Pointon York Group plc v Poulton

Lease of business premises — Right to use car-parking spaces — Whether spaces constituting premises occupied by respondent tenant for purposes of application for new lease — Whether use of premises amounting to occupation — Section 23 of Landlord and Tenant Act 1954 — Appeal dismissed The appellant let a suite of offices on the first floor of a building to the respondent company. The property demised under the lease was expressed to include easements and rights granted in connection with the respondent’s business, including: “The right during normal business hours for all purposes connected with the use by the tenant of the demised premises (a) to use the parking spaces subject to the rights of the landlord to substitute equivalent alternative parking spaces.” The respondent sublet the premises by an underlease that expired three days before the end of its own term under the lease. It wished to reoccupy the premises after the sublessee vacated, and it informed the appellant of that intention. In order to reoccupy, it required the premises to be decorated, recarpeted and equipped with telephone and computer equipment. The decorating and carpeting were carried out by the sublessee, pursuant to its contractual obligations under the underlease. That work was completed the day after the underlease ended, when the respondent’s director visited to confirm that the works were suitable for its business occupation. The computer and phone installation was planned for the following week or two, after which the respondent proposed to move in furniture and staff. However, the day after the respondent’s term ended, the appellant changed the locks and clamped a number of cars parked by the respondent’s employees in the parking spaces. The respondent served a notice on the appellant, claiming a new tenancy under Part II of the Landlord and Tenant Act 1954. The validity of the notice depended upon whether the respondent occupied the premises as required by section 23 of the 1954 Act, such that the tenancy continued under Part II. In proceedings brought by the respondent to establish that matter, issues arose as to whether: (i) the parking spaces that the respondent had the right to use under the lease were “premises” that could be “occupied” for the purpose of section 23; and (ii) the situation in the three days between the end of the underlease and the end of the lease could in law constitute occupation for that purpose. The judge found in favour of the respondent, and the appellant appealed. Held: The appeal was dismissed. (1) An incorporeal hereditament could constitute “premises”. That had been the meaning given to “premises” before the enactment of the 1954 Act, in the application of section 17 of the Landlord and Tenant Act 1927. Section 17 of the 1927 Act and section 23 of the 1954 Act served similar purposes and, given that the tenor of the 1954 Act was in favour of enlarging the rights of business tenants, it was unlikely that parliament had intended to depart from that meaning of “premises”: Whitley v Stumbles [1930] AC 544 applied; Land Reclamation Co Ltd v Basildon District Council [1979] 1 EGLR 85; (1979) 250 EG 549 and Jones v Christy (1963) 107 SJ 374 distinguished. (2) A right to occupy a parking space was capable of being “occupied” for the purposes of the 1954 Act. On a correct interpretation of the lease in the instant case, the right was conferred, during normal business hours, to the exclusion of the landlord and other persons deriving title under her, unless the landlord chose to substitute equivalent spaces. The right was, in effect, a right to occupy the parking spaces for discontinuous periods of part of a day. Occupation of a property could take place notwithstanding that the property was to be occupied for discontinuous periods: Smallwood v Sheppards [1895] 2 QB 627 applied. Whether there was, in fact, occupation was a question of fact and degree: Graysim Holdings v P&O Property Holdings [1996] 1 EGLR 109; [1996] 03 EG 124 applied. The judge had been entitled to find that the parking spaces were occupied on the facts of the instant case. (3) It was established that, for the purposes of sections 37 and 38 of the 1954 Act, a tenant did not need to be physically present in the premises in order to occupy them, so long as: it was using them in some way incidental to the ordinary course of business life; the premises were not occupied by any other business occupier; and they were not used for any non-business purpose. There was no justification for applying any different meaning to the word “occupy” for the purposes of section 23: Bacchiocci v Academic Agency [1998] 3 EGLR 157 applied. The judge had been entitled to find that the use of the premises by the respondent between the expiry of the underlease and the end of the lease term was occupation for business purposes. Paul de La Piquerie (instructed by Andrew M Ford, of Leicester) appeared for the appellant; Mark Wonnacott (instructed by Harvey Ingram, of Leicester) appeared for the respondent. Sally Dobson, barrister