Landlord and Tenant Act 1954, Part II, sections 30(1)(f) and 31A(1)(a) and (b) — Two Court of Appeal and three county court hearings required to elucidate the application of these provisions to a preliminary issue — Provisions analysed in depth by Court of Appeal at second hearing — Tenants not required to make advance election whether to claim a tenancy of the whole or a part only of the holding — Section 31A provides an escape route or fall-back position — After all the litigation the registrar’s formulation of the preliminary issue was left unamended
Kensington property which was the subject of the considerable litigation in
this case consisted of an end-of-terrace house in Sumner Place with a rear
extension on the ground and first floors along the flank wall in Old Brompton
Road — The extension was reached from that road — Its position in relation to
the entirety of the property explains some of the problems in the case —
Following the termination of the lease of the property by the landlords’ notice
under section 25 of the 1954 Act the tenants applied for a new tenancy — The
landlords objected, relying on section 30(1)(f) of the Act — The county court registrar
ordered the trial of a preliminary issue as to the landlords’ entitlement to
oppose the grant, the registrar’s statement of the issue following closely the
wording of para (f) — The county court judge answered ‘no’ to the question
posed and the landlords appealed to the Court of Appeal — The Court of Appeal
criticised the judge for lack of necessary findings and remitted the case to
the county court to be tried by a different judge — Farquharson LJ in the Court
of Appeal made some comments which caused questions later and were explained by
the court in the present appeal — When the case got back to the county court a
different judge refused to amend the registrar’s formulation of the preliminary
issue — Hence the present appeal from his order
sought directions which would enable the issue under para (a) of section 31A(1)
to be decided first and the issue under para (b) to be decided second and
separately — In this way, if the tenants failed on the para (a) point they
would be able to express unqualified willingness to accept a tenancy of part of
the holding (the Old Brompton Road part) and succeed under para (b) — The
landlords’ submission was that if the tenants wished to rely on para (b) they
must make an advance election to abandon reliance on para (a) — It was
suggested that they would not satisfy para (b) if they sought to rely primarily
on para (a) and were willing to accept a tenancy of an economically separable
part of the holding only if they failed to obtain a tenancy of the entirety
under para (a) — The suggestion in regard to a duty to elect seemed to derive
some support from the observations of Farquharson LJ in the first Court of
Appeal hearing
Court of Appeal were in no doubt that the suggestion that the tenants needed to
make an advance election was wrong — The true position was as follows — The
relevant date for ascertaining the landlords’ intention was the date of the
hearing — If the primary question of the landlords’ intention and need for
possession was answered in favour of the tenants, that is, of course, the end
of the landlords’ opposition under the grounds in para (f) — If, however, the
landlords were to succeed under para (f), read alone, Parliament has provided
tenants with an escape route or fall-back position by section 31A(1)(a) and (b)
— Before answering the primary question in favour of the landlord the court
must go on to consider whether either para (a) or para (b) is satisfied — If
para (a) is satisfied, the tenant will be entitled to a new tenancy of the
whole holding — If para (a) is not satisfied, the tenant may still, under para
(b), succeed in obtaining a tenancy of part — He will, of course, have to
convince the court that he is willing to accept a tenancy of an economically
separable part of the holding and that the other requirements of para (b) are
satisfied
to this analysis of section 30(1)(f) and section 31A(1), the court decided that
there was no justification for interfering with the wording of the preliminary
issue in the form ordered by the registrar — Thus at the end of this fairly
lengthy process the parties were due to go back to the county court for the
matters to be decided in the light of the instruction now given
The following
case is referred to in this report.
Betty’s
Cafes Ltd v Phillips Furnishing Stores Ltd
[1959] AC 20; [1958] 2 WLR 513; [1958] 1 All ER 607; [1958] EGD 92; (1958) 171
EG 319, HL
This was an
appeal by the tenants, Romulus Trading Co Ltd, from the order of Judge Phelan,
in the West London County Court, whereby he refused to amend the form of a
preliminary issue ordered by the registrar in proceedings under the Landlord
and Tenant Act 1954 between the appellants and the respondent landlords, Henry
Smith’s Charity Trustees. The proceedings concerned the lease of a corner
property comprising 13 Sumner Place and 47 Old Brompton Road in South
Kensington, London SW7.
