Business tenancy–Lease for 16 years from Christmas Day 1956–Landlord’s notice to terminate ‘on the 25th day of December 1972’ held good–Ground for possession in section 30 (1) (g) held established though landlord sought premises for the purposes of a business to be carried on by him in partnership with his wife–Further point as to compensation certificate under section 37 of Act of 1954–Court obliged to take point as to position of Jersey executor of deceased tenant–Absence of UK grant of representation bars grant of certificate or (semble) other relief under the statute–Illuminating discussion as to action to be taken by the court in such circumstances–Landlord’s anxiety for ‘tenant’s’ present summons to be dismissed
This was an
originating summons by Mrs Ellinor Betty Sims-Hilditch, widow, and purported
executrix of John Henry Sims-Hilditch, seeking, in substance, a declaration
that notices served on her by the defendant, Mr John Philip Simmons, purporting
to terminate business tenancies of land at Crowhurst Park, Crowhurst, Sussex,
were invalid and of no effect; alternatively, an order for the grant of a new
tenancy.
Mr M
Lyndon-Stanford (instructed by Capel Cure, Peachey & Bates) appeared for
the plaintiff, and Mr L Hoffmann (instructed by McKenna & Co) represented
the defendant.
Giving
judgment, GOULDING J said: This is an application by originating summons
entitled ‘In the matter of the Landlord and Tenant Act 1954,’ and it relates to
claims regarding business premises made under Part II of that Act as
subsequently amended. The defendant, Mr John Philip Simmons, is the owner of
property known as Crowhurst Park, near Battle, in Sussex, and from time to time
he granted tenancies of several parts of his property to the late Major
Sims-Hilditch, whom I will refer to as ‘the tenant.’ The present plaintiff is the widow of the
tenant; she claims to be the executrix of his last will, and counsel stated
that she has proved that will in the island of Jersey, though not yet in any
part of the United Kingdom. To the question of the plaintiff’s position as
executrix I shall return later.
By her
originating summons, as amended, the plaintiff claims several different heads
of relief. I can conveniently take them one by one. The first is stated in
paragraph 1A of the summons, and it claims a declaration that the tenancy of
premises generally known as the stable flat, Crowhurst Park, granted by the
defendant to the tenant by an agreement dated December 16 1960 is a business
tenancy to which Part II of the Landlord and Tenant Act 1954 applies, with a
further declaration that that tenancy is still subsisting. It became clear from
the uncontradicted evidence of the defendant that the necessary facts to
support that claim do not exist; in particular, the flat in question has not
been occupied for a considerable time. Accordingly, the claim under paragraph
1A of the summons was not pursued. The next claim is in paragraph 1B of the
originating summons and is for a declaration that three notices purported to be
given by the defendant under the provisions of section 25 of the Act of 1954
are invalid and of no effect. Those notices relate to three separate tenancies
which are agreed to be business tenancies within Part II of the Act of 1954.
The principal tenancy agreement or lease is dated December 23 1958 and
comprises the mansion house known as Crowhurst Park and certain adjoining
grounds. Then there is a second agreement dated February 6 1959 comprising a
piece of land adjoining the parcels demised by the first document and thirdly,
there is a brief tenancy agreement relating to a walled garden at Crowhurst
Park and some stable accommodation. That third instrument is dated July 2 1961.
A separate notice, as I have said, was served in respect of each of those
tenancies, but all the notices are mutatis mutandis in the same form,
and it will be sufficient to refer to that regarding the principal property,
the mansion house and grounds. The notice is given on a printed form and drawn
in accordance with the relevant statutory regulations. It reads:
Landlord and
Tenant Act 1954. Landlord’s notice to terminate business tenancy. To Mrs
Ellinor Betty Sims-Hilditch, executor of Major John Henry Sims-Hilditch
deceased, of Melbourne House, St John, Jersey, tenant of premises known as
Crowhurst Park, Crowhurst, Sussex, together with the pleasure grounds belonging
to the said mansion house.
