Section 37 of Landlord and Tenant Act 1954 – Tenancy agreement excluding statutory compensation where period of business occupation less than five years – Landlord serving notice relying upon intention to redevelop – Tenant not responding – Tenancy losing protection three years 11 months after commencement – Tenant holding over for further 19 months as tenant at will – Tenant claiming compensation – Landlord relying upon exclusion – Judgment for landlord
The claimant (LBC) ran a left luggage centre at Charing Cross Station from premises known as unit 26, having commenced occupation in or about October 1994 under a written agreement for a periodic tenancy, terminable at any time at six months’ notice. Clause 5.4 of the agreement purported to exclude any claim by LBC to statutory compensation “where at the date on which the Tenant is to quit the Premises they have been occupied for a period of less than five years immediately preceding that date for the purpose of the business carried on by the Tenant…”.
In February 1998 the landlord (Railtrack) served a notice, under section 25 of the Landlord and Tenant Act 1954, stating that possession of the unit was required for redevelopment. LBC did not serve a statutory counternotice, and the protected tenancy accordingly terminated on 29 September 1998. Thereafter, LBC remained in occupation as a tenant at will. Following an unsuccessful claim to a fresh periodic tenancy protected by the Act ( see [2000] EGCS 57), LBC quit the premises in May 2000.
Relying upon the fact that it had quit the holding following the service of a notice founded on para (f) of section 30(1) of the Act, LBC claimed to be entitled to compensation under section 37. Railtrack relied, inter alia, upon the exclusion in clause 5.4, contending that LBC could point to a period of business occupation of no more than three years 11 months. LBC claimed that the relevant period was the period of five years and seven months ending on the date that it had (physically) quit the premises.
Held: The claim to compensation failed.
1. Upon a proper construction of clause 5.4, the date on which the tenant was to quit was 29 September 1998, namely the date on which the protected tenancy came to an end as a result of LBC not responding to Railtrack’s section 25 notice. Railtrack was, accordingly, entitled to rely upon the clause, which was not, in the circumstances, invalidated by section 38(2) of the Act.
2. It was doubtful whether Railtrack would have succeeded if the case had turned on its alternative contention that a claiming tenant had to be protected by the Act immediately before he quit the holding: International Military Services Ltd v Capital & Counties plc [1982] 1 EGLR 71 and Cardshops Ltd v John Lewis Properties Ltd [1982] 2 EGLR 53 considered.
David Lord (instructed by Paul Leach & Co, of Godalming) appeared for the claimant; Edward Cole (instructed by Kennedys) appeared for the defendant.
Alan Cooklin, barrister
