Beer v Bowden (Note)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Buckley,Lord Justice Goff,Lord Justice Geoffrey Lane |
| Judgment Date | 02 April 1976 |
| Judgment citation (vLex) | [1976] EWCA Civ J0402-5 |
| Date | 02 April 1976 |
| Court | Court of Appeal (Civil Division) |
[1976] EWCA Civ J0402-5
Lord Justice Buckley,
Lord Justice Geoffrey Lane and
Lord Justice Goff
In The Supreme Court of Judicature
Court of Appeal
Civil Division
On appeal from Order of Mr. Justice Foster.
Mr. G.W. JAQUES (instructed by Messrs Boxall & Boxall, Agents for Messrs R. Hancock & Son, Callington, Cornwall) appeared on behalf of the Appellant (Defendant).
Mrs. ELLEN SOLOMONS (instructed by Messrs Scott, Son & Chitty, Epsom, Surrey) appeared on behalf of the Respondents (Plaintiffs).
I will ask Lord Justice Goff to deliver the first judgment.
This is an appeal from a judgment of Mr. Justice Foster dated the 12th June, 1975, given in proceedings commenced by Originating Summons, raising questions as to the effect of the provision as to rent in a lease, dated the 17th July, 1968, of premises known as 54 and 56, Torbay Road, Paignton, in the County of Devon.
The Appellant was the Defendant in the proceedings and tenant under the lease. It is not necessary, I think, to read any part of the lease, other than some parts of Clause 1, by which clause the premises were demised for a term of ten years from the 25th March, 1968. The clause then reads: "paying therefor as follows:- Until the 24th day of March 1973 (yearly and proportionately for any fraction of a year) the rent of £1,250 per annum and from the 25th day of March 1975 such rent as shall thereupon be agreed between the Landlords and the Tenant but no account shall be taken of any improvements carried out by the Tenant in computing the amount of increase, if any, and in any case not less than the yearly rental payable hereunder such rent to be paid in advance by four equal quarterly payments on the four usual quarter days".
The term of ten years was increased in 1971 to fourteen years by a memorandum endorsed on the lease which reads as follows: "Memorandum. In consideration of the covenants on the part of the Tenant contained in the within-written Lease the Landlords agree that the term of years contained in Clause 1 of the within written Lease shall be read and construed as if the term of fourteen years were substituted therein in the place of ten years and the referencein the said Clause to a rent review in respect of the rent to be charged for the said premises from the 25th day of March 1973 shall be read and construed as if there were also inserted reference to a rent review for the rent to be charged for the said premises from the 25th day of March 1978 but that in all other respects the covenants conditions and agreements in the within-written Lease shall remain in full force".
At the end of the first five years, the parties failed to agree upon a new rent. In these circumstances, the Plaintiffs issued an Originating Summons, which was amended before the hearing, and, in its amended form, posed two questions in these terms: "1. Whether upon the true construction of Clause 1 of a Lease made the 17th day of July 1968 between the Plaintiffs as Landlords and the Defendant as Tenant of premises known as 54 and 56 Torbay Road aforesaid and of the memorandum to the said Lease dated the 17th day of May 1971 the rental payable under the said Lease (subject only to the provisions of Part II of the Counter Inflation Act 1973 and orders made thereunder) between the 25th days of March 1973 and 1978 is a proper and reasonable rental having regard to the market value of the said premises on the 23th day of March 1973. 2. If yes, whether the sum of £2850 per annum represents such a proper and reasonable rental".
It is not absolutely plain what happened at the hearing, because the learned Judge came to the conclusion that he had decided something which was not in accordance with the submissions of either party, and on that account he made no Order as to costs. But, as far as I can gather, except that he imported the restriction chat one should not take account of tenant's improvements in ascertaining the market value of thepremises, he did in fact (though perhaps by a different route) accept the submission which was being made on behalf of the landlord, or at any rate arrived at the same result.
In reply, it appears to have been suggested on behalf of the landlord that if the true view were that no rent was reserved at all for the second five years, then the lease was or had become void for uncertainty. That submission arose in that way only, and it was not submitted on behalf of the Appellant, nor has it been submitted before us, that the lease was or became void.
The actual Order which the learned Judge made was as follows: "This Court doth declare upon the true construction of Clause 1 of the said Lease" – then it is described by its date and parties – "and of a Memorandum", which is also described, "that the Defendant is liable to pay to the Plaintiffs (a) between 25th March 1973 and 24th March 1978 (subject only to the provisions of Part II of the Counter Inflation Act 1973 and orders made thereunder) a rental representing what the demised premises at 54 and 56 Torbay Road Paignton Devon were reasonably worth on 25th March 1973 on a demise for a term of 5 years therefrom provided that (i) in computing such amount no account shall be taken of any improvements carried out by the Defendant and (ii) the said rental shall not be less than £1,250 per annum and (b) between 25th March 1978 and 24th March 1982 a rental representing what the said premises are reasonably worth on 25th March 1978 on a demise for a term of 4 years therefrom subject to the same provisos as are set out in sub-paragraphs (i) and (ii) of paragraph (a) of this Order". The expression used there, "what the demised premises were reasonably worth", must I thinkmean what would be a fair rental value for the premises. I cannot see any other meaning which could be attributed to it. I think one should also point out that, of course, so far as paragraph (b) of that Order is concerned, it will only become operative subject to any agreement which the parties may make with regard to the rent for the last four years.
The Respondents are content to stand on the Order, but they have served a Respondents Notice in which, should this Court be of opinion that the Order ought to be reversed or varied, they seek to make certain submissions as to the proper Order and to revive the alternative contention that the lease might be void.
Mr Jaques, who has taken every point here which could be taken on behalf of the tenant, has put forward as his first submission an argument that the words in Clause 1, "and in any case not less than the yearly rental payable hereunder", upon their true construction, mean "and in default of agreement the yearly rental payable hereunder"; that is, £1,250. Re says that Clause 1 is really in three parts: first, it reserves a rent of that amount for the first five years; secondly, it provides that the rent for the second five years shall be as the parties agree; and, thirdly, so construing the words I have mentioned, he says it provides that in default of agreement the rent shall continue to be £1,250. he treats the words "out no account shall be taken of any improvements carried out by the Tenant in computing the amount of increase, if any" as if they were in parenthesis, but he does not take into that parenthesis the further words "and in any case not less than the yearly rental payable hereunder".
I think, for my part, that that is an impossible construction. It is not, on the scheme of the clause as a whole, in my view, the natural meaning of the words; and, if one is to treat any part of it as in parenthesis, I think the provision about rent is as much in the parenthesis as the provision about tenant's improvements. But, secondly, that construction would make the clause futile, because, if in default of agreement the rent was to continue to be £1,250, obviously tenant would never agree to pay more, however much the premises might appreciate in value, and conversely, in the unlikely event of them depreciating, the landlord clearly would not agree to accept less. All that that...
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