Landlord entitled to initiate review – Late service of landlord’s trigger notice – Tenant claiming time to be of essence -Tenant claiming that court not bound by House of Lords authority relied upon by landlord – Judgment in favour of landlord
The claimant occupied the ground and mezzanine floors of the Exchange Buildings, New Street, Birmingham for a 21-year term that commenced in June 1991. The rent was subject to an upwards-only review every seven years. For the purpose of rent review, a schedule to the lease provided that the market rent “may be determined and notified to the lessees” by a lessor’s notice specifying the proposed rent, such notice to be served not more than 12 nor less than six months prior to the relevant review date. The schedule further provided for an independent determination in default of agreement or in the event of the lessee not serving a counternotice within one month of the service of the lessor’s notice. Unless otherwise agreed, the determination was to be made by an expert appointed by the president of the Royal Institution of Chartered Surveyors “on the application of the Lessors”.
In August 1999 the defendant landlord purported to serve a lessor’s notice proposing an annual rent of £465,000 for the seven-year period commencing in June 1998, which was the relevant review date. The claimant contended that the notice was too late to implement the desired review. The landlord claimed that there was nothing in the schedule to displace the rule (affirmed by the House of Lords in the conjoined appeals in: United Scientific Holdings Ltd v Burnley Borough Council and Cheapside Land Development Co Ltd V Messels Service Co [1977] 2 EGLR 61) that time was not (in the absence of a contraindication) of the essence in rent review clauses.
Before the High Court, the claimant accepted that the rent review clause in issue was practically identical to the clause considered in the Cheapside case, but nevertheless argued that it was open to the court to find whether time was of the essence. It was argued that the actual decision in Cheapside, was not directed at a trigger notice but at the landlord’s failure to apply for the appointment of a valuer within the time limit specified by the clause.
Held: Judgment was given for the landlord.
1. Although the claimant’s argument was not without force, the observations made in the leading speeches in the United Scientific appeals together provided binding authority for the wider proposition advanced by the landlord.
2. Nor could a compelling contraindication be found in the requirement that the expert’s valuation had to be given not less than 14 days prior to the relevant review date: London & Manchester Assurance Co Ltd v GA Dunn & Co [1983] 1 EGLR 111; Greenhaven Securities Ltd v Compton [1985] 2 EGLR 117; Metrolands Investments Ltd v JH Dewhurst Ltd [1986] 1 EGLR 125; Glofield PropertiesLtd v Morley (No 2) [1989] 2 EGLR 118, considered.
Timothy Fancourt (instructed by Forsters) appeared for the claimant; Christopher Stoner (instructed by Denton Wilde Sapte, of Milton Keynes) appeared for the defendant.
Alan Cooklin, barrister
