Landlord and tenant–Rent review clause–Apparent conflict between rent review clause and user clause in lease of business premises–Rent review clause framed with reference to a hypothetical lessee paying a market rent–User clause, however, restricted use of premises to use by Consumers’ Association (the present tenants) and associated organisations for office purposes–Submission by tenants that the hypothetical lessee envisaged by the rent revision clause must be regarded as subject in a literal sense to the restriction in the user clause, is restricted to use for offices for the Consumers’ Association and associated organisations–Held that this construction was unacceptable as being inconsistent with the references in the review clause to ‘market rent,’ ‘open market’ and ‘vacant possession’–Tenants’ construction in conflict with underlying purpose of the revision clause–Stultifying effect of user clause on assignment clause–Case an illustration of dangers of using common form clauses without necessary adaptation to circumstances of lease
This was an
appeal by the Consumers’ Association Ltd from a decision of Whitford J in an
action by The Law Land Company Ltd, the respondents to the present appeal, for
declarations in regard to the true construction of certain provisions in a
lease, dated December 10 1972, of premises at 13-14 Buckingham Street, Strand,
London WC2, demised by the respondents to the appellants.
Edward Nugee
QC and Terence Etherton (instructed by Harris Nyman & Co) appeared on
behalf of the appellants; Gerald Godfrey QC and W Poulton (instructed by Lee
& Pembertons) represented the respondents.
Giving the
first judgment at the invitation of Buckley LJ, TEMPLEMAN LJ said: This is an
appeal from an order of Whitford J dated June 27 1979; it involves the
construction of a lease which, like an old sock, contains strands of different
colours and textures roughly stitched together. The question is whether, in
valuing the market rent as defined by the rent review clause, the valuer must
assume that the demised premises may be let to anyone, or must assume that the
demised premises can only be let to the present tenants, the Consumers’
Association or their associated organisations. The statement of the question
indicates the answer.
By the lease
dated December 10 1972, the respondent plaintiff landlord, the Law Land Co Ltd,
demised the premises 13-14 Buckingham Street, Strand, London, to the appellant
defendants, Consumers’ Association, from March 25 1973 for a term of 15 years.
Consumers’ Association is a company limited by guarantee. The rent reserved by
the lease was £55,400 per annum, subject to provisions for rent review. The lease
referred to the parties to the lease as ‘the Lessor’ and ‘the Lessees,’ and by
clause 3(2)(a) those expressions, where the context so admits, are deemed to
include the persons deriving title under them respectively. By clause 2(11)(b)
the tenants covenanted not, without the prior written consent of the landlord,
to use or permit the demised premises or any part thereof to be used, other
than as offices of the Consumers’ Association and its associated organisations.
Clause 3(5) conferred on the landlord a power which was exercised and requires
a revision of the rent from March 25 1978, and provides a similar power of
revision exercisable on March 25 1983. The rent, from each revision date, shall
be whichever is the greatest of (a) the rent payable immediately before the
revision date; (b) a rent equal to the market rent; and (c) the initial rent of
£55,400 per annum. By clause 3(8) and in the events which have happened, the
market rent falls to be determined by a surveyor who has been appointed for that
purpose.
The object of
a rent revision clause is to enable the landlord to obtain the market rent;
that is to say, the highest rent anyone is willing to offer at the reversion
date. I expect therefore to find that the market rent mentioned in clause 3(5)
is not greater or less than the landlord would have been able to obtain and
would have been willing to accept on the relevant revision date from anybody
who required the premises for his own use for office purposes.
