“12.21.1 Not to use the Demised Premises otherwise than as a Motorists Centre and for the sale supply storage and fitting of tyres exhausts batteries shock absorbers brakes clutches radiators oil filters and steering parts together with any other motorist components or such other uses as the Landlord shall approve such consent not to be unreasonably withheld or delayed”
“35. Other terms of new tenancy. (1) The terms of a tenancy granted by order of the court under this Part of this Act (other than terms as to the duration thereof and as to the rent payable thereunder) , including, where different persons own interests which fulfil the conditions specified in section 44(1) of this Act in different parts of it, terms as to the apportionment of the rent, shall be such as may be agreed between the landlord and the tenant or as, in default of such agreement, may be determined by the court; and in determining those terms the court shall have regard to the terms of the current tenancy and to all relevant circumstances. (2) In subsection (1) of this section the reference to all relevant circumstances includes (without prejudice to the generality of that reference) a reference to the operation of the provisions of theLandlord and Tenant (Covenants) Act 1995 .” (1) The terms of a tenancy granted by order of the court under this Part of this Act (other than terms as to the duration thereof and as to the rent payable thereunder) , including, where different persons own interests which fulfil the conditions specified in section 44(1) of this Act in different parts of it, terms as to the apportionment of the rent, shall be such as may be agreed between the landlord and the tenant or as, in default of such agreement, may be determined by the court; and in determining those terms the court shall have regard to the terms of the current tenancy and to all relevant circumstances. (2) In subsection (1) of this section the reference to all relevant circumstances includes (without prejudice to the generality of that reference) a reference to the operation of the provisions of theLandlord and Tenant (Covenants) Act 1995 .”
“From [Sections 34 & 35 LTA 1954] …I deduce three general propositions. (1) It is clear from section 34 that, in contrast to the enactments relating to residential property, Parliament did not intend, apart from certain limitations to protect the tenant from the operation of market forces in the determination of rent. (2) In contrast to the determination of rent, it is the court and not the market forces which, with one vital qualification, has an almost complete discretion as to the other terms of the tenancy (which, of course in turn must exercise a decisive influence on the market rent to be ascertained under section 34). And (3) in deciding the terms of the new tenancy, as to which its discretion is otherwise not expressly fettered, the court must start by " having regard to" the terms of the current tenancy, which ex hypothesi must either have been originally the subject of agreement between the parties, or themselves the result of a previous determination by the court in earlier proceedings for renewal.”
“A certain amount of discussion took place in argument as to the meaning of " having regard to " in section 35. Despite the fact that the phrase has only just been used by the draftsman of section 34 in an almost mandatory sense, I do not in any way suggest that the court is intended, or should in any way attempt to bind the parties to the terms of the current tenancy in any permanent form. But I do believe that the court must begin by considering the terms of the current tenancy, that the burden of persuading the court to impose a change in those terms against the will of either party must rest on the party proposing the change, and that the change proposed must, in the circumstances of the case, be fair and reasonable, and should take into account, amongst other things, the comparatively weak negotiating position of a sitting tenant requiring renewal, particularly in conditions of scarcity, and the general purpose of the Act which is to protect the business interests of the tenant so far as they are affected by the approaching termination of the current lease, in particular as regards his security of tenure. I derive this view from the structure, purpose, and words of the Act itself. …[Having referred to various judgments as also confining this point] The point is also emphasised by the decision in Charles Clements (London) Ltd. v. Rank City Wall Ltd (1978) 246 E.G. 739, where the court rejected an attempt by the landlord as a means of raising the rent to force on a tenant a relaxation of a covenant limiting user which would have been of no value to the particular tenant, and Aldwych Club Ltd. v. Copthall Property Co. Ltd. (1962) 185 E.G. 219 where the court rejected an attempt by the tenant to narrow the permitted user with a view to reducing the rent. A further point which was canvassed in argument, and with which I agree, is that the discretion of the court to accept or reject terms not in the current lease is not limited to the security of tenure of the tenant even in the extended sense referred to by Denning L.J. in Gold v. Brighton Corporation [1956] 1 W.L.R. 1291. There must, in my view, be a good reason based in the absence of agreement on essential fairness for the court to impose a new term not in the current lease by either party on the other against his will. Any other conclusion would in my view be inconsistent with the terms of the section. But, subject to this, the discretion of the court is of the widest possible kind, having regard to the almost infinitely varying circumstances of individual leases, properties, businesses and parties involved in business tenancies all over the country.”
