Town Investments Ltd v Department of the Environment
| Jurisdiction | UK Non-devolved |
| Judge | Lord Diplock,Lord Morris of Borth-y-Gest,Lord Simon of Glaisdale,Lord Kilbrandon,Lord Edmund-Davies |
| Judgment Date | 02 March 1977 |
| Judgment citation (vLex) | [1977] UKHL J0302-1 |
| Court | House of Lords |
| Date | 02 March 1977 |
[1977] UKHL J0302-1
Lord Diplock
Lord Morris of Borth-y-Gest
Lord Simon of Glaisdale
Lord Kilbrandon
Lord Edmund-Davies
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause Town Investments Limited and others against Department of the Environment, That the Committee had heard Counsel, as well on Monday the 13th, Tuesday the 14th, Wednesday the 15th and Thursday the 16th, days of December last, as on Monday the 10th day of January last, upon the Petition and Appeal of The Department of the Environment, of 2 Marsham Street, London, S.W.l, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 10th of May 1976, so far as regards the words, "THIS COURT DOTH ORDER that the said Order insofar as it relates to the tenancy created by the said Underlease made 14th September 1973 comprising the said premises Keysign House Numbers 421 423 425 427 and 429 Oxford Street London W.l and to the tenancy created by the said Underlease made 28th September 1973 comprising the said premises 17 North Audley Street London W.1 be affirmed" might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament, might seem meet; as also upon the Case of the London County Freehold and Leasehold Properties Limited and MEPC (Mayfair Properties) Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 10th day of May 1976, in part complained of in the said Appeal, be, and the same is hereby, Reversed, except as to Costs, and that Originating Summonses Nos. 1973 L3774 and M5012, dated 30th November 1973, be, and the same are hereby Dismissed: And it is further Ordered, That there be no Costs of the Appeal to this House: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Chancery Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
On 6th November, 1972, and at all material times thereafter, two buildings known as Keysign House, Oxford Street, and No. 17 North Audley Street, in London, were occupied as Government offices. 6th November 1972 was the starting date of the rent freeze imposed by the Counter-Inflation (Business Rents) Order 1972, made under Section 2(4) of the Counter-Inflation (Temporary Provisions) Act 1972, and continued by the Counter-Inflation (Business Rents) Order 1973, made under Part II of the Counter-Inflation Act 1973, which replaced the earlier statute.
These orders, as their names indicate, dealt with rents payable under "business tenancies" and their effect was to prohibit a landlord during a standstill period which ultimately expired in March 1975 from recovering rent at a rate in excess of the rent payable on 6th November 1972.
Each of the orders contained a definition of "business tenancy" and a statement of what was included in the expression "business" in terms that are identical so far as they are relevant to the facts of these appeals:�
"'Business tenancy' means 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 �"
"'Business' includes a trade, profession or employment and includes any activity carried on by a body of persons, whether corporate or unincorporate".
The only issue before this House has been whether during the standstill period the premises to which these appeals relate were the subject of "business tenancies" within the meaning of the order. This in turn depends upon the answer to three questions:� (1) Who was the tenant of the premises? (2) Were the premises or any part of them occupied by the tenant? And, if so, (3) was the tenant's occupation for the purposes of a business carried on by him or for those and other purposes?
The leasehold title under which Keysign House was held on 6th November 1972 was an underlease entered into in 1952. The landlord was the predecessor in title of the respondents, the London County Freehold and Leasehold Properties Limited; the tenant was described as follows:�
"The Minister of Works (hereinafter called 'the Lessee' which expression where the context so admits includes his successors and assigns) for and on behalf of Her Majesty."
In the case of No. 17 North Audley Street, the landlord was the predecessor in title of the respondent, MEPC (Mayfair Properties) Limited. The tenant was described as follows:�
"The Minister of Works (hereinafter called 'the Tenant' which expression shall where the context so admits include his assigns) for and on behalf of Her Majesty".
Both of these leases expired upon 25th December 1972. Fresh leases for a term of 5 years from 25th December 1972 were entered into in substantially the same terms as those which they replaced. The description of the lessee/tenant in the new leases was the same as in the former leases of 1952 except that the description "Secretary of State for the Environment" was substituted for that of "Minister of Works".
This change in title was a consequence of the Secretary of State for the Environment Order 1970, made under the Ministers of the Crown (Transfer of Functions) Act 1946. By this order the former Ministry of Works, whose title had in 1962 been changed to that of Ministry of Public Buildings and Works, was dissolved and all the functions of the Minister of Public Buildings and Works were transferred to the Secretary of State for the Environment, to whom were also transferred all property, rights and liabilities to which that Minister was entitled or subject to before the coming into operation of the order.
Included in the functions of the Minister of Public Buildings and Works transferred to the Secretary of State for the Environment, was the provision of accommodation for civil servants employed in departments of government other than the Ministry of which that Minister was head. At all material times the buildings that are the subject of these appeals were used to accommodate civil servants who were not engaged in the work of the Ministry of Public Buildings and Works or the Department of the Environment, but were engaged in the work of other government departments.
The rents reserved under the 1952 leases and current on 6th November 1972 had been in the case of Keysign House £39,690, and in the case of No. 17 North Audley Street £17,500. Under the new leases the rents reserved from 25th December 1972 were in the case of Keysign House £369,500, and in the case of No. 17 North Audley Street £19,000, viz. more than ten times as much as previously. If the Counter-Inflation Orders of 1972 and 1973 applied to the premises, only the former rents were payable in respect of the standstill period.
The landlord's claim that these orders did not apply to either of the premises. They took out an originating summons for a declaration to this effect and for a declaration that the rents payable after 25th December 1972 were the rents payable under the new leases and not the lower rents payable under the 1952 leases.
The summonses were heard together before Foster J. The main ground on which he found in favour of the landlords was that the Crown was not entitled to avail itself of the provisions of either of the Acts or Orders in Council made thereunder, because it is expressly stated in each of the Acts that it does not bind the Crown. This ground of decision was not accepted by the Court of Appeal as correct in law, and has not been relied upon in your Lordships' House. In view of the provisions of section 31(1) of the Crown Proceedings Act 1947, I need say no more about it.
The appeal by the Department of the Environment from the judgment of Foster J. was dismissed by the Court of Appeal upon another ground. They held that neither of the premises was the subject of a "business tenancy" within the meaning of the Counter-Inflation Orders. Their answers to the three questions that are posed by this appeal were (1) The tenant is the Secretary of State for the Environment and not the Crown; (2) No part of the premises were occupied by the tenant, and (3) No part of the premises were occupied for the purposes of a "business".
Accordingly, I turn to these three questions:�
1. Who was the tenant of the premises?
In the Court of Appeal this was treated as a pure question of construction of the leases themselves, as if Her Majesty, the Minister of Works, and the Secretary of State for the Environment were all persons to whose relationships to one another and to third parties the ordinary principles and concepts of private law applied. If this were right, it would involve a conflict between, on the one hand, the statement in the lease that the Minister or the Secretary of State is party thereto "for and on behalf of Her Majesty" and, on the other hand, the inclusion in the definition of "the lessee" in the case of Keysign House, of "his successors and assigns" and, in the definition of "the tenant" in the case of No. 17 North Audley Street, of "his assigns". This conflict was pointed out by Buckley L.J. and Sir John Pennycuick and resolved by them by holding that the tenant was the Minister or Secretary of State and not the Crown, and...
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