Barclays Bank Plc v Savile Estates Ltd

Where a rent-review clause requires the landlord to apply for an expert’s appointment but specifies no time limit, a term may be implied requiring the application within a reasonable time if that is necessary to give the lease business efficacy or is obvious.

Once such a term is implied, the tenant may make time of the essence by giving reasonable notice. The adequacy of the notice depends on the circumstances, including the history of delay and the simplicity of the required step. A period of 20 days was sufficient where the matter had been outstanding for several years and the landlord needed only to send an application.

Barclays Bank Plc occupied premises from Savile Estates Ltd under a 42-year lease containing seven-yearly rent reviews. The rent was to be agreed before the next review period or, in default, assessed by a surveyor appointed on the landlord’s application to the President of the Royal Institution of Chartered Surveyors.

No application had been made for the review due in 1996. Barclays later gave notice requiring Savile Estates to apply within 28 days, stating that time was of the essence. The landlord contended that the lease imposed no time limit and that the notice was ineffective.

The Master dismissed the proceedings, and the judge upheld that conclusion. The central issue was whether a time limit was to be implied and, if so, whether the notice gave sufficient time.

1. Appeal allowed. The orders of the judge and Master were set aside. A declaration was made that the rent payable from the 1996 review date was £11,500 per annum.
2. The rent-review clause contained no express period within which the landlord had to apply to the President of the Royal Institution of Chartered Surveyors. Nevertheless, a term was implied. Without one, the landlord could delay the review for up to six years, leaving the tenant uncertain of its rent and impairing the commercial efficacy of the lease. The most appropriate implication was that the application had to be made within a reasonable time.
3. The court rejected the submission that the reasoning in Amherst v James Walker Goldsmith & Silversmith Ltd [1983] 1 Ch 305 governed the case. In Amherst the tenant could itself make time of the essence. Here Barclays could do so only if the lease contained, expressly or by implication, a relevant time obligation.
4. Following United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, a short notice could suffice. The 20 days actually available was reasonable because the rent review had been outstanding since 1996, the issue had been raised previously, relevant comparables had been supplied, and the landlord’s required step was simple.
5. Lord Justice Tuckey agreed that business efficacy required the implication of a time term and that the notice afforded a reasonable period. Costs were assessed at £15,000 including VAT.

• Court of Appeal (Civil Division): Appeal allowed; the orders of the judge and Master were set aside and the declaration made.
• High Court, Chancery Division: His Honour Judge Levy QC dismissed Barclays’ appeal from the Master’s order.
• Master Bragge: The proceedings and application for summary judgment were dismissed.