Clarke (Richard) & Company Ltd v Widnall

Richard Clarke & Co. Limited., the plaintiffs in the action out of which this appeal arises, are brewers. They are the freehold owners of licensed premises. Stag's Head Hotel, Mill Lane, Great Warford, Cheshire. The defendant, who is the appellant in this Court, Mr. Frederick Edward Widnall, became the tenant of Stag's Head Hotel by a tenancy agreement dated 3rd April, 1974. By a notice to quit dated 25th February, 1975, served the following day, the plaintiffs gave the defendant three months' notice to determine the tenancy "in accordance with clause 13 (4) of your agreement…. dated 3rd April 1974 by reason of your non-observance of clause 2 (1) (to pay rent) of the same agreement". The defendant was substantially in default in payment of rent when the notice was served. Under the agreement the rent was £480 per annum, payable quarterly. The defendant had failed to pay the rent due on the quarter days in June, September and December, 1974. On 25th February, 1975, the defendant paid £186 towards the outstanding rent. On 21st March, 1975, the plaintiffs made a demand on the defendant for the quarter's rent due on 24th June, 1975. Such a demand was inconsistent with the intended effect of the notice to terminate: for it, if effective, would have put an end to any obligation on the part of the defendant to pay any rent in respect of any period after 25th May, 1975. It is conceded, however, that the plaintiffs did not intend by this demand (so far as their intention may be relevant) to create a new tenancy, assuming that the notice to terminate was effective. On 27th March, 1975, the defendant paid the plaintiffs £294, which covered both the arrears of rent and the whole rent for the quarter ending on 24th June, 1975. After 26th May, 1975, the defendant continued in occupation of the premises. On 10th June, 1975, the plaintiffs began proceedings in the Maeclesfield County Court, claiming possessionagainst the defendant and also mesne profits from 26th May,1975. On 13th June the plaintiffs sent the defendant a cheque for £38.13, being a refund of rent for the period from 26th May to 24th June, 1975. By his defence in the action the defendant denied that the plaintiffs were entitled to possession, for reasons which will appear after the relevant provisions of the tenancy agreement have been cited.

At the hearing in the County Court on 15th September, 1975, there was no material dispute as to the facts, as stated above. Deputy Judge Woolley gave judgment for the plaintiffs for possession and for mesne profits of £150.35 to the date of judgment, continuing until possession should be obtained. He granted a stay of execution pending an appeal. The defendant has appealed to this Court.

The tenancy agreement of 3rd April, 1974, provided by clause 1 for the letting of the premises to the defendant from 11th April, 1974, at the rent already mentioned. Clause 2 (1) provided that the tenant should pay rent "at the times and in the manner aforesaid". Then follow numerous provisions which are not relevant in this appeal. Part V of the agreement, comprising clauses 13 and 14, is headed "Termination". The provision which is primarily of importance in the issue before us is a part of clause 13 (4).

Clause 13 (1) contains a provision enabling either the landlords or the tenant to determine the tenancy by giving 12 months' notice in writing, at any time after the first 6 months has expired. Clause 13 (2) makes special provision in the event of the death of the tenant. It is not necessary to set it out in detail. Its broad effect is to enable the landlords to determine the tenancy by 14 days' notice, presumably to the deceased tenant's personal representatives: but there is special provision enabling the tenant's widow, if she wishes and if she obtains a transfer of the licence toherself, to require a new agreement with her on the same terms.

It is Aesirdble to set out sub-clauses (3) and (4) in full, lengthy though they are. Clause 13 (3) reads: "If the Tenant shall either:- (a) fail to observe and perform or commit any breach of any one or more of the agreements contained in clauses 2 (2) (to repair inside) 2 (3) (not to make alterations or additions) 2 (4) (to insure plate glass and third party risks, 2 (5) (not to increase fire risks), 2 (8) (not to use except as licensed premises 2 (9) (not to cause a nuisance) 6 (to purchase goods from Landlords 7 (not to dispose of fixtures, etc.), 9 (1) (to allow Landlords to enter), 9 (2) (to allow prospective tenants to view), 9 (6) (to permit inspection and sampling), 9 (8) (not to give undertakings), 9 (9) (not to permit slate clubs), or 12 (1) (to keep premises and utensils clean to supply food, to observe public bar prices and to reside on the premises) hereof; or (b) after due complaint-commit any further breach of the agreements contained in clause 12 (2) (reasonable prices and courtesy) hereof; or (c) be convicted of a misdemeanour involving in the opinion of the Landlords his suitability as a licensee the tenancy may be determined by the Landlords giving to the Tenant three calendar months notice in writing expiring at any time as well during the first as during any subsequent year and either at or at any time earlier than the end of such first year or any subsequent year thereafter provided that such notice shall specify the clause (if any) of this agreement alleged to have been broken or not to have been observed and performed".

Clause 13 (4) has a marginal side-note "Forfeiture". "(4) If the Tenant shall either:- (a) fail to observe and perform or commit any breach of any one or more of the agreements contained in clauses 2 (1) (to pay rent, etc.) 2 (7) (not to assign), or 12 (3) (not to transfer or surrender licence to comply with the law torenew licences to perform undertakings to keep open not to alter not to apply for conditions not to give bills of sale and not to allow acquisition of easements) hereof; or (b) become bankrupt or compound with his creditors or suffer his goods or any of them to be taken in execution or depart out of the country; or (c) be convicted of any offence specified in Section 10 (3) of the Licensing Act 1964 notwithstanding the provisions of the Criminal Justice Act 1948 with regard to felonies committed by a licensee; it shall be lawful either:- (i) for the Landlords or any person duly authorised by them into or upon the said premises or any part thereof in the name of the whole to re-enter and the said premises peacefully to hold and enjoy thenceforth as if this letting or agreement had not...