Landlord and tenant — Part II of Landlord and Tenant Act 1954 — Effect of severance of reversion on rights of way granted to tenants — Before severance freeholders granted leases for 21 years (which by the date of the action had expired by effluxion of time) to the plaintiffs with rights of way over land which gave access to the rear of the properties leased to the plaintiffs — The plaintiffs’ tenancies were protected by Part II of the 1954 Act — On severance of the reversion the land over which the plaintiffs’ right of way subsisted became vested in the defendants — The question raised in the present proceedings was whether on the expiry of effluxion of time of the plaintiffs’ terms the right of way over the part of the land running alongside the property vested in the defendants came to an end — Held that the plaintiffs continued to be protected under Part II of the 1954 Act not only in respect of the premises demised to them but also in respect of rights of way including the right of way running alongside the defendants’ property — Defendants had no power to determine the plaintiffs’ interest in this right of way (being only part of the interest granted to the plaintiffs) and in any case the defendants were not ‘the landlord’ within the meaning of Part II of the 1954 Act in relation to this right of way — Plaintiffs entitled to declarations sought
In this
summons the plaintiff companies, Nevill Long & Co (Boards) Ltd and S A Wise
(Timber) Ltd, sought declarations against the defendant company, Firmenich
& Co, an unlimited company. The declarations sought were (1) that Part II
of the Act of 1954 applied to the plaintiffs’ tenancies and that certain rights
of way continued after the expiry of the tenancies by effluxion of time, and
(2) that the defendant company was not ‘the landlord’ for any of the purposes
of Part II of the Act in relation to the plaintiffs’ tenancies. The leases were
of adjoining pieces of land at North Hyde Walk, Southall, Middlesex.
D K Rattee QC
and R W Ham (instructed by Stilgoes) appeared on behalf of the plaintiffs; S
Rich QC and J C Harper (instructed by Tarlo, Lyons & Aukin) represented the
defendants.
Giving
judgment, WHITFORD J said: In this matter there are two plaintiffs, Nevill Long
& Co (Boards) Ltd and S A Wise (Timber) Ltd. The defendants are Firmenich
& Co. The questions which I have to decide arise out of two leases in
respect of adjoining pieces of land at North Hyde Walk, Southall, Middlesex.
The whole of the land relevant to the matters that I have to consider at this
date belonged to a company Winckley Investments Ltd and Winckley granted two
leases, each of them, I think, for a term of 21 years from December 1959. I
have said that Winckley were the owners of the whole of the land relevant to
this dispute and it is convenient at this stage to make a brief reference to a
plan attached to one of the leases, for I think for all material purposes they
are in the same terms. I will take exhibit A to the affidavit of Mr Scott-Tucker
sworn on the plaintiffs’ side, on the third page of which we see the area the
subject of this dispute. Omitting altogether a small corner of land at the
bottom of the page as it is bound up in the affidavit there is next an area of
land which comes out in the photocopy as being surrounded in black but should
in fact be surrounded in red, which was referred to throughout the proceedings
as plot 2. Above that there is another area of land, the exact limitations of
which can also be seen by similar outlining by reference to exhibit B, but it
comprises virtually that part of the land which is cross-hatched and that was
referred to as plot 1. Finally, at the top we have an area which was referred
to as plot 3. There is in the form of an inverted ‘L’, with rather a long leg
in one direction, a portion which again appears in black in the photocopy but
was marked brown which is in fact a road giving access to the rear of each of
these plots 1, 2 and 3; it also runs along the edge of the Grand Union Canal.
At the relevant time Winckley also owned what has been referred to as plot 3.
These leases
were granted, and in all material respects they are the same, to each of the
plaintiffs for the term of years which I have indicated together with, so far
as each of the plaintiffs is concerned, a right of way over what I will refer
to as the brown land, the plaintiffs also undertaking certain obligations with
regard to repairs which it might be necessary to do to this roadway. The
plaintiffs are, I understand, both companies engaged in the timber trade and
the terms of each of the leases appear to indicate that it may at least at one
time have been contemplated that the canal would be used for the purposes of
loading or unloading timber, but I was told by counsel that in actual practice
the brown land constituting the roadway at the rear of the premises has in
substance been used, so that access along this roadway by lorries bringing
goods to or taking goods from the site in question is of importance.
