TFS Stores Ltd v The Designer Retail Outlet Centres (Mansfield) General Partner Ltd
| Jurisdiction | England & Wales |
| Judge | Davis-White |
| Judgment Date | 04 June 2019 |
| Neutral Citation | [2019] EWHC 1363 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: PT-2017-000099 |
| Date | 04 June 2019 |
[2019] EWHC 1363 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST (ChD)
Rolls Building,
Fetter Lane,
London EC4A 1NL
HIS HONOUR JUDGE Davis-White QC
(SITTING AS A JUDGE OF THE HIGH COURT)
Case No: PT-2017-000099
Case No. PT-2018-000035
Mr Guy Fetherstonhaugh QC and Mr Mark Galtrey (instructed by Gordons LLP) for the Claimant in Claim no. PT-2017-000099 and the Defendant in Claim no. Case No. PT-2018-000035
Mr Wayne Clark and Mr Joseph Ollech (instructed by Shoosmiths LLP) for the Defendant in Claim No. PT-2017-000099 and the Claimants in Claim no. PT-2018-000035
Hearing date: 13 – 16 May 2019
HIS HONOUR JUDGE Davis-White QC
(SITTING AS A JUDGE OF THE HIGH COURT)
Approved Judgment
I direct that pursuant to CPR PD 39 A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
HIS HONOUR JUDGE Davis-White QC (SITTING AS A JUDGE OF THE HIGH COURT)
His Honour Judge Davis-White QC:
Introduction
The question in this case is whether valid agreements have been reached to exclude certain tenancies of six different business premises from the protections of sections 24 to 28 of Part II of the Landlord and Tenant Act 1954 (the “ 1954 Act”). That turns upon whether the procedural requirements of s38A of the 1954 Act (as inserted by the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 (the “ 2003 Order”) have been met.
By the time of the trial before me, the issues regarding validity had been narrowed to three:
(1) Whether solicitors for the tenant, in the case of two of the tenancies, had authority in each case to accept service of a Warning Notice under the s38A procedure;
(2) Whether a particular employee of the tenant who executed statutory declarations in relation to the same two tenancies, purportedly in compliance with the s38A procedure, had authority to do so;
(3) Whether the relevant statutory declaration was validly completed as regards the description of the tenancy in question in the case of each of the six leases. The relevant wording whose validity is challenged, relates to the commencement date. Two different formulae were used. One in respect of two of the tenancies and one in respect of four of the tenancies.
Although raised as issues on the pleadings, it was agreed that I did not need to determine certain issues:
(1) The Tenant reserved its position for a higher court as regards the question of the validity of service of Warning Notices under the s38A procedure on agents of, rather than directly on, the prospective tenant, accepting that I am bound by authority to the effect that service on an agent will suffice (see Galinski v McHugh (1989) 57 P&CR 539 and Yenula Properties Ltd v Naidu [2002] L&TR 9).
(2) In the light of disclosure, subject to (1) and the question of the details of the “commencement date” in the relevant statutory declarations, the Tenant accepted that no issue remained with regard to the validity of the relevant s38A procedure as regards the tenancies other than those of the Bridgend and Mansfield Premises.
(3) Following cross-examination, the Tenant determined not to pursue further an issue raised on the pleadings, that the statutory declaration regarding the tenancy of the Bridgend Premises was entered into after (rather than before) entry into a legally binding contract to take a tenancy and that therefore the s38A procedure had not been validly followed. At the commencement of the trial this issue had been limited to the tenancy of the Bridgend Premises.
The question of authority raises issues as to whether there was express or implied actual authority or apparent authority in each case and, if not, whether such authority was conferred with retrospective effect by ratification. Finally, and failing all else, there is a question as to whether there is an estoppel by deed (namely through execution of the relevant lease) that the procedure under the 2003 Order was validly followed. As regards the descriptions of the premises in each of the statutory declarations, the issue is one of law. Estoppel by convention arising from the relevant leases has not been relied upon as regards this issue, though in argument I think Mr Clark ultimately accepted that if the estoppel by convention argument was correct it could probably be relied upon to validate any defect in the content of the statutory declarations as well as any want of authority in the person making the same.
