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England and Wales Court of Appeal (Civil Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Manton Securities Ltd v Nazam (t/a New Dadyal Cash & Carry) [2008] EWCA Civ 805 (17 July 2008) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2008/805.html Cite as: [2008] EWCA Civ 805 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE BIRMINGHAM COUNTY COURT
Mr Recorder Behrens
Case No: 7BM70062
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE HUGHES
and
LORD JUSTICE RIMER
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MANTON SECURITIES LIMITED |
Appellant |
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- and - |
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MOHAMMED NAZAM (t/a NEW DADYAL CASH AND CARRY) |
Respondent |
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WordWave International Limited
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Giles Harrison-Hall (instructed by Grove Tompkins Bosworth) for the Respondent
Hearing date: 25 June 2008
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Crown Copyright ©
Lord Justice Rimer :
Introduction
Preliminary questions
"… beginning with such date, not more than twelve nor less than six months after the making of the request, as may be specified therein:
Provided that the said date shall not be earlier than the date on which apart from this Act the current tenancy would come to an end by effluxion of time or could be brought to an end by notice to quit given by the tenant."
Mr Nazam's notice purported to request a new tenancy commencing on 25 April 2007. But his equitable tenancy would not expire until 2018 and he had no right to terminate it by a notice to quit before them.
Early days
Negotiations for the grant of a lease to Mr Nazam: 1998 to 2000
Resumed negotiations – January 2002 onwards
"As mentioned you acquired the shop business in 1998 [in fact 1997] continued with rent payment based on 20,000 per annum which is low and will be reviewed. However by using table 'B' I propose your new rental commencing 1st February 2002 will £43,104 pax.
If you decide to improve the property in accordance with Scheme B drawings our company will hold the above rent at £43,104 pax for the next 3 years, conditional on you carrying out agreed remedial improvements works, i.e. electrical maintenance and refurbishment. This offer shows a saving of £9,592 per annum, based on the existing accommodation and current comparative rents for the areas rising to £21,068 per annum if based on Scheme 'B' being operational quickly. On the above basis our company would not be willing to financially contribute to any works, indeed of the £30/60,000 rental saving I would reserve the right to rentalise at the open market rent the revised area in 3 years time.
I would like to meet you on Friday to settle the rental and the extent of improvements you envisage. Would you please telephone me so that a mutually agreeable time can be arranged for a meeting."
"Further to our recent discussions over your future occupation of the above premises, may I inform you that I have submitted the original lease (prepared 1997) with amendments to our solicitors, Shakespeares …, who will review the clauses on the basis that you will carry out substantial improvements to the building, in light of insurance, statutory requirements and also the use of the land at the rear of this unit.
Until we have a better idea on how the future use/occupation of the new area rear land improves the whole store operation, I am reserving my rights before granting use also bearing in mind the potential shared use by our adjoining occupiers …. I have informed our solicitors to avoid shared use disputes but reserve access rights where possible.
Would you kindly inform your own solicitors of the terms agreed and that you are agreeable to a £1,000.00 contribution towards the preparation of the lease."
"Landlord to retain full rights over land, property including rear land 102-118 Alum Rock Road, for access, construction and use of storeroom, loading, parking of 5 vehicles at any one time. Tenant to obtain planning approval for a permanent store area extension and improvements. Tenant to complete works (as schedule) within 6 months. Tenant on completion to provide electrical, fire and smoke alarm, burglar alarm certificates from independent parties and meet the statutory regulations and insurers requirements.
Also enclosed are copies of coloured plans A & B which represent the existing store layout (with approx. areas) and amended floor plan (Plan B) showing a revised, much improved floor sales area, with first floor storage and rear storage to be built (firstly temporary, later permanently; subject to planning approval). The costs for improvement are approximately £70/80,000 all payable by Mr Nazam directly to the builder.
The importance of Plan B is that on the first review the amended floor space is to be fully rentalised (not disregarded as tenants improvements) at open market price per square foot.
Regarding the land at the rear of this unit, we must retain rights of access throughout 124/132 Alum Rock Road. I envisage charging an increased rent for using this land when we have some idea as to what extent it will be utilised, i.e. loading/unloading, vehicle circulation, limitation of number of vehicles (suggested as 5 No.). [The adjoining occupiers] also wish additional parking. We will be clearing the entire area, Nazam will construct a temporary store. If Nazam's use can be limited to say 50% of this area I propose to construct a division fence later and avoid tenant shared parking aggravation but a useful financial return from our new lump of land at £5/6,000 pax."
The "land to the rear" (Wrights Road) is bought - more negotiations
Works to the premises and to the land to the rear
Breakdown of relations between Mr Nazam and Manton
What was the nature of Mr Nazam's tenancy?
"75. … I accept that this is a case where a tenant has been in occupation for many, many years, but there was throughout, despite the long delays either by solicitors or indeed on one occasion by Mr Manton who was considering selling the property, it seems to me that Mr Nazam's status did not change from the day he entered until the proceedings were over. So if that was all he would simply be a tenant at will and would not be entitled to bring this application for rent [sic: must mean 'for a new tenancy']."
But was it all?
Was the right to such a new tenancy defeated by Mr Nazam's rent payment record?
"51. I make the point now that if he is to be granted a new lease, the dates of payment of rent under the new lease are not simply matters for negotiation, but they are times when money must be paid – not a cheque sent, but money must be received. Rent is payable on the date it says it is payable. A cheque is only a conditional payment. If Mr Nazam is in arrears under any new lease which is granted by this court and proceedings for possession are brought, the fact that he has been warned in this judgment about payment of rent being necessarily paid on time, will I hope be drawn to the attention of the new court. At any rate he has been very remiss in paying rent on average about three months late and in future that must not be the case."
"82. I think that the 'ought' in [section 30(1)(b)] imports the full consideration of the merits of the case, including those which entitle the tenant to bring the proceedings under the Act at all. It is not limited just to consideration as a word. It seems to me that it would be highly wrong, morally and legally, for the tenant to be entitled to bring a claim under the Act because of Mr Manton's promises made to him which have not been fulfilled and then to have victory pulled away from him at the last minute because of this failure to pay rent which was acceded to by Mr Manton. … on balance I do not consider that Mr Nazam ought not to have a tenancy because of his bad payment record. In particular I am entirely satisfied that he is able to pay the rent under the new tenancy when that is due. I am entirely satisfied that this judgment, in making it crystal clear that rent must be paid when due, will be used against him if there should be any default in the future when he gets his new lease. I am not saying that an occasional delay of a day will mean that he is out, but if there any regular delay, or the delay is in any way serious, I am quite sure that the warning in this judgment will be drawn to the attention of a judge in any future application for possession. Accordingly I do not consider the defence under section 30(1)(b) is made out."
What premises should be comprised in the new tenancy?
The appeal
"Regarding the lease may I first assure you that its completion will be dealt with after we have concluded the planning and acquainted ourselves with the precise amount of land you require. Our solicitors have been advised accordingly.
May I advise you that the rent for the quarter periods December 2002 and March 2003 totalling £18,776.86 remains unpaid. A payment for the December quarter will be required over the next few days."
Result
Lord Justice Hughes :
Lord Justice Thomas :