1 I, John Philip Simmons, of Breadsell Farm,
Breadsell Lane, St Leonards-on-Sea, Sussex, landlord of the above-mentioned
premises, hereby give you notice terminating your tenancy on the 25th day of
December 1972.
2 You are required within two months after the
giving of this notice to notify me in writing whether or not you will be
willing to give up possession of the premises on that date.
3 I would oppose an application to the court
under Part II of the Act for the grant of a new tenancy on the ground that I
intend to occupy the premises for the purposes or partially for the purposes of
a business to be carried on by me in them.
4 This notice is given under the provisions of
section 25 of the Landlord and Tenant Act 1954. Your attention is called to the
notes overleaf.
The notice is
dated January 21 1972 and is signed by the defendant’s solicitors as his agents
for the purpose. I need not read the common-form printed notes on the back. To
explain the criticism which is made of that form of notice I must refer to
section 25 of the Act of 1954. Subsection (1) contains provisions which are
necessary because of the enactment in the preceding section, section 24, that a
tenancy to which Part II of the Act applies shall not come to an end unless
terminated in accordance with the provisions of that part of the Act. The
subsection takes that up and says, subject to a proviso that is not now
material:
The landlord
may terminate a tenancy to which this Part of this Act applies by a notice
given to the tenant in the prescribed form specifying the date at which the
tenancy is to come to an end (hereinafter referred to as ‘the date of
termination’).
Subsection
(2):
Subject to
the provisions of the next following subsection a notice under this section
shall not have effect unless it is given not more than twelve nor less than six
months before the date of termination specified therein.
Then follow
two subsections which are clearly designed to ensure that the statutory notice
which terminates a business tenancy shall not abridge the contractual rights of
the tenant. Subsection (3) concerns periodic tenancies which could have been
brought to an end by notice to quit apart from the Act, and then subsection (4)
deals with tenancies for a fixed term in the following words:
In the case
of any other tenancy a notice under this section shall not specify a date of
termination earlier than the date on which apart from this Part of this Act the
tenancy would have come to an end by effluxion of time.
Subsection
(5):
A notice
under this section shall not have effect unless it requires the tenant, within
two months after the giving of the notice, to notify the landlord in writing
whether or not, at the date of termination, the tenant will be willing to give
up possession of the property comprised in the tenancy.
Subsection
(6):
A notice
under this section shall not have effect unless it states whether the landlord
would oppose an application to the court under this Part of this Act for the
grant of a new tenancy, and if so, also states on which of the grounds
mentioned in section thirty of this Act he would do so.
It is of
course those last two subsections, (5) and (6), that require the statements
contained in paragraphs 2 and 3 of the form of notice which I have read. The
attack which is made on the notice is quite a short one, and it arises under
subsection (4) of section 25, although to decide it it is necessary to bear in
mind the rest of the provisions of the section. What is said is that the notice
offends subsection (4) in that it specifies a date of termination earlier than
the date on which, apart from the Act, the tenancy would have come to an end by
effluxion of time. I therefore have to look at the instruments by which the
respective tenancies were granted to see what the last-mentioned date would
have been. The principal lease of 1958 demised the property comprised therein
for the term of 16 years ‘from the 25th day of December 1956.’ The second instrument provided that the
tenancy was granted for the period of the first lease; the third instrument was
also made by reference, namely for the duration of the lease on the mansion
house. Accordingly, I am concerned in each case with a term of 16 years from
Christmas Day 1956. It is agreed, having regard to the use of the preposition
‘from,’ that the first day of that term was St Stephen’s Day, commonly called
Boxing Day, December 26 1956, and accordingly the last day of the term is
Christmas Day, December 25 1972. The tenant, or his successor in title, was
entitled to remain in possession until the very last moment of Christmas Day
1972. In other words, the moment of termination of the contractual tenancy by
effluxion of time would have been that point of time, that instant of midnight,
which divided Christmas Day from Boxing Day. Which then is the date on which,
in the language of subsection (4), the tenancy would have come to an end?