Clause 3(5),
paragraph (a)(ii), defines the market rent; it means the yearly rent at which
the demised premises, fully repaired in accordance with the provisions of the
lease, might reasonably be expected to be let in the open market with vacant
possession by a willing lessor for the then remainder of the term thereby
granted without taking a premium, and subject to the provisions of the lease
other than the rent thereby reserved, there being disregarded any of the
tenants’ goodwill and any of the tenants’ improvements. That clause envisages
the existence of an open market, an offer with vacant possession, a willing
lessor and, by implication, a willing lessee. The rent review clause of the
lease requires the tenants to pay from the reversion date a rent as high as the
landlord could obtain from any hypothetical lessee on the reversion date, on
the footing that the hypothetical lessee was competing in the open market and
would be given vacant possession. There would be no market rent or open market
if the premises could not be used by the hypothetical lessee, and there would
be no point in offering vacant possession to the hypothetical lessee if the
premises could only be occupied and used by the Consumers’ Association and its
associated organisations before and after the grant of the hypothetical lease
to the hypothetical lessee.
Mr Nugee, on
behalf of the tenants, submitted that the provisions of the hypothetical lease
must be identical with the provisions of the actual lease and therefore that
the hypothetical lessee will be subject to a covenant in the terms of clause
2(11)(b) not, without the prior written consent of the landlord, to use the
premises otherwise than as offices of the Consumers’ Association and its
associated organisations. Mr Nugee put his point forcefully and logically by
saying that all one does is to copy out the whole words of the lease in a
hypothetical form. But it is not possible to copy out the hypothetical lease
until one knows the identity of the hypothetical lessee. In the same way as
clause 2(11)(b) could not have been completed originally until the name of the
lessee was known, so in my judgment that clause cannot be completed in the
hypothetical lease until the name of the hypothetical lessee is known. As Mr
Godfrey, for the landlord, submitted, the hypothetical lease necessarily has
the name of the hypothetical lessee in blank as a party, and clause 2(11)(b)
must likewise be in blank, just as the draft of the original lease was in blank
in its inception. In my judgment the submission made by Mr Nugee on behalf of
the tenants is inconsistent with the references in the rent review clause to
‘market rent,’ ‘open market’ and ‘vacant possession,’ and produces results
which are both incredible and unworkable. If the hypothetical lease contains a
provision that the demised premises can only be used by Consumers’ Association
and its associated organisations, no hypothetical lessee could, or would, agree
to take such a lease from the landlord without first procuring a binding
agreement
higher than the rent payable by the hypothetical lessee to the landlord. But
Consumers’ Association would not be willing to pay an underlessee of the
hypothetical lessee a higher rent than they would be willing to pay the
landlords as hypothetical lessees themselves.
Mr Nugee was
driven to concede that if the tenants’ construction of the rent review clause
were correct, the rent determined by the valuer is the rent which the landlord
would be willing to accept and the tenants, Consumers’ Association, would be
willing to pay for the demised premises at the revision date. The surveyor is
to determine what rent the landlords and the tenants would agree after
negotiations between them and between them alone. I do not understand how the
surveyor could arrive at a market rent, or any other rent, in these
circumstances.
Mr Nugee
suggested that the surveyor might first assess the rent which would be payable
by a hypothetical lessee if he were permitted to use the premises for his own
offices; in other words, a rent for a lease which was not on offer. But then Mr
Nugee submitted that the surveyor might, or would, or ought to make a discount
from this rent, which to my mind is the market rent, in order to give effect to
the fact that only Consumers’ Association could use the premises. The discount,
it was submitted, might take into account Consumers’ Association’s capacity to
pay the true market rent according to its financial position; the surveyor
might also take into account whether Consumers’ Association required larger or
smaller premises, or whether these premises were just right for them during the
remainder of the term, and if he found that Consumers’ Association might
require larger or smaller premises, then in some way, and for some reason which
I am quite unable to understand, the discount he would then make on the true
market rent would be higher than it would be if the demised premises were
exactly suitable in size and facilities for the business of Consumers’
Association and so remained until the year 1985. Mr Nugee did not accept that
the market rent payable by Consumers’ Association should be the rent which
Consumers’ Association would have to pay on the open market in the
neighbourhood to secure equal comparable premises on the revision date.
