Landlord and Tenant Act 1954–Application by club for a new tenancy–Application opposed by landlord on ground of intention to occupy holding for purposes of business–Landlord’s undertaking to use land only for his business as a farmer–Evidence of landlord’s intention–Whether intention fixed and genuine–Existing land occupied by landlord not fully farmed–County court judge entitled to conclude intention not fixed and genuine–Landlord’s appeal dismissed
This was an
appeal by the landlord, Harold Walton, from a decision of Judge Suddards
granting an application by the Lightcliffe and District Cricket and Lawn Tennis
Club for a new tenancy of land held by the club from Mr Walton. The application
had been opposed by the landlord under section 30(1)(g) of the Landlord and
Tenant Act 1954.
I McCullough
(instructed by Newstead & Walker, of Otley) appeared on behalf of the
appellant; J Meredith (instructed by F G & H E Smith, of Bradford)
represented the respondent club.
Giving the
first judgment at the invitation of Stephenson LJ, SHAW LJ said: This is an
appeal from a decision of His Honour Judge Suddards given on October 7 1976,
when he
District Lawn Tennis Club, for a new tenancy of their ground which they held
from Mr Walton, who was the landlord. The application was opposed on the ground
set out in section 30(1)(g) of the Landlord and Tenant Act 1954, namely, that
the landlord intended to occupy the holding for the purpose of a business to be
carried out by him.
The main
ground of appeal is that in arriving at his conclusion the learned judge
misdirected himself in that he failed to give due weight to an undertaking
which was offered by the landlord in the course of his evidence, repeated by
his advocate in his final address and reiterated in somewhat broader terms by
counsel in this court. The undertaking was that when the land comprised in the
club’s lease fell into possession it would be used for and only for the
purposes of the appellant’s business as a farmer. There is a cross-notice by
the respondent club which arises from the fact that by agreement the parties
asked for a determination only of the question whether or not a new tenancy
should be granted so that the conditions of the new tenancy, if granted, could
then be dealt with between themselves. The learned judge overlooked that
arrangement and fixed a term of five years. It is conceded by Mr McCullough on
behalf of the landlord that that part of the order cannot stand in any
circumstances.
The history of
the matter is a long one. The cricket club has been established on this
particular ground, where there are also some tennis courts, for more than a
century. The appellant came to the land in 1939 when he took a lease of some 20
acres. The part which is occupied by the respondent club is some 31/2 acres and
forms an island in the middle of the whole of that land. The remainder of it,
some 16 acres, together with a further 9 acres, of which the landlord acquired
a lease also is used by him as land for grazing cattle. That has been the
position for a substantial time. When the lease which the club held at the time
the appellant acquired the land was due to expire, they applied for a new
tenancy. They were granted one for a term of 10 years. On the expiration of
that tenancy they sought a further lease in the present proceedings.
The opposition
by Mr Walton was based on the fact that farming was the family business and he
intended it to be continued by his son and other members of his family.
Accordingly, he wished to extend the use of his land and to farm it all in its
entirety. This had been, so he asserted, his fixed intention for a long time
past. When he gave his evidence it became apparent that he had not used the
land already available to him to its fullest advantage. His own estimate was
that it was used to 50 per cent of its capacity. This evidence was both cogent
and material and the learned judge rightly attached considerable importance to
it. The question which he had to decide in the face of that evidence was
whether the undertaking offered by the landlord represented a bona fide
intention, so that it could be accepted with confidence. The appellant put it
in these terms: ‘I am prepared to give an undertaking that if the tenancy is
refused I shall use this land for grazing.’
He estimated he could put something like nine extra beasts out to graze
if he had the extra land occupied by the club. There was evidence that the land
was of poor quality. Furthermore, that part which had been occupied by the club
for so very long a time would require considerable treatment before it could
become suitable for grazing. That would involve a substantial expenditure by
the landlord. All these factors and others were before the learned judge. It
was incumbent upon him to examine the whole of the situation in deciding the
answer to the question propounded: ‘Was the intention of the landlord genuine
and bona fide?’
When he came
to give his judgment, which was in admirably concise terms, he said:
If I had to
decide if there was a case of greater hardship, the matter would be easy, but
that is irrelevant. The fact that Mr Walton is land-hungry, as many farmers
are, is irrelevant. The question whether he needs the land or wants the land is
irrelevant. The fact that he could help to do a great public disservice is
irrelevant. The fact that he would probably make himself one of the most
unpopular men in the district is irrelevant.
What the
learned judge was seeking to do was to reject and exclude those factors which
did not impinge upon the essential problem. His last comment referred to the
fact that this long-established cricket club was one of the great amenities of
the district and was looked upon with pride by people who dwelt in and about.