Michael
Driscoll (instructed by Nabarro Nathanson) appeared on behalf of the
appellants; David Neuberger QC (instructed by Denton Hall Burgin & Warrens)
represented the respondents.
Giving
judgment, NEILL LJ said: This is an appeal from the order dated March 16
1990 of His Honour Judge Phelan sitting in the West London County Court whereby
he refused to amend the form of a preliminary issue which is due to be tried at
a hearing beginning on September 24 1990.
It is the
second occasion on which this matter has come before the Court of Appeal*.
*Editor’s
note: The earlier decision (by Mustill and Farquharson LJJ and Sir Michael
Kerr) was given on November 30 1989 and reported at [1990] 2 EGLR 75.
The applicants
in the proceedings (Romulus Trading Co Ltd, whom I shall call ‘the tenants’)
are presently holding over as the tenants of a corner property which comprises
47 Old Brompton Road and 13 Sumner Place in South Kensington under a lease
which was granted to the tenants’ predecessors in title by Henry Smith’s
Charity Trustees (‘the landlords’).
No 13 Sumner
Place is a five-storey house at the end of a terrace. The flank wall overlooks
Old Brompton Road. It has a rear extension on the ground and first floor only
along that flank wall. The extension is known as 47 Old Brompton Road and is
reached from that road. It is used by the tenants as a bureau de change. In the
lease, dated November 21 1970 and granted for a term of 18 years and one
quarter of another year from September 29 1969 by the landlords to the tenants’
predecessor in title, there was a covenant by the tenants in clause 3(13)
restricting the use of 47 Old Brompton Road and one rear room on the ground
floor of 13 Sumner Place to that of a travel agency and offices in connection
therewith or such other user as may be approved by the landlords, and that of
the remainder of the premises, namely 13 Sumner Place, to that of a furnished
and unlicensed guest house. The lease was assigned to the tenants on August 15
1979.
On May 12 1987
the landlords served a notice to terminate the lease on December 25 1987 in
accordance with section 25 of the Landlord and Tenant Act 1954 (‘the Act’)
which stated that the landlords would oppose an application to the court for a
new tenancy on the ground specified in section 30(1)(f) of the Act. On
May 27 the tenants notified the landlords that they would not be willing at the
date of termination to give up possession of the property.
On September 9
1987 the tenants made an application to the West London County Court for a new
tenancy in accordance with section 24 of the Act. On November 20 1987 the
landlords served an answer repeating their objection to the grant of a new
tenancy.
On January 29
1988 the registrar at the West London County Court made an order for the trial
of a preliminary issue. The order provided:
The following
question to be tried as preliminary issue in this matter, namely whether the
respondents are entitled to oppose the grant of a new tenancy to the plaintiffs
on the grounds that on the termination of the current tenancy it is intended to
demolish or reconstruct the premises comprised in the holding or a substantial
part thereof, or to carry out substantial work of construction on the holding
or part thereof, and this could not reasonably be done without obtaining
possession of the holding.
The registrar
also gave certain directions for the trial including directions as to expert
evidence.
There then
ensued some correspondence between the parties in which reference was made to a
possible new lease restricted to 47 Old Brompton Road alone. It is sufficient
to refer to the concluding documents in that correspondence. In the last
paragraph of the fax dated September 16 1988 from the landlords’ solicitors it
was written:
We note that
you deny that our client has sufficient intent but that if we are successful
then you ought to be entitled to a new lease of 47 Old Brompton Road. We assume
that this is pursuant to the provisions of section 31A(1)(b). If that is
the case then our client accepts that your client would be entitled to a new
lease of that part.
