Bass Holdings Ltd v Lewis

Section 149(6) of the Law of Property Act 1925 applies to leases granted for life or lives, or to terms of years limited by reference to a life or conditional on survival. It does not convert a fixed-term lease merely because the lease permits termination by notice after the death of a life. Such a lease remains a term of years absolute, even where death is a condition precedent to serving a valid notice. The statutory language and the scheme of sections 1 and 205(xxvii) support that construction.

Bass Holdings Ltd v Lewis concerned a tenancy of the Railway Tavern. Bass Holdings Ltd granted Lewis a three-year underlease from Michaelmas 1974. After the term expired, he held from year to year. The landlord later served notice under the agreement to terminate the tenancy. Lewis contended that section 149(6) of the Law of Property Act 1925 converted the tenancy into a 90-year term determinable by notice after his death.

Hoffmann J rejected that contention. The appeal concerned whether a fixed term subject to termination by notice after the dropping of a life was a term of years determinable with life or lives within section 149(6).

Appeal dismissed unanimously. Nourse LJ delivered the first judgment. Glidewell LJ agreed. Sir John Donaldson MR also agreed, adding statutory-system reasoning.

1. Scope of section 149(6). Per Nourse LJ, the provision applies to leases granted for life or lives, or to terms of years limited by reference to a life or conditionally upon the survival of a life or lives. The tenancy in question fell outside that description.
2. Fixed terms and notice provisions. A lease granted for a fixed period, with a proviso permitting determination by notice, remains a term of years absolute. That remains so even if the dropping of a life is a condition precedent to serving a valid notice.
3. Textual distinction. The words determinable with life or lives and on marriage describe leases which determine automatically on the relevant event. By contrast, the substituted statutory term is determinable by notice after death or marriage. The contrast, reinforced by proviso (c), shows that determinable in the first part of section 149(6) does not mean determinable by notice.
4. Statutory scheme. Sir John Donaldson MR relied additionally on sections 1 and 205(xxvii) of the Law of Property Act 1925. The appellant’s construction would cause the substituted 90-year term itself to be excluded from the definition of a term of years absolute, contrary to the statutory scheme limiting legal estates.

The appeal was dismissed. No order for costs was made against the appellant, directions were given concerning payment from the legal aid fund, and the appellant was permitted to remain in the premises for 28 days from judgment.

1. Court of Appeal (Civil Division): In [1986] EWCA Civ 2, the appeal was dismissed.
2. High Court: Hoffmann J rejected the contention that section 149(6) converted the tenancy into a 90-year term.