Bacchiocchi v Academic Agency Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SIMON BROWN,LORD JUSTICE WARD,MR JUSTICE MOORE-BICK |
| Judgment Date | 20 February 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J0220-9 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | QBENF 97/0414 CMS1 |
| Date | 20 February 1998 |
[1998] EWCA Civ J0220-9
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(HIS HONOUR JUDGE BURSELL QC)
Royal Courts of Justice
Strand
London W2A 21L
Lord Justice Simon Brown
Lord Justice Ward
Mr Justice Moore-Bick
QBENF 97/0414 CMS1
MR E DENEHAN (instructed by Messrs Withy King & Lee, Bath BA1 2JE) appeared on behalf of the Appellant/Plaintiff.
MR R STEAD (instructed by Messrs McCloy & Co, Bradford on Avon BA15 1JS) appeared on behalf of the Respondent/Defendant.
This is an appeal from that part of the order of Judge Bursell QC sitting as a judge of the High Court in Bristol on 21st February 1997 which held the appellant not entitled to statutory compensation for disturbance following the termination of his business tenancy. It raises an interesting question under s.38(2) of the Landlord and Tenant Act 1954.
The basic facts are these. From 1974 to 1994 the appellant ran a restaurant, "La Pentola", in the basement and cellars at 14 North Parade, Bath. He was the tenant of those premises under a 20 year lease dated 14th January 1974—until 23rd April 1983 with a partner and thereafter alone. The respondents became his landlords on 11th July 1980. The annual rent, reviewable at five yearly intervals, started at £900 and rose finally to £2,875. The tenancy was one to which the Landlord and Tenant Act 1954 Part II applied. All statutory references hereafter are to that Act.
On 4th October 1993 the respondents served a s.25 notice seeking to determine the tenancy on 8th April 1994, and stating that any application by the appellant for a new tenancy would be opposed on the statutory grounds contained in paragraphs (f) and (g) of s.30(1). On 3rd November 1993 the appellant served a counter-notice stating that he was not willing to give up possession of the premises, and on 8th December 1993 he applied to the Bath County Court for an order for the grant of a new tenancy. On 5th January 1994 the respondents filed an answer stating that they would not oppose the appellant's application for a new tenancy but objecting to the terms proposed. The appellant too then changed his mind and on 29th April 1994 applied to the Court for leave to withdraw his application. On 11th May 1994 the appellant formally discontinued his application by notice under CCR Order 18 Rule 1. In the result, by operation of s.64, the tenancy was continued until 11th August 1994 and terminated on that date.
Generally speaking, a tenant in those circumstances would be entitled to compensation under s.37—indeed, having occupied the premises for (more than) 14 years, to compensation calculated at twice the basic rate. It is common ground here that such compensation, if due, would amount to £15,030. The respondents, however, contend, and the judge below held, that no such compensation is payable: the right to it was excluded under the lease. True, s.38(2) provides that in certain circumstances such an exclusion is void. That, however, depends upon the premises having been occupied for the purposes of the business "during the whole of the five years immediately preceding the date on which the tenant … is to quit the holding" (here 11th August 1994). Critically for present purposes, the appellant had vacated the premises and handed over the keys to his solicitors on Friday 29th July 1994. During the 12 days between then and 11th August 1994, so the judge held, the appellant was not in occupation of the premises. Those were the days "immediately preceding" 11th August 1994. It accordingly followed that the appellant had not been in occupation during the whole of the required five year period. Was the judge right to take that view? This is the critical issue raised upon this appeal.
With that brief introduction let me at once set out the relevant clause in the lease and the material parts of s.37 and 38.
Clause 4(7) of the lease provided that:
"If the tenancy hereby granted is within Part II of the Landlord and Tenant Act 1954 then subject to the provisions of sub-section (2) of s.38 of that Act neither the Tenant nor any assignee or under-lessee of the term hereby granted or of the demised premises shall be entitled on quitting the demised premises to any compensation under Section 37 of this same Act …"
S.37 (as amended) so far as material provides:
"(1) … where no other ground is specified in the Landlord's notice under section 25 … than those specified in the said paragraphs (e), (f) and (g) [of s.30(1)] and either no application under … section 24 is made or such an application is withdrawn, then … the tenant shall be entitled on quitting the holding to recover from the landlord by way of compensation an amount determined in accordance with the following provisions of this section.