There was a
reply to that by the tenants’ solicitors by fax on September 20 in which they
say:
We confirm
your understanding in the last paragraph of your fax of September 16 is correct
and note that your clients accept that our clients would be entitled to a new
lease of 47 Old Brompton Road.
Then a few
days later on September 26 1988 the solicitors for the tenants wrote again in
relation to the fax of September 16:
In respect of
your final paragraph, we note that your clients accept that should your clients
succeed in proving that they have the necessary intent (which is denied) then
our clients are entitled under S31A(1)(b) to a new lease of 47
Old Brompton Road. Accordingly, our clients will not be preparing any expert
evidence in relation to this aspect.
The
preliminary issue was tried by His Honour Judge Oddie at about the end of 1988.
He gave judgment on February 6 1989. Before I refer to the judgment, however,
it may be convenient to set out the relevant sections of the Act. First section
30(1)(f) provides one of the grounds on which a landlord may oppose an
application and it is in these terms:
that on the
termination of the current tenancy the landlord intends to demolish or
reconstruct the premises comprised in the holding or a substantial part of
those premises or to carry out substantial work of construction on the holding
or part thereof and that he could not reasonably do so without obtaining
possession of the holding.
Pausing there,
it will be seen that para (f) may give rise to a number of issues which
could include the following:
whether the
landlords’ intention is genuine;
whether the
work to be carried out constitutes substantial work of construction;
whether the
landlords could or could not reasonably do the work without obtaining possession
of the holding.
I turn next to
section 31A, which was inserted by the Law of Property Act 1969. That section,
so far as is material, is in these terms:
(1) Where the landlord opposes an application
under section 24(1) of this Act, on the ground specified in paragraph (f)
of section 30(1) of this Act the court shall not hold that the landlord could
not reasonably carry out the demolition, reconstruction or work of construction
intended without obtaining possession of the holding if —
(a) the tenant agrees to the inclusion in the
terms of the new tenancy of terms giving the landlord access and other
facilities for carrying out the work intended and, given that access and those
facilities, the landlord could reasonably carry out the work without obtaining
possession of the holding and without interfering to a substantial extent or
for a substantial time with the use of the holding for the purposes of the
business carried on by the tenant; or
(b) the tenant is willing to accept a tenancy of
an economically separable part of the holding and either paragraph (a)
of this section is satisfied with respect to that part or possession of the
remainder of the holding would be reasonably sufficient to enable the landlord
to carry out the intended work.
Finally, I should
read section 32(1A), which was another addition to the Act made by the Law of
Property Act 1969. That subsection is in these terms:
Where the
court, by virtue of paragraph (b) of section 31A(1) of this Act, makes
an order under section 29 of this Act for the grant of a new tenancy in a case
where the tenant is willing to accept a tenancy of part of the holding, the
order shall be an order for the grant of a new tenancy of that part only.
At the trial
before Judge Oddie the tenants accepted that the landlords intended to carry
out a substantial amount of work and that the work could not be carried out
under the terms of the existing tenancy. They argued, however, that the
requirements of section 30(1)(f) were not met because some of the work
was work of repair and most of the remainder was not structural work.
The judge
considered the evidence relating to the work which was to be carried out and
directed his attention both to the nature of this work and to the question
raised by section 31A(1)(a) as to whether the landlords could reasonably
carry out the work without obtaining possession of the holding and without
interfering to a substantial extent or for a substantial time with the use of
the holding for the purposes of the business carried on by the tenants. He
stated his final conclusion in these terms:
In my view,
‘construction must involve a structure, not merely refurbishment in ways not
involving the structure of an existing building. Accordingly, I accept Mr
Driscoll’s argument. It follows, therefore, that in considering what amounts to
the relevant work, I must disregard work which is not structural in that sense.
