Business tenancies

Citation

Waterson, G. and Lee, R. (2000), "Business tenancies", Property Management, Vol. 18 No. 2. https://doi.org/10.1108/pm.2000.11318bab.008

Business tenancies

Sight and Sound Education Ltd v. Books etc Ltd (1997) 43 EG 161

In this case the court was concerned with the question of whether or not the tenant was entitled to claim statutory disturbance of one or two times the rateable value of the demised premises on giving up its business tenancy, pursuant to the provisions of Part II of the Landlord and Tenant Act 1954.

Briefly, the facts were as follows: the tenant held lease(s) of its business premises at 118/120 Charing Cross Road for the term of 14 years expiring on 28 September 1997. The landlord served a section 25 notice seeking to terminate the lease(s), giving a termination date of 25 February 1998, and objecting to the grant of a new lease on grounds (f) and (g) of section 30 of the 1954 Act, namely that the landlord intended to demolish or reconstruct the premises and/or that the landlord required them for its own occupation. The tenant in fact gave up possession a few days before the term date of the lease(s) and in consequence was entitled to compensation under section 37. The question was, how much?

Section 37(2) of the 1954 Act provides for the payment of one times the rateable value of the holding by way of compensation except where certain conditions are satisfied. Section 37(3)(a) provides that one of these conditions is "that during the whole of the 14 years immediately proceeding the termination of the current tenancy, the premises being or comprised in the holding have been occupied for the purposes of business carried on by the occupier or for those and other purposes".

The tenancy argued that the lease terminated on the original term date, and since it was accepted that the two or three days when the property had been vacant just before that date were not sufficient to break the continuity of business occupation, this would on the face of it would have entitled the outgoing tenant to twice the rateable value by way of compensation. The landlord on the other hand argued that the lease(s) terminated on 25 February 1998, the date specified in the section 25 notice, which, if this argument were to be accepted by the court, would mean that the tenant was only entitled to one times the rateable value.

The court referred to the decision of Falconer J in Dept of Environment v. Royal Insurance plc (1987) IEGLR 83; (1987) 282 Eg 208, and to the more recent decision of the Court of Appeal in Bacchiocchi v. Academic Agency Ltd (1998) 2 AllER 241; (1998) 3 EGLR 157 which had been concerned with similar (though not identical) issues, before concluding that the wording of the relevant provisions meant that in this case the tenant was entitled only to receive one times the rateable value by way of compensation.