Certainty of Leasehold Term
| DOI | http://doi.org/10.1111/j.1468-2230.1994.tb01926.x |
| Date | 01 January 1994 |
| Author | David Wilde |
| Published date | 01 January 1994 |
January
19941
Certainty
of
Leasehold Term
Certainty
of
Leasehold
Term
David
Wilde”
The House of Lords’ decision on certainty of leasehold term in
Prudential
Assurance
Co
Ltd
v
London Residuary Body1
has proven controversial.2 This
was only to be expected of an important case implicitly raising fundamental issues
concerning the relationship between contract and property; especially since a
majority of their Lordships themselves expressed reservations about the state of
the law as it was found to be, and called for consideration of ref~rm.~ However,
whatever the various views on the merits of the law as pronounced in the case, it
appears
so
far to have gone unquestioned that the House of Lords’ formulation of
the law was at least well reasoned and coherent. To the contrary, this note seeks to
argue, with great respect, that there is a fundamental logical flaw in their
Lordships’ reasoning, and that the case leaves the law in a very uncertain state.
The
Facts
In
1930
the owner of a strip of land sold it to the London City Council, which
contemporaneously purported to lease it back to him on certain terms. These terms
provided that, ‘the tenancy shall continue until the
.
. . land is required by the
council for the purposes of [road widening] and the council shall give two months’
notice to the tenant at least prior to the day of determination when the
.
.
. land is
so
required.’
A
rent of
f30
per annum was stipulated. The agreement was evidently
intended to be of comparatively short duration. However, all road widening plans
were subsequently abandoned, and the lease and reversion passed to successors in
title over a period of decades. In
1988
the landlord purported to give six months’
notice to quit, treated as a common law notice. The tenant sought a declaration that
the tenancy could only be determined upon the land’s being required for road
widening. An appropriate commercial rent for the land by this time would have
been in the order of
f
10,OOO
per annum. The declaration sought by the tenant was
refused.
The
Decision
The House of Lords re-established, in the face of more recent
derogation^,^
the
old common law rule that, to be valid, a lease must, at its commencement, have a
certain (or ascertainable) maximum possible duration. The agreement between the
original parties was therefore void. If it had provided
‘forfive
years,
but with the
landlord having power
to
determine earlier on the land’s being required for road
*Department of Law, University of Reading.
1
[I9921
2
AC 386, noted by Stuart Bridge at [1993] CLJ
26.
2 Contrast the views of Susan Bright, ‘Uncertainty in Leases
-
Is
It
a Vice?’ (1993) 13
LS
38 and Peter
Sparkes, ‘Certainty of Leasehold Terms’
(1993)
109 LQR 93.
3
Lords Griffiths, Browne-Wilkinson and Mustill; Lords Templeman and Goff evinced no disquiet.
4
Most notably
Ashburn Anstalt
v
Arnold
[1989] Ch
1
(CA).
0
The
Modern
Law
Review
Limited
1994
117
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