Kaiser Engineers and Constructors Inc. (Plaintiffs) E. R Squibb & Sons Ltd (First Defendants (Respondents) Centrovincial Estates Ltd (Second Defendants (Appellants)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RUSSELL,LORD JUSTICE PHILLIMORE,LORD JUSTICE CAIRNS |
| Judgment Date | 12 November 1971 |
| Judgment citation (vLex) | [1971] EWCA Civ J1112-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 November 1971 |
| Docket Number | 1970 K No. 632 |
[1971] EWCA Civ J1112-1
In The Supreme Court of Judicature
Court of Appeal
On Appeal From the High Court of Justice Chancery Division
(Mr. Justice Ungoed-Thomas)
Lord Justice Russell
Lord Justice Phillimore
and
Lord Justice Cairns
1970 K No. 632
In the Matter of the premises known as the Suite of Offices on the fourth floor Regal House, Twickenham, Middlesex, demised by a sub-Underlease dated 30th June, 1969
and
In the Matter of the Landlord and Tenant Act 1954
MR. G. AVGHERINOS (instructed by Messrs. Baker Dodsworth & Co, Solicitors, London) appeared on behalf of the Second Defendants (Appellants)
MR. W. K. TOPLEY (instructed by Messrs. Linklaters & Paines, Solicitors, London) appeared on behalf of the First Defendants (Respondents)
This appeal concerns a preliminary issue in proceedings under the Landlord & Tenant Act 1954. The issue is between the two defendants Squibb and Centrovincial, and raises the question whether a notice dated 23rd December 1969, given by Centrovincial to Squibb, operated to determine a lease by Centrovincial to Squibb under a break clause in that lease, and operated as a valid notice of determination under section 25 of the Landlord & Tenant Act, 1954. The notice either operated for both purposes or for neither.
Centrovincial own under a head lease an office block, Regal House, Twickenham. By a lease in November 1963 Centrovincial leased to Squibb offices on the 9th floor of Regal House, not comprising the whole floor, for a term of 21 years from 24th June 1963, at a yearly rent of some £10,900. If within one year the lessee should so require, the lease was to contain an option to either party to determine the lease (by not less than 6 months' notice) on 24th June 1970. The lessee did so require and the 1963 lease was accordingly subject to such a break clause.
On 10th June 1965 Centrovincial granted a lease to Squibb of other parts of Regal House for a term expiring also on 24th June 1984 and with the same break clause. The rent was £5,000 per annum. The parcels demised were firstly offices, part of the 4th floor, and secondly a director's residential suite, part of the 9th floor: though described as firstly and secondly it was of course one entire demise or letting, and the break clause could only be operated on the whole demise. Shortly afterwards, as was permitted by the lease, Squibb converted the director's suite into offices and so used it.
In June 1969, Squibb (with the consent of Centrovincial) sublet the 4th floor offices, included in the 1965 lease, to the plaintiff Kaiser at an annual rental of £6,500 for a term expiring on 21st June 1970, three days before the break date in the 1965 lease. Thereafter the 9th floor was occupied by Squibb as offices for the purposes of its business, including what had previously been the director's residential suite, and Kaiser occupied the part 4th floor as offices for its business.
I observe that the fact that the break clause had been by notice introduced into the 1963 lease from Centrovincial to Squibb, though of course known to Centrovincial, had not been communicated (we were told) by Centrovincial to its managing agents.
On 23rd December 1969 the solicitors for Centrovincial sent the following letter to Squibb: "Dear Sirs, Part Fourth floor, Regal House, London Road, Twickenham, Middlesex. On behalf of Centrovincial Estates Limited we enclose by way of service upon you Landlords Notice to terminate your tenancy of the above premises on 24th June 1970".
The notice enclosed was in the following terms, which embodied the prescribed statutory form of landlord's notice of determination under section 25 of the 1954 Act with typewritten additions. It is headed: "Form 7 in the appendix to the Landlord and Tenant (Notices) Regulations, 1957, as amended". Then: "Landlord and Tenant Act 1954; Landlord's Notice to terminate business tenancy. To" and then is typed: "E. R. Squibb & Sons Limited". Then there is the word "of" and then, typed: "Regal House, London Road, Twickenham, Middlesex,""Tenant of premises known as" and then is typed "part of the fourth floor of Regal House London Road, Twickenham aforesaid". Opposite the words "premises known as" is printed the direction "(Insert full address)".