In my judgment, on the facts of this case, the work of reconstruction or
construction in the intended work includes that specified on p 4 of Mr
Driscoll’s argument. I would include the completion of the interior of the new
accommodation so built as part of the construction. I consider it also includes
demolition and replacement of the basement slab, the installation of staircases
and the provision of new drainage and hot and cold water system and bathrooms
where they did not exist before. If one disregards, as I must, the repair work,
which I have already referred to, and the structural work, which I have listed
above, then it seems to me that the rest of the work, although substantial in
amount, really comprises work of refurbishment and not of demolition,
reconstruction or construction works within the meaning of the Act. When one
considers the nature of the interference described by Joyce and Hudson
— ie two of
the experts who had given evidence —
in the use of
the holding, I conclude that there would not be substantial interference with
its use for the purpose of the tenant’s business. The answer to the question
put in the preliminary issue is therefore ‘no’.
It is not
necessary to examine the judgment in detail, however, because on the subsequent
appeal by the landlords to the Court of Appeal it was decided that the case should
be remitted to the county court to be retried by another judge on the basis:
(a) that the judge had not made any finding as
to whether the works which fell within para (f) of section 30(1)
amounted to ‘works of reconstruction of a substantial part of the premises
comprised in the holding’ or to ‘substantial work of construction on part of
the holding’: per Farquharson LJ, and
(b) that the judge had not identified the
relevant works for the purpose of section 31A(1)(a) and had not then
considered whether those works as distinct from the entirety of the works
proposed constituted ‘interference to a substantial extent or for a substantial
time with the use of the holding for the purposes of the business carried on by
the tenants’: also in the judgment of Farquharson LJ.
Nevertheless,
it is right to draw attention to a short passage in Judge Oddie’s judgment
where he identified the issue which had to be decided under section 31A. At p 3
of his judgment he said:
The tenant is
willing to accept a tenancy of that part of the building known as 47 Old
Brompton Road without 13 Sumner Place if it cannot obtain a new tenancy of
both. In particular, it is common ground that 47 Old Brompton Road is an
economically separable part of the entire holding, and that possession of the
remainder, namely 13 Sumner Place, would be reasonably sufficient for the
landlord to carry out the intended work. And so the factual issue which will
have to be resolved as the second main issue in the case [which] has to be
decided by the court is whether the landlord could reasonably carry out the
work without obtaining possession of 13 Sumner Place and without interfering to
a substantial extent, or for a substantial time, with the use of the holdings
for the purpose of a business carried on by the tenant. On this issue, the
tenant contends that if the works involved were rephased, then they could be
completed much sooner than the landlords say they could, with the tenants
remaining in possession, and without interference to a substantial extent or
for a substantial time with the use of the holding for the purposes of their
business. Proposals were advanced by the tenants’ surveyor as to how this might
be done. The landlord’s case is that these proposals are quite unrealistic, so
that the court could not hold that the landlord could not reasonably carry out
the relevant works without obtaining possession of the holding.
It seems clear
to me from this passage that the judge considered that the preliminary issue
might raise questions under subsection (1)(a) of section 31A but would
not raise any questions under subsection (1)(b) because
(i) the tenants were willing to accept a tenancy
of 47 Old Brompton Road if they could not obtain a tenancy of the whole;
(ii) 47 Old Brompton Road was an economically
separable part of the holding; and
(iii) possession of 13 Sumner Place would be
reasonably sufficient to enable the landlords to carry out the intended work.
