First Property Growth Partnership LLP v Royal & Sun Alliance Property Services Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mummery,Lord Justice May,Lord Justice Judge |
| Judgment Date | 27 November 2002 |
| Neutral Citation | [2002] EWCA Civ 1687 |
| Docket Number | Case No: A3/2002/0616 CHANF |
| Court | Court of Appeal (Civil Division) |
| Date | 27 November 2002 |
[2002] EWCA Civ 1687
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (MR JUSTICE RIMER)
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Judge
Lord Justice Mummery and
Lord Justice May
Case No: A3/2002/0616 CHANF
MR KIM LEWISON QC (instructed by Cawdery Kaye Fireman &Taylor) for the Appellant
MR JONATHAN BROCK QC (instructed by Mace & Jones) for the Respondent
This is an appeal, with the permission of the judge, from an order of Rimer J dated 8 March 2002. He granted a declaration on a short point of construction of the rent review provision in a lease as to the time for the giving of a rent review notice by the landlord. The appellant is the landlord of premises at 27 Mount Pleasant, Tunbridge Wells (the Property). On 25 April 2001 it acquired the freehold reversion of the Property, subject to a lease dated 7 May 1975 (the Lease) for a term of 35 years from that date. I shall refer to the appellant as "the Lessor".
In 1993 the respondent acquired the residue of the term of the Lease. It trades from the Property as an estate agent, valuer and auctioneer under the name of Fox & Sons Limited. I shall refer to the respondent as "the Lessee".
The Lease
The dispute between the parties turns on the construction of the rent review provisions in clause 4 of the Lease.
"4. (a) The Lessor may from time to time give notice in writing to the Lessee in accordance with the provisions of this clause requiring the rent payable hereunder to be reviewed
(b) Such notice may be given at any time not more than twelve months before the expiration of each or any of the following years of the said term that is to say every fifth year thereof but not at any other time and from and after the giving of any such notice the following provisions of this clause shall take effect for the purpose of reviewing the rent payable hereunder in accordance with such notice and in such provisions the expression "the material date" shall be construed as meaning the end of the year of the said term during which such notice is given."
There follow provisions establishing the mechanics for ascertainment of the amount of increased rent either by agreement or, in default of agreement, by the appointment of an expert valuer. The Lease continues—
"(f) If the full yearly rack rent so agreed or certified by the said valuer shall be greater than the rent hereinbefore reserved and payable immediately before the material date then as from the material date this Lease shall have effect as if the yearly rent so agreed or certified were the rent reserved by clause 1 hereof but if the full yearly rack rent so agreed or certified is the same as or less than the yearly rent hereby reserved and payable immediately before the material date the yearly rent hereby reserved shall be unchanged
…..
(h) If at any of the review dates the Landlord shall be obliged to comply with any enactment (which expression shall include any Act of Parliament now or hereafter in force and any instrument regulation or order made thereunder or deriving validity therefrom) dealing with the control of rent and which shall restrict or modify the Landlords right to revise the rent in accordance with the terms of this Lease then the Landlord shall on each occasion that any such enactment is removed relaxed or modified be entitled on giving not less than two Months' notice in writing to the tenant expiring after the date of such removal relaxation or modification to introduce an intermediate review date which shall be the date of expiration of such notice and the rent payable hereunder from any such intermediate review date to the next ensuing review date or intermediate review date as the case may be (whichever shall first occur) shall be calculated and agreed or settled in accordance with the provisions of sub clauses (c)(d)(e)(f) and (g) of this clause."
The Lessor gave notice of a rent review on 25 April 2001, by which time the relevant 5 year period, expiring by 7 May 2000, had already passed.
The Proceedings
On 8 August 2001 the Lessor began proceedings against the Lessee for the determination of the following question –
"Whether on the true construction of the Lease a notice under clause 4 is required to be given, if at all, by a set date and, if so, what date."
In the order of 8 March 2002 Rimer J made the following declaration—
"That on a true construction of the lease dated 7 May 1975 to which the original parties were Mount Sion Properties Limited as landlord and Dudley Cecil Quirk and others as tenant a notice given under clause 4(b) may be given at any time during but not more than twelve months before the expiration of each or any of the following years of the term that is to say every fifth year thereof but not at any other time and time is of the essence for the service of the notice."
Rimer J accepted the Lessee's submission that (a) the rent review notice had to be given before the end of the relevant 5 year period expiring by 7 May 2000 and (b) time was of the essence, with the result that a notice given late would be invalid on that ground and the rent set at the 1995 figure could not be reviewed until the end of the next relevant 5 year period expiring on 7 May 2005.
As Mr Kim Lewison QC (counsel for the Lessor) made clear at the opening of the appeal, the Lessor accepts that, if Rimer J's decision on the time limit point is upheld, then time is of the essence for the giving of the rent review notice. As in the court below, Mr Jonathan Brock QC appeared for the Lessee. He contended that the judgment of Rimer J on the time limit point should be upheld for the reasons given by him.
The Judgment
Having correctly directed himself that clause 4(b) fell to be construed "in the context of the relevant parts of the lease as a whole" the judge described the general setting of the rent review provisions—
"12. As to the general picture, the term of the lease is 35 years and clause 1 reserved a specified rent only for the first five years. Thereafter the rent was to be as determined by clause 4, and clause 4(b) shows that the activity towards determining the rent for subsequent periods of the term was to commence no earlier than the beginning of every fifth year of the term. Five divides neatly into 35 so that it is arithmetically obvious that the parties' intention was that in each fifth year a procedure could or would be activated directed at fixing the rent for the five-year period commencing at the beginning of the sixth year. Further, as the only rent which the lease expressly reserves after the first five years is that determined by clause 4, I approach the construction of clause 4 with the instinctive feeling that it is unlikely that the parties intended its machinery to do other than enable the landlord to...
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