Winter Garden Theatre (London) Ltd v Millennium Productions Ltd
| Jurisdiction | UK Non-devolved |
| Judge | Viscount Simon,Lord Porter,Lord Uthwatt,Lord MacDermott |
| Judgment Date | 29 July 1947 |
| Judgment citation (vLex) | [1947] UKHL J0729-1 |
| Court | House of Lords |
| Date | 29 July 1947 |
[1947] UKHL J0729-1
Viscount Simon
Lord Porter
Lord Simonds
Lord Uthwatt
Lord MacDermott
House of Lords
My Lords,
This is an appeal from an order of the Court of Appeal (Lord Greene, M.R., Somervell and Cohen L.JJ.) allowing the Respondents' appeal from the judgment of Mr. Justice Roxburgh, in an action in which the Respondents were Plaintiffs and the Appellants Defendants, and also Plaintiffs by counter-claim. The Learned Judge dismissed the Respondents' claim and gave judgment for the Appellants on their counterclaim. The Court of Appeal reversed this decision, finding for the Respondents on their claim and dismissing the Appellants' counter-claim. The Appellants are appealing from the order of the Court of Appeal in regard to both claim and counter-claim.
The appeal relates to a licence under which the Respondents were permitted to use the Winter Garden Theatre, Drury Lane, which is the property of the Appellants, for the purpose of producing Stage Plays, Concerts or Ballets, in return for a weekly payment which at the time when the Appellants sought to terminate the licence amounted to £300 per week. There was no express term in the licence providing that the Appellants could revoke it and the principal question of the case is whether, as the Respondents contend, and as the Court of Appeal decided, the Respondents are entitled to continue their use of the theatre in perpetuity if they so desire, and continue the weekly payments, or whether, as the Appellants contend, the licence is revocable by them by reasonable notice.
By letter dated June 10th, 1942, from the Appellants to the Countess de la Marr (hereinafter referred to as the Countess) the Appellants purported to grant to a company to be formed by the Countess under the name Millennium Limited a licence to use the theatre on the terms and conditions there set out. A counterpart of the said letter was signed by the Countess "for and on behalf of Millennium Limited in course of registration." By a further letter of the same date, the Appellants stipulated that the licensees should keep deposited with the Appellants a sum equal to four weeks' "rent" at the rate from time to time payable under the licence.
By an Agreement in writing dated October 1st, 1942, to which the Appellants, the Countess and the Respondents were parties, the Appellants consented to the assignment of the licence by the Countess to the Respondents and also consented to the Respondents granting a sub-licence of the theatre to Messrs. Tom Arnold and Jack Hylton upon certain terms and conditions. The parties have proceeded on the view that the effect of the Agreement of the 1st October was to constitute the Respondents from that date licensees of the theatre from the Appellants. The Arnold and Hylton sub-licence came to an end in September, 1943, long before the matters now in question arose, and after such determination the Respondents' licence was governed by the terms of the letter of June 10th, 1942.
Many of the terms of this letter have required close examination during the argument of the appeal. The most important matters contained in it are as follows:—
Clause 1 provided that the licence should be for six months from 6th July, 1942, at a weekly "rent" of £80 per week.
Clause 2 provided that the Respondents should have the following options: —
"At the expiration of the six months you are to have the option of continuing for a further period of six months at a rental of £100 per week plus ten per cent. of the gross weekly receipts in excess of £500 (such receipts to be calculated after deduction of Library discounts and Entertainment Tax) but it is understood and agreed that the maximum rental in any week, including this percentage, shall be £200. Further should an Armistice be signed between Germany and Italy and Great Britain during the second period of your Licence the rent which shall become due and payable shall be at the flat rate of £200 per week.
On the expiration of the two periods of six months before mentioned you are to have the option of further continuing the Licence of the Theatre on the payment each week of a flat rental of £300 per week and you will give us one month's notice of your intention of then terminating the Licence.
You are to give us previous six weeks' notice of your intention to exercise your option to continue the Licence for the further period of six months and six weeks' notice of your intention to exercise your option to continue thereafter."
