Sweet & Maxwell Ltd v Universal News Services Ltd

JurisdictionEngland & Wales
JudgeLORD JUSTICE HARMAN,LORD JUSTICE PEARSON
Judgment Date02 June 1964
Judgment citation (vLex)[1964] EWCA Civ J0602-1
CourtCourt of Appeal
Date02 June 1964
Sweet & Maxwell Limited
and
Universal News Services Limited

[1964] EWCA Civ J0602-1

Before:

Lord Justice Harman

Lord Justice Pearson and

Mr. Justice Buckley.

In The Supreme Court of Judicature

Court of Appeal

(From: His Honour Judge Block - Mayor's and City of London Court)

Mr. H. E. FRANCIS. Q. C. and Mr. B. T. BUCKLE (instructed by Messrs. T. D. Jones & Co.; appeared on behalf of the Appellants (Defendants) (Respondents on cross-appeal).

Mr. E. I. GOULDING. Q. C. anMr. V. G. WELLINGS (instructed by Messrs. George & George) appeared on behalf of the Respondents (Plaintiffs) (Appellants on cross-appeal).

LORD JUSTICE HARMAN
1

The plaintiffs in this case are and have been since 1959 or so the tenants of a building recently erected in Fetter Lane in the City known as No. 11 New Fetter Lane. The defendant company is and has for some years been in occupation of either the whole or part of the fifth floor of that building. The question in the action is whether they are entitled to any and what kind of lease of that fifth floor in pursuance of an agreement made between the parties in writing. It is perhaps a slightly odd case to come to this court by way of the Mayor's and City of London Court, but it seems to have had an excellent trial there on proceedings started by the plaintiffs by way of a demand for possession of the floor in question on the footing that the defendants were either licensees or tenants at will only of that floor.

2

The learned judge decided that the agreement set up by the defendants as entitling them to a lease had been repudiated by them but that they were yearly tenants.

3

It is necessary, in order to understand the matter, to go a little back in time. I start in 1959, when the plaintiffs had acquired the building, for a term of 42 years or so, had sublet the ground floor, and were occupying the rest of the building except the fifth floor. At that time they were In touch with a man of the name of Geiringer, and the defendant company Universal News Services Limited was his creation, to which the plaintiffs at his persuasion largely supplied the sinews of war.

4

About the 1st January, 1960, the defendant company being then a subsidiary of the plaintiffs, that company passed a resolution to admit them into the possession of part of the fifth floor. On the 12th February, 1960 (I find this in the judgment) "It was resolved that from the 1st January 1960 the rent of that part of the fifth floor occupied by Universal News Services Limited be charged at the rate of 25s. per square foot and as service charge 1/23rd of the total for the building". Those were the terms on which the defendant company went intooccupation. The so-called rent demand shows the rent as quantified at £2,187. 10s. 0d. a year on the footing that they were occupying 1,750 square feet at 25s. a feet, that being roughly half the floor space of that floor, and "Service charge' (as it is described in the same document) "1/23rd of £3,515". That demand note was for the half-year from 1st January to 30th June, 1960; and the amount of £170. 3s. 3d. was paid in fact according to the date stamp on the 29th August, 1960.

5

There, then, was the set-up (so to call it) in 1960. The defendant company was engaged on a new venture in the journalistic world which I for one do not in the least understand but which I do not think I need explain even if I could. It was a business which was the invention, I gather, of Mr. Geiringer, and it needed no doubt a good deal of time to get it under way. In the meanwhile it needed and was losing a good deal of money which was being supplied by the plaintiff company. By the early part of 1961 Sweet & Maxwell had put some £30,000 down this particular drain and had not seen any of it come back again and decided, as a matter of policy, to button up their pockets and not to put any more money into the venture.

6

The question then arose what was to happen to Mr. Geiringer's child. There was a certain amount of to-ing and fro-ing about it and Mr. Geiringer, being a person of resource, found somebody else, first a bank and then a financier of some sort or another, to keep him afloat, and he eventually persuaded the plaintiff company to allow him to stay where he was while they loosened the bonds that bound the two and wrote their investment (so to call it) down, and got rid of some of their shares: they were going to separate themselves from him.

