted in the lease to enable such an adjustment to be made. The
suggestion that upon the true construction of the clause it provides that the
rent shall continue to be at the rate of £1,250 a year unless the parties
otherwise agree would, in my opinion, render the provision entirely inoperative,
because, as I say, one could not expect the tenant voluntarily to agree to pay
a higher rent.
I do not see
how in the present case one could say that the rent review provisions would be
rendered completely inoperative if Mr Essayan’s terms were not implied. The
rent review provisions would of course work if the express time-limits were
adhered to and if they were not there is the fail-safe procedure for
determining a rent, that is to say either party could go to the president for
the nomination of a surveyor to assess the rent, and the landlord can compel
the tenant’s concurrence in such a step. In my judgment, therefore, Beer
v Bowden does not provide any principle that is applicable in the
present case.
It seems to me
that it would be a very surprising consequence if in a lease containing such
similarities of language to the Amherst lease the lessor would find
itself in a worse position than the lessor in the Amherst case who
failed to comply with an express provision as to time, whereas the lessor in
the present case was under no express obligation to take an initiating step.
Like Megaw LJ in the Amherst case, I would have expected express
provisions if the initiation of the rent review procedure by July 19 1980 was
intended to be a matter of crucial importance, so as to make it clear that the
lessor or lessee wanting a review would lose his rights if no step were taken
by that date. Again as in the Amherst case the contrast between what is
sought to be implied and the express provisions making time of the essence is
very striking. Further there is the same difficulty in the present case in
implying that the initiating step should be made by the date by which agreement
had to be reached between the parties as to rent as there was in the Amherst
case in respect of the trigger notice. To serve a trigger notice or to take an
initiating step on or shortly before the date in question as a practical matter
makes it impossible to reach agreement by that date.
Of course the
Court of Appeal did not have the benefit of the arguments that Mr Essayan has
put with such skill and lucidity to me, but that court does not appear to have
been troubled by the fact that time-limits in respect of which the parties had
laid such heavy emphasis by making time of the essence thereof could in effect
be ignored by the concertinaing of the successive stages. In the light of the
approach of the Court of Appeal and consistently with the Amherst case
it seems to me that I would not be justified in holding that necessity requires
the implication of a term.
In the result
I shall make the declarations requested in the originating summons in the
following form:
1. A
declaration that upon a true construction of clause 1 of the subunderlease the
plaintiff is now entitled to apply and to require the defendant to concur in
applying to the president of the Royal Institution of Chartered Surveyors to
appoint an independent valuation surveyor to assess the fair market rent for
the premises thereby demised for the period of seven years following March 19
1981.
2. A
declaration that the rent so assessed by the said surveyor or £2,750, whichever
shall be the higher, shall be the yearly rent payable by the defendant for the
said period.
The
plaintiffs were awarded costs.
