Investment & Freehold English Estates Ltd v Casement

Landlord and tenant — Rent Acts and Leasehold Reform Act 1967 — Long tenancy at a low rent — Rent payable of less than two-thirds of rateable value — Effect on the right to charge premiums — Parties under a misapprehension as to legal position when lease was entered into in 1972 — Lease, which was for a term of nearly 33 years from March 25 1968, provided for a service charge to meet the cost of lighting and cleaning common areas, outside painting and repairs to main structure and external parts — It contained a provision that the ground rent plus the lessee’s proportion of the service charge would in no event exceed two-thirds of the rateable value of the premises and added a proviso that, if in any year it seemed likely to so exceed, the lessor would not be under an obligation to carry out any work or perform any duties which would impose on him a liability in excess of the amounts to be101 collected from the lessees — There was also an agreement that ‘if the Leasehold Reform Act 1967 shall have been amended at any time in the future by legislative action or by a decision of the High Court’ to the effect that service charges would not be taken into account so as to prevent the lessor or lessee from charging a premium on the grant or assignment of the tenancy, the lessor would then be at liberty to demand a full contribution to the service charges — These provisions appeared to indicate that the parties were unaware that the Housing Act 1969 had, by section 80(1), already required sums payable inter alia for services to be disregarded in determining whether a tenancy was a tenancy at a low rent for the purposes of the Rent Acts The lessors sought by originating summons a declaration that, on the true construction of the relevant clauses in the lease, they were entitled to demand a full contribution from the lessee towards money spent in relation to services and repairs as set out in the lease — Judge Paul Baker QC, sitting as a judge of the High Court, decided in their favour and the lessee appealed The lessee argued that in a strict literal sense the Leasehold Reform Act 1967 had not been ‘amended’ by legislative action, but this argument was dismissed by the Court of Appeal as largely semantic and involving a narrowly literal interpretation — The lessee’s more important submission was that the relevant legislative action could not be said to have occurred ‘at any time in the future’ within the meaning of the lease because the 1969 Act was already law before the lease was executed in 1972 — The court held, however, that this argument ignored two important points — The first was the use of the future perfect tense in the words ‘shall have been amended’ in contrast with the future tense ‘shall be amended’ — The second point, a crucial one, was that the argument failed to do justice to the manifest intention of the parties — The parties at the time of execution of the lease wrongly believed that the then existing law would prevent the charging of premiums if the sum of the rent and the service charge exceeded two-thirds of the rateable value — Their intention was that, if the law as thus understood were to be altered, the lessors were to be free to demand a full contribution to service charges — The provisions in the lease were unhappily drafted, but the landlords’ construction, without doing unacceptable violence to language, accorded more closely than the tenant’s with the intentions which it was reasonable to impute to the parties — Appeal dismissed The following case is referred to in this report. Property Holding Co Ltd v Clark [1948] 1 KB 630; [1948] 1 All ER 165; (1948) 64 TLR 76, CA This was an appeal by the lessee, Ann Casement, from the decision of Judge Paul Baker QC, sitting as a High Court judge, in favour of the lessors, Investment & Freehold English Estates Ltd, the present respondents (plaintiffs below). The flat which was the subject of the proceedings was Flat no 4, one of eight in a block known as 5 Kensington Park Gardens, London W11. The decision of Judge Paul Baker is reported at [1987] 2 EGLR 112, (1987) 283 EG 748. Nicholas Patten (instructed by Freed Stone Goodman) appeared on behalf of the appellant; David Neuberger QC (instructed by Julian Holy) represented the respondents. Giving judgment, SLADE LJ said: This is an appeal by Miss Ann Casement from an order of His Honour Judge Paul Baker QC, sitting as a High Court judge, made on February 17 1987. It raises a point of construction of a lease. The issue is whether the landlord is entitled to demand a full service charge from the tenant or is restricted to recovering a much smaller sum. The premises demised by this lease (which I will call ‘the premises’) are Flat no 4 in a building, 5 Kensington Park Gardens, London W11. The building is a block of eight flats. The reversion to the lease is now vested in Investment & Freehold English Estates Ltd, the respondents to this appeal. The lease itself is vested in the appellant tenant. The lease was dated May 18 1972 and was made between Cityland Securities Ltd as lessor and Daniel Joseph as lessee. By clause 1 the lessor, in consideration of a premium of £9,000 and of the rent and the lessee’s covenants therein contained, demised to the lessee the premises together with certain rights and subject to certain exceptions and regulations for a term from March 25 1968 to March 15 2001: . . . paying therefor during the said term the yearly rent of seventy five pounds (£75) and also a