Tunstall v Steigmann
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DANCKWERTS |
| Judgment Date | 23 March 1962 |
| Judgment citation (vLex) | [1962] EWCA Civ J0323-1 |
| Date | 23 March 1962 |
| Court | Court of Appeal |
[1962] EWCA Civ J0323-1
Lord Justice Ormerod
Lord Justice Wilimer and
Lord Justice Danckwerts
In The Supreme Court of Judicature
Court of Appeal
From His Honour Judge McKee York County Court
MR J. C. A. BUHKE-GAFFNEY (instructed by Messrs Ridsdale & Son, Agents for Messrs Crosbis, Wilkinson & Robinson, York) appearedas Counsel fop the Appellant.
MR E. ASHIEY BRAMALL (instructed by lisssrs Kenneth, Brown, Baker, Batesr, Agents for Messrs H. E. Harrowell, Bloor, For & Stanley, York) appeared as Counsel for the Respondent.
LORD JUSTICE GREKROD: This appeal, which is from an order of his Honour Judge McKee made at the York County Court on the 26th September, 1961, raises a novel point on the construction of the Landlord and Tenant, Act, 1954, Section 30(1)(g). The County Court Judge decided the tenant was not in the circumstances entitle to a new tenamey.
The necessary facts are that Mrs Tunstall was tenant of a shop at 28 Fossgate, York, where she carried on the business of a wardrobe dealer. Mrs Steigman, the landlord, is the owner of the pemises and the shop held by the tenant on a lease for three years from the 19th April, 1958, at a weekly rent of £1. 10s.0d. Mrs Steigman also owns the shop next door and has carried on there the business of a pork buteher. On the 12th April, 1961, the landlord br her solicitors served a notice to terminate the tenance on the 19th October, 1961. The notice stated that the landlord would oppose an application for a new tenancy on the ground that she, the landlord, intended to Occupy the holding for the purpose of a business to be carried on by her therein. The notice was in accordance with the provisions of the statute and no question arises thereon. On the 11th October, 1961, the tenant applied to the Court for a grant of a new tenancy pursuant to the Act. The application was for a lease for a term of five years at a rent of £75 par annum. On the 23rd August, 1961, the landlord filed a notice of her intention to oppose the grant on the ground (inter alia) that she intended "to occupy the said premises for the purposes of a business to be carried on by her thereat". In due course the matter came on for herring before the learned County Court Judge. In the meantime, on a date which has not been given to us, the landlord promoted a limited company for the purpose of carrying on her business. It is not challenged that the landlord held the whole of the shares in the limited company, with the exception of two which were in the possession of her nouinses, and had the sole control of the business of the company. This was agreed at the hearing between the partiesand the question then was whother in the circumstances the landlord intended to carry on her business on the premises, the business by that time being owned by the limited company. It was agreed that the learned Judge should consider this preliminary point. He did so and decided that it was the landlord's intention to carry on the business notwithstanding that the business was then owned by the limited company and in the circumstances refused to grant a new lease to the tenant. It is from this order that the tenant appeals and the question before the learned County Court Judge, whieh now comes before this Court, is whether the landlord oan be said to intend to occupy the premises for the purpose of carrying on a business in accordance with the terms of the sub-section when in fact the business is to be carried on by a limited company of which she is virtually the sole shareholder and of which she has complete control.
The learned Judge came to the conclusion that such was the intention of the landlord. It was said that it was the intention of the landlord or of the company to combine the shop, the subject of this application, with the shop in which she had previously carried on her business next door and to carry on the business of a pork butcher in the combined shop. The learned Judge found that this was her intention and that in the circumstances the tenant was not entitled to a new tenancy. He said this: "If this lady (the landlord) were going to carry on the business, clearly she would have good ground for succeeding but she is proposing to carry on the business through a company. The Court of Appeal in Fouler v. Craven made it clear that a company could be a person's alter ego. Where a company is in common sense merely the private individual who has complete control of it, that person is going to occupy for the purposes of their business and their business is really the running of the company. The landlord succesded. Tenant's application refused"
The case of Fegler v. Craven was a decision of this Court and is reported in 1958, 2 Queen's Bench, p. 69 It was acase where a business was to be carried on by a company to which the landlord had assigned the goodwill at the request of the tenant but the company paid no rent to the tenant and the shares of the company were held by the tenant and his wife and some relations and friends and he was the managing director. He alone held rather less than half the shares of the company but with his wife's shares held a majority interest. It was held that the plaintiff was not the occupier of the shop as the business of the shop was the business of the company and was not the tenant's business. He was not, therefore, entitled to the grant of new lease under the Act. There is a passage, however, in the judgment of the Master of the Rolls, Lord Evershed, on page 79 of the report which reads as follows: "It may be that in some circumstances it could be said that a company in actual occupation was but the alter ago of the tenant. It is possible that such a conclusion might be arrived at in some cases I but it cannot, in my Judgment, be arrived at in this case; for, as my brother has pointed out, the company here cannot be said to be a mere alter ago of the applicant Pegler. Though the company's right to occupy the premises is in law no doubt precarious, still it is not a wholly controlled company, and I think it is impossible, therefore, to accede to either of the arguments put forward by Mr Eastham, who does not, I think, substantially dispute the view of the construction of the Act which I have expressed. These arguments are:- (1) that the occupation here of the company is really an occupation for and on behalf of the tenant, and is in truth but an occupation of the tenant; and (2) that the tenant and the company in some sense jointly occupy the shop".
The learned County Court Judge appears to have relied upon the first part of that passage as indicating that in a case such as the one under consideration, the Court will hold that it is the intention of the landlord or tenant as the case may be to carry on the business notwithstanding that the business has been assigned to a limited company, if the company
company and the individual or individuals terslag a company were separate legal entities, however complete the control might he by one or more of those individuals over the company. That is the whole principle of the formation of United liability companies and it would be contrary to the scheme of the Companies Acts to depart from that principle. It has been contended in this case that a realistic view should be taken of the circumstances. It is submitted that any person in the street would say that the business was the landlord's business, notwithstanding that it was being...
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