“The crucial section, for present purposes, is section 35 which relates to the terms of the tenancy. other than terms as to duration and rent. This section contains a mandatory guideline or direction to "have regard to" the terms of the current tenancy and to all relevant circumstances. The words "have regard to" are elastic: they compel something between an obligation to reproduce existing terms and an unfettered right to substitute others. They impose an onus upon a party seeking to introduce new, or substituted, or modified terms, to justify the change, with reasons appearing sufficient to the court (see Gold v. Brighton Corporation [1956] 1 W.L.R. 1291, 1294—on "strong and cogent evidence" per Denning L.J., Cardshops Ltd. v. Davies [1971] 1 W.L.R. 591, 596 per Widgery L.J.). If such reasons are shown, then the court, applying the words "all relevant circumstances," may consider giving effect to them: there is certainly no intention shown to freeze, or in the metaphor used by learned counsel, to "petrify" the terms of the lease. In some cases, especially where the lease is an old one, many of its terms may be out of date, or unsuitable in relation to the new term to be granted. If so or for other good reasons shown, the court has power to order a modification by changing an existing term or introducing a new one (e.g. a break clause, cf. Adams v. Green (1978) 247 E.G. 49). Before doing so it will consider any objections by the tenant, and where there is an insoluble conflict, will decide according to fairness and justice.”
“…the desire to increase or diminish the rent was a perfectly legitimate negotiating objective for the, landlord or the tenant respectively, but not, as the court held, by forcing on the opposing party an unwanted advantage which, in the circumstances, would have conferred no real benefit on him, and to which he did not agree.”
“The origin of the dispute derives from the desire of the appellants to convert the terms of the tenancy, which did not previously possess this characteristic, into what is known as a " clear lease." The effect of giving effect to this proposal would, according to the evidence, be to enhance the value of the appellants' reversion by a sum somewhere between one and two million pounds, and at the same time to render it more readily marketable partly owing to the increasing part played (amongst others) by pension funds and life insurance companies in purchasing office property as an investment. The purpose of a " clear lease " is to render the income derived from the rent payable by the tenants as little subject to fluctuation in respect of outgoings as may be possible. The method proposed by the appellants in the present case is to transfer in effect the risk of fluctuation of the items in the covenants which in the nature of things will be executed by the landlord to the respondents by providing that the appellants should be fully reimbursed in respect of the fluctuating elements by provision for fluctuations in what has been referred to, perhaps inaccurately, as the service charge, in return for a flat diminution in the fixed element in the rent. In return for the transfer of risk, the appellants are prepared to accept a fixed reduction in the amount of the fixed rent calculated as a matter of figures at a sum of 50p. a square foot, in actual fact reducing the fixed rent component of the total rent which would otherwise be£10 -50 per square foot to£1000 if a clear lease were granted. The main bone of contention between the parties is that the respondents are unwilling to be insurers of the risk of fluctuation, and would prefer instead to pay the full fixed rent of£10.50 a square foot in place of the reduced rent of£10.00 .”
