Preliminary point of law as to whether a covenant not to underlet or part with possession without landlord’s consent precluded assignment without such consent–Held that, despite absence of any reference to assignment, the covenant applied to it as the assignment would necessarily involve a parting with possession
This case is
reported only on the preliminary point of law mentioned above. The wording of
the covenant, which related to a cottage of which the tenancy was assigned by
the defendant to the plaintiff, is set out in the judgment.
P Hampton
(instructed by Brecher & Co) appeared on behalf of the plaintiff; R Tager
(instructed by Frere, Cholmely & Co) represented the defendant.
Giving
judgment, BROWNE-WILKINSON J said that he had to construe a covenant in a
tenancy agreement which was in the following somewhat unusual form:
The tenant
agrees with the landlord as follows . . . not to underlet or part with
possession of the premises without the landlord’s previous consent in writing,
which shall not be unreasonably withheld.
It would be
noted that the covenant did not in terms expressly preclude assignment, but
only underletting or parting with possession. The question was whether an
assignment of the tenancy by the defendant, Mr Warren, to the plaintiff, Mr
Marks, was covered by the covenant and so required the landlord’s consent.
According to the normal meaning of words the assignment in this case
necessarily involved a parting with possession. It was argued, however, that
covenants against assignment, underletting and parting with possession had been
for so long framed in this traditional three-limbed form that the omission of
one of the limbs must be significant. In reply to this it could be said that it
was wrong to treat the three limbs as mutually exclusive. An act constituting a
breach of one of the covenants could also constitute a breach of another of the
covenants. It was an open question whether a covenant against underletting
alone precluded assignment, but the case of Russell v Beecham
[1924] 1 KB 525 strongly suggested that a covenant against parting with
possession by itself precluded such parting by way of underletting and, in his
Lordship’s judgment, also assignment. The actual decision in that case turned
on the construction of the particular words used.
In the present
case the assignment by the defendant to the plaintiff necessarily involved a
parting with possession and it therefore fell within the fair, ordinary, normal
meaning of the words without any strain or distortion. It was consequently a
breach of covenant unless the landlord’s consent was obtained or unreasonably
withheld.