(2) … the said amount shall be as follows, that is to say,
(a) where the conditions specified in the next following sub-section are satisfied it shall be the product of the appropriate multiplier and twice the rateable value of the holding,
…
(3) The said conditions are -
(a) that, during the whole of the 14 years immediately preceding the termination of the current tenancy, premises being or comprised in the holding have been occupied for the purposes of a business carried on by the occupier or for those and other purposes;
… "
S.38 so far as material provides:
"(2) Where –
(a) during the whole of the five years immediately preceding the date on which the tenant under the tenancy to which this Part of this Act applies is to quit the holding, premises being or comprised in the holding have been occupied for the purposes of a business carried on by the occupier or for those and other purposes, and
…
any agreement (whether contained in the instrument creating the tenancy or not and whether made before or after the termination of that tenancy) which purports to exclude or reduce compensation under the last foregoing section shall to that extent be void …
(3) In a case not falling within the last foregoing subsection the right to compensation conferred by the last foregoing section may be excluded or modified by agreement."
We were referred to a number of cases decided under Part II of the 1954 Act which consider the question of what constitutes the occupation of business premises. All but one of these, one should note, were concerned with the basic question arising under s.23, the question whether, when the contractual term ends, the tenant is occupying the premises for business purposes and thus entitled under the Act to continue his tenancy. The question of occupation in the present case arises in a rather different context; here by definition there is to be no continuation of the tenancy. It is nevertheless important to discover the central principles emerging from the s.23 authorities.
I start with the most authoritative of the cases, the recent decision of the House of Lords in Graysim Holdings Limited v P & O Property Holdings Limited [1996] 1 AC 329, far removed though that case was from the present. The question there was not whether anyone was in business occupation of the premises but rather which amongst competing candidates for that role was properly to be regarded as occupier. Was it the respondent, the tenant of the enclosed market hall, or was it the individual stallholders who had exclusive possession of their stalls? In holding the latter, Lord Nicholls in the single reasoned speech made, under the heading 'Occupied', these important general observations:
"… As has been said on many occasions, the concept of occupation is not a legal term of art, with one single and precise legal meaning applicable in all circumstances. Its meaning varies according to the subject matter. Like most ordinary English words 'occupied', and corresponding expressions such as occupier and occupation, have different shades of meaning according to the context in which they are being used. … In many factual situations questions of occupation will attract the same answer, whatever the context. A tenant living alone in a detached house under a residential lease would be regarded as the sole occupier of the house. It would need an unusual context to point to any other answer. But the answer in situations which are not so clear cut is affected by the purpose for which the concept of occupation is being used. In such situations the purpose for which the distinction between occupation and non-occupation is being drawn, and the consequences flowing from the presence or absence of occupation, will throw light on what sort of activities are or are not to be regarded as occupation in the particular context. In Part II of the Act of 1954 'occupied' and 'occupied for the purposes of a business carried on by him' are expressions employed as the means of identifying whether a tenancy is a business tenancy and whether the property is part of the holding and qualifies for inclusion in the grant of a new tenancy. In this context 'occupied' points to some business activity by the tenant on the property in question. The Act seeks to protect the tenant in his continuing use of the property for the purposes of that activity. Thus the word carries a connotation of some physical use of the property by the tenant for the purposes of his business.
This is a good starting point but it is not a test which will provide an answer in all cases. Occasionally the question will be whether the property is occupied or unoccupied. Wandsworth London Borough Council v Singh [1991] 89 LGR concerning a small public open space at St. Johns Hill in Wandsworth, is an example of this. More usually,...
To continue reading
Request your trial
- Jafari-Fini v Phoenix Acquisitions Ltd and Others
-
Pointon York Group Plc v Poulton
...had moved in a desk and made calls from it, business occupation would have been established. He held, however, on the basis of Bacchiocchi v The Academic Agency [1998] 1 WLR 1313 that it was unnecessary that there should be any physical presence in the premises provided the premises were be......
-
Arnander v HM Revenue and Customs
...not occupied by her for agricultural purposes. Physical presence was not required and he cited Bacchiocchi v Academic Agency LimitedWLR[1998] 1 WLR 1313. Lady Cecilia continued to carry on the farming business through the contractor; she remained in rateable occupation of the house; she wan......
- Sight & Sound Education Ltd v Books etc Ltd