sum of thirty five pounds (£35) per annum on account of the proper proportion of expenses referred to in Clause 2(3) hereafter and so in proportion for any less time than a year the said rent to be paid without any deduction (except for Landlord’s Property Tax) by equal quarterly payments on the usual quarter days the first of such payments after the date of these presents to be made on the 24th day of June One thousand nine hundred and seventy-two and the last payment to be made in advance one calendar month before the expiration of the said term or immediately on the determination thereof in the event of the same being determined by re-entry under the power in that behalf hereinafter contained and also paying by way of further or additional rent from time to time a sum or sums of money equal to the amount which the Lessor may expend in effecting or maintaining the insurance of the said premises or any part thereof against loss or damage by fire (including Architect’s fees) and such other perils as are commonly included in similar policies such last mentioned rent to be paid without any deduction on the quarterly day for payment of rent next following each such expenditure by the Lessor as aforesaid provided always that the ground rent hereby reserved together with the proportion of expenses referred to in Clause 2(3) of these presents will in no event exceed two-thirds of the rateable value of the premises but Provided nevertheless that should the said expenses together with the ground rent be likely in any one year to exceed two-thirds of the rateable value the Lessor shall not be under any obligation to carry out any work or perform any duties (notwithstanding his covenant to that effect) which would impose upon him a liability in excess of the amounts to be collected from the Lessee and the lessees of other flats. By clause 2(3), so far as material, the lessee covenanted with the lessor: To pay due proportion of all proper expenses of the Lessor in connection with the said property including lighting and cleaning of the common areas and the cost of painting in every third year of the said term and also in the last year of all the outside wood iron stucco cement and other like work in or upon the said premises or any addition thereto and of keeping in substantial repair the main structure of the building and all the external parts thereof including the common area in front and at the rear of the building the entrance passage and entrance hall the common staircase landings and passages and all the drains ducts conduits and water pipes such proportion to be determined by the Lessor’s Surveyor and to be calculated by reference to the rateable value of the said premises . . . Clause 12 of the lease took an unusual form: The Lessor and the Lessee hereby agree and covenant accordingly that if the Leasehold Reform Act 1967 shall have been amended at any time in the future by legislative action or by a decision of the High Court to the effect that service charges do not for the purpose of the Rent Acts as amended by the Leasehold Reform Act 1967 attract the operation of the Acts to estop the Lessor or the Lessee wishing to assign the residue of the term from charging a premium on the grant of the Lease or assignment (as the case may be) then and in such event the proviso hereinbefore contained shall be of no effect and the Lessor shall be at liberty to demand a full contribution from the Lessee as provided in Clause 2(3) of these presents notwithstanding that such contribution together with the ground rent hereby reserved exceeds two-thirds of the rateable value. The wording of clause 12 of the lease indicates the belief and understanding of the draftsman and of the parties that, at the time of its execution, the effect of the Rent Acts, as amended by the Leasehold Reform Act 1967 (‘the 1967 Act’), would have precluded the lessor from charging a premium on the grant of the lease and the lessee from charging a premium on the assignment of the lease if the lease had provided for the aggregate of the rent and service charges payable by the lessee to exceed two-thirds of the rateable value of the demised premises. In order to explain the references to the Rent Act legislation, Mr Patten on behalf of the appellant has taken us on a helpful journey through the relevant statutory provisions relating to the charging of premiums. For present purposes, however, I think it will suffice to summarise very briefly the relevant legal position as it was immediately before the passing of the 1967 Act. As at that date section 2(1) of the Landlord and Tenant (Rent Control) Act 1949, as amended by section 37(1) of and the 5th Schedule to the Rent Act 1965, precluded a person from requiring the payment of a premium as a condition of the grant of a tenancy to which the section applied. Section 2(2) of that Act, as amended, precluded a person from requiring the payment of a premium as a condition of the assignment of a tenancy to which the section applied. Section 2(3) in effect rendered the section applicable to any tenancy of a dwelling-house falling within the Rent Acts. However, the section did not apply if the tenancy was outside the Acts, that is to say if the rent was less than two-thirds of the rateable value (see section 12(7) of the Increase of Rent and Mortgage Interest (Restrictions) Act 1920, as amended by section 26(3) of and the 8th Schedule to the Rent Act 1957) or if the term of the tenancy was for more than 21 years (see sections 21(1) and 25(1) of the Rent