When the case
reached the Court of Appeal at the beginning of November 1989, however,
subsection (1)(b) of section 31A had assumed a new significance. Counsel
for the tenants sought to raise a preliminary point. He sought to argue, as I
understand it, that the preliminary issue was bound to be decided in favour of
the tenants because they were willing to take a tenancy of 47 Old Brompton Road
alone. But this was a bad point for at least three reasons:
(1) because the preliminary issue had been argued
below on the basis that subsection (1)(b) did not have to be considered;
(2) because subsection (1)(b) did not
entitle the tenants to defeat the landlords’ opposition to a new tenancy except
to a limited extent; it was only a partial shield and could not lead to more
than a new tenancy of part: see section 32(1A) of the Act, and
(3) because the issues before the Court of Appeal
were whether the judge had reached the correct conclusions on the matters which
he had considered, namely whether the requirements of section 30(1)(f)
had been satisfied and how far the access and facilities which the tenants agreed
to give under a new lease affected the position. Furthermore it is in the
context of a preliminary point which did not begin to deal a knock-out blow to
the landlords’ appeal that one must consider what Farquharson LJ said about the
matter in his judgment (with which Mustill LJ agreed). Farquharson LJ said*:
At the outset
of this appeal the respondent took a preliminary point arising under section
31A(1)(b). It appears that in correspondence between the parties’
solicitors in 1988, prior to the hearing before Judge Oddie, the respondent
claimed to be entitled to a new tenancy of 47 Old Brompton Road on the basis
that it was an economically separable part of the holding comprised in the
original tenancy. This claim was conceded by the appellants’ solicitors. Before
this court Mr Driscoll on behalf of the respondent has argued that this
concession meant that the judge was bound to answer the question put to him in
the negative. The grounds for this argument were that even if the appellants
succeeded in proving the matter required of them by section 30(1)(f) the
fact that the tenant, ie the respondents, were willing to accept a new tenancy
of 47 Old Brompton Road meant that the appellant landlords could not satisfy
section 31A(1). Occupation by the tenant of 47 Old Brompton Road would not
prevent the landlord carrying out the intended works on 13 Sumner Place. The
fallacy in this argument was that in truth the respondent was only willing to
accept a tenancy of 47 Old Brompton Road if it could not obtain a tenancy of
both 47 Old Brompton Road and 13 Sumner Place. It was a fall-back position.
This meant that at the relevant time, namely at the date of the hearing, the
respondent was not willing to take a tenancy of no 47. Accordingly, in my
judgment, this point cannot be sustained.
*Editor’s
note: See [1990] 2 EGLR 75 at p 76G.
It seems to me
that, on a careful reading of what Farquharson LJ said, he meant no more than
that he rejected the argument that section 31A(1)(b) provided a complete
answer to the landlords’ case. I do not believe that either he or the other
members of the court were dealing with what matters might arise for examination
on the retrial or were suggesting that the tenants had to elect whether to
claim a tenancy of the whole or of a part only.
It is also to
be remembered that the question of intent under section 30(1)(f) has to
be judged at the date of the hearing and that evidence of this intent can be
admitted even though the intent was not formed in a provable form until after
the hearing had begun: see Betty’s Cafes Ltd v Phillips Furnishing
Stores Ltd [1959] AC 20. I see no reason why a similar approach should not
be adopted to evidence about the willingness of a tenant to accept a tenancy of
part (for the purpose of section 31A(1)(b)) or, indeed, about his
agreement to the terms of a new tenancy (for the purpose of section 31A(1)(a)).
On the hearing
of an application under section 24(1) of the Act, where the landlord relies on
the ground specified in section 30(1)(f) the court is required to
consider that ground in the light of section 31A. In my judgment, this means
that a tenant is entitled to put forward conditional arguments. For example, he
can say that he disputes the genuineness of the landlord’s intention, or, if it
is genuine, that the work satisfies section 30(1)(f), or, if section
30(1)(f) is satisfied, then he can say that the work can be carried out
by means of the access and the facilities contemplated by section 31A(1)(a),
or, if it cannot, that it can be done if the tenant were to accept a tenancy of
a part only of the holding and that he is willing to do this.
Accordingly,
in view of the conclusions which I have reached as to the meaning of what the
Court of Appeal decided last November and as to the scope of what can be argued
on the hearing of the preliminary issue, I would leave the issue in its present
form.
Agreeing,
NICHOLLS LJ said: On September 24 a judge sitting in the West London County
Court is due to embark on a hearing, for the second time, of a preliminary
issue which was directed in these proceedings in a form commonly used when a
landlord seeks to rely on ground (f) in section 30(1) of the Landlord
and Tenant Act 1954. That form closely follows the wording of ground (f)
itself. This formulation is none the less apt to embrace not only the issue
raised by ground (f) read by itself but also the provisions of section
31A(1), because section 31A(1) is a statutory provision dictating the answer
which, in prescribed circumstances, must be given by the court when ground (f)
is in issue between the parties.
