London Borough of Newham v Thomas-Van Staden

Contracting out of business-tenancy security requires a tenancy for a term of years certain. A lease clause extending the defined term to include any indefinite holding-over or extension may prevent that requirement from being met. If so, the contracting-out order is a nullity and the tenancy remains protected under Part II of the Landlord and Tenant Act 1954. Continued occupation after the fixed term must then be analysed under the statutory protection.

A tenancy at will remains terminable at will. Negotiations conducted expressly or impliedly subject to contract do not create a binding agreement for a lease unless that qualification is removed. A court should not determine an unpleaded case which the opposing party was not required to meet.

Newham brought two possession claims concerning commercial premises at Rathbone Market. The first concerned 4/4A, occupied under a lease whose fixed term expired on 28 September 2004. The lease excluded sections 24 to 28 of the Landlord and Tenant Act 1954 pursuant to a county court order, but defined the term as including any period of holding over or extension. The appellant remained in occupation, and Newham relied on a 21-day contractual notice.

The second claim concerned 1A, occupied under a tenancy at will while negotiations for a proposed three-year contracted-out lease continued. The trial judge ordered possession in both claims, but also found that a binding lease agreement had been reached at a later meeting. The appeals concerned the status and protection of the appellant’s occupation, the effect of the negotiations, and whether that finding was properly open on the pleadings.

1. 4/4A Rathbone Market—appeal allowed. Sections 24 to 28 of the Landlord and Tenant Act 1954 could be excluded only in relation to a tenancy for a term of years certain. The lease defined its term as the fixed term plus any period of holding over or extension. That wording was deliberate and could not be treated as meaningless surplusage.
2. The lease therefore did not create a tenancy for a term of years certain. The December 2003 contracting-out order was consequently a nullity, so the tenancy was not contracted out of sections 24 to 28. The appellant’s tenancy continued after 28 September 2004 under section 24 and had not been determined by a notice under section 25. The possession order was set aside. The court left open the separate forfeiture claim and the consequences for the remaining orders.
3. There was no need to decide whether, on the alternative analysis, the appellant occupied as a monthly tenant or tenant at will. The court indicated that tenancy at will was unpromising because the lease terms gave the appellant a right to 21 days’ notice, whereas removal at will is essential to that status.
4. 1A Rathbone Market—appeal dismissed. The September 2004 letter was impliedly subject to contract. That qualification could cease to apply only if the parties expressly or impliedly agreed to remove it, and there was no evidence of such an agreement. The appellant therefore remained a tenant at will, whose tenancy had been validly determined.
5. The trial judge had no proper basis to find a binding agreement for a three-year lease at the February 2005 meeting. The issue was not pleaded, and Newham had not been required to meet it in evidence or cross-examination. Permission to appeal on the blocked-drain claim was refused because it raised only factual findings with no realistic prospect of reversal.

• Court of Appeal (Civil Division): The appeals were determined under [2008] EWCA Civ 1414. The appeal concerning 4/4A was allowed and the possession order was set aside. The appeal concerning 1A was dismissed.
• Central London County Court: Her Honour Judge Faber made possession orders on 12 December 2007 in the two claims. The Court of Appeal varied the result by allowing the appeal concerning 4/4A and dismissing the appeal concerning 1A.