Esselte AB and Another v Pearl Assurance Plc
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MORRITT,SIR JOHN MAY,LORD JUSTICE STUART-SMITH |
| Judgment Date | 08 November 1996 |
| Judgment citation (vLex) | [1996] EWCA Civ J1108-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 November 1996 |
| Docket Number | CHANF 95/0816/B |
[1996] EWCA Civ J1108-1
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(HIS HONOUR JUDGE COLYER QC)
Sitting as a Judge of the High Court
Royal Courts of Justice
Strand
London W2A 2LL
Lord Justice Stuart-Smith
Lord Justice Morritt
Sir John May
CHANF 95/0816/B
MR PAUL MORGAN QC and MR WAYNE CLARK (instructed by Messrs Geoffrey Delany, Peterborough) appeared on behalf of the Appellant (Defendant).
MR JONATHAN BROCK (instructed by Messrs Theodore Goddard, London EC1A 4EJ) appeared on behalf of the Respondents (Plaintiffs).
The question for decision on this appeal is whether a tenancy for a term certain to which Part II Landlord and Tenant Act 1954 once applied of property which the tenant, Pearl Assurance PLC ("Pearl"), had ceased to occupy for the purpose of its business before the expiration of that term determined at the expiration of the contractual term or only on the later expiration of a notice given by Pearl to its immediate landlords, Esselte AB and British Sugar PLC ("the Landlords"), pursuant to s.27 of that Act. By his order made on 9th May 1995 HH Judge Colyer QC, sitting as a deputy judge of the High Court, declared that the tenancy determined on 24th June 1993 at the expiration of the notice given by Pearl Assurance PLC to the Landlords on 15th January 1993 pursuant to s.27 Landlord and Tenant Act 1954. This is an appeal of Pearl. Pearl contends that the judge should have declared that the tenancy determined on the earlier expiration of the term on 15th February 1993.
On 18th September 1989 Esselte AB as the tenant of part and British Sugar as subtenant of another part of Guild House, Oundle Road, Peterborough executed a lease and an underlease respectively demising those parts to Pearl Assurance PLC for a term of five years commencing on 15th February 1989 and expiring on 14th February 1993. In each case the substantial rent payable by Pearl was payable in advance. By notices in writing given to each of the Landlords on 16th November and 24th December 1992 Pearl purported to terminate the lease or underlease as the case might be on 14th February and 31st March 1993 respectively. It is common ground that all such notices were ineffective. The judge held, and there is no appeal from such finding, that by 6th December 1992 Pearl ceased to occupy Guild House for the purposes of its business within s.23 Landlord and Tenant Act 1954. Thereafter three notices were served. The first was a notice under s.25(1) served by British Sugar on Pearl on 6th January 1993 to determine the sub-tenancy created by the sub-underlease from British Sugar on 3rd January 1994. The second and third were notices under s.27 served by Pearl on each of the Landlords on 16th January 1993 to determine both tenancies on 24th June 1993. It is common ground that the second and third were effective if, contrary to the submissions of Pearl, the tenancies had not determined earlier.
Pearl paid the rent due up to 14th February 1993. The Landlords claimed that it should also pay rent up to 24th June 1993 and on 25th June 1993 commenced proceedings for the purpose of enforcing such a liability. On 20th June 1994 Master Moncaster ordered the trial of a preliminary issue whether the tenancies terminated on 15th February 1993, 24th June 1993 or on some other and if so what date.
The answer to that question depends on the true construction of the relevant provisions of Landlord and Tenant Act 1954 as amended by Law of Property Act 1969. They are as follows:
"23. Tenancies to which Part II applies
(1) Subject to the provisions of this Act, this Part of the Act applies to any tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by him or for those and other purposes.
(2) In this part of the Act the expression 'business' includes a trade, profession or employment and includes any activity carried on by a body of persons, whether corporate or unincorporate.
(3) In the following provisions of this Part of this Act the expression 'the holding', in relation to a tenancy to which this Part of this Act applies, means the property comprised in the tenancy, there being excluded any part thereof which is occupied neither by the tenant nor by person employed by the tenant and so employed for the purposes of a business by reason of which the tenancy is one to which this Part of this Act applies.