At the
forthcoming hearing, as matters stand at present, the landlords intend to
submit that if the tenants wish to rely on para (b) in section 31A(1),
they must elect to abandon reliance on para (a). They must elect,
because if they seek to rely primarily on para (a), and they are only
willing to accept a tenancy of an economically separable part of the holding
under para (b), should they fail to obtain a tenancy of the whole under
para (a), then they do not satisfy para (b). They do not satisfy
para (b) because their willingness to accept a tenancy of part only is
not unconditional.
That is the
submission the landlords are proposing to make. It is in order to meet this
point that the tenants seek directions which will have the effect of the para (a)
issue being decided first and the para (b) issue being dealt with
secondly and separately. In this way, if the tenants fail on the para (a)
point, they will have an opportunity in court to express an unqualified
willingness to accept a tenancy of part of the holding. Hence, if they fail on
all else, they will succeed on para (b). It is common ground that,
leaving aside this election point, this is a case in which, if the tenants fail
on everything else, they will be entitled to a new tenancy of part only of the
holding under para (b).
I am in no
doubt that the landlords’ proposed submission, which has led to this appeal, is
misconceived. In my view, there is no question of the tenants needing to elect
as suggested. Neither the language nor the scheme of the statutory provisions
seem to me to admit of room for doubt on this. When ground (f) is raised
by a landlord, the primary question is whether the landlord has the requisite
intention and, if so, whether he could not reasonably do the intended works
without obtaining possession of the holding. The relevant date for ascertaining
the landlord’s intention is the time of
[1959] AC 20. If that primary question is answered in favour of the tenant,
that is an end of opposition ground (f). But if, reading ground (f)
alone, the landlord would succeed, Parliament has provided the tenant with a
further possible escape route. That is found in section 31A(1). Thus, before
answering the primary question in favour of the landlord, the court must go on
to consider whether either para (a) or para (b) of section 31A(1)
is satisfied. If the requirements of para (a) are satisfied, the tenant
will be entitled to a new tenancy of the whole holding. So the judge will have
to consider whether the tenant agrees to the inclusion in the terms of the new
tenancy of terms giving the landlord access and other facilities for carrying
out the work intended, and whether, if he does so agree, the other requirements
of para (a) are satisfied.
I pause there.
If the requirements of para (a) are satisfied, that will be an end to
opposition ground (f); the tenant will succeed on para (a). But
the matter does not rest there. A landlord is still not home. If para (a)
is not satisfied, there is a further step which must still be taken. Para (b)
provides a route by which a tenant, having failed to obtain a new tenancy of
the whole holding, may still be entitled to succeed to a lesser extent by
obtaining a new tenancy of part only. Accordingly, the tenant having failed on
para (a), the court will need to consider para (b): is the tenant
willing to accept a tenancy of an economically separable part of a holding and,
if so, are the further requirements of para (b) satisfied? If they are, section 32(1A) will apply.
I can see no
ground for thinking that Parliament intended that if a tenant seeks to rely on
para (a), para (b) is not to be open to him as a fall-back
position, or, I might add, vice versa. There are several features which point
away from Parliament having so intended. First, it is open to a tenant to rely
on para (a) even though his agreement to the inclusion of terms as to
access and facilities is a fall-back position which arises only if he fails on
ground (f) read alone. Thus a tenant may put a landlord to proof of his
intention under ground (f) or he may dispute that the proposed works
constitute demolition or reconstruction of the premises or a substantial part
thereof. His attitude may be that, if he fails on these points, he is agreeable
to the inclusion of terms as to access and facilities pursuant to para (a).
I can see nothing in the Act to suggest that such an attitude by a tenant would
put him outside para (a). If that is so under para (a), surely
the position must be the same under para (b).
