Landlord and Tenant Act, 1954 — Landlords’ appeal against grant of new tenancy — Premises required for reconstruction — Landlords’ primary purpose said to be occupation not reconstruction — County Court decision challenged — Appeal allowed
In this case Peacock’s Stores, Ltd, of Paradise Street, West Bromwich, Staffordshire, appealed against the granting of a new lease by Judge Morris, at Dudley County Court, to Town Tailors, Ltd, trading under the title of “Weaver to Wearer,” of Mabgate, Leeds, in respect of a ground-floor shop at 29/30, Market Place, Dudley, Worcestershire, of which the appellants are the landlords.
When Town Tailors, Ltd, applied for a new lease the landlords objected, under the Landlord and Tenant Act, 1954, on the ground that (1) they intended to reconstruct the premises on termination of the tenant’s current lease and (2) they intended to occupy the premises for the carrying on of their own business. The second ground was abandoned.
The County Court judge was satisfied that Peacock’s intended to carry out substantial reconstructions, but he held that as the work was to be done for their own use and occupation, he was bound by the decision of the Court of Appeal in the case of Atkinson v Bettison, when it was held that the landlords’ objection failed when their primary purpose was to obtain the premises for their own occupation and not reconstruction, in spite of the five-year limitation.
He granted the tenants a new lease for a period of five years at £750 a year rent.
Mr H Heathcote-Williams, QC, Mr Paul Layton and Mr Dennis Smith (instructed by Messrs TD Jones & Co, agents for Messrs W Douglas Clark, Brookes & Co, West Bromwich) represented the landlords; Mr Philip Cox (instructed by Messrs Lupton & Fawcett) appeared for the tenants.
Mr Heathcote-Williams said Peacock’s had been mesne landlords of 29/30, Market Place since 1935 and Town Tailors were their subtenants for almost the same period. In May, 1952, Peacock’s surrendered their old lease and took a new lease for 10 years from December 25, 1951. As this was less than five years before the tenants’ application, they were not entitled to oppose the application on the ground of intending to occupy the premises for their own business.
So far as reconstruction was concerned, the judge had the view that the back part of the premises was derelict and the upper part was in need of reconstruction. He found there was a bona fide intention to reconstruct.
Mr Heathcote-Williams submitted there was a distinction between this case and Atkinson v Bettison and that the judge was wrong in holding that the latter decision applied to this case. He added that the motive of the landlords was immaterial if the intention to reconstruct was genuine.
Mr Cox, replying, submitted that on the facts of the case it was clear the primary purpose of the landlords was to occupy the premises for their own business. He said the convenient test would be: Were the landlords prepared to carry out the work of demolition or reconstruction if an order for possession was not made?
Judgment on the issue was deferred until the Court had heard another case (Fisher v Taylor’s Furnishing Stores, Ltd) in which a similar point was raised.
In his judgment, Lord Justice Denning said the tenants’ lease expired on March 18, 1956. Peacock’s had been the leaseholders for 21 years and wanted possession because they intended to reconstruct a substantial part of the premises. As they surrendered their previous lease in 1952 and took a new one, they came within the five-year rule.
The premises were over 100 years old. The tenancy was only for a shop on the ground floor and the judge found the rest of the premises, which he saw, in a ramshackle state. It called aloud for reconstruction. Peacock’s plan for the work meant rebuilding the shop and making walls to support a new upper storey.
The County Court judge was satisfied the landlords had a bona fide intention to carry out substantial reconstruction and that they intended to do it on the termination of the tenants’ lease. It seemed, his Lordship said, to bring the case within Section 30(1)(f) of the Landlord and Tenant Act. The judge thought it was intended merely to turn the place into Peacock’s Stores and he did not think it was permissible in view of the decision in Atkinson v Bettison. On that ground he held the tenant were entitled to a new lease.
Referring to the Atkinson case, his Lordship said it had not got the meaning the judge thought it had. The appeal should be allowed and a new lease refused.
Lords Justices Morris and Parker agreed.
The appeal was allowed with costs in this Court and the County Court.
