Case Summary By :
Court : Court of Appeal, Civil Division
Source :  All ER (D) 165 (Feb)
Landlord and tenant – Periodic tenancy – Creation – Claimant bringing proceedings for possession of property against defendants – Defendants claiming periodic tenancy – Judge not addressing issue of whether alleged periodic tenancy at best rent – Judge finding in favour of claimant – Landlord and Tenant Act 1954 – Law of Property Act 1925, s 54.
The claimant company brought proceedings against the first defendant and second defendant, a company owned by the first defendant, claiming the right to possession of a property as freehold owner, following its purchase of the property in July 2006. The defendants resisted the claim relying on a document which they asserted was a lease agreement made in 1998 for a one year tenancy between the prior owner to the property and the first defendant's brother. The defendants submitted that they had taken the benefit of the lease and accordingly had a periodic tenancy over the property which was protected by the Landlord and Tenant Act 1954. They further submitted that the rent was £4,000 and was paid in cash. The claimant disputed the genuineness of the asserted lease and the fact that it had been executed. It further submitted that as registered owner its title took precedence over all prior interests unless they were overriding interests within the meaning of the Land Registration Act 2002. The claimant argued that therefore meant that the tenancy could not suffice as a periodic tenancy unless it fell within s 54 of the Law of Property Act 1925. The issue that arose from that provision was whether, assuming in favour of the defendants that a periodic tenancy might have been otherwise created, whether there was a parole lease because the lease document had not been properly executed, at the best rent or a rent at market rate (the best rent issue). The best rent issue was argued before the judge and evidence was presented to the judge in relation to it. The judge found in favour of the claimant on the basis that the documents relied on did not amount to a lease and made an order giving possession of the property. However, the judge did not make any judgment on the best rent issue. The defendants appealed. The claimant cross-appealed.
The defendants submitted that the conduct of the judge had prevented them from receiving a fair trial.
The claimant conceded that defendants had not received a fair trial and so the issue that remained was the issue arising from the claimant's cross-appeal, namely the best rent issue.
The appeal would be dismissed. The cross-appeal would be allowed.
In the instant case, the point that the judge had entirely ignored was a good point. The effect was that, even giving the fullest effect to the material relied on by the defendants as evidence that a lease had been granted, it could not give rise to a continuing periodic tenancy under the Landlord and Tenant Act 1954. That was because it was clear that, on the evidence, any agreement made for a tenancy at £4,000 of the property was not within the meaning of s 54 of the Act a best rent. Accordingly, the claimant was entitled to possession of the property.
Michael Roberts (instructed by Reid Minty LLP) for the defendants.
David Lewis (instructed by Lawson George) for the claimant.