Open land — Former GLC granted lease to plaintiffs predecessors — Option for further lease subject to conditions — Conditions met — Whether option ultra vires GLC — Whether conditions fulfilled — Whether unconscionable to allow reneging from common assumption — Judgment for plaintiff
The plaintiff sought a declaration that it had validly exercised an option contained in a 21-year lease entered into in 1971 between the GLC and the trustees of the West Middlesex Golf Club. The land comprised some 120 acres in the suburbs of Southall abutting Uxbridge Road and Greenford Road. It also adjoined other sporting facilities. A temporary club house had been erected in 1939. The public had access to footpaths and the links at particular times. In 1968, the club wrote to the GLC that the lease was due to expire in 1973 and asking for terms of a new lease. A 21-year lease was agreed upon in the event that the club built a new clubhouse and that the hedges, ditches, fences and railings were to be kept in good order. In 1971 the GLC and the trustees entered into a new lease and in 1976 the reversion became vested in Ealing London Borough Council. Also in 1976, the members had formed themselves into a company — the present plaintiff. In 1977 the plaintiff built the clubhouse at its own expense. Under clause 5 the trustees had the option for a further term of 21 years upon notice provided the covenants had been observed. That lease expired in 1991. However, when the plaintiff sought to exercise the option the council sought to terminate the tenancy alleging, inter alia, breaches of covenant. The council contended that (a) the option was ultra vires; (b) that the tenant had failed to observe the covenants of the lease.
Held Judgment for the plaintiff.
1. The defendant submitted that in so far as the 1971 lease was granted under the provisions of section 164 of the Local Government Act 1933, no power was conferred to grant an option to a new lease: see Trustees of Chippenbam Golf Club v North Wiltshire District Council (1991) 64 P&CR 527. That submission was accepted. There was nothing in the legislation which widened the scope of the word “let” so as to let in an option to renew. The golf course and clubhouse was not provided by the local authority. It was provided and maintained by the plaintiff to whom leases had been granted. While a local authority was entitled to enter into a wide variety of contracts for the management of open space including a letting, that did not — applied to section 164 — include an option.
2. However, it would be unconscionable to allow the defendant to renege from the common assumption that the option clause was of full validity and effect. The building of the new clubhouse was contemplated by the option itself albeit it was part of the lease. Plans for it were approved with plenty of encouragement to the plaintiff to go ahead. It was perfectly reasonable to infer that all was done in the belief that — subject to fulfilment of the other necessary preconditions for the exercise of the option — the plaintiff would acquire an new 21-year lease.
3. On the question of breach, it was impossible on the totality of the evidence to say there had been any actionable want of repair or breaches at the relevant date.
David Neuberger QC and Nicholas Dowding (instructed by Herbert Smith) appeared for the plaintiff; Kirk Reynolds QC (instructed by Crossman Block) appeared for the local authority.
