London and Provincial Millinery Stores Ltd v Barclays Bank Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ORMEROD,LORD JUSTICE DANCKWERTS |
| Judgment Date | 05 March 1962 |
| Judgment citation (vLex) | [1962] EWCA Civ J0305-1 |
| Court | Court of Appeal |
| Date | 05 March 1962 |
[1962] EWCA Civ J0305-1
In The Supreme Court of Judicature
Court of Appeal
From his Honour Judge Emlyn-James
Chester County Court
Lord Justice Ormerod
Lord Justice Wilimer and
Lord Justice Danckwerts
MR A. E. HOLDSWORTH (Instructed by Messrs Lawrance Messer & Co.) appeared as Counsel for the Appellants.
MR H. HEATHCOTE-WILLIAMS, Q. C. and MR PHILIP PANTO (instructed by Messrs B. V. Christian & Co.) appeared as Counsel for the Respondents.
This is an appeal from a Judgment of his Honour Judge Emlyn-Jones given at the Chester County Court on the 15th July, 1961, when he granted a now lease for a term of nine years of provisos 73, Foregate Street, Chest or. The only issue before the learned Judge was that of the duration of the lease and that is the only issue which has been argued before this Court. The relevant lease of the premises to the tonants was dated the 1st July, 1947. and was a lease for seven years from the 25th March 1950. It would, therefore, be due to expire in March of 1957. There was an assignment to the present tenants, who have a number of shops of a similar character, on the 3rd October 1949. On the 23rd August, 1956, a notice was given by the tenants to the landlords under Section 26 of the Landlord and Tenant Act, 1954, asking for a new tenancy of the premises as from the 26th March, 1957, which would be from the tine the existing lease expired, and they asked for a tenancy for the maximum period of fourteen years. The landlords at that time were Barclays Bank Ltd. who were acting in the capacity of trustees and did not, therefore, serve a counter notice objecting to the issue of a new tenancy. The position, therefore was that at the appropriate tine after the expiry of the current lease, an application could be made to the Court for a new tenancy and the landlords would then be unable to resist the application but could challenge the terms submitted of the new tenancy. The application to the Court was made on the with December, 1956, and a defence was filed by the landlords on the 10th November, 1957. which put in issue the terms upon which the new lease should be granted. It is material to notice that on the 3rd August, 1961, the landlords, Barclays Bank, contracted to soil the premises comprised in this lease and other adjacent promises to the Venture Property and Development Company Ltd., who have boon called the Venture Company in the course of those proceedings. The case came on for hearing in the County Court a fewdays later, on the 6th August 1961. The contract for sale, which was made on the 3rd August, 1961, was completed by conveyance on the 14th September, 1961. Notice of appeal against the order of the learned Judge was given on the 31st August, 1961, and on the 4th December of the same year the Venture Company was added as appellant.
Those, I think, are the relevant facts, but there are certain other matters which are important, some of which have been proved but in regard to the majority of which there is no challenge. The premises in question are part of larger promises owned by the sane landlords. The tenants was occupants of the ground floor of part of the premises which they use as a milliner's shop. In addition to the shop they have other promises, such as a yard and store, and so on, at the back of the shop. There are other buildings on the sar.10 site adjacent to this shop -and there is a floor above the shop. The evidence is all one way. None of those premises had been occupied for some time, and the consensus of the evidence was that they were in a decrepit or dilapidated condition. The shop itself is situate outside the wall of the City of Chester, and although there arc a number of well established firms, chain store and multiple store firms, who have premises in the same area, the particular district is not regarded quite so highly as a shopping district as the district inside the City walls. None the less it is not I think challenged that Foregate Street is a street where there is a good deal of shopping and whore there are established shop premises occupied by firms of standing. The important thing, I think, to be inferred from that (and, indeed, it is more than an inference because there was a good deal of evidence about it: nor do I think there was any serious challenge) is that the promises were ripe for what in those days is called development. "Development" is a term which does not occur, so far as I know, in the Landlord and Tenant Act; the process there is known as reconstruction, but none the lessit Is generally agreed that these premises were In such a state that some form of reconstruction was obviously desirable and, Indeed, some of the witnesses went so far as to say that reconstruction was demanded. One of the plaintiffs, witnesses, the tenants, own valuer, said that the site was much more valuable empty than built upon, as it was at that time. The real difficulty, I think, Is that in order to put the premises into reasonable condition a very large sum of money would be required, that is to say, large compared with the size of the premises, One of the witnesses said that probably a sum of from £3,000 to £5,000 would be required in order to make the premises safe: indeed, nother of the witnesses went so far as to say that although the shop Itself was In good order and in a good state of repair, nevertheless the buildings above It and the buildings around it were in such a decrepit state that they might at any time fall down and do considerable damage to the shop premises. That, I think, is a fair picture of this site and of the buildings that were upon it.