The club itself has achieved some distinction in the cricket world. Quite
obviously, Mr Walton, whatever his ideas about his need for this land, would
make himself somewhat unpopular in many quarters, but the learned judge wished
to make it quite clear that he would not allow such irrelevant considerations
to affect his decision of the problem before him. He said: ‘What I have to
decide is whether he at this moment has the genuine intention of using the land
for business.’ He said ‘at this moment’
because he had in mind the decision in the case of Betty’s Cafes Ltd v Phillips
Furnishing Stores Ltd [1957] 2 All ER 223, where Danckwerts J, as he then
was, first came to the conclusion that the material time at which the landlord
had to exhibit an intention to use premises for the purposes of his business
was when he gave notice of opposition. Accordingly, if he had not exhibited
that intention until the matter came before the court for decision, it was too
late and could not adversely affect the tenant’s claim. On the landlord’s
appeal the Court of Appeal came to the opposite conclusion. They held that the
material time was when the matter came before the court. Romer LJ said: ‘I
would . . . remit the case . . . for . . . determination whether the intention
at which the landlord company arrived on April 23 1956 possessed the necessary
qualities of fixity and genuineness.’
The fact that the Court of Appeal thought fit to remit that question for
decision demonstrates that an undertaking is not ipso facto decisive of
the matter. It must be looked at by the court which has to decide whether it
possesses the necessary qualities of fixity and genuineness. It so happened in
that case that the landlord was a registered company and the undertaking
followed from a resolution of its board. It may well be that for practical
purposes somewhat different considerations arise in deciding whether an
undertaking which is given by a substantial company of good reputation is more
dependable than an undertaking given by an individual who may for personal
reasons find it necessary or expedient to change his mind.
The learned
judge went on to say: ‘He has undertaken to graze cows on it and it is
suggested that that has great value. I say this is interesting but in this case
it does not help me to decide whether or not his intention is genuine.’ Mr McCullough, who put forward every possible
argument which might support the proposition that the learned judge misdirected
himself in law, argued that the brushing aside of the landlord’s undertaking
shows that the learned judge did not really apply his mind to the problem.
Counsel submitted that he ought at least to have asked himself whether there
was any good reason for rejecting that undertaking as lacking bona fides or not
showing fixity of intention. What the learned judge was saying however was:
‘That is relevant but in this case it does not really take my mind to the
conclusion that the intention which is behind it is a genuine one.’ He goes on to explain why that is so. He
says:
If he needed
the land it would give a hint to me as to whether his intention is genuine
because if his land is already stuffed with cattle then obviously there is a
greater need, and obviously there is a more genuine intention to use every
scrap of land one can get. But here on his own evidence he is using his own
land to 50 per cent of its capacity.
That
consideration alone may not be conclusive one way or the other but the judge
was entitled to look at it as a factor
He added the comment: ‘I think I am entitled to say that if I don’t think he
was telling me entirely the truth then I am entitled to say ‘Has he been
telling me the truth as to his genuine intention?”
The learned
judge does not say in which particular aspect of the landlord’s evidence he
found it impossible to accept what he was saying, but he makes it clear that
there were aspects of that evidence which cast doubt in the judge’s mind upon
the landlord’s veracity and upon the bona fides of the intention which he had
expressed in the undertaking which was offered. The judge added: ‘Since he knew
that this matter would be brought to court he has taken steps to get estimates
of buildings which will allow him to increase his stock. That I do not regard
as evidence in his favour of a genuine intention. The whole question on the
balance of probabilities is: ‘Do I think he has a genuine intention of using
this land in his business?’ Not: ‘Does
he need it?’ not ‘Is it reasonably
required?’ but ‘Has he that intention?”
Mr McCullough
cited a number of other cases including Expresso Coffee Machine Co Ltd v
Guardian Assurance Co Ltd [1959] 1 All ER 458. That was described by
Harman J at first instance as a very peculiar case. The judgment was affirmed
in the Court of Appeal in favour of the respondent landlords who had given an
undertaking which the court accepted as ‘honest, present and real.’ This is the critical issue which has to be
decided. It is by no means the case that if an undertaking is given there is a
presumption that it represents a genuine intention. It must be examined in the
light of all the circumstances of the case. The only avenue really open to Mr
McCullough upon this ground of appeal is one that leads to the conclusion that
the learned judge had no evidence before him upon which he could reasonably
have doubted the honesty of the undertaking. But there was much in the evidence
which could warrant such a view. This did not necessarily involve the fact that
the landlord was a dishonest man–of course not–but it meant that there were
factors which told against the reality and bona fides of the intention which he
stated he had. It is not as though there is nothing in the history since the
landlord acquired the property in 1949 which does not tell against the
genuineness of his intention in relation to the land. When the last application
was made for a fresh tenancy, and the tenancy of 10 years was granted, the
landlord put forward a different projected user for the land. That might be
inconsiderable if it stood alone.
None the less,
it is something which is part of the whole picture, and in coming to his final
conclusion, the learned judge said this: ‘Is the real reason ‘I want that land,
it’s mine,’ and I think that is all he wants.’
I do not think he ever thought what he intended to use it for and that
is another way of saying ‘I do not think the intention that he expresses is a
bona fide one.’ The judge goes on: ‘I
don’t know what his intention is. I doubt if he does. In my conclusion he has
no genuine intention and I am prepared to grant a new lease to the club. I am not
going to decide rent; that is unnecessary. The lease is for five years.’
