B e f o r e :
LORD JUSTICE SOMERVELL
LORD JUSTICE JENKINS and
LORD JUSTICE HODSON
Between
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Between:
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Transcript of the Shorthand Notes of The Association of official Shorthandwriters, Ltd.,
Room 392, Royal Courts of Justice, and 2 New Square, Lincoln's Inn, London W.C.2).
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MR. H. HEATHCOTE-WILLIAMS, Q.C. , and MR. C. HAWSER (instructed by Messrs. Ranches & Co)
appeared on behalf of the Appellant (Defendant).
MR. CONSTANTINE GALLOP, Q.C., and MR. G. AVGHERINOS (instructed by Messrs Adler & Adler)
appeared on behalf of the Respondent (plaintiff).
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HTML VERSION OF JUDGMENT
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Crown Copyright ©
LORD JUSTICE SOMERVELL: This is an appeal from a decision of Mr. Justice Ormerod. It is a dispute between landlord and tenant. The question is whether a weekly notice to quit was a valid notice. The tenant entered into an agreement with his landlord at one stage in their relationship for a tenancy for one year, of shop premises at a rent of three pounds a week. At the end of the year he remained in the shop and he continued to pay £3 per week. The notice to quit, as I have said, was on the basis that the tenancy was a weekly one. The tenant now seeks to say that this is wrong and to rely on the presumption — which is a rebuttable presumption — that in certain circumstances where there has been a yearly tenancy or a tenancy for a term and the tenant holds on and rent is accepted, it is a yearly tenancy. It is stated in this way in Hill & Redman:
"A tenancy from year to year arises by presumption of law when a person who has entered upon premises, or, having been a tenant, has remained in possession of premises with the consent of the landlord in such circumstances as to be in the first instance tenant at will or, in the ease of holding over, tenant at sufferance, subsequently pays rent with reference to a yearly holding provided that there are no circumstances to rebut the presumption".
At one time the tenant here was a tenant admittedly by the week. Then there was the agreement for a year to which I have referred and we are concerned with the period after that year had come to an end. It is on the agreement for the year that the tenant relies and it will be noted that the rent as expressed in the agreement was so much per week. The decided cases when a yearly tenancy has been implied are cases where the rent is stated as a rent per year, though, of course, such a rent may be payable half yearly, quarterly, monthly or, in one of the reported cases, weekly.
The first question is whether the fact that there is no yearly rent prevents the presumption applying or, rather, leads to the conclusion that it would not apply unless there might be some other circumstances on which it could be based. That point came before Mr. Justice Maugham (as he then was) in Ladies' Hosiery and Underwear Ltd. v. Carter (1930 1 Chancery, page 304). The learned Judge decided that case on another point, but as this matter had been argued he gave his views upon it. The lease in that case was to let the premises for a term of three years commencing from October the 12th, 1914, at a weekly peat of £2 to be paid every week. The learned Judge refers to the principle which I have stated and to an old case where the principle was applied where the rent was a yearly rent, 20 guineas a year, but it was to be paid weekly. Then he goes on to say this:
"In the present case, the lease or agreement is one for three years at a rent of £2 a week. It is not a lease for three years at a rent of £104 per annum payable weekly: and it is observable that £2 a week is a rent which, as we all know, is not exactly divisible into the number of days either of an ordinary year or of a leap year. I cannot find, and counsel have been unable to find, any case exactly in point; but I have come to the conclusion that there is no reason for extending the views, which are binding on me, as to the terms which justify the inference that a tenancy is from year to year, and that in this case, narrow as the distinction is, the holding over of the premises after the expiration of the agreement of October 10, 1914, would have resulted only, and did result only, is the tenant's being a tenant from week to week".
I agree with that. I think that when, as here, a term comes to an end one has, of course, to consider what inferences are properly to be drawn from the payment and acceptance of rent. That is the basis of the presumption. In the cases in the books the rent is expressed to be so much per year and if one takes the extreme case in which the rent being so expressed is to be payable weekly, when the landlord accepts a weekly sum what he is accepting is an instalment of the agreed figure for a yearly rent. One, therefore, sees from that the force of the line of argument which has led the Court in those cases to presume a tenancy for a further year. But in a case like the present where the rent is expressed to be per week I think when the fixed period has come to an end one should net presume anything but a weekly tenancy, namely, a tenancy for the period in respect of which the rent is expressed. It is one of those cases (and there are many) when the law has to do its best to fill up a gap which has been left by the parties. The parties are obviously in some relationship of landlord and tenant but they have not taken the trouble to write down in black and white what the relationship is. That, I think, is the proper conclusion.