“Instead of the landlord being responsible (as under the old lease) for repairs, maintenance, and decoration of the exterior and common parts of the building, and for providing and maintaining lifts and other plant (including boilers), the tenants are to bear, by way of service charges, a proportion, attributable to their holding, of the cost of these items. These costs are to be ascertained by certificate of the landlord's surveyor which the tenants have only a limited right to challenge. There is further proposed a funding provision under which the tenants are to pay annually an amount based on the assumption that work is done at intervals or on assumed life expectancies. I do not detail these provisions, because at this stage the landlord's proposals must be regarded as one packaged whole and, if the main provision for shifting the burden is unacceptable, must be rejected however fair other provisions taken by themselves might be.”
“The learned judge admittedly arrived at his decision by the application to the facts of the instant case of four tests or the answers to four questions, after cautiously and, in my opinion correctly, making it plain that " I do not regard them as a correct scheme of analysis for all similar cases." The four tests, or questions, were as follows. (1) Has the party demanding a variation of the terms of the current tenancy shown a reason for doing so? (2) If the party demanding a change is successful, will the party resisting it in principle be adequately compensated by the consequential adjustment of open market rent under section 34? (3) Will the proposed change materially impair the tenant's security in carrying on his business or profession? (4) Taking all relevant matters into account is the proposal, in the court's opinion, fair and reasonable as between the parties?”
“There is no obligation, under section 35 of the Act, to make the new terms conform with market practice, if to do so would be unfair to the tenant. And there is no inherent necessity why the terms on which existing leases are to be renewed should be dictated by those of fresh bargains which tenants may feel themselves obliged to accept.”
“(1) The requirement that the court is to “have regard to the terms of the current tenancy” indicates that there is an onus on the party seeking any change from those terms to justify that change see, e.g. Cardshops v Davies. It has been said that the words “have regard to” are elastic: they compel something between an obligation to reproduce existing terms and an unfettered right to substitute others. (2) It is insufficient justification for the change that one party will thereby benefit greatly. (3) The court would be unlikely to allow any change which prejudiced the security of tenure of the tenant in his business, because it is the policy of the Act to protect the tenant in his business: see Gold v Brighton Corp…. Thus, the court should not narrow the user clause contained in the current tenancy so as to restrict the business actually carried on, although there may be good reason why a wide user clause should be narrowed so as to restrict the use of the premises to the business actually being carried on: Gold v Brighton Corp. (4) The court is unlikely to allow any change in the terms of the tenancy which is sought to be introduced for the sole purpose of increasing the rent payable, by making the lease more favourable to the tenant, if the tenant does not wish that change: see Charles Clements (London) v Rank City Wall…. (5) The court will recognise that the terms of the current tenancy are either the result of a free bargain between the parties or their predecessors, or the result of some previous decision of the court under the Act. (6) It is the court and not market forces which determines the terms of the tenancy. The fact that other tenants in the market may be prepared to accept the term sought is not irrelevant but is simply one factor to which the court will have regard: Wallis Fashion Group Ltd v CGU Life Assurance Ltd…. (7) This does not, however, mean that the court will seek to “petrify” the terms of the lease. If the terms of the current tenancy are obsolete or deficient, the court may consider this an adequate reason for change. (8) In particular, the incidence of inflation in recent years will justify the court in introducing a rent review clause, even if the current tenancy was a lengthy term of years at a fixed rent. (9) The court will bear in mind all relevant circumstances, in particular the fact that the tenant may be in a weak negotiating position. (10) Special considerations may apply to a proposal by the landlord to introduce a redevelopment break clause, because that is a term which is concerned not merely with the rights and obligations of the parties under the current tenancy, but also requires a recognition of the policy considerations which govern the exercise of the discretion of the court under s.35(3) in relation to the duration of tenancies…. (11) The fact that, at least on paper, the landlord or tenant can be said to be compensated for the proposed change by an increase or reduction in the rent payable under the new tenancy does not of itself justify the change. In particular, if a tenant is being asked to shoulder a risk which is more appropriately borne by the freeholder in return for a reduction in rent, he is being made an involuntary insurer of that risk. (Compare the approach of Goulding J in O’May at first instance on this point with that of the Court of Appeal and House of Lords). (12) All the preceding considerations are subject to the overriding question: whether the proposed change can be justified on grounds of “essential fairness” between landlord and tenant.”
