Royal Courts of Justice,
Strand, London, WC2A 2LL
B e f o r e :
| EDF ENERGY NETWORKS (EPN) Plc
|(1) BOH LIMITED
(2) LAYHAWK CONSULTANTS LIMITED
(3) SALVATORE AVANZATO
Mr Jonathan Small QC (instructed by Ahmud & Co of Hendon) for the First and Second Defendants
Mr Avanzato in person
HEARING DATES: 15,16,17 and 20 July 2009 - Further written submissions 7 September 2009
Crown Copyright ©
To the north of Plot 31 are various other Plots which comprise industrial units (including Plot 35 - Mr Avanzato's plot) which abut the northern boundary of Plot 31.
"Together with a right of way (in common with the Commission and the occupiers of the adjoining and neighbouring premises) at all times and for all purposes necessary for the enjoyment of the demised premises with or without vehicles over and along the Commission's roads and on foot only over and along the Commission's paths as provided from time to time between Wembley Hill Road and the demised premises And Together Also with full right and liberty for the Lessees to lay maintain inspect renew use alter and remove electric cables and lines and conduits or pipes for containing the same where necessary under the Commission's said roads and paths along such route or routes between Wembley Hill Road and the demised premises as may be agreed between the Commission and the Lessees and to break up the surface thereof so far as necessary from time to time for the purpose of relaying repairing maintaining altering and removing the said electric cables and lines and conduits or pipes such right to be exercised on such terms and conditions as may from time to time be agreed between the Commission and the Lessees (all which rights are together hereinafter referred to as "the said rights ") Provided that the Commission may close any such road or path on substituting another similar road or path therefor".
(1) a covenant by the lessee (clause 2(6)) not to erect anything upon the demised premises except an electricity sub-station ;
(2) a covenant by the lessee (clause 2(7)) not to use the demised premises for any purpose other than as an electricity substation; a standard form proviso for re-entry in the event of the yearly rent, or any part thereof, being in arrear for 21 days (whether legally demanded or not).
THE CONVEYANCING HISTORY
The "X" Land
THE SECTION 25 NOTICE
" Whether there are circumstances in which a person can in relation to a tenancy within Part II of the Landlord and Tenant 1954 (and contrary to the decision in Dodson Bull Carpet Co Ltd v. City of London Corporation) serve a notice under section 25 in respect of part only of the premises compromised in the tenancy (being a severed part of the reversion) we not need not decide ".
Implicit in Mr Small's submissions was, I think, the proposition that I should chose not to follow Dodson Bull.
"The defendants' argument, it seems to us, places too much weight upon the statutory fiction in section 140(1) of the 1925 Act. What we are primarily concerned with in the present case are the provisions of Part II of the 1954 Act. They are designed to protect business tenancies. That protection is a matter of much importance to the business community and we think that the proposition that there has been removed from the protection of the Act property which prima facie is within it needs to be approached with some caution. For the reasons which we have indicated, it seems to us clear that, despite the severance, a single tenancy remained in existence in respect of each lease. Prior to the severance, that tenancy was, in each case, plainly within the protection of the 1954 Act. We find it impossible to suppose that Parliament can have intended that the severance of the reversion could remove from the protection of the Act rights of access which might be a vital consequence to the business user of the demised property which itself at all times remained within the protection of the Act. The purpose of section 140 of the 1925 Act is to apportion conditions and rights of re-entry on severance and not to create new rights. It is not a general deeming provision that, where there has been a severance of the reversion, the severed part was the only property originally comprised in the lease. We see no reason to suppose that it was intended to have the effect of removing protective statutory rights of the tenant who would not normally even be a party to the severance ".
Granted that reasoning it is a little difficult to see why Fox L.J. went on to say:-
" Whether there are circumstances in which a person can in relation to a tenancy within Part II of the Landlord and Tenant Act 1954 (and contrary to the decision in Dodson Bull Carpet Co Ltd v. City of London Corporation) serve a notice under section 25 in respect of part only of the premises comprised in the tenancy (being a severed part of the reversion) we need not decide. But if he can, we think that for the reasons which we have indicated in relation to the intendment of the 1954 Act, that would in no way justify the conclusion that the rights of way in the present case are removed from the ambit of the 1954 Act by the severance of the reversion
"Re : Primary Substation at Fourth/Fifth Way Wembley
I am in receipt of your Notice under Section 25 of The Landlord and Tenant Act 1954 in respect of the above property.