Second, this
construction of the Act does not involve reading the phrase ‘is willing’ in
para (b) as applying to a case where a tenant is willing but only
conditionally. As with the landlord’s intention under ground (f), so
with the tenant’s willingness under para (b): this falls to be
ascertained at the time of the hearing. What matters is how things stand at the
conclusion of the case when the court comes to make its findings. If the
tenant’s attitude as established in evidence in the course of the hearing is
that he is willing to accept a tenancy of part only should he fail, for
example, on para (a), then when the court comes to decide para (b),
the tenant’s willingness will be unqualified and unconditional because the
qualification or condition, namely failure of the tenant on the other issues,
will by then have been satisfied.
Third, the
contrary view of the construction of the statute would lead to an altogether
extraordinary result. Even on the landlords’ contention it would always be open
to a court in this type of case to hear para (a) as a separate issue
first and, having decided that issue against the tenant and having given
judgment accordingly, to then go on and hear and determine para (b) as a
separate issue. At that stage the tenant would be able to give evidence of an
unqualified unconditional willingness to accept the tenancy of part only. So,
if all the other ingredients of para (b) were present, the tenant would
succeed on para (b). This is a highly unattractive conclusion. A riposte
which is available to a tenant if the proceedings are carved into pieces and
dealt with separately, but is not available if the proceedings are heard in
their entirety in one piece in the normal way, would be nothing short of
ludicrous. Parliament cannot have intended that the parties’ rights in relation
to the grant of a new business tenancy should be dependent on such procedural
niceties.
The linchpin
of the landlords’ case is a dictum of Farquharson LJ on the previous occasion
when these proceedings were before this court. For the reasons given by Neill LJ,
I, too, do not think that that dictum was intended as a general proposition
corresponding to the submission now being advanced by the landlords. The court
had no occasion to consider such a general proposition and, read in the context
of the issues before the court, Farquharson LJ is not to be understood as
having enunciated any such far-reaching proposition.
Accordingly,
in my view, the tenants’ fears are groundless because the landlord’s election
submission is erroneous. Accordingly, I see no reason to make any alteration in
the form of the issue which will come before the judge on September 24 1990.
Also agreeing,
STAUGHTON LJ said: There are two problems, the general and the
particular.
The general
problem is whether, and if so when, a tenant has to elect to accept a tenancy
of a separate part of a holding, pursuant to section 31A(1)(b) of the
Landlord and Tenant Act 1954. Must he do this (i) in his application to the
court for the grant of a new tenancy, or (ii) when he gives evidence at the
trial, or (iii) in his final submissions, or (iv) after the judge has given
judgment, or (v) after the determination of any appeal?
The answer, in
my judgment, is that the tenant does not at any stage have to elect, in the
sense of declaring that he wishes to have a new tenancy of part and does not
wish to have a new tenancy of the whole. It is desirable that he should, from
stage (i) onwards, make it clear that he wishes a new tenancy of part on the
assumption that he cannot have a new tenancy of the whole — if that be the
fact. But there is nothing in the statute which shows that he has to choose
between those remedies, until a final determination has been made. If, for
example, the case for a new tenancy of the whole fails at trial, the tenant can
ask the judge to order a new tenancy of part but still preserve his full rights
on appeal.
It is said
that this is inconsistent with the judgment of Farquharson LJ (with whom
Mustill LJ agreed) in the earlier proceedings. But there was no issue in those
proceedings as to whether Romulus Trading Co Ltd should have a new tenancy of
part, nor did it fall to be decided. I cannot read Farquharson LJ as expressing
any view on whether they might subsequently be entitled to a new tenancy of 47
Old Brompton Road.
That being the
answer to the general problem, it seems to me that there is no need to
interfere with the preliminary issue ordered on January 29 1988. It will be for
the judge at the trial to determine whether that issue does or does not include
the question whether there should be a new tenancy of part. If it does not, and
if the case for a new tenancy of the whole fails, he will then have to decide
when he should try the alternative case that there should be a new tenancy of
part — assuming that there is any issue as to that, which does not at present
appear likely.
I would leave
the preliminary issue untouched and leave the matter there.
Appeal
dismissed.