Jacobs v Chaudhuri
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HARMAN,LORD JUSTICE DAVIES,LORD JUSTICE WINN |
| Judgment Date | 02 February 1968 |
| Judgment citation (vLex) | [1968] EWCA Civ J0202-4 |
| Court | Court of Appeal (Civil Division) |
[1968] EWCA Civ J0202-4
In The Supreme Court of Judicature
The Court of Appeal
(Civil Division)
(From: Her Honour Deputy Judge Rowland - Margate County Court)
Lord Justice Harman
Lord Justice Davies and
Lord Justice Winn
In the Matter of the Landlord and Tenant act 1954
- and
In the Matter of Premises known as the Theatre Royal Margate:
Mr, M. O'CONNELL STRANDERS, Q.C. and Mr. B.T. BUCKLE (instructed by Messrs. Boxall & Boxall, Agents for Messrs. Boys & Maughan, Margate, Kent) appeared on behalf of the Appellant (Applicant).
Mr. J.S. COLYER (instructed by Messrs. Robinson & Allfree, Broadstairs, Kent) appeared on behalf of the Respondent.
This is an appeal from the decision of the deputy County Court judge at Margate County Court under the Landlord and Tenant Act, 1954, whereby Her Honour refused an application by the applicant Harry Jacobs for a new tenancy of an extremely dilapidated building at Margate which he had been conducting as a bingo hall. The learned deputy judge delivered a most careful and lucid judgment for which this Court is much obliged to her and the case has been very well argued here and raises a point of some difficulty on which I confess my mind has wavered from time to time.
The plaintiff, a man with apparently some experience of running clubs, in 1964 became friendly with a Mr. Wootton and the two decided to embark on a joint adventure in running a bingo hall in this theatre, and for that purpose they entered into a lease dated the 8th November, 1965, the respondent being the landlord, whereby he demised to Messrs, Jacobs and Wootton (there defined as the tenants, which expression should include their successors in title) The Theatre Royal, Margate, for a term of one year from Michaelmas, 1965, at a rent of £1,500 a year plus an insurance covenant. The lease contained joint and several covenants by the tenants to keep the demised premises in repair (which of course would include the obligation to put them in repair) and other covenants usual in a repairing lease: further to use the property as a bingo hall only and not to assign, underlet, charge or part with possession, this last being an absolute prohibition. The lease also contained the usual power of re-entry, a special right to terminate the lease if the roof of the building proved to be beyond repair and an option to "the tenants" to take a further lease at the expiration of the current term for a period of two years at the same rent and on the same terms except the option.
The partners apparently entered into possession at the beginning of October, 1965, or thereabouts and carried on the bingo hall with some success, but towards the end of Novemberthey fell out and Wootton left and handed over the property and the conduct of the business to the applicant, who has carried it on ever since and has performed apparently all the tenants' obligations under the lease.
There have been comparatively lengthy negotiations for the winding up of the partnership but that was completed in January of 1967, when the accounts were agreed on the footing that the partnership was dissolved as from the 26th November, 1965, and in February, 1967, a sum of over £1,300 was paid to Wotton in satisfaction of all his rights in the business, whether to share the capital or profits. From that time on, anyhow, Wootton had no beneficial interest in the business but would be entitled to indemnity from his former partner against liability under the lease, for that is still subsisting, although only grafted for a year from Michaelmas, 1965, having regard to Part II of the Landlord and Tenant Act, 1954. The long title of that Act reads (so far as relevant): "An Act. to enable tenants occupying property for business, professional or certain other purposes to obtain new tenancies in certain cases. "This is brought about by. Part II, which begins, in section 23 (1), "Subject to the provisions of this Act, this Part of this 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".
Section 24 provides: "(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 Acts; and, subject to the provisions of section 29 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 the next following section to terminate the tenancy…."