Act 1957). The term of the lease in the present case exceeded 21 years. Accordingly, if the lease had been executed before the 1967 Act was passed, the statutory provisions precluding the demand of a premium by the landlord on the grant of the lease or by the tenant on its assignment would not have applied, even though the rent had exceeded two-thirds of the rateable value of the premises. However, the 1967 Act brought tenancies for more than 21 years under Rent Act protection. Section 39(1)(a) of that Act provided: the Rent Act 1965 shall have effect as if at the end of section 1(2) (which lists the cases in which the Rent Acts are to apply as modified by that Act) there were added — ‘or (d) that the tenancy is a long tenancy within the meaning of Part I of the Landlord and Tenant Act 1954’; A ‘long tenancy’ within that meaning was ‘a tenancy granted for a term of years certain exceeding 21 years’. Thus, for the time being, the effect of this amendment of section 1(2) of the Rent Act 1965 was to preclude a landlord from charging a premium on the grant of a lease or a tenant from charging a premium on the assignment of a lease in any case where the aggregate of the rent payable by the tenant exceeded two-thirds of the rateable value of the demised premises, even though the term exceeded 21 years. Furthermore, it was well established by judicial authority that for the purpose of the Rent Acts the word ‘rent’ included payments made by a tenant to his landlord by way of service charge (see, for example, Property Holding Co Ltd v Clark [1948] 1 KB 630). On June 8 1968 the Rent Act 1968 (‘the 1968 Act’) came into force. It was a consolidating Act which replaced the previous statutory provisions of the 1967 Act to which I have referred but effected no change in the law material for present purposes. Part VII contained provisions prohibiting the requirement of premiums on the grant and assignment of protected tenancies broadly corresponding with, though not identical to, those in force before the statute came into effect. It specifically repealed section 39(1)(a) of the 1967 Act. The result of section 39(1)(a) of the 1967 Act and the reproduction of its substantive effect in the 1968 Act was that, if the rent payable under a lease was more than two-thirds of the rateable value of the demised premises, then, whatever the length of the term, the lease could not be granted or assigned for a premium and, furthermore, the decided cases showed that for this purpose service charges were to be reckoned as part of the rent. In so far as this state of the law applied to long leases, it was radically altered by section 80(1) of the Housing Act 1969 (‘the 1969 Act’) which, so far as material, provided: (1)  In determining whether a long tenancy is, or at any time before the commencement of this Act was, — (a)  a tenancy at a low rent within the meaning of the Rent Act 1968 . . . there shall be disregarded such part (if any) of the sums payable by the tenant as is expressed (in whatever terms) to be payable in respect of rates, services, repairs, maintenance, or insurance, unless it could not have been regarded by the parties as a part so payable. Section 80(3), with an immaterial exception, defined ‘long tenancy’ as meaning ‘a tenancy granted for a term certain exceeding 21 years’. The tenancy granted by the lease in the present case is a ‘long tenancy’. Accordingly, the effect of section 80 was that, in determining whether that tenancy is, or was at any time before the commencement of the 1969 Act, ‘a tenancy at a low rent’ within the meaning of the 1968 Act, the service charges payable by the lessee fell to be disregarded. It is, therefore, clear that, contrary to the apparent belief and understanding of the parties as expressed in this lease, even at the time when it was executed, there would have been nothing to prevent the lessor from demanding a premium on the grant of the lease, nor the lessee from demanding a premium on its assignment, even though the lease had not included either of the two provisos to clause 1 or clause 12. It is clear that to this extent the parties entered into the lease under a complete misapprehension of the relevant legal position. It is in these circumstances that dispute arises as to the construction and effect of clause 12 of the lease. By the originating summons the respondent landlord sought a declaration that, upon the true construction of the proviso to clause 1 of the lease and pursuant to clause 12, it is entitled to demand a full contribution from the lessee in relation to moneys expended by it in performing its covenant contained in the lease in accordance with the provisions of clause 2(3). The learned judge granted a declaration to this effect and the tenant now appeals from his judgment. The learned judge himself summarised the arguments submitted to him and his conclusions on them as follows in the course of his judgment: By the time this lease was granted in 1972, the danger which had obviously been looked at and been guarded against of having the rent go over the two-thirds and thereby bring about the premium restrictions among other things, had already gone by legislative action. The parties nevertheless put a clause in on the basis that such alteration and change in the law had not taken place, and until it had, they would restrict the rent to within two-thirds of the rateable value. Mr Patten’s argument on this is quite simple; that when you look at the earlier proviso it is clear and unambiguous, as I have noticed, and