A business lease provided that if the tenant wished to assign, he must first offer a surrender to the landlord for the net premium value. If the landlord did not accept, then he could apply for consent to assign, such consent not to be unreasonably withheld. The tenant made an offer which was accepted. The tenant then, unhappy with the offer, withdrew his own offer. The landlord sought specific performance. The tenant said the agreement was avoided by s.38(1).
Held: Though the agreement if performed was void, precluding the tenant applying for a new tenancy. However the machinery for the conclusion of that agreement was not.
Sir Robert Megarry V-C said: ‘In short, until it is known whether the landlords have accepted or rejected the offer to surrender it cannot be known whether there is any agreement which will preclude an application or request, within the meaning of the subsection : there may or may not be. It will be observed that all that cl 3(21)(b) does is to require an offer to be made; it depends on what happens to that offer whether there ever comes into being an agreement which offends against the subsection. It is not as if the sub-clause gave the landlords an option or other right to require the tenant to surrender the lease. In my view, the sub-clause does not fall within the subsection, but stands at one remove from anything that does. It seems to me that the subsection, as construed in Joseph v Joseph, is perfectly adequate to guard against the mischief which it envisages if it strikes down the actual agreement to surrender, and that there is no need to construe the subsection so as to make it extend to the mechanism for producing an offer which, if accepted, would be invalidated. Nor do I feel any more enthusiasm than was felt by the Court of Appeal in Joseph v Joseph for enabling either party to a lease to escape from his bargain further than is necessary to give effect to the subsection and its manifest purpose.’
Sir Robert Megarry V-C
[1981] 2 All ER 290
Landlord and Tenant Act 1954 38(1)
England and Wales
Citing:
Cited – Joseph v Joseph CA 1967
The words in section 38(1) ‘purports to’ means ‘has the effect that’ so that an agreement to give up possession in two years when the lease would still have six years to run infringed section 38 as it would preclude an application or request for a . .
Cited by:
Cited – Tiffany Investments Ltd and Another v Bircham and Co Nominees (No 2) Limited and others CA 4-Dec-2003
The tenancy was a long lease at a low rent under the 1954 Act, and so had continuing protection under the 1977 Act whilst occupied by the original tenant. The lease was assigned and registered. It had been conditional upon an application to purchase . .
Appeal from – Allnatt Properties Ltd v Newton 1984
A business lease contained a clause to the effect that if the tenant wished to assign the premises he should first offer to surrender them to the landlord for the equivalent of the net premium value. If the landlord did not accept the offer then the . .
These lists may be incomplete.
Updated: 24 June 2021; Ref: scu.192034
