Respondents lessees of premises – Appellants claiming against respondents for non-payment of non-domestic rates in respect of premises – Justices finding respondents surrendering leasehold interest by operation of law – Appellant appealing – Appeal allowed
The appellant council made a complaint against the respondents, for payment of non-domestic rates for the period 1998-1999, in respect of 188 Station Road, Surrey. In June 1989 the respondents entered into a 24-year lease in order to use the property for business purposes. In 1994 the respondents sold the business to Amcon Resources Ltd but remained as directors. In September 1995 Amcon and its subsidiary, Accountancy Appointments, evicted the respondents. The respondents wrote to the landlord in November 1995 indicating that unless they were permitted to re-occupy the property within 28 days, they would consider the lease null and void. The landlord accepted rent from Accountancy Appointments while they occupied the property, although the lease was never assigned. In June 1996 the landlord’s agent wrote to the respondents demanding rent for the quarter commencing June 1996. The respondents did not pay the quarter rent and no further demand was made or action taken to recover rent arrears. The property was currently empty and the business rates had not been paid.
On these facts, as found by the justices, the court concluded that there was no surrender of the lease by operation of law as the landlord had not acted inconsistently with the terms of the lease. However the court held that the landlord’s acceptance of rent from a third party and the failure to pursue the respondents for the rent arrears, taken with the respondents’ letter of November 1995 to the landlord, did amount to a surrender by operation of law. Accordingly the court held that the respondents were not liable under section 45(1) of the Local Government Finance Act 1988.
Held: The appeal was allowed.
It was important to consider exactly what the position was at each of the various stages of the transaction and it was essential to identify the precise occasion upon which the surrender of the lease by operation of law occurred. The justices, however, failed to adopt such a detailed, analytical approach and therefore their reasoning could not be sustained. It was not possible to answer the question raised, as the evidence was not sufficiently set out, in terms of the justices’ findings of fact. The decision was quashed and was to be remitted.
David Forsdick (instructed by the solicitor to Runnymede Borough Council) appeared for the appellants; Adrian Jack (instructed by Reid Minty) appeared for the respondent.
Sarah Addenbrooke, barrister
