Betty's Cafés Ltd v Phillips Furnishing Stores Ltd
| Jurisdiction | UK Non-devolved |
| Judge | Viscount Simonds,Lord Morton of Henryton,Lord Keith of Avonholm,Lord Somervell of Harrow,Lord Denning |
| Judgment Date | 27 February 1958 |
| Judgment citation (vLex) | [1958] UKHL J0227-1 |
| Date | 27 February 1958 |
| Court | House of Lords |
[1958] UKHL J0227-1
House of Lords
Viscount Simonds
Lord Morton of Henryton
Lord Keith of Avonholm
Lord Somervell of Harrow
Lord Denning
Upon Report from the Appellate Committee, to whom was referred the Cause Betty's Cafés Limited against Phillips Furnishing Stores Limited, that the Committee had heard Counsel, as well on Monday the 27th, as on Tuesday the 28th and Wednesday the 29th, days of January last, upon the Petition and Appeal of Betty's Cafés Limited, whose registered office is at 8, 9, 10 and 11 Cambridge Crescent, Harrogate, in the County of York, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 28th of November 1956, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, and that the Petitioners might have the relief prayed for in the Appeal, or such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the printed Case of Phillips Furnishing Stores Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 28th day of November 1956, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is hereby Declared, That the application of the Appellants for the grant of a new lease fails and should be dismissed: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
This appeal raises a short question of construction of certain sections of Part II of the Landlord and Tenant Act, 1954, to which I will refer as "the 1954 Act". Concretely, it is whether Mr. Justice Danckwerts was right, when the matter first came before him, in ordering the Respondents to grant to the Appellants a new tenancy of certain business premises known as 42-44 Darley Street in the City of Bradford for the term of fourteen years from the 14th June, 1956, at a rent of £3,000 per annum and otherwise upon the terms of a lease dated the 29th April, 1946, to which I will refer later. The Court of Appeal have by a majority (Birkett and Romer, L.JJ., dissentiente Lord Evershed, M.R.) held that he was wrong in doing so.
It is necessary to state briefly the relevant facts upon which this question arises.
The Appellants and their predecessors in title have since 1925 carried on the business of café proprietors and retail confectioners on the greater part and since the 24th June, 1955, on the whole of the premises in question under a series of leases the last of which was dated the 29th April, 1946, and was for a term of eight years from the 1st January, 1946, at a rent of £1,400 per annum. On the 23rd September, 1953, the Bradford County Court made an order under the Leasehold Property (Temporary Provisions) Act, 1954, for the grant of a new tenancy of the premises to the Appellants' predecessor in title for a term of twelve months from the 1st January, 1954, at a rent of £2,000 per annum and otherwise on the terms of the said lease. This tenancy was from the 1st January, 1955, continued by section 24 (1) of the 1954 Act and has since the 17th February, 1955, been vested in the Appellants.
In the meantime the Respondents had acquired the long leasehold reversion of the premises at a price of £38,750, the contract for purchase having been made on the 25th August, 1953, and the purchase completed on the 1st March, 1954. It was in the view of the learned Judge, which I see no reason to doubt, fairly clear that they hoped to occupy this property for the purposes of their furnishing business. It is also, I think, clear that this idea was never formally given up by the Board of Directors of the company, though the inconsistent idea of selling the premises to the Appellants was favoured by certain of the directors and was by them carried so far that the Appellants felt a legitimate grievance at its abandonment. All this, however, has become of no importance, for your Lordships have to determine this appeal upon two findings of fact, (i) that it was proved that on the 23rd April, 1956, the Respondents intended on the termination of the current tenancy to carry out a substantial work of construction on the premises and could not reasonably do so without obtaining possession thereof; and (ii) that it was not proved that they so intended at any earlier date. The relevance of these dates must now be explained.
Part II of the 1954 Act was designed ( inter alia) to give a greater degree of protection to the tenants of business premises than they formerly had. To effect this purpose it provided in the first place that a tenancy to which it applied should continue automatically under section 24 until one or other of several events should happen, of which the relevant event for the purpose of this case is that the tenant should, pursuant to section 26, make a request for a new tenancy. That section provided that a tenant's request for a new tenancy might be made in the circumstances therein described (which admittedly covered the present case) and should be for a tenancy beginning with such date not more than twelve nor less than six months after the making of the request as might be specified therein, with a proviso which I need not state. It further provided that a tenant's request for a new tenancy should not have effect unless it was made by notice in the prescribed form given to the landlord and set out the tenant's proposals as to the property to be comprised in the new tenancy, as to the rent to be payable thereunder and as to the other terms thereof. And by subsection (6) it provided as follows:
"Within two months of the making of a tenant's request for a new tenancy the landlord may give notice to the tenant that he will oppose an application to the court for the grant of a new tenancy, and any such notice shall state on which of the grounds mentioned in section thirty of this Act the landlord will oppose the application."
Taking advantage of this section the Appellants by notice in the prescribed form to the Respondents dated the 28th June, 1955, requested the grant of a new tenancy of the premises commencing on the 24th June, 1956, at a rent of £2,500 per annum for a term of fourteen years, the other terms being, except as therein mentioned, those of the existing tenancy.
On the 15th August, 1955, the Respondents replied that they were not willing to grant a new tenancy and, following precisely the language of subsection (6) and of section 30 (1) ( f), said the grounds "on which we shall oppose any application which you may make to the Court for the grant of a new tenancy of the said property are that on the termination of the current tenancy we intend to reconstruct the premises comprised in the holding or a substantial part of those premises or to carry out substantial work of construction on the holding or part thereof and that we could not reasonably do so without obtaining possession of the holding."
On the 27th October, 1955, the Appellants accordingly issued an originating summons in the Chancery Division of the High Court asking that the Respondents might be ordered to grant them a new tenancy in the terms of their notice. This summons, having come before the Master on certain affidavit evidence, was adjourned to be heard in effect as a witness action by the Judge. It was heard with oral evidence before Mr. Justice Danckwerts on the 16th April, 1956, and five further days, and on the 7th May he gave judgment in favour of the Appellants and ordered the Respondents to grant them a new lease of the premises for fourteen years from the 24th June, 1956, at a rent of £3,000 per annum.
It is necessary now to remind your Lordships of what proved to be the decisive event of April 23rd, 1956. On that day at a Board Meeting of the Respondents, the hearing of the case before the learned Judge being nearly but not quite concluded, it was resolved:
"(1) That in the event of the Company obtaining possession of these premises from Betty's Cafes Limited on the termination of the last mentioned Company's current tenancy thereof the works detailed in Mr. Ovenden's specification dated January 1955 and plan numbered 45/2 be forthwith carried out and that expenditure of up to £20,000 upon such works be approved",
and "(2) That Counsel appearing for the Company in the Application by Betty's Cafes Ltd. now proceeding in the Chancery Division be authorised to give an undertaking either to the Court or to Betty's Cafes Ltd, that the above mentioned works will be carried out as soon as is practicable in the event of possession being so obtained."
I have said that the passing of this resolution was a decisive event. But it was not yet to be decisive. For Mr. Justice Danckwerts, while holding that the works in question were a substantial work of construction within the meaning of section 30 (1) of the Act and that the Respondents could not reasonably carry them out without obtaining possession of the premises, held that upon the true construction of the Act the Respondents must prove that already at the date when they gave their notice of opposition, namely, on the 15th August, 1955, they had a firm and settled intention to carry out these works at the end of the current tenancy. He held (and it has not since been disputed)...
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