Landlord and Tenant Act 1954, Part II, section 29(3) — Application to court for new tenancies — Applications premature as having been made less than two months after the giving of the tenants’ requests for new tenancies — Appeal from county court judge’s dismissal of tenants’ applications — Whether landlord waived his right to rely on the prematurity of the applications to the court, alternatively whether he was estopped by his conduct from doing so — Judge’s decision upheld
in question were of stores and an adjoining lock-up shop, demised at different
times but both tenancies expiring at the same date, April 2 1986 — New
tenancies were requested by the tenants under section 26 of the 1954 Act by
notices dated June 25 1985 — The applications to the court for the new
tenancies were dated August 13 1985 — From then until December 1987, when the
respondent landlord’s counsel drew his solicitor’s attention to the matter, no
point was taken on behalf of the respondent to the possible invalidity of the
applications — Procedural steps had been taken during this period —
Respondent’s solicitor had given notice on June 25 1985, after receiving the
appellants’ requests, that the respondent would be opposing the grant of new
tenancies on the grounds set out in section 30(1)(a) and (c) of the 1954 Act,
but apart from that no question had been raised by way of objection to the
applications — As late as October 1987 answers filed on behalf of the
respondent repeated his opposition to new tenancies on the above grounds; the
answers also contained an application for interim rent under section 24A — The
judge, although holding that the prematurity of the appellants’ applications
was fatal to their validity, made a finding on which the appellants relied in
the Court of Appeal — He said that the appellants would have been led to
believe between June 1985 and October 1987 that new leases might well be
obtained through negotiation and that there was some prospect of success if
negotiations failed — One further point should be mentioned — The respondent’s
solicitor admitted that, although he knew in general terms of the time-scale in
section 29(3), he had not observed that the dates set out on the face of the
originating application showed that it was premature until his attention was
drawn to it by counsel in December 1987 — The judge had accepted this evidence
appellants’ arguments on appeal were based on waiver by election and on
estoppel, principally on the latter — The court did not take long to dismiss
the submission that the respondent landlord had waived the irregularity by
electing not to rely on it — It was essential for an election that the party
electing must not only know of the facts giving rise to the right to elect but
also that he has that right — Here the respondent himself knew nothing of the
defect or of any right to rely on it
showed a lack of knowledge of the right — The solicitor’s actual lack of
knowledge could not be treated as the respondent’s knowledge — There could be
no question of waiver by election
submission based on estoppel needed more consideration — Three things had to be
established: (a) a representation of fact; (b) reliance upon the representation;
and (c) detriment resulting from such reliance — As regards the representation,
the appellants relied on the respondent’s course of dealing with the
applications to the court and on the judge’s finding as to what the appellants
would have been led to believe — The difficulty was, however, that there was no
representation, either expressly or by conduct, that if negotiations failed the
respondent would not oppose the grant of new leases — In these circumstances
the court could not spell out of the respondent’s conduct in carrying on
without prejudice negotiations a promise that the only grounds of opposition to
new tenancies would be those raised at the outset under section 30(1) of the
Act — This decision really disposed of the submission on estoppel, but in case
it was wrong the court proceeded to consider the other two ingredients,
reliance and detriment
reliance, the appellants referred to the statement by Lord Denning MR in Brikom
Investments Ltd v Carr that ‘once it is shown that a representation was calculated to
influence the judgment of a reasonable man, the presumption is that he was so
influenced’ — Thus it was for the respondent in the present case to show, if he
could, that the appellants were not so influenced and did not rely on the
representation — The court, however, took the line that if they had been
satisfied that there was a clear representation to be spelt out of the
respondent’s conduct, and that the appellants had suffered detriment,
consistent with the assumption that the representation was true, they would
have been disposed to conclude, in the absence of contrary evidence, that the
appellants had relied on the representation
question of detriment to be considered — As the judge below had pointed out, the
appellants had called no evidence of detriment — They had argued, relying on
the judgment of Templeman LJ (as he then was) in Bristol Cars Ltd v RKH Hotels Ltd
(in liquidation) that the judge should have inferred detriment from the
circumstances — The crucial difference in that case, however, was that it was
there clear throughout that the tenants expected to get a new lease because
there was no opposition to it — That was not the position in the present case —
Moreover, in the present case, as it was impossible to say at what time any
representation had been made, it necessarily followed that it was impossible to
identify a time from which any detriment had been suffered — Appeal dismissed
The following
cases are referred to in this report.