……
24. Continuation of tenancies to which Part II applies and grant of new tenancies
(1) A tenancy to which this Part of this Act applies shall not come to an end unless terminated in accordance with the provisions of this Part of this Act; and, subject to the provisions of twenty-nine of this Act the tenant under such a tenancy may apply to the court for a new tenancy —
(a) if the landlord has given notice under section 25 of this Act to terminate the tenancy, or
(b) if the tenant has made a request for a new tenancy in accordance with section twenty-six of this Act.
(2) The last foregoing subsection shall not prevent the coming to an end of a tenancy by notice to quit given by the tenant, by surrender or forfeiture, or by the forfeiture of a superior tenancy unless —
(a) in the case of a notice to quit, the notice was given before the tenant has been in occupation in right of the tenancy for one month; or
(b) in the case of an instrument for surrender, the instrument was executed before, or was executed in pursuance of an agreement made before, the tenant had been in occupation in right of the tenancy for one month.
(3) Notwithstanding anything in subsection (1) of this section, —
(a) where a tenancy to which this Part of this Act applies ceases to be such a tenancy, it shall not come to an end by reason of the cesser, but if it was granted for a term of years certain and has been continued by subsection (1) of this section then (without prejudice to the termination thereof in accordance with any terms of the tenancy) it may be terminated by not less than three nor more than six months' notice in writing given by the landlord to the tenant;
(b) where, at a time when a tenancy is not one to which this Part of this Act applies, the landlord gives notice to quit, the operation of the notice shall not be affected by reason that the tenancy becomes one to which this Part of this Act applies after the giving of the notice.
……
25. Termination of tenancy by the landlord
(1) The landlord may terminate a tenancy to which this Part of the Act applies by a notice given to the tenant in the prescribed form specifying the date at which the tenancy is to come to an end (hereinafter referred to as 'the date of termination'):
Provided that this subsection has effect subject to the provisions of Part IV of this Act as to the interim continuation of tenancies pending the disposal of applications to the court.
……
26. Tenant's request for a new tenancy
(1) A tenant's request for a new tenancy may be made where the tenancy under which he holds for the time being (hereinafter referred to as the "current tenancy") is a tenancy granted for a term of years certain exceeding one year, whether or not continued by section twenty-four of this Act, or granted for a term of years certain and thereinafter from year to year.
(2) A tenant's request for a new tenancy shall be for a tenancy beginning with such date, not more than twelve nor less than six months after the making of the request, as may be specified therein:
Provided that the said date shall not be earlier than the date on which apart from this Act the current tenancy would come to an end by effluxion of time or could be brought to an end by notice to quit given by the tenant.
……
27. Termination by tenant of tenancy for fixed term
(1) Where the tenant under a tenancy to which this Part of this Act applies, being a tenancy granted for a term of years certain, gives to the immediate landlord, not later than three months before the date on which apart from this Act the tenancy would come to an end by effluxion of time, a notice in writing that the tenant does not desire the tenancy to be continued, section twenty-four of this Act shall not have effect in relation to the tenancy unless the notice is given before the tenant has been in occupation in right of the tenancy for one month.
(2) A tenancy granted for a term of years, certain which is continuing by virtue of section twenty-four of this Act may be brought to an end on any quarter day by not less than three months' notice in writing given by the tenant to the immediate landlord, whether the notice is given…after the date on which apart from this Act the tenancy would come to an end or before that date, but not before that tenant has been in occupation in right of the tenancy for one month.
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44. Meaning of 'the landlord' in Part II, and provisions as to mesne landlords, etc
(1) Subject to the next following subsection, in this Part of this Act the expression 'the landlord', in relation to a tenancy (in this section referred to as the 'relevant tenancy'), means the person (whether or not he is the immediate landlord) who is the owner of that interest in the property comprised in the relevant tenancy which for the time being fulfils the following conditions, that is to say —
(a) that it is an interest in reversion expectant (whether immediately or not) on the termination of the relevant tenancy, and
(b) that it is either the fee simple or a tenancy which will not come to an end within fourteen months by...
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