when you come to clause 12 — it was a provision that was out of date when it was put in. The Leasehold Reform Act could not be amended at any time in the future — it had already been amended in the past. Therefore, there is nothing for this clause to operate on. There is obviously some misapprehension here which may form the basis of some action for rectification or may not; but as a matter of construction it says you cannot apply it to these circumstances which have arisen because it had no operation. The Act of 1967 was not amended or judicially construed at any time after 1972 in any relevant sense, and therefore one is left with the proviso through the whole term. There is considerable force in that argument, but I have come to the conclusion that as a matter of construction I must find that that is not the true meaning of the clause when one comes to attend to the wording more closely. First of all, one sees that it says, reading the terms of it overall — that it operates at the time, in my judgment, of the grant of the lease because what it says is: ‘The Lessor and the Lessee hereby covenant accordingly that if the Leasehold Reform Act shall have been amended at any time in the future . . .’ ‘In the future’ I would take to be simply an expression that means in the future following the passing of the Act. I would not have taken that view in the ordinary course, but the rest of the clause would seem to indicate it. Apart from the words ‘shall have been amended’, which would seem to indicate that it had already been amended at the grant of the lease — those words by themselves — one then goes on to describe what the effect of the amendment shall have been. It says: ‘. . . to the effect that service charges do not for the purpose of the Rent Acts as amended by the Leasehold Reform Act attract the operation of the Acts to estop . . .’ or ‘prohibit’, as I would read that word, ‘. . . the Lessor or the Lessee wishing to assign the residue of the term from charging a premium on the grant of the lease or assignment, as the case may be.’ It does not refer to the position of lessors and lessees generally; it refers to this particular lessor as defined. Yet the position of the lessor in this connection is only relevant at the grant of lease, not during its course. Then the clause goes on: ‘And in such event the proviso hereinbefore contained shall be of no effect.’  It is not that it shall become of no effect, but it shall from all times, as I would read that, be of no effect. It is of course on the face of it a very singular way of providing for this because one would expect the parties at the time when the lease was granted to have made up their minds whether or not the provisions applied or the law was in such a state as to allow for the grant of a premium. That is obviously the sensible and efficient way to draft such a lease. There may be some excuse for it. As I have said, this is a block of eight flats and this formula was devised because there was going to be a series of grants, or there might be a series of grants, and the legislation might change during the course of the grants. It would not be known precisely when the legislation would have changed. It has this consequence; that if the lease was granted before any relevant amendment lifting the premium provisions, it would mean that that particular lease would be subject to the restrictions and continue to be so — or might be so. That is not a case I have to consider before me. I read these two provisos together. At the grant of the lease one asks oneself, to my mind, whether the Leasehold Reform Act has already been amended and, therefore, with the consequence both that the Lessor can take a premium and the Lessee can subsequently assign it with the benefit of a premium. As I say, I have not found that at all an easy point of construction, but doing the best I can with the language which I am confronted and particularly relying on the words ‘shall have been’ and the references to the Lessor in the clause, I am of the opinion that the provisos in clause 1 have no operation. Therefore I shall make the declaration that is asked for. I now turn to the submissions advanced on behalf of the tenant by Mr Patten in support of this appeal. He pointed out that, as was common ground before Judge Baker, there has been no judicial 102 decision to the effect that service charges are not to be treated as ‘rent’ for the purpose of the Rent Acts. Indeed, it was the absence of any such decision which rendered the enactment of section 80 of the 1969 Act necessary. Therefore, as he pointed out, the only question for the court is whether the contingency referring to legislative action, mentioned in clause 12 of the lease, has in fact occurred, within the meaning of that clause. One of the subsidiary grounds upon which Mr Patten criticised Judge Baker’s decision was that, in answering this question, the judge suggested that the form of lease was prepared at a time before section 80 of the 1969 Act had taken effect. He suggested that, in referring to this block of eight flats, ‘this formula was devised because there was going to be a series of grants, or there might be a series of grants, and the legislation might change during the course of the grants’. This hypothesis may or may not be well founded. Some slight support is perhaps lent to it by the chosen date of the commencement of the term, March 25 1968, which was a long time before the date on which the lease was actually executed. Nevertheless, with