Brikom
Investments Ltd v Carr [1979] QB 407; [1979]
2 WLR 737; [1979] 2 All ER 753; (1979) 38 P&CR 326; [1979] EGD 454; 251 EG
359, [1979] 2 EGLR 36, CA
Bristol
Cars Ltd v RKH Hotels Ltd (in liquidation)
(1979) 38 P&CR 411; [1979] EGD 176; 251 EG 1279, [1979] 2 EGLR 56, CA
Greasley v Cooke [1980] 1 WLR 1306; [1980] 3 All ER 710, CA
Kammins
Ballrooms Co Ltd v Zenith Investments (Torquay)
Ltd [1971] AC 850; [1970] 3 WLR 287; [1970] 2 All ER 871; (1970) 22
P&CR 74, HL
Peyman v Lanjani [1985] Ch 457; [1985] 2 WLR 154; [1984] 3 All ER
703, CA
This was an
appeal by the tenants, Stevens & Cutting Ltd from the decision of Judge
Main QC, at Guildford County Court on a preliminary issue, when he held that
the tenants’ applications for new tenancies were invalid. The tenancies were of
Mayford Stores, Mayford, Woking, and an adjoining lock-up shop. The landlord,
defendant below and respondent to this appeal, was Clare Augustus Anderson.
Edward Cole
(instructed by Trowers & Hamlins, who acted only in relation to the Court
of Appeal proceedings) appeared on behalf of the appellants; John Bryant
(instructed by Triggs Turner & Co) represented the respondent.
Giving
judgment, STUART-SMITH LJ said: This is an appeal from a judgment of His
Honour Judge Main QC at the trial of a preliminary issue at Guildford County
Court on October 13 1988. The learned judge held that the appellant’s
application under Part II of the Landlord and Tenant Act 1954 (the Act) for new
tenancies of premises known as Mayford Stores, Mayford, Woking, and of adjoining
premises consisting of a lock-up shop should be dismissed because the
appellant’s applications under section 24 of the Act for new tenancies had been
made less than two months after the making of their request for new tenancies
and because the respondent landlord was not prevented from relying on the
irregularity. The appellant appeals against that decision. Mr Cole contends on
behalf of the appellant company that the respondent has waived the right to
rely on the irregularity, either because he has elected not to do so or
alternatively that he is estopped from so doing.
The facts are
these. The respondent is a freehold owner of premises known as Mayford Stores,
Mayford, Woking, Surrey (‘the stores’), and of adjoining premises being a
lock-up shop (‘the shop’). By a lease dated November 1 1971 the respondent let
the stores to the appellant for a term of 15 years from April 3 1971. By a
supplemental lease dated July 9 1982 the respondent let the shop to the
appellant for a term of five years from April 3 1981. Each term expired on
April 2 1986. By notices dated June 12 1985, Shaikh Zafar Masood and Kauser
Masood, directors of the appellant company, purported to request a new tenancy
beginning April 3 1986 in pursuance of the provisions of section 26 of the Landlord
and Tenant Act 1954 in respect of each of the premises. By letter dated June 24
1985 the respondent’s solicitors pointed out that the tenant was the appellant
and, while not admitting the validity of the notices, indicated the
respondent’s opposition to any application to the court for new tenancies on
the grounds set out in section 30(1), paras (a) and (c), of the 1954 Act. By
notices dated June 25 1985 the appellant requested a new tenancy in respect of
each of the premises in pursuance of section 26 of the 1954 Act.