So far as plot
3 is concerned, in 1967 that was sold by Winckley and eventually it came into
the hands of and is now in the hands of the present defendants. So far as the
other two plots are concerned, the freehold reversion in both those plots has
been acquired by a company called Meek Investments Ltd, who have in fact also
acquired a controlling interest in each of the plaintiff companies. But be that
as it may, although Meek have secured the reversionary interest in the freehold
so far as plots 1 and 2 are concerned nothing has changed so far as the
plaintiffs are concerned and they still continue to occupy the land and
buildings which they obtained tenancies of under their respective leases for
the purposes of their respective businesses in the timber trade. The leases
have now expired by effluxion of time and so far as the two portions of land
outlined in red in the relevant leases are concerned no question arises which
is of any concern in this present summons. No question arises likewise in
respect of that portion of the brown roadway which runs alongside plots 1 and
2. The dispute which has arisen is as to whether or not in all the
circumstances — and this is the first contention of the defendants — on the
expiry of the term of the lease the right of way over the brown land running
alongside plot 3 came to an end. There can I think be no doubt about this, that
the plaintiffs must be right when they say, as they do, that the tenancies
which they acquired were tenancies protected by Part II of the Landlord and
Tenant Act 1954 and by virtue of the provisions of section 23 of this Act they
have tenancies to which subsection (1) of that section apply, the subsection
being in these terms:
Subject to
the provisions of this Act, this Part of this Act applies to any tenancy where
the property comprised in the tenancy is or includes premises which are
occupied by the tenant and are so occupied for the purposes of a business
carried on by him or for those and other purposes.
So far as the
land outlined in red is concerned — and from now on I can treat it as if I were
dealing with only one of the tenancies because the same arguments apply to both
of them — it might seem to anybody just reading the language of the Act, to
which I have just referred, that some question might arise in relation to the
right of way which was in fact granted over the whole of the brown land, but I
am satisfied, having regard to the decision of the House of Lords in Whitley
v Stumbles [1930] AC 544 that this tenancy is properly to be regarded as
a tenancy embracing not only the land and the buildings upon it outlined in red
but also the right of way, and it follows from this that so far as the interest
under the right of way is concerned that would on the face of it appear to be
protected just as the interest in the occupation of the land and the buildings
upon the land is protected by the Act.
The difficulty
that has arisen in this case was I think really put, quite forcibly so far as
the defendants are concerned, in this way. It was conceded by Mr Rich on behalf
of the defendants that if a situation had arisen under which, let me suppose
for the moment, Winckley had never parted with their freehold interest in any
of the properties in question and the tenancies had come to an end, it must
undoubtedly be the case that the plaintiffs could claim to be protected tenants
in respect of their interest not only of the properties but of the rights of
way which had been granted; and subject to the provisions of the 1954 Act, if
steps had been initiated by Winckley to bring the plaintiffs’ interest to an
end, they could have applied
continuation of their existing tenancy with a continuation of the existing
rights of way. As matters now stand, Meek, the company who are in fact in
control of the two plaintiff companies, have secured the reversionary interest
in plots 1 and 2 with the brown land adjacent, but it was submitted by Mr Rich,
and I think accepted by Mr Rattee, that under no circumstances could Meek be in
a position to grant to these plaintiffs upon any question of consideration of
the grant of a new tenancy rights which would include rights of way over the
brown land appurtenant to plot 3, which is now owned by the defendants.
The whole of
the difficulty in this case has arisen out of this simple fact, that the
reversionary interest has fallen into two separate hands. I think Mr Rattee is
right when he says that it seems probable that those who were responsible for
the enactment of the 1954 Act never really had such an eventuality in
contemplation. The authorities to which I have referred to my mind establish
this beyond any possible doubt, namely, that the severance of a kind such as we
have here of the freehold interest cannot possibly bring two separate tenancies
into being, with the result that during the period in which the tenancies were
still subsisting the plaintiffs ought properly to be regarded as being in the
position of tenants of their respective portions of land edged red and the
rights of way over the brown land adjacent thereto of Meek, and so far as the
brown land adjacent to plot 3 is concerned tenants only of the right of way
over that particular portion of the brown land. Had that in fact been the case
their position would have been one which was considered in Land Reclamation
Co Ltd v Basildon District Council [1979] 1 WLR 767, when the Court
of Appeal, considering the question of the possibility of the application of
the Act to a mere tenancy of right of way came to the conclusion that it was
not protected.