Then paragraph 1 reads, in type: "As Solicitors and agents for Centrovincial Estates Limited whose registered office is at 4, 5 and 6 Savile Row, London W. 1.", and then, printed "landlords… of the above-mentioned premises," and then typed "we the undersigned" and then, printed "hereby give you notice terminating your tenancy on the (blank) day of (blank) 19.", and that is filled in, in type as " 24th day of June 1970".
Paragraph 2: "You are required within two months after the giving of this Notice to notify us in writing whether or not you will be willing to give up possession of the premises on that date" - that is all printed, except for thee erection from "me" to "us".
Paragraph 3: "Your said Landlords would not oppose an application to the court…. under Part II of the Act for the grant of a new tenancy" - that clause is in print, except for "Your said Landlords".
Paragraph 4: "This notice is given under the provisions of section 25 of the Landlord and Tenant Act 1954. Your attention is called to the Notes overleaf", and then there is the date and the signature of the solicitors.
Then attached to, and forming part of. the Notice, as referred to in clause 4 of the body of the notice, are a number of notes, forming part of the statutory form, and in particular I shall read notes 1, 2 and 6. Note 1 reads: "Under the Landlord and Tenant Act 1954, a tenancy of premises to which Part IIof the Act applies continues until it is brought to an end in accordance with the Act. One of the ways in which it can be brought to an end is by a landlord's notice to terminate the tenancy. As a general rule, that Notice must be given not more than 12 nor less than 6 months before the date specified in it for the termination of the current tenancy of the premises. This date must not be earlier than the date on which apart from Part II of the Act the current tenancy would expire or could be terminated by notice to quit given by the landlord on the date of the Notice."
Note 2: "Part II of the Act enables the tenant, on being served with a notice in this form, to apply to the court for an order for the grant of a new tenancy. Such an application, however, will not be entertained unless the tenant has within 2 months after the giving of the Notice terminating the tenancy notified the landlord in writing that he will not be willing to give up possession of the premises on the date specified in the Notice. The application must be made not less than 2 nor more than 4 months after the giving of the Notice."
Note 6: "If the landlord states in this Notice that he will not oppose an application to the court for the grant of a new tenancy, it will be open to the tenant and the landlord to negotiate on the terms of the tenancy. If all the terms are agreed between them, an application to the court will not be necessary; if some but not all of the terms are agreed, the agreed terms will be incorporated in any tenancy granted by the court and the other terms will be such as the court may determine. A new tenancy, if granted by the court, will not includeany part of the property comprised in the current tenancy which is occupied neither by the tenant, nor by a person employed by him for the purposes of his business, unless the landlord requires the new tenancy to include the whole of the property."
It is common ground that for the notice to be effective to operate the break clause in the 1965 lease it must on its true construction be a determination of the whole relationship of landlord and tenant under that lease. Equally if the notice is to be effective as a notice of determination under section 25 of the 1954 Act it must on its true construction be a determination of the whole of such relationship under that lease. I need perhaps not add that failure to establish effectiveness under the break clause is in itself fatal to any validity under the 1954 Act: but the whole question of construction cannot be properly approached without regard to the fact that it purports to be also a section 25 landlord's notice.
The learned judge came to the conclusion, both on first impression and after deliberation, that on its proper construction the notice purported to determine the relationship of landlord and tenant only as affecting the offices on the 4th floor, and that consequently the notice was ineffective. From that conclusion Centrovincial appeals.
One thing is clear: that there is no suggestion that the totality of the premises comprised in the 1965 lease have ever been "known as" "part of the 4th floor of Regal House". There is no suggestion, for example, that the 1965 lease is endorsed simply "Lease of part of 4th floor of Regal House".
The other point of fact to be mentioned is that the 9thfloor content of the 1965 lease was rather less in area than half the 4th floor content.
The argument for the appellant may be summarised as follows. There are two reasonably possible constructions of the notice. One is that the reference to premises known as part of the 4th floor of Regal House is merely a means of identifying the relationship of landlord and tenant created by a particular lease, which it is sought to determine, namely a lease which includes in its parcels, in the property demised, part of the 4th floor. The other reasonably possible construction may be that the reference defines and delimits the particular property in respect of which...
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