By letter
dated June 28 1985 the respondent’s solicitors gave the appellant notice of his
opposition to any application to the court for new tenancies on the grounds set
out in section 30(1), paras (a) and (c) of the 1954 Act. By
applications dated August 13 1985 the appellant applied to the court for the
grant of a new tenancy in respect of both the stores (no 8505259) and the shop
(no 8505258).
In each
application the hearing for directions was set down for September 24 1985. By
consent the hearing for directions in no 8505258 was on September 19 1985
adjourned generally with liberty to restore. On that date no 8505259 was struck
out, it not having been included in the consent application. That was an oversight
on the part of the solicitors for both parties. On November 18 1985 the
application in no 8505259 was restored by consent and adjourned generally with
liberty to restore. On March 13 1987 both matters were adjourned generally with
liberty to restore. On July 1 1987 directions were given. Inter alia the
respondent was to file an answer in 14 days in each matter. Time for filing
answers having been extended by the appellant’s solicitors, answers were filed
on October 7 1987.
It will be
observed that the applications for new leases were premature, because section
29(3) of the Landlord and Tenant Act 1954 provides that such an application
shall not be entertained ‘unless it is made not less than two nor more than
four months . . . after the making of the tenant’s request for a new tenancy’.
Application, made on August 13 1985, although complying with this provision had
the original requests been correctly framed, were made too soon in relation to
the effective requests the date of which is correctly given in the originating
applications.
However, no
objection on this score was made in the answers that were filed on October 7
1987. Those answers set out the respondent’s opposition to the granting of new
leases on the grounds set out in the 1954 Act, section 30(1), paras (a)
and (c). These were the only grounds relied on by the respondent in his
notice of opposition given in June 1985 and therefore the only grounds which
could be advanced in the answers, but it is to be observed that one of the
breaches of covenant relied on under section 30(1)(c) is failure to pay
rent, which properly belongs under section 30(1)(b) and in any event
failure after September 1985 is alleged, so that in the end the respondent
might have been unable to rely on this point. The answers also contain an
application for interim rent under section 24A of the 1954 Act.
Correspondence
produced at the hearing showed that between July and December 1985 negotiations
were proceedings between the parties and their surveyors. Each side was
alleging failure by the other to comply with repairing obligations under the
leases, and the rent payable under new leases, if granted, was discussed. On
December 11 1985 the respondent offered three-year terms at high rents, but the
appellant did not accept. Evidence was given by Mr Brown, the respondent’s
solicitor, that these negotiations continued until October 1987.
The judge made
an important finding upon which Mr Cole places reliance. He said that the
appellant would have been led to believe between June 1985 and October 1987
that new leases might well be obtained through negotiation and that there was
some prospect of success before the court if negotiations failed.
The next
development which led to the preliminary issue being tried occurred in December
1987. On December 14 Mr Brown, the respondent’s solicitor, had his attention
drawn by counsel to the appellant’s failure to comply with section 29(3) of the
Act. He admitted that although he knew in general terms of the time-scale laid
down, he had not until then observed that the dates set out on the face of the
originating application showed that the application was premature. The judge
accepted this evidence. Once alerted to the position, he notified the
appellant’s solicitors the next day. The respondent’s answer was amended to
raise this issue.
Election
Although not
in the forefront of his argument, Mr Cole submitted that the respondent had
waived the irregularity in the application by electing not to rely upon it. A
party may be deprived of the right to pursue a certain course of conduct if,
when faced with two alternative and inconsistent courses of action, he chooses
one rather than the other and his election is communicated to the other party.
It is, however, now established that before he can be said to have elected, the
party electing must know not only of the facts giving rise to the right but
that he has the right. In Peyman v Lanjani [1985] Ch 457 at p
487F, Stephenson LJ said:
Knowledge of
the facts which give rise to the right to rescind is not enough to prevent the
plaintiff from exercising that right, but he must also know that the law gives
him that right to choose with that knowledge not to exercise it.