The two cases
relied upon by Mr Rattee for the proposition that the severance of a reversion
does not bring into existence two separate tenancies were Jelley v Buckman
[1974] 1 QB 488 and Dodson Bull Carpet Co Ltd v City of London Corporation
[1975] 1 WLR 781. The first of these cases was a Rent Act case. It was a case
which came before the Court of Appeal and in his judgment in this case Stamp LJ
observed at p 498 in relation to submissions which had been put touching the
possible effect of section 140 of the Law of Property Act 1925 on the question
of splitting a reversionary interest in the context of the Rent Act:
We can find
nothing in the section to suggest for a moment that the legislature intended
that following a severance to which the lessee was not a party he should find
himself holding part of his land under one tenancy and part under another. In
relation to a lease for years as opposed to a weekly tenancy the change in the
law would be dramatic and had the legislature intended to create that result
one would expect to find some clear expression of that intention. Not only is
there an absence of such an expression of intention but we find in this section
positive indications that what was assumed or contemplated was the continued
existence of the pre-existing lease.
Then he goes on
to deal with matters which are perhaps not quite so strictly germane.
I was referred
to section 140 of the Law of Property Act by Mr Rich, who suggested, as I
understood it, that it was of assistance to the claims of the defendants. He
read subsection (1) of section 140, omitting certain words which he said for
present purposes could be considered as immaterial, and summed it up by saying
that the effect of section 140(1) was that notwithstanding severance every
condition could be enforced after severance as if that right alone had been
comprised in the original lease. I do not myself see that section 140 has got
anything to do with the problems with which I am concerned. There is a marginal
note as to the section which reads ‘Apportionment of conditions on severance’,
and the section runs:
(1) Notwithstanding the severance by conveyance,
surrender, or otherwise of the reversionary estate in any land comprised in a
lease, and notwithstanding the avoidance or cesser in any other manner of the
term granted by a lease as to part only of the land comprised therein, every
condition or right of re-entry, and every other condition contained in the
lease, shall be apportioned . . .
I do not need
to go on. We are concerned here not of course with any question of right of
re-entry nor indeed of any other condition of the lease, we are merely
concerned with the effect of severance upon the undoubted right which was
granted and it was a part of the right granted in a single tenancy to each of
the plaintiffs in connection with their occupation and enjoyment of the use of
the land which is edged in red in each of the respective leases.
If one
considers the observations as to the effect of severance, it appears to me that
the conclusion which necessarily follows from the judgments in the two cases to
which I have referred is going to be this. What in fact the defendants are left
with is a position in which there is a continuing protected interest and the
only other question relevant to be determined is whether in those circumstances
the defendants might be entitled to serve a notice determining the interest of
the plaintiffs in the right of way over the brown roadway coming along next to
plot 3. The whole of this question can, I think, be conveniently considered in
the context of the judgment of Goff J in Dodson Bull Carpet Co Ltd v City
of London Corporation (supra). The facts in that case were by no means on
all fours with the facts in this case. It was a case where a tenancy had been
granted of two properties referred to as nos 5 and 6 and a question arose as to
whether these were separate tenancies, but it was found that they were not separate
tenancies and being one tenancy the question which next arose was whether a
notice of determination in respect of each of the tenancies individually was
valid, and it was held by Goff J that it was not. He so held and his final
determination on it I think arises from a passage which starts above the letter
F on p 785. Having held that there was only one tenancy Goff J went on in these
terms:
The
plaintiffs submit that there is nothing in the Landlord and Tenant Act 1954 to
authorise a landlord to serve a notice of determination under section 25 as to
part only of the premises comprised in the relevant tenancy, and indeed, quite
the reverse, to allow him to do so would cut across and jeopardise the
protection afforded by the Act. Defendants’ counsel states that he cannot
dispute that proposition and in my judgment he is plainly right in so doing.
