Hagee (London) Ltd v A. B. Erikson and Larson
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ORR,LORD JUSTICE SCARMAN |
| Judgment Date | 19 February 1975 |
| Judgment citation (vLex) | [1975] EWCA Civ J0219-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 February 1975 |
[1975] EWCA Civ J0219-1
In The Supreme Court of Judicature
Court of Appeal
Appeal by defendants from judgment of His Honour Judge Lipfriend sitting as a Deputy Judge of the High Court, on 3rd July 1974.
The Master of The Rolls (Lord Denning),
Lord Justice Orr and
Lord Justice Scarman
Mr. WALTER BLUM (instructed by Messrs. Lake, Parry & Treadwell) appeared on behalf of the Appellant Defendants.
Mr. EDWIN PRINCE (instructed by Messrs. Clifford-Turner & Co.) appeared on behalf of the Respondent Plaintiffs.
In 1956 the House of Lords held that the Landlord and Tenant Act 1954 did not apply to tenancies at will which arose by operation of law: Wheeler v. Mercer (1957) A. C. 416. In Manfield Ltd. v. Botchin (1970) 2 Q. B. 612, Mr. Justice Cooke held that the Act did not apply to a tenancy at will created by a written tenancy agreement. In this case the decision of Mr. Justice Cooke is challenged.
The premises are 122 New Bond Street in London. In September 1970 the head landlords let the premises to Hagee (London) Ltd. at a rent of £5,000 a year. There was a clause in the lease which prevented the bead tenants from letting part of the premises. For a time the company used the whole of the premises for their business of retail menswear. But in the middle of 1971 they found that they did not need the upper floors. They wanted to sublet them, but they knew that the head landlord would not consent to it, because if the upper floor were let to a subtenant he might get a right to a new lease. So the head tenant, with advice of solicitors decided only to grant a sub-tenancy on the terms that it was to be a tenancy at will. They told the sub-tenants that they would have no security of tenure and they might have to go at any time. The agreement was set down in writing in a letter of 1st September 1971 from the head tenants to the sub-tenants:-
"Dear Sirs,
122 New Bond Street, London, W.1
We write to set out the terms upon which we are prepared to let you use and occupy the whole of the upper part of our premises at 122 New Bond Street, W.1., and if you are agreeable to take the same please sign the enclosed copy letter and return the same to us.
1. You shall from the 6th day of September 1971 have the right to enter upon and occupy the whole of the upper part of our premisesat the above address and to use the same as showrooms on the first floor and as offices as to the remainder.
2. Your right of occupation shall be exclusive save and except that it shall be subject to the rights of occupation and use granted to Maple Clothes Limited whose right of use will be terminated by us at the earliest possible date, and notice has been given to them to vacate not later than November 25, 1971.
3. You shall occupy our premises as tenants at will only and shall pay us in respect of your occupation at the rate of £5,000 per annum, payment to be made by four quarterly payments in advance, the first of such payments to be made on the 6th day of September 1971. Any payment made by you in advance of the date upon which this agreement is terminated shall subject to the terms hereof be refundable to you." There are other clauses which I need not mention. It was signed by both parties and dated 1st September 1971.
In September 1973 the head tenants gave the sub-tenants notice to quit. The sub-tenants were told to give up possession by 14th September 1973- They did not go. They asked for a new tenancy under the Landlord and Tenant Act 1934. But to counter their demand, the head tenants brought proceedings against the sub-tenants for possession on the ground that the sub-tenants had no right whatever under that Act.
The question was argued before the County Court Judge. He found that the sub-tenancy was a tenancy at will, although £5,000 a year rent was payable. He held himself bound by the decision of Mr. Justice Cooke. Now, on behalf of the sub-tenants, Mr. Blum has argued here that the decision of Mr. Justice Cooke was erroneous. He says that a tenancy at will created under an express contract comes within the Landlord and Tenant Act 1934 and is accordingly protected.
In Wheeler v. Mercer (1957) A. C. 416, a tenant held over afterhis lease expired. He became a tenant at will by operation of law. He was held not to be entitled under the 1954 Act. That decision does not govern this case. Lord Simonds left open the case of a tenancy at will created by express agreement. He says at page 427: "I do not exclude the possibility of such a contract being a 'tenancy agreement' even If a tenancy at will arising by implication of law is not." On studying the provisions of the 1954 Act, I think that tenancies at will are not contemplated at all, no matter whether created by operation of law or by express agreement. Section 25(3) and (4) show that the only tenancies contemplated as being within the Act are those which are brought to an end by notice to quit and those which are brought to an end by effluxion of time. Section 69 defines notice to quit as meaning: "a notice to terminate a tenancy (whether a periodical tenancy or a tenancy for a term of years certain) given in accordance with the provisions (whether express or implied) of that tenancy." There is no room...
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