The respondent
himself knew nothing of the defect or any right to rely upon it. Mr Cole submits,
however, that Mr Brown knew of the facts, namely the relevant dates, and must
be presumed to know the law. The conduct of the proceedings and negotiations
after receipt of the defective application, he argues, amounts to an election.
No doubt in the ordinary way a solicitor would be presumed to know the law; but
in this case that presumption was rebutted by Mr Brown’s evidence, which the
judge accepted. In these circumstances, I do not see how Mr Brown’s actual lack
of knowledge of the right can become the respondent’s knowledge of it. Once Mr
Brown became aware of the point, he acted promptly. In my judgment, there is no
question of waiver by election here.
Estoppel
Mr Cole’s main
submission is that the respondent is estopped from taking the point that the
application is defective. He relies upon the authority of Kammins Ballrooms
Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 and Bristol
Cars Ltd v RKH (Hotels) Ltd (in liquidation) (1979) 38 P&CR 411
for the proposition that in an appropriate case a landlord can be estopped from
taking the point that such an application is defective because it does not
comply with the statutory requirements as to date. In the former case the
landlords had indicated that they opposed the grant of a new tenancy on grounds
open to them under section 30 of the Act. They were not estopped from relying
on a defect in the tenant’s application which did not comply with section 29(3)
of the Act. In the latter case the landlord did not oppose the grant of a new
tenancy; after protracted negotiations the landlord realised that the tenant’s
request for a new tenancy under section 26 of the Act was defective, since it
failed to specify the date for commencement of the new tenancy. The landlord
was estopped from raising this point.
In order to
found an estoppel three things must be established: a representation of fact;
reliance upon the representation by the person to whom it is made; and
detriment resulting from such reliance.
In the case of
promissory estoppel, there must be a promise intended by the promisor to affect
his legal relationship with the promisee upon the faith of which the promisee
has acted to his detriment.
The
representation
Mr Cole
submits that there was a representation or promise by conduct that the landlord
would not rely on any other ground of opposition to the grant of a new lease
save those which he had specified under section 30(1) of the Act. No such
representation or promise can be spelt out from the landlord’s solicitor’s
letter of June 28 1985 giving notice that the tenant’s application would be
opposed on the grounds set out in section 30(1), paras (a) and (c)
of the 1954 Act, nor in the answer served on October 7 1987, also setting out
these grounds of opposition: see Kammins case and in particular per Lord
Diplock at pp 883H-884D.
Faced with
this difficulty, Mr Cole sought to rely upon the course of dealing with the
application to the court, for example by consenting to their adjournment and
the negotiations between the parties, and in particular on the judge’s finding
to which I have referred that between June 1985 and October 1987 the appellant
would have been led to believe that new leases might well be obtained by
negotiation and that there was some prospect of success before the court if
negotiations failed. But what is clear is that there was no representation
either expressly or by conduct that if negotiations failed the respondent would
not oppose the grant of a new lease. In this respect the case differs
materially from the Bristol Cars case, where the effect of the
landlords’ representation, both express and by conduct, was that they would not
oppose the grant of a new tenancy. In these circumstances I find it extremely
difficult to spell out of the landlord’s conduct in conducting without prejudice
negotiations a promise that the only grounds of opposition to a new tenancy
would be those already raised under section 30(1).
This
difficulty is accentuated by the question, when did the landlord’s conduct
amount to such a representation? When asked
this question in the course of argument, Mr Cole’s answer was, at the latest by
October 7 1987, the date the respondent’s answer was served. This answer is not
satisfactory, since it is clearly crucial that a date, even if only
approximate, is given, because it is only detriment suffered by the tenant in
reliance on the representation or promise that is relevant.
In my opinion,
therefore, no sufficient representation or promise can be spelt out of the
landlord’s conduct. If I am wrong, it is necessary to consider the two
remaining aspects.