I have
considered that question, with helpful arguments from counsel, in the light of
all the other language of section 25, but in the end it seems to me that the
words of subsection (4) are themselves sufficiently clear. Mr Hoffmann, for the
defendant, puts this question: ‘On which day of the calendar does the year come
to an end by effluxion of time?’ The
natural answer, in his submission, is on December 31, not on January 1. I
accept that submission. I think the natural usage is that for which Mr Hoffmann
contends. Further, there is sufficient authority to show that it is proper so
to use language in relation to tenancies. I refer to the case of Sidebotham
v Holland [1895] 1 QB 378. That was a decision of the Court of Appeal on
a yearly tenancy, but the language and the reasoning used, in my judgment, can
fairly be extended to the case of a fixed term. Accordingly, when in paragraph
1 of the notice the defendant gave notice to the plaintiff terminating each
tenancy on Christmas Day 1972, he did, in my judgment, refer to the date on
which, apart from the Act, the tenancies would have come to an end by effluxion
of time, and he did not offend against subsection (4) of section 25. Paragraph
2 of the notice was relied on by Mr Lyndon-Stanford for the plaintiff, because
it requires the person receiving the notice to state whether she will be
willing to give up possession of the premises on that date. Mr Lyndon-Stanford
says that that points to giving up possession before the last moment of
Christmas Day and therefore the construction I have put on paragraph 1 must be
wrong. I do not think so. It would be an affirmative answer to paragraph 2 to state
the occupier’s willingness to give up possession at the last moment of
Christmas Day, and that would make the paragraph harmonise with the Act and
with paragraph 1 of the notice, both interpreted in what I have held to be the
ordinary use of language. Accordingly, the claim made by the plaintiff in
paragraph 1B of the originating summons must fail. I should mention one other
authority that was cited on that point, Ladyman v Wirral Estates Ltd
[1968] 2 All ER 197. In my judgment it does not assist either side here,
because the particular point which I have had to deal with was in effect
conceded by the tenant, as appears at the foot of page 198 of the report
The next claim
on the originating summons, and the only remaining one apart from formal claims
for further or other relief and costs, is contained in paragraph 1C of that
document: ‘Alternatively,’–that is, on the footing that the section 25 notices
were good–‘an order for the grant by the defendant to the plaintiff pursuant to
Part II of the Act of 1954 of a new tenancy.’
The defendant resists that, as has already
paragraph (g) of subsection (1) of section 30 of the Act of 1954. The
subsection begins: ‘The grounds on which a landlord may oppose an application
under subsection (1) of section 24 of this Act’–that is, an application for a
new tenancy–‘are such of the following grounds as may be stated in the
landlord’s notice under section 25 of this Act or as the case may be, under
subsection (6) of section 26 thereof, that is to say’–paragraph (g)–‘subject as
hereinafter provided, that on the termination of the current tenancy the
landlord intends to occupy the holding for the purposes, or partly for the
purposes, of a business to be carried on by him therein, or as his
residence.’ The words ‘subject as
hereinafter provided’ relate to subsection (2) of section 30, which is not
material in the present case. Subsection (3), added by the Law of Property Act
1969, enables the landlord, where he has a controlling interest in a company,
to treat the business to be carried on by the company as if it were a business
to be carried on by him personally. The defendant has given evidence and been
cross-examined, and I find without hesitation that he has a genuine and
substantial intention for the occupation of the several premises for the
purposes of a business. The real objection that is made by the plaintiff to
that contention of the defendant is that in the plaintiff’s submission the defendant
wants the occupation of the premises for a business to be carried on not by
himself alone, but in partnership with his wife.
The
expressions used by the defendant in cross-examination were, as one might
expect in the case of a husband and wife living happily together, not
altogether unambiguous as regards partnership. On the other hand there is, in
my judgment, a significant piece of evidence in the shape of a printed form of
application for caravan pitches which the defendant says he has had printed
with a view to using it in the business that he desires to pursue. It is
headed: ‘Site application form to J P and E J Simmons. Please reserve a site
for my caravan at Crowhurst Park,’ etc. Although the point is not altogether an
easy one, taking that form put in evidence by the defendant together with his
oral evidence, I find that his present intention does relate to a business to
be carried on by the defendant in partnership with his wife. However, in my
judgment that is not an obstacle to his contention here. The defendant, in the
ordinary use of language, will nonetheless occupy the premises and will
nonetheless carry on business in the premises for the existence of the
partnership. Where two persons carry on business in common as partners each of
them occupies the firm’s premises and each of them carries on business.