Section 25 of
the Landlord and Tenant Act 1954 is in these terms:
(1) The landlord may determine a tenancy to which
this Part of this Act applies by a notice given to the tenant in the prescribed
form specifying the date at which the tenancy is to come to an end (hereinafter
referred to as ‘the date of termination’).
Then there are
certain provisos which I do not think for present purposes I need refer to.
I am bound to
say that it appears to me that the conclusion reached by Goff J is the only
conclusion which could have been come to. Mr Rich said that it was in fact
reached only because upon the face of it counsel on the other side accepted the
proposition; and that one should put some discount upon the observation of Goff
J that he thought counsel was plainly right in so doing. I agree that he was
plainly right in so doing.
If the
situation be, as in my judgment it plainly is, that at the moment the
plaintiffs respectively stand in the position of being protected tenants in
respect of the occupation and use of the land and premises respectively granted
to them under the terms of their leases and have a continuing protected
interest in the right of way, the first difficulty which is faced by the
defendants is that they cannot, I think, on the plain meaning of the Act, and
indeed in the light of the judgment of Goff J, determine what is in fact only a
part of the interest granted; and that, on the face of it, must be sufficient
to determine this summons in favour of the plaintiffs. There is, however,
another difficulty which to my mind is just as acute so far as the defendants
are concerned. Section 25 in the terms which I have read out contemplates a
determination of the tenancy by the landlord. There is a definition of ‘the
landlord’ in section 44 of the Act, subsection (1) being in these terms:
Subject to the
next following subsection, in this Part of this Act the expression ‘the
landlord’, in relation to a tenancy (in this section referred to as ‘the
relevant tenancy’), means the person (whether or not he is the immediate
landlord) who is the owner of that interest in the property
following conditions, that is to say —
(a) that it is an interest in reversion
expectant (whether immediately or not) on the termination of the relevant
tenancy, and
(b) that it is either the fee simple or a
tenancy which will not come to an end within 14 months by effluxion of time
and, if it is such a tenancy, then no notice has been given by virtue of which
it will come to an end within 14 months or any further time by which it merely
continued under section 36(2) of section 64 of this Act,
and is not in
reversion expectant (whether immediately or not) on an interest which fulfils
those conditions.
Mr Rich
submitted that the relevant tenancy in this particular case is the right of
way. The defendants are not in my judgment the persons who are the owners of
that interest and they can fall neither within (a) nor (b). They are the owners
in fee simple of the land which is encumbered by the existing right of way and
I can well understand that either they might think that this was a valuable
property or they might desire that they should be in a position to stop passage
across it. But none of this is really of any relevance if they cannot, as I
would hold, properly claim to be a landlord within the meaning of the Act.
I should refer
to one other case which was referred to by both counsel. It was a case which
was heard in the same year as that in which Goff J gave his decision in the Dodson
Bull case. It was a case which came before Judge Edgar Fay sitting as a
deputy judge of the High Court and it is reported in [1975] 1 QB 361, being the
case of Skelton (William) & Son Ltd v Harrison & Pinder Ltd.
I do not propose to go into this case in detail. It is a case in which the
judge was referred to Jelley v Buckman among a number of other
authorities. It is a case in which he gave careful consideration to the effect
of the provisions of section 140 of the Act of 1925. It was a case in which in
the whole of this context he considered, in the light of the Act of 1954, three
situations affecting the method of terminating the teanancy: first, a tenancy
never protected; secondly, a tenancy protected which none the less had lost
protection; thirdly, a tenancy continuing to be protected. He was specifically
concerned with the rights of free entry. Mr Rattee submitted, and I think there
was substance in the submission, that in some parts at least of this judgment
it may be found that there is a conflict with the findings of Goff J in the
case to which I have referred, given a few months later in the same year. I
follow the judgment of Goff J.
In my judgment
the plaintiffs are entitled to the declarations which they seek in the summons,
namely a declaration that Part II of the 1954 Act applies to the tenancies
created by the leases and that the rights of way included in such tenancies
continued after December 1980 in accordance with the provisions of section 24
of the 1954 Act. They are also entitled to a declaration that the defendant
company is not the landlord in relation to such tenancies for the purposes of
Part II of the Act and is not entitled to serve notice terminating such
tenancies under section 25 of the 1954 Act.
Judgment was
given for the plaintiffs, with costs.