Reliance
No evidence
was called on behalf of the appellant. The judge said that in the absence of
evidence he could not presume detriment. He made no specific finding about
reliance. Mr Cole relied on the decison of this court in Greasley v Cooke
[1980] 1 WLR 1306. That case was concerned with the question of the burden of
proving reliance on a representation. The headnote is misleading in suggesting
that it was concerned with the onus of proving detriment. Lord Denning MR at p
1311, citing his own judgment in Brikom Investments Ltd v Carr
[1979] QB 467 at p 483, said:
Once it is
shown that a representation was calculated to influence the judgment of a
reasonable man, the presumption is that he was so influenced.
It is then for
the representor, if he can, to show that the representee was not so influenced
and did not rely upon it. Waller LJ’s judgment is to the same effect. Both
these members of the court emphasised that the issue in the appeal concerned
propositions of law enunciated by the county court judge in these terms:
If the
defendant is to succeed she has to prove that she acted to her detriment as
a result of her belief.
There was no
question that she had acted to her detriment. Dunn LJ agreed and added only a
very short judgment, but he does say at p 1314:
The only
question before us is as to the burden of proof of the detriment. The judge
thought that the onus lay on the claimant to prove it.
With great
respect, I do not think this can be correct. There was ample evidence of
detriment; it did not need to be presumed and in my judgment could not be
presumed, though it may be inferred from certain primary facts.
For my part,
therefore, if I were satisfied that there was a clear representation or promise
to be spelt out of the respondent’s conduct, and that the appellant had
suffered detriment by or adopting a course of conduct consistent with the
assumption that the representation was true or the promise binding, I would be
disposed to conclude that in the absence of evidence to the contrary the
appellant had adopted that course in reliance on the representation or promise.
Detriment
The judge
expressed his conclusion on this matter as follows:
I have no
specific evidence from the tenants of any detriment suffered by them in
reliance upon their application and I am not prepared to assume such detriment
in the absence of specific evidence in a case where negotiations albeit over a
long period were all conducted against the background of the landlord’s
opposition to the grant of new leases which although clearly capable of being
abandoned by agreement never was so abandoned.
The Greasley
case does not assist the appellant on this aspect. Mr Cole submits that the
judge should have inferred detriment and he relied upon the judgment of
Templeman LJ in the Bristol Cars case. It is not clear whether evidence
was called in that case of detriment. I am prepared to accept that it was not.
At p 420 Templeman LJ said:
The lapse of
time between February 1976, when the tenants served their request, and April
1977, when the landlords sought to assert the invalidity of the request, is a
long time in the life of businessmen. The tenants were faced with an entirely
new situation — the danger of losing their premises in 1977 at a time when,
possibly, the property market had altered or the position as to alternative
accommodation had altered: any plans that they had made during that year, on
the assumption that they were going to stay, would be frustrated. Worse than
that, however, the position was that, whereas, as I have indicated, it seems
highly likely, to put it at its lowest, that the landlords and their
predecessors in title had had no grounds on which to oppose the grant of a new
tenancy, by April 1977, as a result of the passage of time, and (I suppose) the
landlords getting themselves organised, the landlords were in a position at
least to allege that they had the intention at that time of reconstructing the
premises, so that this delay that took place because the tenants were
blissfully thinking that they were bound to get a lease and that time was of no
importance radically changed the position of the landlords and faced the tenants
with an entirely new situation that meant that, if they had known of it
originally, they might have taken a very different course of action.
The last
reason was peculiar to that case. But Mr Cole urges that the others apply
equally to this case, with the added comment that here negotiations continued
for over two years. I do not agree. The crucial difference is that in that case
throughout the tenants expected to get a new lease because there was no
opposition to it. Here that is not so.
Moreover,
because it is impossible to say at what time any representation or promise can
be said to have been made, it seems to me to be equally impossible to infer
that any detriment was suffered from that time and as a result of the
representation or promise. If the representation was not made till October
1987, it cannot possibly be suggested that any detriment was caused between
then and mid-December when the respondent’s solicitors took the point.
