Effect of assignment on a tenancy at will

In Pinhorn v Souster (155 E.R. 1560) one of the questions was whether a tenancy at will had been determined as a result of the assignment of the tenancy. Parke B, said:

‘[T]he assignment by the tenant at will of his interest to a third party is no determination of the tenancy, unless the lessor at will have notice.’ (1864 – 5)

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Holding over

In Pang Kin Hang v Tsui Hung Restaurant Ltd ([1986] HKEC 12) T refused to leave the demised premises at the end of the term. L sought vacant possession and mesne profits by summary judgment. It was held that a full trial was needed as to whether or not there was an estoppel or oral agreement to grant a new tenancy.

The judgment contains this passage:

‘[I]t is well established that if a tenant whose lease has expired be permitted to continue in possession pending a treaty for a further lease, he is not a tenant from year to year, but a tenant strictly at will, until some other interest is granted to him.’ (Hon. Deputy Judge Saied)

Michael Lower

Conveyance of reversion determines tenancy at will when the tenant knows of it

In Doe d Davies v James Thomas (155 E.R. 792) T was L’s tenant at will. L’s own estate in the property was vested in a third party and T knew of this. It was held that a conveyance of the reversion brings a tenancy at will to an end when the tenant has knowledge of it:

‘The moment the tenant knows that the landlord has done an act which is inconsistent with the continuance of his will – which he has done when he has parted with the reversion, – that is a determination of the will, and the tenant must know that it is his duty to quit at once.’ (Alderson, B)

Michael Lower

Tenancy at will: right to distrain

In Anderson v The Midland Railway Company ((1861) 3 Ellis and Ellis 614, 121 E.R. 573) L and T entered into an agreement for lease. The lease was to be under seal but, in the meantime, T was allowed into possession under the terms of an express agreement that contained a provision to the effect that rent was to be paid in the same manner as was to be provided for in the formal lease. When T fell into arrears, it was held that L had a right to distrain on L’s goods.

Cockburn C.J. said:

‘The tenancy thus created was, by the words of the agreement, at a fixed and ascertained rent, commencing at an ascertained date: and, that being so, it follows that the landlord had a right to distrain.’ (576).

Michael Lower

Holding over during negotiations for new lease. Tenancy at will? How to calculate rent?

In Dean and Chapter of the Cathedral and Metropolitan Church of Christ, Canterbury v Whitbread ((1996) 72 P. & C.R. 9) a lease had come to an end. The parties tried to negotiate a new lease. The tenant remained in occupation during the negotiations. There had been some discussion as to the rent that they should pay during the period of holding over but they were never concluded. In the end, the tenant changed its mind and moved out. The court had to decide on the nature of the tenant’s occupation during the holding over and as to the sum that the tenant should pay for its use and occupation of the property during the holding over. The period of the holding over was a little more than a year.

First, the court decided that the tenant was a tenant at will during the holding over:

‘I think that the critical test is (a) that this was a holding over for all practical purposes except, arguably, rent, as if the old tenancy had continued, (b) that it was, as I found, wholly consensual, and (c) the initial purpose was to negotiate terms for a new tenancy. When that purpose was exhausted nothing was done by either party to change the nature of the arrangement.’ (13, H.H. Judge Cooke)

As to the payment for use and occupation, the first question was whether it should be the same as the rent payable under the old lease. The court said that there was a presumption to this effect but that it was rebutted where, as here, there was evidence of disagreement between the parties as to the sum to be paid (and the same would be true if they had agreed that the rent was to be some other, perhaps unspecified, figure) (15)

The landlord had to elect (before judgment) for a sum calculated either on the basis of the loss to the landlord or the gain to the tenant (but there was likely to be no difference in this case whichever approach was taken). The ordinary measure is the proper letting value of the property for the relevant period (16).

The judge set out his basic approach:

‘On my view of the basic law, one is entitled to look not at what some hypothetical market would have been for a 12-month lease with no security, but what a holding-over tenant and this tenant carrying on this business and dealing with these landlords would pay for a further year at the end of his tenancy, on the basis that it would be his last year (I think that one is entitled to use hindsight) in order to evaluate the asset of the tenancy that the tenant actually got.’ (19)

The court took the rent paid by the new tenant who subsequently took a lease of the property as its basis of valuation but making adjustments to take account of the fact that the new tenant took on a more extensive repairing covenant, the fact that the new tenant was not as strong a covenant as the outgoing tenant and the fact that the lease was only for a period of one year.

Michael Lower

Effect of possession proceedings on tenancy at will

In Banjo v London Borough of Brent ([2005] EWCA Civ 292, CA (Eng)) T’s lease came to an end on 17th June 1982. T remained in possession but did not pay any rent. On 8th February 2002, L gave notice of its intention to bring possession proceedings. T still remained in possession. The English Court of Appeal held that from 17th June 1982 until 8th February 2002, T was a tenant at will. L’s letter notifying T of its intention to issue possession proceedings brought the tenancy at will to an end ([32]). From then on, T was a trespasser ([33]).

Michael Lower

Tenant allowed into possession during lease negotiations: periodic tenancy or tenancy at will?

In Javad v Aqil ([1990] 2 EGLR 82, CA (Eng)) L and T were negotiating a fixed term lease. L allowed T into possession during the term and accepted rent. The negotiations failed. The question was whether T was a periodic tenant or a tenant at will. The court emphasised that it depended on the objective intention of the parties. If T was alleging that a periodic tenancy existed he would have to show it. Here there was no evidence to show that the parties intended a periodic tenancy. T was a tenant at will.

Nicholls L.J. said:

‘The law will imply, from what was agreed and all the surrounding circumstances, the terms the parties are to be taken to have intended to apply. Thus if one party permits another to go into possession of his land on payment of a rent of so much per week or month, failing more the inference sensibly and reasonably to be drawn is that the parties intended that there should be a weekly or monthly tenancy. Likewise, if one party permits another to remain in possession after the expiration of his tenancy. But I emphasise the qualification “failing more”. Frequently there will be more. Indeed, nowadays there normally will be other material surrounding circumstances. The simple situation is unlikely to arise often, not least because of the extent to which statute has intervened in landlord-tenant relationships. Where there is more than the simple situation, the inference sensibly and reasonably to be drawn will depend upon a fair consideration of all the circumstances, of which the payment of rent on a periodical basis is only one, albeit a very important one. This is so however large or small may be the amount of the payment.’ (at 84)

 

Michael Lower