“ 33. Duration of new tenancy. Where on an application under this Part of this Act the court makes an order for the grant of a new tenancy, the new tenancy shall be such tenancy as may be agreed between the landlord and the tenant, or, in default of such an agreement, shall be such a tenancy as may be determined by the court to be reasonable in all the circumstances, being, if it is a tenancy for a term of years certain, a tenancy for a term not exceeding fifteen years, and shall begin on the coming to an end of the current tenancy.”
“There could be no certainty as the future. There can be dramatic changes in market conditions, and no certainties today as to what may be a profitable redevelopment in four of five year’s time. It is to be observed, so far as it is relevant, that the judge did not think redevelopment on the cards after the end of seven years” (2) Secondly, it was (and is) no part of the policy of the act to give security of tenure to a business tenant at the expense of preventing redevelopment: see s30(1)(f) itself. Where redevelopment is “in prospect” it would be right that the prospect should be reflected in the terms of the tenancy agreement. The result might be that the tenancy would be less valuable but the primary purpose of the Act is to protect the tenant in the enjoyment of his business and not to confer on the tenant a saleable asset. (3) Thirdly: “ the unfairness to the tenant of including the proposed break clause can well be exaggerated. If the tenant's submission that the property will not be ripe for development within the next seven years is well founded, he will not be disturbed by the existence of the break clause during the continuance of his seven-year tenancy, because the right to break will, of course, not be exercisable.” (4) Fourthly: “Furthermore—and this is another consideration which the learned judge appears not to have taken into consideration—if the break clause is included the tenant will nevertheless be protected by the terms of the Act itself from the effect of any notice not given bona fide for the purpose for which it is intended, for if the tenancy is determined by a notice it will be open to the tenant to apply for a new tenancy, and the then landlords, in order to sustain an objection to granting a new tenancy, would have to prove the intention to redevelop. Nor does the judge notice that, in the final resort, as counsel for the landlords pointed out, the tenant would be entitled to the compensation provided for by the Act.”
“[23] I emphasise the word “preventing” which is not the same as “delaying”
“It was suggested in earlier editions of this work that the test for incorporation of a landlord’s redevelopment break clause may apply by analogy, i.e. is there a realistic prospect of the event happening (usually affecting the tenant’s relocation of its business), for which the break is sought during the duration of the term to be granted. This test was adopted in Dukeminster Ltd v West End Investments (Cowell Group) Ltd [2019] L.&T.R. 4 CC.”
“[42] The claimant seeks the incorporation of a break clause in the new lease to be exercisable in the event that the occupation of the building becomes intolerable and the claimant is not able to have quiet enjoyment in the event that adjacent redevelopment works prove unbearable. It is submitted on behalf of the claimant that if the defendant’s position on the redevelopment is right, to the effect that all will be well and intrusion minimised by careful adherence to common regulatory standards, then the defendant has nothing to fear; the precondition to invoke the break clause will not arise and the defendant’s position is safeguarded. I do not accept this as a viable approach which seems similar to the idea that an injunction can safely be granted irrespective of a triable issue where there is no risk of a breach.”
“There is no binding authority to assist in this context but I proceed on the analogous basis of a landlord’s redevelopment break clause (Adams v Green [1978] 2 E.G.L.R. 46 ). It is logical to apply the same test namely: `“42.1 Whether there is a real possibility that the event will occur that is described as the precondition of the exercise of the rights under break clause—that is, is there a real possibility that the claimant will be deprived of its Quiet Enjoyment due to the intrusion of neighbouring redevelopment work during the term of the lease; 42.2 If there is such a real possibility, on whom should the burden of the event fall?” [43] A “real possibility” in my judgment, is a prospect that is more than a fanciful conjecture, so the threshold is not a high one. I accept that in a case such as this, if such a real possibility exists then the burden of the consequences should fall on the landlord whose capital interest in the building is unlikely to be affected in the medium or long term.” `“42.1 Whether there is a real possibility that the event will occur that is described as the precondition of the exercise of the rights under break clause—that is, is there a real possibility that the claimant will be deprived of its Quiet Enjoyment due to the intrusion of neighbouring redevelopment work during the term of the lease; 42.2 If there is such a real possibility, on whom should the burden of the event fall?”