For these
reasons I would dismiss the appeal.
Agreeing, FARQUHARSON
LJ said: The respondent is the freehold owner of premises known as Mayford
Stores in Mayford, Woking, Surrey, and of an adjoining shop.
The stores and
shop were let on separate leases, dated April 3 1971 and July 9 1982
respectively to the appellant, each term expiring on April 2 1986.
By notices
dated June 25 1985 the appellant requested a new tenancy in respect of each of
the premises pursuant to the provisions of section 26 of the Landlord and
Tenant Act 1954. On June 28 1985 the respondent gave notice to the appellant of
his intention to oppose any application to the court for new leases on the
grounds set out in section 30(1)(a) and (c) of the 1954 Act,
which relate to the tenant’s breaches of its covenants to repair and of its
other obligations under the leases.
The appellant
made application to the court for the grant of new tenancies in respect of both
premises on August 13 1985. In September 1985 summonses for directions were
adjourned generally and further adjourned from time to time until July 1 1987,
when directions were given. On October 7 1987 answers were filed by the
respondent giving particulars of his grounds for opposing the grant of leases
under the Act to the appellant and applying for interim rent under section 24A.
During the
period from July 1985, that is before the appellant’s application to the court,
until October 1987, when the respondent’s answers were filed, negotiations took
place between the parties for the granting of further leases and in respect of
disputes over the parties’ obligations to repair. Whether these negotiations
would have borne fruit was never determined because in December 1987 counsel
advised that the applications to the court under section 26 were premature.
This advice was correct in that section 29(3) of the Act provided:
No
application under subsection (1) of section 24 of this Act shall be entertained
unless it is made not less than two nor more than four months after the giving
of the landlord’s notice under section 25 of this Act or, as the case may be,
after the making of the tenant’s request for a new tenancy.
The
appellant’s applications were made before two months had expired from the
requests for new tenancies.
The respondent
amended his answers to include this additional ground, which was upheld by
Judge Main when he heard the applications on October 13 1988. It was, of
course, far too late for fresh applications to be made. The learned judge
dismissed the applications and the appellant now appeals to this court against
his order.
The appellant
argues that the learned judge should have found that the respondent had waived
the irregularity by:
(i) entering into negotiations for the grant of
new leases over a period of two and a half years, thus leading the appellant to
believe that they would be successful in obtaining further leases either by
grant from the respondent or by the judgment of the court, and
(ii) filing answers to the application on October
7 1987 seeking the determination of interim rents under section 24A of the Act.
It is
submitted that the knowledge of the respondent’s solicitor of the relevant
dates coupled with the provisions of the Act amounted to either:
(1) an election by the respondent to treat the
applications as valid, or
(2) a waiver of the irregularities, or
(3) an estoppel preventing him from relying on
the irregularities to defeat the application.
Counsel
further submits that in this context the knowledge of the solicitor must be
taken to be the knowledge of the respondent both as to law and fact, and that
the appellant suffered detriment as a result of the respondent’s conduct.
The first
question is whether the respondent waived his right to take the point that the
appellant’s applications were out of time by exercising his common law power of
election not to do so.
Where a party
has elected to pursue a right he has under a contract and has communicated his
decision to the other party, he cannot thereafter rely upon an alternative
right which is inconsistent with the one he has exercised. Thus, where it is
open to a party to a contract on a breach either to treat the agreement as at
an end or to affirm the contract and claim damages, he is bound by a decision
to take one course rather than the other. If he was ignorant of the relevant
facts constituting the breach which give him his right of election or of the
rights he is entitled to following the breach, then he will not be so bound and
can take a different decision when these matters become known to him: see Peyman
v Lanjani [1985] Ch 457.