Accordingly, the analogy between the present controversy which settles on the
words ‘business to be carried on by him,’ and the dispute considered by the
Court of Appeal in Clift v Taylor [1948] 2 KB 394 is not a false
one. It was there held on a different statutory enactment relating to the
rights of tenants that occupation by a firm of which the landlord was a partner
was occupation by the landlord himself within the meaning of the enactment.
Similarly, I hold here that the carrying-on of a business by the defendant in
partnership with his wife will be a carrying-on of business by the defendant
himself within the meaning of section 30 (1) (g). Thus the plaintiff’s case
fails also under paragraph 1C of the originating summons.
The plaintiff
asks, in those circumstances, for a certificate under subsection (4) of section
37 of the Landlord and Tenant Act 1954, the same Act which I have been
discussing hitherto. Subsection (1) of section 37 is long, and I will not read
it, but it provides that in certain cases a tenant of business premises who
fails to obtain a new tenancy under the Act will be entitled on quitting the
holding to recover compensation in money from the landlord. Then subsection (4)
says: ‘Where the court is precluded from making an order for the grant of a new
tenancy under this Part of this Act in the circumstances mentioned in
subsection (1) of this section, the court shall on the application of the
tenant certify that fact.’ Thus the
certificate can be given only on the application of the tenant, that is, the
person in whom the relevant tenancy is vested. Here I come back to the
difficulty I feel owing to the fact that the tenant is dead and the plaintiff,
claiming to be his executrix, has not obtained a grant of probate in this
country. It is pressed on me that if the defendant does not object, it is
really nothing to do with the court whether the regular course has been
followed in that respect or not. I find difficulty in accepting that
contention. There is no doubt that the claim made by the plaintiff here is as
executrix and that the notices served by the defendant on her were addressed to
her as executrix. Whatever may have been the position before the Judicature
Acts, however, in my judgment the present High Court in which the common law,
equitable and ecclesiastical jurisdictions are united cannot disregard an
omission to obtain probate if it is brought to the court’s attention. Of
course, the plaintiff can sue before probate, but in the ordinary course she
cannot obtain relief from the court without producing a grant. In my judgment
the parties cannot, as it were, contract out of those requirements of the law
which are not imposed for their protection alone. I therefore propose to order
that upon due proof of the plaintiff’s title as executrix of the will of the
tenant she be at liberty to apply in chambers for a certificate under
subsection (4) of section 37 of the Landlord and Tenant Act 1954, and except
for that purpose I stay all further proceedings under the originating summons.
Mr Hoffmann
drew his Lordship’s attention to the provision in section 64 (1) of the Act of
1954 extending current tenancies to the date on which an application for a new
tenancy was finally disposed of in the courts. The defendant, said counsel,
would not like to face a situation in which it could be claimed that the
present proceedings had not been finally disposed of, so that possession could
not be regained in four and a half months’ time. If the plaintiff’s application
for a certificate were made in the present proceedings it could hardly be said
that there had been a final disposal, and he (Mr Hoffmann) sought an order
dismissing the proceedings and leaving the plaintiff to make an originating
application for a certificate once United Kingdom representation had been taken
out.
Mr
Lyndon-Stanford said that as far as perfecting title was concerned, the
plaintiff was (counsel thought) in a position to appoint herself as trustee of
the lease, which would cure the technical defect to which his Lordship had
drawn attention. He (counsel) respectfully suggested that if his Lordship was
minded to take the title point, the application should not have been
entertained in the first place; certainly now the condition of application for
a certificate should be only that the plaintiff produce or appoint a proper
trustee.