respect to the learned judge, his hypothesis is pure speculation and whether or not any such evidence would be admissible for the purposes of construing the lease, the speculation is not, I think, supported by any firm evidence. In those circumstances, I agree with Mr Patten that we must construe the lease without conjecture of this kind. I now turn to the two principal propositions submitted by him in support of his appeal. As his first proposition he submitted that there has never been an amendment of the 1967 Act by ‘legislative action’ of the nature referred to in clause 12. He put this point in two ways. First, he pointed out, the only relevant section of the 1967 Act, section 39(1)(a), was repealed by the 1968 Act. By the time that section 80 of the 1969 Act became law, section 39(1)(a) of the 1967 Act was no longer on the statute book. It cannot, in his submission, be properly said that a subsection has been ‘amended’ by new legislation if it is no longer on the statute book when that new legislation is passed. Further or in the alternative, he pointed out that section 39 of the 1967 Act, by adding a new subparagraph to section 1(2) of the 1965 Act, merely restored the pre-1957 position whereby the mere fact that the tenancy was a long tenancy did not disqualify it from Rent Act protection. This remains the position today. The effect of section 80 of the 1969 Act merely was to reverse the judicial interpretation of ‘rent’ within the meaning of the Rent Acts. Thus, it was submitted, it could not be said to involve an amendment of the 1967 Act. The first principal proposition of Mr Patten which I have attempted to summarise involves reading the reference in clause 12 of the lease to an ‘amendment’ of the 1967 Act in the strictest and narrowest possible sense. As he accepted, it would mean that, even if the lease in the present case had been executed before the passing of the 1969 Act, the lessee would still have been able to assert that the lessor had no right to invoke clause 12 after the 1969 Act was passed, because it could do so only if the relevant change in the law had been brought about by an ‘amendment’ of section 39(1)(a), no more and no less. I, for my part, decline to read the words of clause 12 in so narrow a sense. I think it would produce an absurd result. In this context the relevant words of clause 12 are: . . . if the Leasehold Reform Act 1967 shall have been amended at any time in the future by legislative action or by a decision of the High Court to the effect that . . . If the coming into operation of a statute has the legal effect stated in clause 12, so as to negative the state of the law brought about by the enactment of section 39(1)(a) of the 1967 Act, the passing of such statute, in my judgment, amounts to ‘amendment’ of the 1967 Act by legislative action within the meaning of clause 12. Accordingly, the passing of section 80 of the 1969 Act was, in my judgment, legislative action of the kind contemplated by the clause. However, even if this be so, Mr Patten submitted that it cannot be said that the relevant legislative action occurred ‘at any time in the future’ within the meaning of clause 12, because the 1969 Act had already become law prior to the execution of the lease on May 18 1972. This was his second main proposition and, to my mind, by far the most important point in the case. Judge Baker himself construed the words ‘shall have been amended at any time in the future’ as meaning in the future following the passing of the 1967 Act. This, Mr Patten argued, was inconsistent with the actual date borne by the lease. By 1972 there was no need for the restrictions in the lease limiting service charge contributions to two-thirds of the rateable value, because by then section 80 of the 1969 Act had become law. As Mr Patten pointed out, the parties were obviously unaware of this and that was why they inserted the proviso to clause 1. It follows, in his submission, that clause 12 can only have been inserted in the lease to cater for a change in the law taking place after the grant of the lease. In his submission, the words ‘shall have’ in their context look simply to the future and mean simply ‘shall’. This interpretation of the words as having merely prospective effect is, in his submission, consistent with the stated consequence that the proviso to clause 1 ‘then in such event . . . shall be of no effect’. There is no doubt that the original parties to this lease were labouring under a misapprehension as to the true state of the law when they executed the lease in 1972. Possibly the lease may be rectifiable but, in Mr Patten’s submission, the language used is unambiguous and the court must not attempt to remedy the mistake by a process of construction, particularly as between parties now before the court who are not the original parties to the lease. The language of the clause may not have been appropriate, but the parties, he submits, are stuck with it and the court cannot rewrite its provisions. On any footing, clause 12 is not happily drafted. Quite apart from its apparent misapprehension as to the state of the relevant law, the reference to the possibility of amendment to the 1967 Act ‘by decision of the High Court’ reads very oddly. So, too, does the reference to the possibility of changes in the law enabling the lessor to charge a premium on the grant of the lease, bearing in mind that the lessor has already demanded and received a premium of £9,000 on the grant of this lease. Mr Patten’s argument, however, based as