Home Information Cases Northern and Midland Holdings Ltd v Magnet Ltd (2004)

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Northern and Midland Holdings Ltd v Magnet Ltd (2004)

Summary

Where a rent review clause provided that a landlord should apply within a reasonable time to the RICS for the nomination of an independent surveyor following failure to agree a rent and a suitable surveyor, time could only be made of the essence for such application once there had been a failure to agree rent and suitable surveyor.

Facts

Claimant landlord's (L) application for a declaration as to whether it was still open to L to pursue a rent review or whether time had been made of the essence by the taking of a particular step. The defendant tenant (T) occupied two premises, under identical leases, owned by L. The rent review clause (the clause) provided inter alia that if the open market rental value was not agreed between the parties, then it was to be determined by a surveyor agreed by the parties. Failing such agreement, L was to apply by the "appropriate date", 29 January 1999, to the Royal Institute of Chartered Surveyors (RICS) for the nomination of a surveyor. On 19 July 2001, T wrote to L stating that as the rental value had not been agreed, T required L to apply to RICS for the nomination of a surveyor and purported to make time of the essence as regards the application. L applied in December 2001. L submitted that a time limit had to be implied into the clause but the clock only started running once certain steps had been taken: (i) attempt to agree the rental value; failing which (ii) attempt to agree a surveyor; failing which (iii) L had to within a reasonable time apply to RICS. T contended that there was an implied proviso that L had to apply to RICS within a reasonable time of the appropriate date, which had long passed.

Held

The clock only started ticking when a reference to RICS became necessary, which was following the parties' failure to agree on the first two steps. There was an implied term that L's reference would be made within a reasonable time following that failure. L could apply to RICS at any time until barred, which would not occur until time was made of the essence. T's letter was not capable of making time of the essence.

Declaration granted.

Chancery Division
Mann J
Judgment date
22 January 2004
References

LTL 22/1/2004 : [2004] NPC 7 : [2004] EWHC 120 (Ch)

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