Goulding J
said that he was not sure about that. He was inclined to dismiss the summons,
rejecting the application for a certificate on the ground that he had no
admissible evidence that the plaintiff was executrix of the late tenant. That
would not hold matters up unless Mr Lyndon-Stanford could and did appeal.
Mr
Lyndon-Stanford said that he certainly would appeal, the amount of the
compensation in question being more than £4,000. In any event, he (counsel)
doubted whether the summons could be dismissed; he thought no order would be
the correct course, because there was a summons in the action still
outstanding, an application by the defendant for an interim rent.
Mr Hoffmann
said that that raised an interesting point. When section 64 was enacted, the
only application which could be made under Part II of the Act was an
application for a new tenancy, and plainly that was what was referred to. Under
the new section 24A inserted in 1969, the landlord might apply to the court for
determination of an interim rent, and by section 24A (2), ‘a rent determined in
proceedings under this section shall be deemed to be the rent payable under the
tenancy from the date on which the proceedings were commenced.’ The words ‘the proceedings’ in that
subsection referred to the application under section 24A and not to the
originating summons applying for a new tenancy, and this was so even though
section 24A applications were
say, in the tenant’s proceedings applying for a new lease. So here, the
question would be whether the ‘application’ in section 64 included a section
24A application which would have the effect of keeping an originating summons
in which such an application had been made alive solely for the purpose of
determining an interim rent. He (counsel) proposed to resolve this question in
the present proceedings by withdrawing his application for an interim rent. He
remained concerned by the prospect of an appeal from the dismissal of the
summons. If there was an appeal going into next term . . .
Mr
Lyndon-Stanford asked leave to confer briefly with Mr Hoffmann. After a short
discussion, he said that he thought there was a prospect of agreement on some
issues, and the question of the certificate could be left to be mentioned in a
few days’ time when his Lordship had ruled on the substantive points which
remained. That left only the question of costs. He (counsel) asked for the
costs of the application for an interim rent, and for an order that that
application be not renewed. As for the costs of the action generally, he asked
for an order that he pay only a proportion of the defendant’s costs, on the
basis that he was entitled to challenge the defendant’s intention to occupy and
see whether it was a firm one.
Mr Hoffmann
said that the practice on this issue was referred to in the White Book
at page 897, rubric 62/2/64, and at greater length in volume 2 of Woodfall,
page 1383. The law as there stated had however been affected by the amendment
of 1969.
Under the
earlier procedure the tenant had to go to court to contest the landlord’s
intention to occupy, or he had no right to a section 37 (4) certificate. That
situation had now been remedied. As for the more general point in Woodfall
about the plaintiff having to establish his case to the court’s satisfaction,
that was true of any action; nevertheless, a plaintiff who was opposed and was successful
normally got his costs.
Goulding J
said that he would make no order that day, but that the order he was disposed
to make would, among other matters, dismiss the originating summons with costs.
In a further judgment delivered, after renewed argument, on July 31, his
Lordship held (1) that the court could not, despite the defendant’s attitude,
recognise the plaintiff as ‘tenant’ for the purposes of the Act of 1954 until
she had perfected her title by taking out United Kingdom probate, and (2) that the
plaintiff could not appoint herself into the position, occupied by the
deceased, of trustee of the tenancy for a company, since the title of an
executor to appoint a trustee under section 36 of the Trustee Act 1925 could be
established only by a proper grant of representation in the United Kingdom.
Accordingly, the plaintiff could pursue her claim to a section 37 certificate
only upon proof of probate in this country. An order was made by which the
plaintiff’s summons, including the application for a certificate, was dismissed
with costs, without prejudice, however, to the plaintiff’s right to apply for a
certificate by further originating summons on proof of appropriate
representation in the United Kingdom; and the defendant’s summons for
determination of an interim rent was (with his consent) dismissed with costs.
The defendant’s consent to this course was given on the basis that the
originating summons was dismissed, and Mr Hoffmann observed that he (the
defendant) would seek a reconsideration of the position in the event of an
appeal.