In the present
appeal Mr Cole on behalf of the appellant argues that by negotiating with the
appellant for over two years about the terms of new leases the respondent must
be taken to have made an election to approve the appellant’s applications and
it was not open to him at the time he did so to act inconsistently by taking
the point that the applications were out of time. This submission has the
additional attraction from Mr Cole’s point of view that where a party has made
such an election it is not necessary to show that the other party has suffered
detriment or damage as a result of it.
In my
judgment, the present facts do not involve the exercise of a common law power
of election at all. In the case of Kammins Ballrooms Co Ltd v Zenith
Investments (Torquay) Ltd [1971] AC 850, where the facts were very similar,
involving the same point being taken, Lord Diplock said at pp 882H-883D:
So it becomes
necessary to consider whether the respondents did waive this requirement.
‘Waiver’ is a word which is sometimes used loosely to describe a number of
different legal grounds on which a person may be debarred from asserting a
substantive right which he once possessed or from raising a particular defence
to a claim against him which would otherwise be available to him. We are not
concerned in the instant appeal with the first type of waiver. This arises in a
situation where a person is entitled to alternative rights inconsistent with
one another. If he has knowledge of the facts which give rise in law to these
alternative rights and acts in a manner which is consistent only with his
having chosen to rely on one of them, the law holds him to his choice even
though he was unaware that this would be the legal consequence of what he did.
He is sometimes said to have ‘waived’ the alternative right, as for instance a
right to forfeit a lease or to rescind a contract of sale for wrongful
repudiation or breach of condition; but this is better categorised as
‘election’ rather than as ‘waiver’. It was this type of ‘waiver’ that Parker J
was discussing in Matthews v Smallwood [1910] 1 Ch 777.
The second
type of waiver which debars a person from raising a particular defence to a
claim against him, arises when he either agrees with the claimant not to raise
that particular defence or so conducts himself as to be estopped
a prohibition such as that imposed by section 29(3) of the Landlord and Tenant
Act, 1954, and other statutes of limitation. The ordinary principles of
estoppel apply to it.
I therefore
turn to the next ground of appeal, which Mr Cole places in the forefront of his
argument. He submits that the respondent is not entitled to take the section 29(3)
point on the ordinary principles of estoppel. Mr Cole supports this argument by
contending that by his conduct in entering into prolonged negotiations with the
appellant and applying to the court for interim rent under section 24A he has
represented to the appellant that the leases will be renewed pursuant to its
applications and that he would not take any point before the court which would
render the appellant’s applications unsuccessful. Mr Cole further argues that
by participating in the negotiations and not seeking alternative accommodation
for its business the appellant has relied upon the respondent’s representations
and suffered loss or detriment in consequence.
The first
question is whether the respondent has made such a representation. Certainly
there is no evidence that it was made orally, so if the submission is to
succeed the representation must have been made by the respondent’s conduct.
The findings
of fact are very attenuated, but it is evident that from the outset in June
1985 the respondent put the appellant on notice that he opposed its
applications for new leases, and he continued to express his opposition in the
answers he filed on October 7 1987. Further, we have been informed that the
negotiations, prolonged as they undoubtedly were, involved not only discussions
about the terms of any new leases but also the obligations of both parties
under the repairing covenants of the first leases.
For my part I
have difficulty on the evidence available in finding that any unequivocal
representation was made by the respondent by his conduct, and, if it was, when
the representation was made. The longer the negotiations proceeded, the easier
it is to infer such a representation, but it is difficult to make such a
finding based on the length of time in the absence of any other evidence
showing that the purpose of the negotiations was to grant new leases. These
negotiations took place against a backdrop of opposition by the respondent to
such a grant.
The high point
of Mr Cole’s argument is to be found in the judgment at para 18:
Evidence was
given by Mr Brown, the respondent’s solicitor, that these negotiations
continued until 1987. The applicants would have been led to believe between
June 1985 and October 1987 that new leases might well be obtained through
negotiation and that there was some prospect of success before the court if
negotiations failed.