In the event that I find that the tenancies in question were validly excluded from the protection of Part II of the 1954 Act, the remaining issue is whether, as regards the five leases which (on this basis) are now ended but where the tenant is holding over, the landlord is entitled to double the yearly value of the lands in question during the period of holding over after expiry. Such entitlement is said to arise under the Landlord and Tenant Act 1730.
The Parties
TFS Stores Limited (“ TFS”) is or has been the tenant, either the original tenant or by assignment, of leases at the following retail outlet premises of which the current registered landlords (the “ Landlords”) are as shown below:
| Date of lease (Expiry of term) | Premises | Landlord(s) |
| 04.11.08 | Unit 50A, BMG McArthur Glen Designer Outlet, East Midlands (the “ Mansfield Premises”) | The Designer Retail Outlet Centres (Mansfield) General Partner Limited |
| 26.08.09 | Unit 4, Bridgend Designer Outlet (the “ Bridgend Premises”) | (1) British Overseas Bank Nominees Limited (2) WGTC Nominees Limited |
| 14.07.17 (31.03.18) | Unit 25, Ashford Designer Outlet, Kimberley Walk, Ashford (the “ Ashford Premises”) | BMG (Ashford) Limited |
| 14.07.17 (31.03.18) | Unit 122, Cheshire Oaks Outlet, Kinsey Road, Wirral CH65 9JJ (the “ Cheshire Oaks Premises”) | (1) UK OM (LP2) (GP) Limited (2) UK OM (LP2) Limited |
| 14.07.17 (31.03.18) | Unit 69, York Designer Outlet, St Nicholas Avenue, York YO19 4TA (the “ York Premises”) | The Designer Retail Outlet Centres (York) General Partner Limited |
| 10.02.15 (09.11.24) | Unit 122 Swindon Designer Outlet, Kemble Drive, Swindon (the “ Swindon Premises”) | (1) UK OM (LP3) (GP) Limited (2) UK (OM) LP3) Limited |
TFS is a company that was incorporated in January 2009. It trades in fragrance products through about 200 retail stores and has approximately 1,500 staff. Its trading name is “The Fragrance Shop”. It is largely the creation of Mr Sanjay Vadera (“ Mr Vadera”), a director and its Chief Executive Officer. It, with another company, Perfume Point Limited (“ PPL”), are each owned as to in excess of 75% by Cartoon (Holdings) Limited, which is itself controlled by Mr Vadera. PPL was the predecessor tenant to TFS with regard to the Mansfield and Bridgend Premises, the tenancy since having been assigned to TFS. As I understand matters, it was also the tenant of previous leases of the York, Ashford and Cheshire Oaks Premises.
Each of the landlords is a nominee landlord of an investor group which owns designer outlet shopping centres. McArthur Glen (UK) Limited (“ McArthur Glen”) manages these shopping centres on behalf of the landlords. All negotiations for entry into leases of the retail units at the centres which are relevant to the leases before me were conducted on behalf of the landlords by McArthur Glen.
Representation and the evidence
Mr Guy Fetherstonhaugh QC, leading Mr Mark Galtrey, appeared for TFS which is the Claimant in Claim no. PT-2017-000099 and the Defendant in Claim no. PT-2018-000035. Mr Wayne Clark, leading Mr Joseph Ollech, appeared for the Landlords, three of whom (the landlords of the Bridgend and Mansfield Premises) are the Defendants in Claim no. PT-2017-000099 and the remainder are the Claimants in claim no. PT-2018-000035. I am grateful to Counsel for their written and oral submissions and to the solicitors for having prepared the bundle in this case.
On behalf of TFS I heard oral evidence from:
(1) Mr Vadera. In my assessment, until comparatively recently, Mr Vadera did not really understand or focus on the question of what the protections were under the 1954 Act, whether they were excluded and if so what the overall effect was. I am satisfied that as far as he was concerned, he regarded the question of lease renewal as being almost as certain as night following day and he considered that there was no appreciable risk of new tenancies not being...
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