It is quite
plain that neither the landlord nor the tenants could have intended that the
rent should vary according to the capacity of the tenants to pay or according
to the requirements of the tenants for accommodation; the language of the rent
review clause is not apt to produce this result, and in my judgment any
assessment of a rent which the landlord and the tenants would agree on the
revision date must be hopeless speculation even though carried out by an
experienced valuer grimly determined to do his best.
We were
referred to authority, but in my judgment none of it was helpful on the
construction of this lease and this rent revision clause. The first case was Tomlinson
(Valuation Officer) v Plymouth Argyle Football Co Ltd (1960) 6 RRC
173. In that case the district valuer, in determining the annual value of a
football ground, based his assessment of £2,250 rateable value on the rent
actually paid by the football club, plus interest on certain improvements which
had been effected. On the evidence the club was in fact the only possible
tenant, because nobody else could, or would, take on this particular football
ground. The club submitted that they were only willing to pay £500 and
therefore the rateable value must be based on that sum. This was a case in
which the nature of the premises themselves destroyed any possibility of a
comparable letting, and the valuer was driven, as the Court of Appeal opined
with measured caution, to take the figure put forward by the landlord and the figure
put forward by the tenant, and after the close of the case to make some sort of
guess halfway between the two. But it does not follow from that case, in which
there were exceptional premises, and no method of arriving at a comparable
rental value, that that course is to be inflicted on premises in London which
can be let, no doubt with the greatest of ease and for which there is a large
market, on the assumption that the market has entirely disappeared and the only
people in London who are interested in this property are Consumers’ Association
as tenants and the present landlord as landlord. No landlord in his right mind
would be prepared to enter into a lease which has that effect.
The second
case to which we were referred was Inland Revenue Commissioners v Clay
[1914] 3 KB 466. In that case the property was attractive to one possible
purchaser, and it was held that on a sale in an open market it must be assumed
that intending purchasers were aware of the fact that the property was
especially attractive to a particular potential purchaser and that its value
would be thereby increased. That merely shows that on the open market there has
to be taken into account every possible purchaser, including one who may be
prepared to offer more than others. In my judgment it is of no assistance to
the present submission, which is that the property must be judged as though
there were only one bidder in the market.
Similarly in
the next case, Vyricherla Narayana Gajapatiraju v Revenue Divisional
Officer, Vizagapatam, [1939] AC 302; that case decided that where property
has unusual features or possibilities the valuing officer who is valuing the
land on compulsory acquisition must ascertain as best he can from the materials
before him the price a willing purchaser would pay for the land with those
features or potentialities. Again it seems to me that is a far cry from the
present case, where we were asked to say that as a result of this lease,
‘market value’ means the price which would be payable by one purchaser without
regard to any other purchaser.
Finally we
were referred to the case of F R Evans (Leeds) Ltd v English Electric
Co Ltd (1977) 36 P & CR 185. That was a case in which Donaldson J, who
was upheld by the Court of Appeal, construed a rent review clause, but again
the property was an unusual property. The learned judge held that it was to be
assumed that there was in fact a rent on which a willing lessor and a willing
lessee could and would agree as being the rent which the premises were worth,
and that is common ground. Then he held
that the
negotiations were to be assumed to be friendly and fair but otherwise conducted
in the light of all the bargaining advantages and disadvantages existing on
that date; that for the purposes of the clause the willing lessor was not the
plaintiff landlords but a hypothetical person with the right to dispose of the
premises on an 18-year lease, not afflicted by personal ills such as a
cash-flow crisis or importunate mortgagees nor being someone to whom it was
largely a matter of indifference whether he let . . . or waited for the market
to improve but wanting to let the premises at a rent which was appropriate to
all the factors which affected the marketability of the premises . . .
