Landlord and Tenant Act 1954 — Tenant’s business in public house and restaurant — Lease of cellarage — Cellars used for bottle store and dining-room — Landlord served section 25 notice — Whether lease of cellars within 1954 Act
The plaintiff tenant occupies premises off Fleet Street. London, known as “Ye Olde Cheshire Cheese”, a public house with additional dining facilities. They hold the main part of the public house under one lease; two cellars under the adjoining Daily Telegraph building are held under a separate 21-year lease granted in 1958. One cellar is used for the storage of bottles and the other as a private dining-room as part of the tenants’ considerable restaurant business. The cellars cannot be used independently of the main public house premises.
The defendant landlord, The Daily Telegraph, served a section 25 notice on the tenants calling for the termination of the lease in accordance with the provisions of the Landlord and Tenant Act 1954. The landlords served this notice without prejudice to their contention that the lease of the cellars did not enjoy the protection of the Act. It was their argument that the tenancy of the cellars was excluded by section 43(1)(d) of the Act as the tenancy was of premises licensed for the sale of liquor for consumption on the premises. The tenants contended that the cellars fell to be considered under section 43(1)(d)(i), which leaves within the protection of the 1954 Act licensed premises structurally adapted for a restaurant business.
Held For the lease of the cellars to be protected by the saving provision in section 43(1)(d)(i) of the 1954 Act, there must be a tenancy of premises licensed for liquor and the premises must be structurally adapted to be used as a restaurant business and a substantial proportion of the business is other than the sale of liquor. Where only part of the restaurant business is the subject of the demise, the question arises as to whether the reference in the section to “premises” is a reference to “demised premises” or a reference to the premises subject to the license.
Section 43 of the Act is obscure and ambiguous and as originally drafted its application to premises was only to be determined by reference to the nature and type of license in force. Following legislative amendments and repeals by the Finance Act 1959, it must be assumed that Parliament did not intend in the fiscal legislation to make substantive amendments to the landlord and tenant legislation. The question of premises being within the saving provision is now to be determined by the court. In this case the demised premises, the two cellars, were smaller in extent than the licensed premises, but the demised premises were adapted to a restaurant use which was substantial. On that basis they fell within the saving provision and were protected by the 1954 Act.
Grant v Gresbam
(1979) 252 EG 55 considered.
Robert Reid QC and Oliver Albery (instructed by Slaughter & May) appeared for the plaintiffs; and Gabriel Sebestyen (instructed by Simmons & Simmons) appeared for the defendants.