If those are the circumstances, the question then arises as to the legal position, Mr Holdsworth has been at great pains to outline the various considerations to which the Court should have regard. In the first place, of course, we have to observe that as no counter notice was given by the landlords they can only challenge the proposed terms of the new tenancy. The terms which will be considered by the Court in ordering a new tenancy are to be in accordance with the principles laid down in Section 33 of the Landlord and Tenant Act 1954, and I will refer to that section. It says "Where on an application under this Part of this Act the Court makes an order for the grant of a new tenancy, the new tenancy shall be such tenancy as may be agreed between the landlord and the tenant, or, in default of such an agreement, shall be such a tenancy as may be determined by the Court to be reasonable in all the circumstances, being. If it is a tenancy for a term of years certain, a tenancyfor a term not exceeding fourteen years, and shall begin on the coming to an end of the current tenancy". It will be seen from the wording of that section that In the first place, of course, if the parties can agree, that is an end of the matter. In this case the parties have not agreed and, therefore, the section comes into operation, and in default of agreement, there shall be such a tenancy as may be determined by the Court to be reasonable in all the circumstances, with the limit, in the case of a lease of this kind, of the term of fourteen years.
It is clear that a discretion is vested in the Court in this particular case, having regard to the rateable value of the premises, the County Court of Chester. Not only must the Judge in exercising that discretion take into account all relevant factors, as clearly he must do if he is exercising any discretion (and, indeed, that is what the Act says), but it has been decided that one of the factors to be taken into consideration, and, indeed, an important factor in some cases, is the intention to reconstruct. That was set out clearly in the case of Upsons Ltd. v. E. Robins Ltd., 1956, 1 Queen's Bench, p. 131. There can, I think, be no doubt in this case that there was the intention to reconstruct. Some comment was made during the hearing of the evidence on the fact that a contract for the sale of these premises to the Venture Company occurred only a few days Dei ore the hearing, but I think that contract being entered into was an indication of the intention to reconstruct. The bank as trustees were in no position to do anything of that kind themselves. It is not contested that the Venture Company is a Company whose business is the reconstruction and redevelopment of buildings and building sites. It has also been held (and the authority to which we were referred was Reohorn v. Barry Corporation. 1956, 1 Weekly Law Reports, page 845, some words of Lord Justice Denning, as he then was, at page 849) that if property is ripe for development, then the Landlord and Tenant Act should not be used to impede that development, and in those circumstancesa new tenancy should be of short duration only. Be that as it may, it is clear from the numerous authorities that were cited to us (and I do not propose to go into all of them) that the learned Judge in considering a matter of this kind must take all the factors into account and then must exercise his discretion as to the terms of the tenancy which he should order. I think I must say here that Act the learned Judge does exercise his discretion after having taken into account all the relevant factors and not having taken into account some irrelevant factors, then that appears to be a question of fact and this Court would have no authority to interfere-, and would not wish to interfere even if it could.
Mr Holdsworth, in the course of an extremely able and Interesting argument, submitted that there was here an analogy to the way in which this Court would deal with an appeal on the issue of damages, and we were referred to the well known passage from Lord Justice Greer's Judgment in...
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