Clause 3 provided that the Respondents should be responsible for the running expenses of the theatre and should take over the existing staff.
Clause 4 provided that the Appellants should retain the bars and cloak rooms and the right to sell programmes, and the profits or losses arising on these matters should be divided equally.
Clause 5 provided that the Respondents should comply with the terms of the Lord Chamberlain's licence and all other regulations and with the reasonable requests of the Appellants' resident manager.
Clause 6 provided that the Respondents should not enter into any sub-licence of the theatre without the consent of the Appellants, such consent not to be unreasonably withheld, provided mutual arrangement was made for a division of the resulting profit.
The agreement further provided:
( a) That possession of the theatre was retained by the Appellants, but that the Respondents should have the unrestricted right over all the rooms of the theatre with the exception of a certain office and the bars and cloakrooms.
( b) That prices of admission should be fixed by the Respondents, who were however to do nothing which would affect the status of the theatre as a West End theatre.
( c) That the Appellants should pay all rates, taxes, assessments, licence fees and insurances; that the Respondents would on the termination of the licence leave it in the same state as it then was (reasonable wear and tear, damage by storm, tempest and King's enemies excepted); any liability on the Respondents for external or structural repairs was excluded.
( d) That the agreement should not constitute a partnership.
By letter dated November 23rd, 1942, the Respondents exercised their first option and by letter dated April 24th, 1943, the Respondents exercised their further option to continue to use the theatre after the expiration of the two fixed periods.
It is to be noted that, although the expression "rent" or "rental" was used in the documents, it is agreed between the parties (as is plainly the fact) that the Respondents acquired no interest in land but were pure licensees for value, the consideration taking the form of a weekly payment. Such a licence is a contract, and this contract contains the express term that if the Respondents, on proper notice, opt to continue the use of the theatre beyond the first twelve months, they may do so with the right of giving one month's notice of their intention of then terminating the licence. The licensors on the other hand are given by the documents no express right to terminate the licence at all: the question is, is such a right to be implied, and if so, on what terms?
On September 11th, 1945, the Appellants gave the Respondents notice to vacate the theatre on October 13th, 1945, but, in case the Respondents might require further time to make other arrangements, the Appellants wrote a covering letter stating that if October 13th was not a convenient date they would be prepared to give a fresh notice for some later date provided that the date of vacation was not seriously delayed. On September 14th the Respondents replied challenging the authority of the Appellants to terminate the licence in this way. They added that they were heavily committed at the theatre but did not suggest any other date for vacation. On September 20th the Appellants answered that they were entitled to revoke the licence but that they recognised that the Respondents were entitled to a reasonable period within which to move out and again asked the Respondents to suggest a later date. On September 25th the Respondents replied that the licence was not revocable and that they were not prepared to vacate the theatre; they made no suggestion, then or later, of what would be a convenient date.
The Respondents issued their writ on October 9th claiming a declaration that the licence was not revocable by the Appellants except upon breach by the Respondents of its terms. In the alternative, they claimed a declaration that if the licence was revocable at the option of the Appellants such revocation did not become effective until after the lapse of a reasonable time from the notice of revocation and that such time had not elapsed. By an amendment made at the hearing they claimed in the further alternative a declaration that the licence was only revocable by a reasonable notice and that no such notice had been given.
The Appellants' Defence and Counterclaim was delivered on November 27th, 1945. It alleged that the Respondents' licence was revocable by notice and that after the lapse of a reasonable time from such notice the Respondents had no further right to use the theatre and that a reasonable time had elapsed between the notice of September 11th and the delivery of the Counterclaim on November 27th. The Appellants claimed declarations and an injunction in accordance with these allegations, and damages for trespass.
My Lords, the effect of a licence by A to permit B to enter upon A's land or to use his premises for some purpose is in effect an authority which prevents B from being regarded as a trespasser when he avails himself of the licence ( Thomas v. Sorrell, Vaughan, 351). Such a licence may fall into one of various classes. It may be a purely gratuitous licence in return for which A gets...
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