including the market rent of competitive premises, ie premises which were
directly comparable or would be considered as viable alternatives . . .; that,
similarly, the willing lessee was a hypothetical person, not being, nor
necessarily having any of the characteristics of the defendant tenants, actively
seeking premises to fulfil needs which the demised premises could fulfil,
taking account of similar factors to those taken into account by the willing
lessor but similarly unaffected by liquidity problems, governmental or other
pressures to boost or maintain employment in the area and so on; that the rent
was to be agreed in the light of all the circumstances which in fact affected
the demised premises and in theory affected the hypothetical lessor and lessee,
but that any circumstance which affected the plaintiff landlords or the
defendant tenants but which would not affect the hypothetical lessor and lessee
was irrelevant; that the fact that there was no other property on the market
which provided the accommodation and facilities provided by the demised premises
was relevant, but that the hypothetical tenant, being neither reluctant nor
importunate, would take account of the alternative of taking a lease of two or
more other premises; that the fact that it was very likely that the defendant
tenants would have been the only potential lessees of the premises was only
indirectly relevant, since a single potential lessee was nevertheless to be
assumed to be a willing lessee and to remain a willing lessee so long as the
willing lessor did not press his demand for rent beyond the point at which he
was ceasing to act as a willing lessor and at which a willing lessee would
cease to be such.
Again, I find
no assistance from that case on the construction of the particular rent
revision clause with which we are concerned or on the meaning of the provisions
of this lease; but I observe that the learned judge laid stress on the fact
that this assessment was to be done on the basis of a hypothetical landlord and
a hypothetical tenant, ignoring largely their individual circumstances, but
paying attention to the nature of the property and whether there was comparable
property available for the hypothetical tenant. In so far as that case was of
any assistance at all, it assists me in the belief that this rent revision
clause was not intended to be determined by the factors which Mr Nugee has
mentioned, which are purely personal to Consumers’ Association.
There is,
moreover, this further objection: If Mr Nugee is right, the whole of this rent
review clause, with all its references to market rent, an open market and
vacant possession, really only amount to this, that the parties have agreed
that the revised rent should not be less than the rent which the landlord and
the tenants would agree on the revision date, or the rent which the surveyor
determines that they would have agreed. I find it impossible to construe clause
3(5) as having that meaning, and I have no doubt that if the parties had been
asked to sign a lease which plainly said that, each would have refused to do
so.
Mr Nugee
submits that the landlords are protected because they cannot receive less than
the initial rent of £55,400, and thus if the surveyor determines that
Consumers’ Association would only be prepared to pay a peppercorn rent, the
landlord is protected. But the rent review clause is designed to achieve a
higher rent for the landlord; the existence of the guaranteed minimum rent of
£55,400 cannot affect the true construction of the rent review clause itself
and in my judgment this clause is designed to obtain for the landlord a higher
rent, not in accordance with the subjective unknown bargaining between this
particular landlord and these particular tenants, but by reference to
comparable properties being let to anybody in the market-place. As I have
indicated, the result of the tenants’ construction is inconsistent with any
rational intention on the part of the landlord and the tenants; it is
inconsistent with the obvious object and intention of this common form rent
revision clause; it is inconsistent with the language of the rent revision
clause itself, and in particular with the reference to market rent and open
market. On the other hand, the clause works perfectly well if the provisions
which have to be included in the hypothetical lease are the provisions set
forth in the original lease with the necessary modification that the name of
the lessee will be different and therefore the name in clause 11(b) will be
different. Once that is accepted then it seems to me that the lease, including
the rent review clause, makes good sense and there is no difficulty, either for
the surveyor or for the court.
