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 tenant might apply to him for consent to assign such consent not to be unreasonably withheld. The tenant made an offer to surrender which the landlord accepted. The tenant then, being dissatisfied with the price offered, purported to withdraw his offer. The landlord sued for specific performance of the contract he alleged to exist. The tenant contended that any such agreement was avoided by s.38(1).
Held: The agreement if performed would preclude the tenant applying for a new tenancy at the end of the term, and it was void. However, the provisions providing the machinery for the conclusion of the agreement were not: ‘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.’
References: [1984] 1 All ER 423
Judges: Sir Robert Megarry V-C
Statutes: Landlord and Tenant Act 1954 38(1)
Jurisdiction: England and Wales
This case cites:
- Appeal from – Allnatt Properties Ltd v Newton ChD 1981
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 . .
([1981] 2 All ER 290)
This case is cited by:
- Appealed to – Allnatt Properties Ltd v Newton ChD 1981
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 . .
([1981] 2 All ER 290)
These lists may be incomplete.
Last Update: 27 November 2020; Ref: scu.192035 br>