Rent review periods — Application by landlords before beginning of each period — Delay — Whether landlords lost right to review — Whether time of the essence — Judgment for the landlords
By a lease dated July 24 1967 and made between the Prudential Assurance Co Ltd as landlords and the defendant company as tenants the defendants held a term of the property at Chequers Court, Huntingdon, for 99 years from June 24 1965 at a yearly rent of £30,000 for the first rent period expiring on June 23 1989. The rent for the 21 years commencing on the termination of the first period was defined in the definition clause of the lease to be the rack rental value of the premises as at the last quarter day but one before the end of the preceding rent period as agreed between the parties or, failing such agreement, “the amount determined as the yearly rack rental value of the demised premises as at such day by an arbitrator to be appointed by the President for the time being of the Royal Institution of Chartered Surveyors on the application of the Landlords made before but not more than two quarters before the beginning of the next succeeding rent period …”.
The Prudential failed to make any application for the appointment of an arbitrator within the time-limits specified by the lease. The plaintiffs acquired the reversionary interest in November 1989 and contended that the presumption that time was not of the essence for the appointment of an arbitrator applied and that the rent could be reviewed. The defendants contended that time was of the essence because the meaning of the review rent was in the definition clause of the lease and this contained the timetable.
Held Plaintiffs’ application for a declaration allowed.
It is accidental whether the timetable is in the rent review clause or not. Whether time is of the essence is a question of substance not form. In the ordinary case the rent review machinery is not a matter of substance. Whether time is in a definition clause or in a substantive clause in the deed makes no difference. The landlords were entitled to make their application for the appointment of an arbitrator.
Nicholas Dowding (instructed by McKenna & Co) appeared for the plaintiffs; and Donald Campion (instructed by McGrath Payne Skillington) appeared for the defendants.