Whitford J
held that clause 2(11)(b) in any event allowed an assignee of the tenants to
use the demised premises as offices for that assignee. Mr Godfrey, who appeared
for the landlord, sought to uphold this conclusion. He and the learned judge
relied on the provisions of clause 2(13), which contains complicated provisions
regarding assignments and underlettings. He said, with force, that clause 2(13)
is only consistent with the possibility of assignments and underlettings to
assignees and subtenants who are third parties; that is to say, persons who are
not the Consumers’ Association and are not associated organisations of
Consumers’ Association itself; and, as he says, clause 2(13) points towards
permitted assignments and underlettings which cannot be unreasonably refused by
the landlord, and it must follow that clause 2(11)(b) cannot have been intended
to prevent assignees or subtenants who are third parties from using the demised
premises as the offices of those third parties. I acknowledge the force of this
submission and the incongruity of the fact that the combined effect of clause
2(11)(b) and clause 2(13) is that in effect the landlord can refuse consent to
an assignment or underletting to a third party, whether reasonably or
unreasonably, simply by making it clear that the landlord will not consent to
any change of user. However, clause 2(11) does not use the expression ‘lessee’
which the landlord deliberately defined to include the Consumers’ Association
and persons deriving title from the Consumers’ Association, but with
deliberation uses the words ‘Consumers’ Association and its associated
organisations.’ I find it impossible to
construe this clause as though it applied to assignees and subtenants who are
third parties, and if and so far as there is any incongruity and conflict
between clause 2(11)(b) and clause 2(13), it must be the landlord who suffers
for present purposes by drawing the confines of clause 2(11)(b) so tightly that
in effect he has destroyed the force of some of the provisions of clause 2(13),
but he has perfectly plainly said and stipulated that under this original lease
there shall be user only by the Consumers’ Association and its associated
organisations. He has said that because they, the Consumers’ Association, are
the original lessees under the lease, and, for the reasons I have already
given, when it comes to a rent review the revision is in respect of a
hypothetical lease in which the original hypothetical lessee will be subject to
a covenant whereby the premises can only be used as offices for the purposes of
that hypothetical lessee and its associated organisations, if any.
In these
circumstances, being in favour of Mr Nugee on the question of the construction
of clause 11(b), I need not consider the authorities which he cited and in
which the courts have, for the most part, declined to allow the provisions of
an assignment clause impliedly to revoke or modify the provisions of a user
clause. Those cases were: Wilson v Flynn [1948] 2 All ER 40; Creery
v Summersell and Flowerdew & Co Ltd [1949] Ch 751; Packaging Centre
Ltd v Poland Street Estate Ltd (1961) 178 EG 189, the case of Granada
Television Network Ltd v Great Universal Stores Ltd, a decision of
Pennycuick J reported in (1963) 187 EG 391; and finally the case of Killick
v Second Covent Garden Property Co Ltd [1973] 1 WLR 658. Mr Nugee relied
on the unreported case of London Scottish Properties Ltd v The
Council of Professions Supplementary to Medicine, decided in this court on
November 8 1977, in support of his argument that the rent revision clause, on
its true construction in the present case, did require the hypothetical lease
to restrict user to the Consumers’ Association and not to the hypothetical
lessee; but in the London Scottish Properties Ltd case this court was
only concerned to construe the user clause; it was not concerned to construe,
or to deal directly with, the rent revision clause, and I do not derive any
assistance from that case in construing the rent revision clause in the present
case.
Mr Nugee also
relied on the case of Plinth Property Investments Ltd v Mott Hay
& Anderson (1979) 38 P & CR 361, in which the Court of Appeal,
upholding Slynn J, held that where there was a narrow user clause and that had
a depressing effect on market rent, it was not right for the valuer, or the
arbitrator, to take into account the fact that the landlord might relax the
terms of the user clause. The decision in the short judgment of Brandon LJ at p
373 is that the arbitrator is to have regard to the provisions of the lease,
which means the provisions that give rights to and impose obligations on each
of the parties to it. The learned Lord Justice says:
What the
arbitrator has to consider is what those rights and obligations are on either
side and assess the rent in the light of them. He is not to say to himself:
‘Those who have the rights may not enforce them and those who have obligations
may not be required to perform them.’