Section 25 allows the landlord to terminate the tenancy. "(1) The landlord may terminate a tenancy to which this Part of this Act applies by a notice given to the tenant in the prescribedform specifying the date at which the tenancy is to come to an end (hereinafter referred to as 'the date of termination'): Provided that this sub-section 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". I take it that it is under that that this tenancy is at present going on.
Section 29 says this: "(1) Subject to the provisions of this Act, on an application under sub-section (1) of section 24 of this Act for a new tenancy the court shall make an order for the grant of a tenancy comprising such property, at such rent and on such other terms, as are hereinafter provided".
To that I ought to add section 41, which says: "(1) Where a tenancy is held on trust, occupation by all or any of the beneficiaries under the trust, and the carrying on of a business by all or any of the beneficiaries, shall be treated for the purposes of section 23 of this Act as equivalent to occupation or the carrying on of a business by the tenant…"
Now the landlord here did serve a notice to terminate under section 25 which is to be taken as good notice, the date of termination being February 27th, 1967. This notice stated that the landlord would not oppose an application for a new tenancy. It was served on both tenants, but they had by this time fallen out and Mr. wootton was not willing, as afterwards appeared, to join in an application for a new tenancy. This was not unnatural as he had no interest in the business subject to his share of the assets being paid out to him. The applicant however was desirous of obtaining a new lease and on the 18th October, 1966, he served on the landlord what purported to be a counter-notice under section 29 and followed this with an application to the court, applying for a new tenancy for himself for a term of two years from February, 1967, the date on which the landlord's notice expired. The applicant's notico was accompanied by a letter in these terms: "18th October 1966. The Theatre Royal, Margate. As solicitors for one of your tenants Mr. Harry Jacobs we encloseherewith Notice under the Landlord and Tenant Act 1954 in answer to your Notice dated the 23rd August 1966. This notice is sent by registered post.": and so forth. It is to be observed that the solicitors describe Mr. Jacobs as "one of your tenants". The question is whether the applicant as one of the two joint tenants to whom the lease was granted in 1965 is a person entitled within the Act to apply for and obtain a new tenancy.
The respondent landlord objects to the grant of a new tenancy to the applicant, according to his answer, on the ground that the court has no jurisdiction to entertain the application because it is not made by the tenants under the lease but by only one of them. It appeared however in the course of the hearing that this was not the landlord's real reason but that he is desirous of granting a tenancy to Mr. Wootton for a longer term and at a higher rent than would be exigible under the Act, and the applicant's grievance is that he who has built-up the business and created the goodwill and has been ever since November, 1965, the sole occupier is in fact being edged out by his former partner, who admittedly has no rights at all under the statute, so that the applicant who has borne the burden and heat of the day as well as paying the rent and complying with the covenants of the lease is being defrauded of his just reward. It is, says the applicant, the object of the Act, as its long title shows, to grant security of tenure to those who have built up businesses on leasehold property and that this object is being frustrated by the machinations of the landlord and Mr. Wootton. I cannot help sympathising with this view, but the question remains whether the statute entitles the applicant to a new lease or no: it is not a question of discretion of the court having regard to the form of section 29 (1).
The applicant bases his case on the fact that he, and he alone, is the beneficial owner of what was formerly the partnership property and that Wootton has no beneficial interest at all and is merely a bare trustee of the lease which would have been assigned to the applicant but for the prohibition against assignment contained in it. Under these circumstances, says theapplicant, he does or should he held to come within section 23 (1) as being "the tenant" occupying the premises for the purposes of a business carried on by him. He also says he satisfies section 24 (1) as being "the tenant under such a tenancy", that is to say a tenancy within Part II of the Act. He calls in aid the decision of lord Justice Scrutton in ( Howson v. Buxton 97 law Journal, King's Bench, page 749). That was a case under section 12 of the Agricultural Holdings Act, 1923, under which "tenants" may have compensation for disturbance in respect of the removal of goods and chattels or agricultural machinery. The tenancy there was in favour of two people, B. and W., as joint tenants,...
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