it is on the supposed literal and grammatical meaning of the words used, in my judgment, fails to give due weight to two important features of clause 12. The first, which is itself a grammatical feature, is the apparently deliberate use by the draftsman of the future perfect tense in the phrase ‘shall have been amended’ in contrast with the future tense ‘shall be amended’. The use of the future tense ‘shall be’ is apt simply to describe an action or event yet to happen. The use of the future perfect tense ‘shall have been’ likewise looks to a point of time in the future but denotes a completed event or action viewed in relation to that future point of time. The relevant future point of time designated by clause 12 is the time when the lessor wishes to exercise his right to demand a full contribution from the lessee, as provided by clause 2(3) of the lease. While the introductory condition of clause 12 is by no means elegantly or precisely worded, it is, in my judgment, grammatically capable of covering a relevant change of the law which shall have taken place at any time whatever before the lessor seeks in the future to demand a full contribution from the lessee. Some slight grammatical support for this construction which treats the opening condition of clause 12 as capable of having some retrospective content is to be found in the use by the draftsman of the phrase ‘shall be of no effect’ as opposed to the phrase ‘shall become of no effect’. However, the second crucially important feature of the clause to which Mr Patten’s argument, in my judgment, gives quite inadequate weight is the obvious intention of the parties as manifested by clause 12. This clause, as I have already said, clearly demonstrates their belief, at the time of the execution of the lease, that the effect of the Rent Acts as amended by the 1967 Act would have precluded the lessor from charging a premium on the grant of the lease and would have precluded the lessee from charging a premium on the assignment of the lease, if the lease had provided for the aggregate of the rent and service charges payable by the tenant to exceed two-thirds of the rateable value of the demised premises. Furthermore, no less clearly, clause 12 demonstrates the parties’ intention that, if the law were to be changed so that service charges payable by the lessee no longer fell to be taken into account in deciding whether the rent payable under the lease exceeded two-thirds of the rateable value of the premises, for the purpose of applying the statutory provisions precluding the charge of premiums on the grant or assignment of a lease such as this, then the lessor was to be free to demand a full contribution of service charges from the lessee as provided by clause 2(3). Let it be supposed that the parties had been asked at the time of the execution of the lease this question: ‘If, contrary to your understanding, there has already been amending legislation of the relevant nature, is the lessor to be free to demand a full contribution103 from the lessee in respect of service charges?’  In my judgment, the only reasonable inference which one can draw from the language used in clause 12 is that they would have assuredly answered this question ‘Yes’. Thus, I have no doubt that the construction which the respondent landlord attributes to clause 12 accords more closely with the intentions which it is reasonable to impute to the parties than does the tenant’s construction. Nor, in my opinion, for the reasons which I have given, does the landlord’s construction do violence to the language of that admittedly ill-drafted clause as a matter of grammatical construction. Indeed, contrary to Mr Patten’s submission, I do not find it fanciful to suppose that the draftsman could have deliberately used the future perfect tense to cover the eventuality that at some future date it might be discovered that legislation or judicial decision (in particular, judicial decision) of which he was unaware had already effected the relevant change in the law before the lease was executed. On the other hand, the construction which the appellant tenant attributes to the clause would render it totally incapable of having any effect at all. I, for my part, feel unable to construe it in the way which the tenant propounds. In my judgment, the contingency referring to legislative action, mentioned in clause 12 of the lease, has occurred. It makes no difference that, unknown to the parties, the legislative action had already taken place before the lease was effected. The proviso referred to in clause 12 is, in my judgment, of no effect. The lessor is entitled to demand a full contribution from the lessee in relation to moneys expended by it in performing its covenant contained in the lease in accordance with the provisions of clause 2(3). By a respondent’s notice the landlord submitted that, even if all the points argued by the appellant on this appeal were well founded, the learned judge’s judgment should be affirmed on a further ground, that is to say that the 1967 Act has been amended by legislative action consisting of section 78 of the Housing Act 1980. As things were, we did not find it necessary to hear argument on this point raised by the respondent’s notice. For the reasons which I have given, the learned judge, in my judgment, reached the right conclusion. Mr Patten has argued this appeal with great ability, but I, for my part, would dismiss it. RUSSELL and TAYLOR LJJ agreed and did not add anything. The appeal was dismissed with costs.