Of course,
exactly the same principle applies here; the arbitrator has not to have regard
to the fact that the landlord might relax the severity of the user clause
contained in clause 2(11)(b); but what we are concerned with on this present
appeal are the terms of clause 2(11)(b) in the light of the rent review clause,
and, for the reasons I have indicated, the provisions of the lease which must
be read into the hypothetical lease, which the surveyor must consider in
relation to the rent review clause, are provisions which restrict user as
offices for the hypothetical lessee or any associated organisations which that
hypothetical lessee may have.
The learned
judge made a declaration in accordance with the submissions made to him
regarding the construction of clause 2(11)(b) on its own; he declared that the
provisions of clause 2(11)(b) were effective to restrict user of the demised
premises by an assignee of the defendants to use as offices of such assignee.
As I have already indicated, it seems to me that that would be to contradict
the plain words of the clause, and in my judgment that declaration ought to be
set aside and there should be substituted the declaration which the appellant
tenants seek, namely, that the provisions of clause 2(11)(b) are effective to
restrict, without the prior written consent of the lessor to other user, the
user of the demised premises, both by the defendants and by any assigns
thereof, to use as offices of the Consumers’ Association or its associated
organisations.
The second
declaration that the learned judge made, consistently with his first, was that
the surveyor, in determining the market rent under the lease, was required to
determine such rent at which the demised premises might reasonably expect to be
let in the open market, subject inter alia to a provision that the
premises could only be used as offices of the lessee. By the expression
‘lessee,’ I understand that the learned judge intended to mean the lessee for
the time being, as in the lease; but for the reasons I have indicated, and on
the true construction of clause 2(11) and the rent review clause, it seems to
me that declaration ought to be varied, and that it should read: ‘. . .
surveyor should determine such rent at which the demised premises might
reasonably expect to be let in the open market subject, inter alia, to
the provision that the premises could only be used as offices of the original
hypothetical lessee, but not by his assigns or any other persons other than his
associated organisations if any.’ It may
be that counsel will wish to address us on the exact wording which the revised
declaration should bear, in the event of my Lords agreeing with my general
conclusions, which in sum, for the reasons I have given, are that the rent
review clause requires the surveyor to assume that the open market hypothetical
lessee would become entitled to a lease in the form of the existing lease, save
that his name would be substituted for the name of Consumers’ Association in
the opening words of the lease, and that his name would be substituted for the
words ‘Consumers’ Association’ in clause 2(11)(b).
I would vary
the order of the learned judge accordingly.
Agreeing,
BRIGHTMAN LJ said: There is no doubt in my mind that the wording of the rent
review clause exists very unhappily alongside the user clause. The problems to
which this gives rise have been fully explained by my Lord, Templeman LJ, and I
do not propose to enlarge upon them.
Some
modification has to be made to the strict wording of the rent review clause if
it is to work. I fully recognise the strength of the arguments which have been
so attractively advanced by Mr Nugee, but they lead to a solution which, to my
mind, is not practical and cannot possibly have been contemplated by the
parties. The lease is a commercial document and we have to find a commercial
solution to the problem posed.
I have come to
the conclusion that the only way to give business sense to the rent review
clause is to read and apply it in exactly the way that Templeman LJ has
explained and for the reasons he has given.
Accordingly, I
would vary the order made by Whitford J in the way my Lord has indicated.
Also agreeing,
BUCKLEY LJ said: At one stage in the argument I was disposed to the view that
what must be treated as offered on the open market under clause 3(5) of the
lease must be a lease subject to a restricted user clause in precisely the
terms in which it is to be found in clause 2(11)(b), restricting use of the
premises or any part thereof to use as offices of the Consumers’ Association
and its associated organisations.
But that view
must inevitably lead to the result, in the circumstances of this case, of there
being effectually only one possible prospective hypothetical tenant, for the
reference to ‘associated organisations’ does not, in my view, really affect
that position, because organisations associated with the Consumers’ Association
would not be likely to be in competition with the Consumers’ Association for a
lease of these premises, and consequently they would not contribute to the
making of a market in any real sense of the word.