There was a farther point to which the learned Judge referred and though he did not regard it as necessary to his decision I will say a word about it. In July, 1950, this notice to quit was given on the basis that the tenant was a weekly tenant. On receipt of that notice the tenant then proceeded to apply under the Landlord and Tenant Act of 1927 for a new lease and compensation on the basis that that was a good notice bringing his tenancy to an end, whereas, of course, if it had been a yearly tenancy there would have been admittedly a six months' notice required expiring at the end of the year. The learned Judge regarded that as evidence of the intention of the parties as at the time when the year terminated and, therefore, relevant to support the conclusion that the holding over was on the basis of a weekly tenancy. I find it unnecessary to rely on that though it would have been relevant in considering whether the presumption is rebutted if contrary to the view I held there had been a prima facie presumption that the tenant had held on on a yearly tenancy. I do not, however, base my decision on what happened in July 1950 and just afterwards, though it is perhaps comforting to realise that at any rate at that time neither side took the view that this was a yearly and not a weakly relationship. For these reasons I would dismiss the appeal.
LORD JUSTICE JENKINS: I agree. With the exceptions to which I will later refer, I think all the cases in which an implication of a yearly tenancy taking effect after the termination of a letting for one year or a term of years has been held to have been raised have been eases where the original letting from which the implication was deduced was a letting for a year or for a term of years at an annual rent, that is to say, a rent expressed an an annual sum, by whatever instalments it may have been made payable. Mr. Justice Maugham (as he then was) in the Ladies' Hosiery ease in 1930 1 Chancery held, in effect, that it was essential to the implication of a yearly tenancy after the determination of a letting for a year or for a term of years that the rent should be expressed as an annual sum. His view was that where the rent in the original letting was otherwise expressed (as in the ease before him where the original letting was for three years at a rent of £2 a week) there was no ground for the implication of a yearly tenancy. I agree with the reasoning of Mr. Justice Maugham (as he then was) and I think his view is to be preferred to the view taken in the three cases which constitute the exceptions I have mentioned. Those cases were Covered Markets Ltd. v. Green, a decision of Mr. Justice MacNaghten, 1942 2 All England Reports page 140, and two Canadian Cases to which we were referred, namely, Bank of Victoria and M'Hutchison, reported in 7 Victorian Law Reports page 452 and decided in 1881 or 1882, the other, Box v. Attfield, 12 Victorian Law Reports, page 576 decided in 1886. As I have said, I think the reasoning of Lord Maugham in the Ladies' Hosiery & Underwear case is to be preferred and it follows, in my view, that the learned Judge's decision in the present case is warranted by the form of the letting for one year, which was a letting "for a term of one year to commence from the 22nd December, 1947, at the inclusive weekly rent of £3 payable weekly in advance on every Monday in each week during the whole of the tenancy the first four weeks to be paid on the signing hereof", the rent being thus expressed to be payable simply as a weekly rent and not as an instalment of the rent fixed for the one year's tenancy. At highest I think the position so far as it rests on the tenancy agreement alone la equivocal and if it is equivocal then it seems to me that any doubt as to the parties' intention is resolted in favour of the landlord by the facts that the notice to quit of the 7th July, 1950, expressly describes the tenancy as a weekly tenancy and that this view of the position was accepted by the tenant who, thereupon, made his application under the Landlord & Tenant Act 1927 on the footing that he held the premises on a weekly tenancy at £3 per week payable on Mondays, It is no doubt true that the subsequent expression by the parties of erroneous views as to the terms of a bargain previously entered into cannot alter its legal effect; but what one is seeking here is the intention to be imputed to the parties from the facts that the tenant has remained in occupation with the consent of the landlord and has paid rent, after the expiration of the term of the original letting.
As I have said, I think at highest in favour of the tenant the implication here, so far as it is based simply on those bare facts, is equivocal owing to the absence of any reservation of rent expressed as an annual sum. It follows in my view that other evidence may be resorted to for the purpose of ascertaining what their true intention was. Here one has a record of their understanding of the position in July and August 1950 which seems to me to provide at all events soma evidence of what their intention must be taken to have been at the time when the letting for a year at a weekly rent came to an end and the tenant held over. Accordingly, I agree that this appeal should be dismissed.
LORD JUSTICE HODSON: I agree that the observations of Mr. he Justice Maugham (as he then was) in Ladles' Hosiery & Underwear Ltd. v. Carter apply exactly mutatis mutandis to this case and I agree with the learned Judge's view of an agreement which corresponded very closely to the agreement under consideration. That disposed of this case and I think it does involve a rejection of the view which Mr. Justice MacNaghten took in the case of the Covered Market v. Green (1947 2 All England Reports page 141) a case in which the agreement was virtually indistinguishable. It is, therefore, unnecessary to consider what the effect may be or might have been of the subsequent conduct of the parties after the date of the expiration of the agreement. I agree, therefore, that the appeal should be dismissed.
LORD JUSTICE SOMERVELL: I would like to add that I agree with what my brethren have said about the Covered Market case. The appeal will be dismissed with costs.
MR. HEATHCOTE-WILLIAMS: My instructions are to ask your Lordships for leave to appeal to the House of Lords.
LORD JUSTICE SOMERVELL: No, we do not think so.
