Caerphilly Concrete Products Ltd v Owen (Hopkins’ Lease, In re)

A lease is perpetually renewable only where its language plainly produces that result. A renewal covenant requiring the further lease to contain the same or like covenants and provisos, expressly including an option to renew, requires the renewal clause itself to be repeated in each successive lease. The wording therefore creates perpetual renewability, despite contrary commercial expectations. Under the Law of Property Act 1922, the lease operates as a 2,000-year term.

Hopkins granted Owen a five-year lease dated 6 May 1963. Clause 4(3) required a further five-year lease containing the same or like covenants and provisos, including an option to renew. The plaintiff later acquired the freehold and argued that Owen’s tenancy had ended when the first term expired. Owen contended that the clause created a perpetually renewable lease and therefore a 2,000-year term. The appeal from Foster J concerned whether the parenthetical words required the renewal covenant to be reproduced in every successive lease. A separate issue concerning rent accepted after expiry was not decided.

Appeal dismissed with costs. All three Lord Justices agreed in the result.

1. Russell LJ stated that perpetual renewability depends on the language of the lease, which must plainly lead to that result. Historically, wording requiring the renewed lease to contain the same or like covenants did not ordinarily include the renewal covenant itself. Words of inclusion could alter that construction.
2. The parenthesis in clause 4(3) made clear that the reference to the same or like covenants included an option to renew. The second lease therefore had to reproduce clause 4(3), including the parenthesis. The inclusion wording operated recursively, so the lease was perpetually renewable. Sachs LJ treated the wording as having the same legal effect as the formula considered in Parkus v Greenwood [1950] Ch 644. Stamp LJ agreed that the case could not be distinguished from that authority.
3. Sachs LJ concurred in the result but expressed substantial concern that the technical conveyancing formula could defeat the parties’ commercial intentions. He preferred confining perpetual renewability to leases using express words such as for ever, but considered this court bound by the authorities. That preference was not part of the majority ratio.
4. Stamp LJ considered that, absent statutory authority to disregard the clear expression of the parties, the lease had to be construed according to its terms. The perpetually renewable lease consequently conferred a 2,000-year term under the Law of Property Act 1922. The issue concerning the later payment of £50 was left undecided.

1. Court of Appeal: In [1971] EWCA Civ 1, the appeal was dismissed with costs. Russell LJ gave the leading reasoning; Sachs LJ concurred in the result and Stamp LJ agreed with Russell LJ.
2. High Court: The appeal was from Foster J, whose decision treated the lease as indistinguishable from Parkus v Greenwood on the question of perpetual renewal.