Business lease – Part II of Landlord and Tenant Act 1954 – Lease of commercial premises to appellant for fixed term – Term defined to include any period of extension or holding over – Tenancy excluded from protection of Part II of 1954 Act – Appellant continuing in occupation after expiry of fixed term – Respondent landlords obtaining possession order – Whether appellant entitled to protection of 1954 Act in respect of occupation following expiry of fixed term – Whether 1954 Act validly excluded – Appeal allowed
In 2004, the respondent council granted a lease of commercial premises to the appellant for a fixed term from January 2003 to September 2004 at an annual rent of £7,500. By clause 1 of the agreement, the term of the lease was defined to include “any period of holding over or extension… whether by statute or at common law or by agreement”. Since the premises formed part of an area that the respondents wanted to redevelop, they obtained the permission of the court to exclude the tenancy from the provisions of sections 24 to 28 of Part II of the Landlord and Tenant Act 1954 concerning security of tenure. By the terms of the lease, the respondents were entitled to determine the tenancy at any time by giving 28 days’ written notice.
The appellant remained in occupation after the expiry of the fixed term and, in July 2005, the respondents served notice requiring her to give up possession within 21 days. The appellant failed to do so and the respondents brought a claim for possession, contending that the notice had terminated the appellant’s right of occupation. The appellant argued that, following the expiry of the initial fixed term, she had remained in occupation under a periodic tenancy, which was a business tenancy protected under Part II of the 1954 Act since those provisions had been excluded only in respect of the fixed term created by the 2004 lease.
Allowing the possession claim, the judge held that the parties had not entered into a new periodic tenancy but that the appellant had instead held over on the terms of the original lease. She considered that since the words of extension in clause 1 of the lease provided that any period of holding over was part of the term created by the lease, the order excluding the term from the protection of the 1954 Act applied equally to the period of holding over.
The judge granted a further possession order in respect of storeroom premises, holding that the appellant’s tenancy of those premises had been validly determined. The appellant appealed.
Held: The appeal was allowed in part.
(1) The provisions of sections 24 to 28 of the 1954 Act could be excluded only if the term created by the lease was a term of years certain; that was the effect of section 38(4). Where the term of a lease included any period of holding over or extension, as was the case with the appellant’s lease by virtue of clause 1, that lease was not for “a term of years certain” within section 38(4). Since the contracting-out purported to apply not only to the initial fixed term but also to any extension, it was invalid in its entirety such that the appellant had at all times enjoyed security of tenure. Her tenancy had continued after September 2004 under section 24 of the 1954 Act and had not been determined by the respondents’ notice.
(2) The appellant had occupied the storeroom under a tenancy at will that had been validly determined by the respondents. The appellant’s claim to the contrary, which depended upon an allegation that a binding agreement had been reached for a three-year term of those premises, had formed no part of her pleaded case and accordingly could not be the subject of any finding by the court.
The appellant appeared in person; Naomi Hawkes (instructed by the legal department of Newham London Borough Council) appeared for the respondents.
Sally Dobson, barrister