There, in what
are unequivocal terms, the judge is saying ‘Having considered the matter by and
large, and looking at all the evidence before me, I find myself unable to
accept the undertaking as being genuine.’
The matters
went a little further, because when the learned judge came to sign the notes of
his evidence, he added this: ‘I did not believe the respondent’–ie the
landlord–‘had a genuine intention to use this land as a farm as in evidence he
is not fully farming the land he already has.’
In the mind of the learned judge that was a significant circumstance as
it could be. In all the cases which have been cited to us, the decisions went
on their special facts. It is true that it is not necessary for a landlord to
prove that he requires or needs the particular land. All he has to show is that
he has an intention to use it for the purposes of his trade or business. None
the less, absence of need, the lack of requirement, are incidental matters
which either go to support that intention or to show that it is not to be
accepted as being that fixity and genuineness adverted to by Danckwerts J in Betty’s
Cafes Ltd v Phillips Furnishing Stores Ltd [1957] 2 All ER 223 at p
225.
By and large,
the landlord has failed to show that the learned judge misdirected himself in
law or in fact. On the contrary, it seems to us that he apprised himself of the
true nature of the problem, and that he approached the question of whether or
not the undertaking was ‘honest, present and real’ in the right way.
Accordingly, there is no ground, since the question is very much a question of
fact as well as of law, which would justify this court in coming to a different
conclusion from that which the learned judge formed.
There is a
further incidental matter in relation to the question of costs. The learned
judge, having made his order in favour of the tenant club, said when he did so
‘There is no reason why the landlord should not pay the costs since he was able
to turn down an offer of £10,000.’
Perhaps that might have been more happily expressed; but Mr McCullough
did not pretend that that would not represent a proper exercise of the judge’s
discretion as to the incidence of costs. All in all, there is no ground for
departing in any respect from the decision of the learned judge.
I would
dismiss this appeal.
Sir DAVID
CAIRNS agreed and had nothing to add.
Also agreeing
STEPHENSON LJ said: The question in this case for this court is that which was
stated by Lord Evershed MR in the Expresso Coffee v Guardian
Assurance case [1959] 1 All ER 459 at p 463. The question was ‘Was the
judge entitled to find as a fact, as he did, that at the date of the hearing
before him . . . the landlords intended to occupy [this site] for the
purposes of their own business?’
In my
judgment, the judge asked himself the right question and he was entitled to
arrive at the answer at which he did. There was evidence before him which
supported an honest or genuine or settled or fixed intention. There was the
undertaking, and there was undoubtedly the ability of the landlord to carry it
out. But there was also evidence to the contrary. There was evidence that he
had no need whatever for this field. There was evidence that he had taken no
preparatory steps to carry it out, such as the steps which were taken by the
resolutions of the companies in the cases to which Mr McCullough has referred
us. Mr McCullough has failed to satisfy me that the judge discarded the
undertaking because of the language which he uses about it to which my Lord
Shaw LJ, has referred, or that the learned judge failed to consider the ability
of the landlord to carry out his intention simply because the learned judge did
not mention it; nor has he satisfied me that the judge regarded the absence of
need as conclusive simply because it was the reason which he gave in that
manuscript note at the end of his judgment.
Finally, he
has not satisfied me that the learned judge regarded the intention as genuine
in the sense of being bona fide and fixed simply because he was kind enough not
to say everything which he thought about it. It would, in my judgment, be quite
wrong for this court to hold that giving an undertaking, whoever gives it and
in whatever circumstances, creates any legal presumption in favour of a landlord.
Equally, it would be wrong to hold that uncontradicted evidence of a landlord’s
ability to carry out his intention creates such a presumption. Nor are we bound
by any authority which has been cited to us so to decide against commonsense
and to treat as a matter of law what is, it seems to me, quite clearly a
question of fact.
Support for
the view that an undertaking is not conclusive cannot possibly be derived, as
Mr McCullough sought to derive it, from the observations of Romer LJ in the
case of Expresso Coffee. It is quite clear from what that learned
Lord Justice said at p 463 of the report that when he is talking about an
undertaking being perfectly decisive of fixity of intention, he is referring to
the kind of undertaking which had been given by a responsible body like the
landlords in the case of Expresso Coffee and in the earlier case decided
by Danckwerts J of Betty’s Cafes Ltd v Phillips Furnishing Stores Ltd.
Equally, I
find it impossible to draw the conclusion which Mr McCullough asked us to draw,
that the ability to carry out an intention proves its existence, from the
decision or observations of the Lords Justices in the case of Reohorn v Barry
Corporation, reported in [1956] 1 WLR 845 to which he also referred. In
that case, Denning LJ said at p 849 that ”intention’ connotes the ability to
carry it into effect.’ In that case,
there was no ability to carry the intention into effect and so the intention
was negatived. That does not in my judgment help us to decide the converse that
where there is ability to carry out intention the judge ought in the absence of
any other circumstances to find that the intention is genuine and settled.
I can detect
no error of law in the judgment of the learned judge, and I would, therefore,
agree that this appeal should be dismissed. I have nothing to add on the
question of costs.
The appeal
was dismissed with costs and the respondents’ cross-appeal allowed.