“[43]…However, in my judgment the claimant’s fear of intrusion to the extent that it is deprived of its quiet enjoyment is unwarranted, speculative and, in the technical sense, fanciful.”
“Kwik-Fit must remain flexible, able to adapt to the industry, consumers and tech changes, some of which it can plan for a few years ahead, some of which it must react to in months, and so must be able to adapt its property portfolio”
“I’m acting for a Landlord of Kwik-Fit unit in respect of a lease renewal, and am preparing an Expert’s Report for Court I am arguing that auto fast fit operators are prepared to take 10 year leases without break and am therefore looking for recent lettings to such operators. I note that you have let Unit 4 to Formula One. Could you let me know what length of lease they took, the date when the lease commenced and whether or not any break clauses were included”
“5.2 To maintain light and clean in a good and workmanlike manner, until adopted as a public highway maintainable at public expense the Access Way.”
“1. Subject to the payment by the Purchaser of the contribution towards the cost of repair and maintenance thereof in accordance with paragraph 3 of Part 11 of the Third Schedule a right of way at all times and for all purposes connected with the use and enjoyment of the property”
“3. To pay to the Vendor on demand one third of the reasonable cost of the maintenance, lighting and cleaning of the Access Road including all drains serving the same”
“5. Not to dispose of the freehold of any part of the Property without obtaining from each Purchaser a Deed of Covenant in favour of the Vendor or its successors in title to the Retained Land in a form to be approved by the Vendor or its said successors in title obliging ·any such Purchaser to covenant in the terms of this paragraph 5 and to contribute the proportion ·relevant to the land sold of the one third contribution towards the reasonable cost of the maintenance, lighting and cleaning of the Access Road referred to in paragraph 3 of this Schedule.”
“Subject to payment by the Purchaser and its successors in title of the sums referred toin paragraph 3 of Part II of the Third Schedule the Vendor shall keep the Access Road in good and substantial repair and condition including all drains serving the same provided that if the Access Road shall be transferred to Kwik Save Group Plc and the Vendor shall procure that Kwik Save Group Plc shall enter into a deed of covenant with the Purchaser orits successorsin title (as the case may be) in the terms of this Fourth Schedule then as from the date of such transfer (or the date of the said deed of covenant if later) the Vendor shall have no liability under this covenant.”
“5.2 The Landlord will use reasonable endeavours to procure that the Accessway is maintained lit and cleaned in a good and workmanlike manner, until adopted as a public highway maintainable at public expense.”
“It is a fundamental aspect of valuation that it proceeds by analogy. The valuer isolates those characteristics of the object to be valued which in his view affects the value and then seeks another object of known or ascertainable value possessing some or all of the characteristics with which he may compare the object he is valuing. Where no directly comparable object exists the valuer must make allowances of one kind or another, interpolating or extrapolating from his given data. The less closely analogous to the object chosen for comparison the greater allowances which have to be made and the greater the opportunity for error.”
“the lessor has been unable to justify increasing the rent at each fifth anniversary of the term i.e. for each scheduled rent review, primarily as the passing rental at each review remained in excess of the effective rental value based on available rental evidence at the time of each rent review”. (Mr Hardy’s Report paragraph 5.23).”
“ “Term overage” is the standard industry terminology and approach to rental adjustment, which is to deduct or add 1% per annum to the rent being analysed reflecting whether the term for the property being valued is more, or less, than the typical local market norm position.”