The Picture Warehouse Ltd v Cornhill Investments Ltd.

Under Part II of the Landlord & Tenant Act 1954, rights enjoyed by a business tenant in connection with the holding are carried into the new tenancy only if they are included in the current tenancy. A right relating to land outside the holding falls outside section 32(3).

Section 35(1) gives the court a discretion to include an existing right, such as a contractual permission to park, but it does not permit the court to enlarge the holding by creating a new easement or a substantially greater right. The court may properly refuse to include a parking term where the tenant accepted that no formal right would be granted and had existing, albeit limited, parking permission.

The tenant appealed from a decision of His Honour Judge Simpson in the Mayor’s & City of London Court concerning the terms of a new business tenancy under Part II of the Landlord & Tenant Act 1954.

The tenant sought an express right to park up to two vehicles outside its premises for up to 30 minutes. The landlord contended that the tenant had only a permission, arising from correspondence, for customers and delivery vehicles to park temporarily. The central issues were whether the parking arrangement was supported by consideration, whether it fell within section 32(3), and whether it should be included under section 35(1).

1. Appeal dismissed. The existing parking arrangement was a licence or permission, not a right to have parking space available. It was supported by consideration because the transaction, viewed as a whole, involved the tenant moving premises, surrendering two internal parking spaces and accepting a reduced rent.
2. The permission was not irrevocable. The court had not been asked to determine the applicable notice period or the circumstances in which the permission could be terminated.
3. Section 32(3) of the Landlord & Tenant Act 1954 applies to rights included in the current tenancy. The external parking rights were outside the property comprised in the tenancy and therefore outside “the holding”, as defined by section 23(3). The statutory wording should not be extended to include rights merely enjoyed in connection with the tenancy.
4. Section 35(1) permits the court to include an existing right in the new tenancy, but cannot be used to enlarge the holding by granting an easement or rights over the landlord’s land which the tenant had not previously enjoyed. A term reflecting the limited permission could have been drafted, but the court properly declined to include it in the circumstances.
5. The tenant had accepted in 2000 and again in 2003 that the lease would contain no formal external parking right. The tenant had not established an entitlement to an irrevocable right to parking for two vehicles. Its existing rights under the correspondence remained available.
6. The grant of a new tenancy without parking rights did not deprive the tenant of property for the purposes of Article 1 of the First Protocol to the European Convention on Human Rights.

• Mayor’s & City of London Court: His Honour Judge Simpson held that no external parking provision should be included in the new tenancy on 4 June 2007.
• High Court (Queen’s Bench Division): Mr Justice Jack dismissed the tenant’s appeal.