This does not
involve an express finding that the appellant’s belief was raised by any
unequivocal representation on the part of the respondent, but it is fair to say
that it could not have arisen from any other source. With some hesitation, I
conclude that the judge’s finding in that paragraph necessarily involves a
correlative finding that a representation of the kind complained of was made by
the respondent and that the appellant relied upon it.
As the
argument developed in the course of the hearing, it became clear that the
crucial issue in the case was whether the appellant has proved that it suffered
some detriment or damage as a consequence of relying on the representation that
the learned judge found the respondent had made.
The first
point taken by Mr Cole was that the burden of establishing such a detriment did
not lie upon the appellant and it was for the respondent to disprove it. He
based this contention on the decision of this court in Greasley v Cooke
[1980] 1 WLR 1306. Although Dunn LJ made such an observation in terms (ie that
the burden of proving detriment lay upon the representor) an analysis of the
case shows that its ratio was that where a representation was calculated to
influence the conduct of a reasonable man, the presumption is that he was so
influenced. The case is concerned with the circumstances where reliance upon a
representation may be inferred. It is for the party claiming detriment to show
that he sustained it. The headnote of the case is to that extent wrong.
The difficulty
in this case for the appellant is that it called no evidence of detriment. It
was plainly open for it to show, if it was the case, that as a result of its
understanding that it would be granted new leases it took no steps to find
other accommodation to continue its business in the neighbourhood. No such
evidence was ever called. Mr Cole argues that the court may properly infer such
detriment from the circumstances. He points to the judgment of Templeman LJ in Bristol
Cars Ltd v RKH (Hotels) Ltd (in liquidation) (1979) 38 P&CR 411
where in similar circumstances he said at p 420:
The lapse of
time between February 1976, when the tenants served their request, and April
1977, when the landlords sought to assert the invalidity of the request, is a
long time in the life of businessmen. The tenants were faced with an entirely
new situation — the danger of losing their premises in 1977 at a time when,
possibly, the property market had altered or the position as to alternative
accommodation had altered: any plans that they had made during that year, on
the assumption that they were going to stay, would be frustrated. Worse than
that, however, the position was that, whereas, as I have indicated, it seems
highly likely, to put it at its lowest, that the landlords and their
predecessors in title had had no grounds on which to oppose the grant of a new
tenancy, by April 1977, as a result of the passage of time, and (I suppose) the
landlords getting themselves organised, the landlords were in a position at
least to allege that they had the intention at that time of reconstructing the
premises, so that this delay that took place because the tenants were
blissfully thinking that they were bound to get a lease and that time was of no
importance radically changed the position of the landlords and faced the
tenants with an entirely new situation that meant that, if they had known of it
originally, they might have taken a very different course of action.
It is not
clear from this passage whether the learned lord justice was making findings on
any evidence given in the case, nor indeed does the report reveal whether any
evidence of that nature was given. Furthermore, in that case the landlord had
from the outset made it clear that it would not oppose the grant of a new lease
and the negotiations continued upon that basis until the reversion was acquired
by the plaintiff. Such inferences — if they were inferences — drawn by the
learned lord justice regarding detriment would be found more readily in such
circumstances. The case does not assist the present appellant in this context.
The learned
judge in the present case did not make any finding as to when the appellant’s
belief which he described in the passage already cited in fact arose. Plainly
if detriment was suffered it must have occurred, if estoppel is to be relied
upon, after the appellant’s belief was induced by the respondent’s conduct. If,
in truth, the appellant suffered loss in the sense, for example, of failing to
seek and obtain alternative commercial accommodation, it would be necessary to
establish when and in what circumstances such loss occurred. As already
observed, evidence of this nature was not available to the judge and he was
correct, in my judgment, in holding that no detriment or damage to the
appellant had been proved.
It follows
that the respondent was not estopped from taking the point under section 29(3)
that the court had no jurisdiction to hear the applications.
I would
dismiss the appeal.
The appeal
was dismissed with costs.