It seems to me
that a state of affairs in which there is only one possible prospective
hypothetical tenant is, prima facie at any rate, inconsistent with the
idea of there being an open market in which it is possible to offer what is to
be offered, and inconsistent with the idea that the rent which the valuer would
arrive at on the basis of there being only one possible hypothetical tenant,
being properly described as a market rent.
It is not
inconceivable that there might be a case in which, by reason of the nature of
the property assumed to be offered in the open market, there would be only one
hypothetical prospective purchaser or tenant. Such a case was the case of Tomlinson
(Valuation Officer) v Plymouth Argyle Football Club Ltd, which has
been referred to, where the only possible purchaser of the football ground was
the defendant club itself. Where that state of affairs exists, it would not, I
think, be beyond the skill of a valuer exercising ordinary valuation
techniques, to arrive at a price which is the price at which the hypothetical
purchaser and hypothetical vendor would arrive in negotiations between
themselves. But to treat that as a sale in an open market seems to me to be a
very artificial conception, although it may be that the property could be
offered without restriction upon the identity of anybody who might choose to make
an offer for it. But if the circumstances are such that there is only one
possible hypothetical purchaser, then it seems to me that one would be very
slow to recognise that as being the sort of exercise that is contemplated by
the rent review clause which we find in clause 3(5) of the present lease.
Accordingly, I
should be very slow to adopt a construction which would have that result if any
other alternative construction is available, and in the present case I think
that such an alternative construction is available, for to my mind the whole
question really turns upon the meaning to be put upon the words ‘subject to the
provisions of this lease’ in clause 5(3) of the lease.
When one
considers that the hypothesis upon which the clause is to operate is that the
premises are vacant and that they are being offered on the market to a lessee
who is prepared to accept them upon the terms of a lease tendered by the
lessor, it is reasonable to suppose that the lease so hypothetically tendered
will be a lease in which the name of the lessee will not be stated, because the
assumption is that the lessee has not yet been identified. Also if the lease is
to be a lease in the form of that with which we are concerned, clause 2(11)(b)
will necessarily be a clause in which the user covenant does not yet specify
the name of the tenant which is to be inserted in that clause, although it will
be drawn in such a way as to suggest that, when the identity of the
hypothetical tenant has been identified, the name of that tenant will be
inserted in the clause as the name of the Consumers’ Association is inserted in
the clause in the actual lease.
Construing the
words ‘subject to the provisions of this lease’ in that way, it seems to me
that a perfectly satisfactory method of operating the rent review clause in
conjunction with the user clause is available, and I think so to construe the
words ‘subject to the provisions of this lease’ is a perfectly legitimate way,
in the circumstances, in which to read those words. It does have the remarkable
consequence that the sub-clause which deals with, and controls, assignment of
the lease is rendered really nonsensical, or practically so, for reasons which
have already been indicated by Templeman LJ. But that, it seems to me, is the
result of the lessor in the present case having used what appears to have been
a common form lease, and using it in a way which has had that result. If the
user clause confines use to use as offices of the Con-
Association assigning to anyone other than perhaps an associated organisation
while that restrictive clause is in operation, and there is no duty on the
lessor to agree to any modification of the user clause to facilitate an
assignment; so that the assignment clause is, to a very great extent,
stultified by the user clause. But in my judgment that does not effect the
appropriate way in which to construe the rent review clause.
With regard to
the authorities, I do not wish to add anything to what has been said by
Templeman LJ in the judgment which he has delivered.
For these
reasons, and for the reasons which have been given both by Templeman LJ and by
Brightman LJ, I agree that the learned judge’s order should be varied in the
way proposed, subject to any discussion about the precise terms in which the
declarations as varied should be couched.
In substance
the appeal is dismissed, but as we are varying the learned judge’s order,
perhaps to that extent we allow the appeal; but that is not in response to any
invitation by the appellants!
The
declarations made by Whitford J were varied as mentioned in the judgment of
Templeman LJ. No costs were awarded to either party in the Court of Appeal or
below.
