Fitzkriston LLP v Panayi and another
Business premises – Respondent owner claiming possession – Appellant occupants claiming protected periodic tenancy – Judge making possession order on basis that documents supporting existence of lease not genuine – Judge failing to deal with whether alleged parole lease at best rent – Whether judge failing to give appellants fair trial – Whether respondent succeeding on best rent issue – Appeal dismissed – Cross-appeal allowed
The respondent company purchased the freehold of commercial premises in 2006. It subsequently commenced proceedings against the first appellant and a company owned by him (the second appellant) for possession of the property. The appellants resisted the claim. They relied upon a document that they asserted was an agreement, made in 1998, for a one- year tenancy between the respondent’s predecessor and the brother of the first appellant, the rent for which was £4,000 pa payable in cash. The appellants contended that they had taken the benefit of that lease and held a continuing periodic tenancy over the property, which was protected by Part II of the Landlord and Tenant Act 1954.
The respondent argued that the document was not genuine and had not been recognised or executed in any way. It also contended that its title, as the registered owner, took precedence over all prior interests unless they constituted overriding interests falling within Schedule 3 to the Land Registration Act 2002. Accordingly, by virtue of section 54 of the Law of Property Act 1925, the issue was whether, assuming in favour of the appellants that a periodic tenancy might otherwise have been created, there was a parole lease at best rent because the lease document had not been properly executed. It was common ground for these purposes that best rent meant market rent. The judge granted an order for possession on the ground that the documents relied upon by the appellants did not amount to a lease, but he failed to deal with the best rent issue.
Business premises – Respondent owner claiming possession – Appellant occupants claiming protected periodic tenancy – Judge making possession order on basis that documents supporting existence of lease not genuine – Judge failing to deal with whether alleged parole lease at best rent – Whether judge failing to give appellants fair trial – Whether respondent succeeding on best rent issue – Appeal dismissed – Cross-appeal allowedThe respondent company purchased the freehold of commercial premises in 2006. It subsequently commenced proceedings against the first appellant and a company owned by him (the second appellant) for possession of the property. The appellants resisted the claim. They relied upon a document that they asserted was an agreement, made in 1998, for a one- year tenancy between the respondent’s predecessor and the brother of the first appellant, the rent for which was £4,000 pa payable in cash. The appellants contended that they had taken the benefit of that lease and held a continuing periodic tenancy over the property, which was protected by Part II of the Landlord and Tenant Act 1954. The respondent argued that the document was not genuine and had not been recognised or executed in any way. It also contended that its title, as the registered owner, took precedence over all prior interests unless they constituted overriding interests falling within Schedule 3 to the Land Registration Act 2002. Accordingly, by virtue of section 54 of the Law of Property Act 1925, the issue was whether, assuming in favour of the appellants that a periodic tenancy might otherwise have been created, there was a parole lease at best rent because the lease document had not been properly executed. It was common ground for these purposes that best rent meant market rent. The judge granted an order for possession on the ground that the documents relied upon by the appellants did not amount to a lease, but he failed to deal with the best rent issue. The appellants appealed, arguing that the judge conducted the trial in such a manner as to deprive them of a fair trial. The respondent cross-appealed, conceding that the appellants had not received a fair trial, but arguing that, in any event, it should have succeeded on the best rent issue. Held: The appeal was dismissed and the cross-appeal allowed.On the evidence, the judge had conducted the trial in an unjudicial manner and had not given the appellants a fair trial.However, the respondent was entitled to the possession that it claimed since the best rent issue, which the judge had ignored, was a good point. The clear evidence of a professional surveyor, in 1999, was that a tenancy of the premises in question at a rent of £4,000 pa was not a best rent within section 54 of the 1925 Act. The result was that, even giving the fullest effect to the material relied upon by the appellants as evidence of a lease being granted to the first appellant’s brother, it could not give rise to a continuing periodic tenancy protected by the 1954 Act. Accordingly, despite the unfair way in which the judge had dealt with the main issue, the respondent was entitled to possession of the property. Michael Roberts (instructed by Reid Minty LLP) appeared for the appellants; David Lewis (instructed by Lawson George Solicitors) appeared for the respondent.Eileen O’Grady, barrister