I shall be obliged if you would accept this letter as Eastern Electricity's Couternotice under the said Section 25 that it is not willing to give up possession of the premises referred to in your Notice ".
The letter was signed by a Mrs Train, who describes herself as signing for Eastern Electricity's Solicitors.
where with knowledge of the relevant facts a party has acted in a manner which is consistent only with his having chosen one of the two alternative and inconsistent courses of action then open to him - for
example, to determine a contract or alternatively to affirm it - he is held to have made his election accordingly .. "
I have already found that at the date of service of the counter- notice EDF did not appreciate that Mr Dormer was not entitled, under the scheme of Part II, to serve the section 25 notice. Further, I do not regard the terms of the counter- notice as constituting a choice between two alternative, and wholly inconsistent, courses of action. The counter-notice can easily be read, and in my view should be read, as a counter-notice if Mr Dormer were entitled to serve a valid section 25 notice. It does not go further and say that the validity of the section 25 notice is accepted, irrespective of whether or not Mr Dormer had the substantive right under Part II to serve the same. I do not regard the service of the counter-notice as inconsistent with, or mutually exclusive to, the subsequent raising of the argument that Mr Dormer never had the substantive right under Part II to serve a section 25 notice.
PART XI CONTINUATION
(1) it is not necessarily the case, even though no rent was physically paid by EDF, that EDF was in breach of the covenant contained in the Lease to pay the £25 annual rent. On severance of the freehold reversion on the Lease there was no formal apportionment of rent (i.e. no apportionment agreed by EDF, made under statutory powers or under court order). In these circumstances, absent formal apportionment, EDF could pay the whole of the £25 to any of the severed freehold reversioners. It could, therefore, pay the £25 to itself. It did not actually do so but why should it not be treated as if it had, in fact, done so ? If so, there would be no breach of covenant in any event;
(2) where forfeiture takes place by physical re-entry the acts relied upon must be unequivocal. At best the grant of the lease of 27 March 1999 is an equivocal act, since there is no indication that Commercial Rentals Limited ever entered into occupation of any part of Plot 31. The act of forfeiture must manifest an intent to forfeit and the act must be communicated to the tenant. None of these conditions are satisfied in respect of the grant of the lease of 27 March 1999. Indeed, I am more than satisfied that as at the date of the grant of this lease Containerised had no intention, whatsoever, to forfeit the Lease (whether in respect of Plot 31 or Plot 26). Containerised had just purchased Plots 20 and 31 and Mr Todd's initial correspondence with EDF (starting 25 March 1999) is concerned with what is said to be unlawful trespass by EDF across Plot 20. I am more than satisfied that the suggestion that the lease of 27 March 1999 was granted with a view to effecting forfeiture of Plot 31 (and even more so Plot 26) is nothing but a figment of retrospective historical imagination. The lease of 27 March 1999 was entered into for whatever good commercial reasons existed as between Containerised and Commercial Rentals Limited. It had nothing to do with forfeiture at all;
(3) reliance has, also, been placed in the past, although I am not sure how much reliance is placed thereon now, on the lease which Commercial Rentals Limited entered into with Mr Avanzato on 6 March 2001. I am satisfied that this was entered into simply to regulate dealings between Commercial Rentals Limited and Mr Avanzato in respect of the part of Plot 31 which Mr Avanzato was occupying. It most certainly was not an unequivocal act manifesting an intent to forfeit. In any event, neither Containerised nor Commercial Rentals Limited were the freehold owners of Plot 26 at this stage (so the 2001 lease cannot effect a forfeiture of Plot 26).
"The conduct of the parties must unequivocally amount to an acceptance that the tenancy has ended. There must either be relinquishment of possession and its acceptance by the landlord, or other conduct consistent only with the cesser of the tenancy, and the circumstances must be such to render it inequitable for the tenant to dispute that the tenancy has ceased or such as to render it inequitable for the landlord to dispute that the tenancy has ceased".
Peter Gibson L.J. said (paragraph 30):-
"The doctrine of surrender by operation of law is founded upon the principle of estoppel, in that the parties must have acted towards each other in a way that is inconsistent with the continuation of the tenancy. That imposes a high threshold, which must be crossed if the tenant is to be held to have surrendered and the landlord is to be held to have accepted the surrender".
PLOT 20 AGAIN