First Property Growth Partnership Lp v Royal & Sun Alliance Property Services Ltd

In construing a rent review clause, the court must read the language in the context of the lease as a whole. The word before may perform a dual temporal function: it can define both the earliest date on which notice may be given and the latest date for giving it. A clause permitting notice not more than twelve months before the end of a five-year period, followed by the words “but not at any other time”, required notice to be given within that twelve-month period. Time was of the essence. A notice served after the relevant period had expired was invalid, and no review was available for that period unless the lease expressly provided otherwise.

The appellant landlord acquired the freehold reversion subject to a 35-year lease containing five-yearly rent review provisions. The clause permitted the landlord to give notice not more than twelve months before the expiry of each relevant fifth year, but not at any other time.

The landlord served notice on 25 April 2001, after the relevant period had expired on 7 May 2000. Rimer J declared that notice had to be served during the permitted period and that time was of the essence. The landlord appealed, arguing that the clause prescribed only an earliest date and allowed notice thereafter.

1. Appeal dismissed. The landlord’s notice, served on 25 April 2001, was invalid because it was not served before the expiry of the relevant five-year period.

2. Clause 4(b) had to be construed in the context of the lease as a whole. The ordinary and natural meaning of “not more than twelve months before the expiration” was not confined to calculating the twelve-month period. The word “before” also governed the period within which notice had to be given.

3. The permitted period ran from 7 May 1999 to 7 May 2000. The words “but not at any other time” reinforced the conclusion that the clause fixed both a starting point and an end point. They also made time of the essence, so a notice served outside that period was invalid.

4. The definition of “the material date” did not support the landlord’s construction. It was consistent with a notice being served within the stipulated period. Clause 4(h) further supported the tenant’s construction because it made special provision for an intermediate review where statutory rent controls affected the ordinary review dates; that provision would have been unnecessary on the landlord’s interpretation.

5. Lord Justice May agreed, expressly confirming that “before” stipulated both the beginning and the end of the period and that time was of the essence. Lord Justice Judge agreed with both judgments.

• Court of Appeal (Civil Division): First Property Growth Partnership Lp v Royal & Sun Alliance Property Services Ltd, [2002] EWCA Civ 1687. Appeal dismissed.
• High Court, Chancery Division: Rimer J made a declaration on 8 March 2002 that notice under clause 4(b) had to be served during the permitted twelve-month period and that time was of the essence.