7

That culminated in an agreement of the 19th March, 1962, between the plaintiff company of the first part, Mr. Geiringer of the second part, a company called A. G. Enterprises Limited (another child of his) of the third part, and the defendant company of the fourth part. There were recitals, and the first five clauses of the agreement dealt with the financial divorceof these two companies, the plaintiffs and the defendants. I do not think they are important for my purpose, except to show that the plaintiff company had not very much prospect or anyway very much likelihood in their view of recovering much of the money they have expended. But there remained, of course, the occupancy by the defendant company of the fifth floor or part of the fifth floor. The fifth floor, being in a modern building, was mostly what in old times would have seemed a desert – just space. There was an office; there was a machine room where very elaborate machinery was installed; but the rest of the space was open and desks were dotted about here and there, and for part of the time anyhow an employee of the plaintiffs had been installed at one of the windows. At another juncture the plaintiffs were willing to allow a sub-tenant to come in for a period of six months, in order to raise a little money, so that they were not being at all unreasonable. They were getting their rent, so it is called, and it was, as the documents show, treated as a rent for part of the fifth floor. One looks for instance at 22nd June, 1961 (paid on the 8th August), "Rent part 5th floor, 11 New Fetter Lane, June quarter at £2,187. 10s. 0d. per annum. Service charge 1/23rd of £4,200", £592. 10s. 0d. The money for that was defrayed from some source of Mr. Geiringer's - for all I know from his own pocket.

8

On the eve of the agreement in writing which I have begun to recite, that was the state of things. The last rent on that footing was asked in fact two days after the agreement of the 19th March. On the 21st March,1962, there is a demand of rent for "part 5th floor, March quarter at £2,187. 10s. 0d. per annum, £546. 17s. 6d: Service charge 1/23rd of £4,527 for March quarter". That was paid on the 29th March; so that up to the 25th March, 1962 – that is to say after the date of the new agreement – the defendant company was still in occupation under that more or less informal agreement, whatever it ought to be styled.

9

Clause 6 of the written agreement, which is the bone ofcontention in this action, is in these terms: "(a) Sweet & Maxwell will grant and U. N. S. will take a lease of the fifth floor of the building known as 11 New Fetter Lane, London, E. C.4, as the same is now in the occupation of U. N. S. together with all ancillary rights as now enjoyed for the term of five years from 25th March 1962 at the exclusive rent of £5,000 per annum. (b) The lease shall be non-assignable for this period but U. N. S, shall have the right to surrender such lease on giving one quarter's notice of its intention so to do. (c) The said lease shall be renewable for a further period of seven years U. N. S. shall give six months' notice of its intention to exercise its right of renewal and at that time rent for the term shall be agreed and in the event of failure to agree the rent shall be determined by an arbitrator appointed by the President of the Royal Institution of Chartered Surveyors, (d) The lease shall contain such other covenants and conditions as shall be reasonably required by Sweet & Maxwell"; and the document is signed over a sixpenny stamp by a director of the plaintiffs and by Mr. Geiringer for all the other parties.

10

Now the rent was thereafter demanded on a new basis, namely on the basis that the lease contemplated by the written agreement would sooner or later be executed. One finds on the 13th June, 1962, a demand for rent of "5th floor" – not "part of 5th floor' but of "5th floor" – "at 65,000 per annum for June quarter, £1,250; Service charge 1 11th for June quarter", so much, and that is paid on the 25th June; and one finds that going on thereafter through 1962 and indeed 1963. The subletting which I have already mentioned was made, I should have said, not before the written agreement but after it, on the 15th May, 1963. Two bays were sublet with the consent of the plaintiffs, who in fact demanded the rent for them.

11

On the 17th April a draft lease was sent by the plaintiffs' solicitors to the defendants' solicitors in the normal way when an executor agreement for a lease is made. The draft on the whole does not need much comment from me. The proposal was(as the written agreement showed) "the rooms or offices situate on the fifth floor of the building known as 11 New Fetter Lane". There was some alight dispute about the garage below, and the parking facilities, but that was settled in the course of time. There were a number of lessees' covenants, to most of which no objection was raised, and there was a controversial one about a covenant by the lessees to repair the structure on their part of the building - unusual in a lease of a floor at a rack rent, as was pointed out, and the proposed lessees' solicitors struck that out in red. But in particular there was a covenant (r), and as drawn it was: "Not to assign underlet or part with the possession of the demised premises or any part thereof or any interest therein for all or any part of the said term". To that, objection was taken on the part of the lessees, who struck out "underlet or...

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