Home Information Cases Sun Life Assurance plc v (1) Thales Tracs ltd (2) Thales Properties ltd (2001)

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Sun Life Assurance plc v (1) Thales Tracs ltd (2) Thales Properties ltd (2001)

Summary

A tenant of business premises who made a request for the grant of a new tenancy under s.26 Landlord and Tenant Act 1954 did not have to have a genuine intention of taking up a new tenancy at the time of making that request in order subsequently to be entitled to compensation under s.37 of the Act.

Facts

Defendants' appeal from the order of Mr Recorder Black QC, sitting as a deputy judge of the Technology and Construction Court, by which he dismissed their claim for compensation under s.37 Landlord and Tenant Act 1954. The defendants ('the tenants') held commercial premises ('the premises') under two leases from the claimant ('the landlord') which were due to expire in December 1998. In the summer of 1996 the landlord indicated to the tenants that it would require vacant possession of the premises at the end of the leases. At that time the landlord had hopes of developing the premises in conjunction with an adjoining site ('the site') that it hoped to acquire. Faced with the need to acquire new premises, the tenants exchanged contracts for the purchase of the site in November 1997. Completion was deferred until April 1998. The tenants served requests for a new tenancy in respect of the premises in March 1998, which requests were opposed by the landlord on the redevelopment ground under s.30(1) of the Act. In April 1998 the landlord offered to renew the leases but the tenants' plans for the site were by then too far advanced. The landlord withdrew its opposition to the tenants' requests but the tenants did not apply to the court for the grant of new tenancies and vacated the premises on the expiry of the leases. The judge held that, given the chronology of events, the proposals for new tenancies contained in the tenants' requests were not genuine proposals such that the requests were themselves invalid. The judge held that it followed that the tenants could not claim compensation under s.37 of the Act. The tenants did not challenge the judge's finding that they had no intention of taking up new tenancies when they served their requests, but contended that the issue of intention was irrelevant to their right to compensation.

Held

(1) The words "request" and "proposals" as they appeared in s.26 of the Act were both ordinary English words, which were to be given an unqualified objective meaning. In particular, they were "performance" words: ie they described acts that were required to be performed by a business tenant if the right to compensation were to be preserved. They did not say or reveal anything about the state of mind of the tenant in making the request or putting forward the proposal. (2) There were no wider considerations that required s.26(3) to be construed as requiring any request or proposal to be "genuine" or subject to any other "qualifying" intention. It followed that the judge had erred in reading words into s.26(3) of the Act.

Appeal allowed.

Court of Appeal
Dyson LJ, Hale LJ, Waller LJ
Judgment date
10 May 2001
References

​[2001] EWCA Civ 704

Practice areas