Skinns v Greenwood

Long tenancy — Right to acquire freehold — Exceptions — Appellant tenant seeking to acquire freehold of property — Lease determinable on tenant’s death on not less than one month’s notice — Section 3(1)(b) of Leasehold Reform Act 1967 excluding from freehold acquisition regime leases with notice provision of not more than three months — Judge holding that lease falling within section 3(1)(b) — Purpose of legislation — Proper construction of exception — Appeal dismissed The appellant tenant held a 90-year lease of a house in Nottinghamshire, from the defendant landlord, at a fixed rent of £520pa. The lease provided that after the tenant died, her executors, or the landlord, could terminate the tenancy by giving “not less than one month’s notice”. It also contained a covenant against assignment or subletting. The tenant subsequently sought to acquire the freehold of the property under sections 1(1) and 1AA of the Leasehold Reform Act 1967, and, to that end, she obtained a valuation and served notice on the landlord. In his reply, the landlord disputed the tenant’s right to acquire on the ground that the lease did not satisfy the requirement of being a “long tenancy”. He contended that the lease fell within the exception set out in section 3(1)(b) of the 1967 Act, namely that a notice period of “not more than three months” applied to the provision for the lease to be terminated after the tenant’s death. He submitted that the notice clause in the lease, providing for a minimum notice period of one month, left it open to the parties to give less than three months’ notice. At first instance, the judge held that the appellant was entitled to acquire the freehold. He ruled that the wording of section 3(1)(b) created a maximum notice period, and that any minimum notice period within a lease was irrelevant for those purposes. That decision was overturned on appeal on the ground that section 3(1)(b) was satisfied as long as there was a right, if not an obligation, to determine within three months. The tenant appealed. Held: The appeal was dismissed. The 1967 Act was intended to give to tenants having leases of more than 21 years the right to acquire the freehold. Section 3(1) was meant to exclude from the Act tenancies that were genuinely intended to be determinable upon the death or marriage of the tenant. In order to do so, however, it needed to distinguish such tenancies from those that were simply devices to avoid the consequences of the Act. Such a device could consist of a landlord creating a lease that was determinable upon death or marriage, but with a very long notice period. The length of the notice period could be such as to defeat the overall purpose of the legislation, locking the tenant into what was, in reality, a long tenancy, without the right to acquire the freehold, or any meaningful right to terminate on the occurrence of the specified events. Section 3(1)(b) was intended to solve that problem, and to ensure that only leases that were genuinely intended to be determinable upon death or marriage were excluded from the Act. The purpose of section 3(1)(b) could be achieved only by construing it as covering not only leases, under which there was an obligation to give less than three months’ notice but also those where there was a right to do so. In such a lease, the tenant, or its executors, would be genuinely free to determine upon the occurrence of the specified events. The tenant’s lease in the instant case was of that type, and was precisely the kind of lease to which the section 3(1) proviso was intended to apply. Any construction of section 3(1)(b) to the contrary, was to be rejected: Proma Ltd v Curtis [1990] 1 EGLR 117 considered. Jason Cox (instructed by MacLaren Britton, of Nottingham) appeared for the appellant; Stanley Gallagher (instructed by Fraser Brown, of Nottingham) appeared for the respondent. Sally Dobson, barrister