Bell & Ors v General Accident Fire and Life Assurance Corporation Ltd

A tenancy by estoppel of business premises falls within Part II of the Landlord and Tenant Act 1954 where the parties are estopped from denying the grantor’s title. The common-law estoppel treats the grantor’s title, and the legal consequences flowing from it, as real between the parties and their successors. A tenant cannot accept the tenancy by estoppel but contend that it was not created out of the freehold or that the grantor was not the statutory landlord. Sections 44 and 69 do not exclude such tenancies. The landlord may therefore apply under section 24A for an interim rent following a section 25 notice.

Fire, a group company without title to the premises, granted business premises to Eagle Star, whose lease was later assigned to the appellants. Both parties assumed that the Landlord and Tenant Act 1954 applied. Fire served a section 25 notice, the appellants applied for a new tenancy, and Fire applied under section 24A for an interim rent.

The appellants withdrew their new-tenancy application and sought to strike out Fire’s interim-rent application, arguing that Fire was not the statutory landlord and that the tenancy by estoppel was outside the Act. A district judge struck out the application, but Judge Moseley QC allowed Fire’s appeal in the Cardiff County Court. The central issue was whether a tenant by estoppel could invoke the protection of Part II of the Act. An adverse-possession argument raised by Fire was not decided.

Appeal dismissed. Hutchison LJ gave the principal judgment. Mummery LJ agreed and gave additional reasons; Beldam LJ agreed with the reasons of both. The defendants were awarded the costs of the appeal from the date of the last order.

1. The common-law doctrine of tenancy by estoppel is reciprocal. Between landlord and tenant, it requires the hypothetical title represented by the grantor to be treated as real. Its consequences include a reversion in fee simple by estoppel and a tenancy capable of devolution and assignment. A tenant cannot accept the tenancy while asserting that the grantor had no title, was not the landlord, or created no tenancy out of the freehold. The doctrine was applied consistently with Cuthbertson v Irving [1859] 4 H & N 742 and [1860] 6 H & N 135.
2. The statutory definitions in sections 44 and 69 of the Landlord and Tenant Act 1954 did not exclude a tenancy by estoppel. The estoppel made Fire the landlord, as between the parties, for section 44 purposes. It also meant that the tenancy was treated as created immediately or derivatively out of the freehold for section 69 purposes.
3. There was no sound statutory or policy reason to deprive business tenants of protection merely because their landlord’s title was defective. Section 44 was directed primarily to identifying who should give and receive notices. Section 69 was not rendered surplusage, since Wheeler v Mercer [1956] AC 416 showed that its language excluded at least tenancies at will. Mummery LJ additionally applied the statutory-deeming reasoning in East End Dwellings Co Ltd v Finsbury Borough Council [1952] AC 109.
4. The court did not determine whether Fire had acquired title by adverse possession. That issue was unnecessary to the result and raised evidential and joinder difficulties.

• Cardiff County Court. On 7 March 1996, Judge Moseley QC allowed Fire’s appeal from a district judge’s order striking out its interim-rent application.
• Court of Appeal (Civil Division). The appellants’ appeal was dismissed. The court upheld the conclusion that the tenancy by estoppel was within the protection of Part II of the Landlord and Tenant Act 1954.