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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Talisman Property Co (UK) Ltd v Norton Rose (A Firm) [2005] EWHC 85 (Ch) (01 February 2005) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2005/85.html Cite as: [2005] EWHC 85 (Ch) |
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CHANCERY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
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Talisman Property Co (UK) Limited |
Claimant |
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- and - |
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Norton Rose (A Firm) |
Defendant |
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D. Halpern (instructed by Barlow Lyde & Gilbert) for the Defendant
Hearing dates: 20th and 21st January 2005
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Crown Copyright ©
Mr Justice Lindsay :
"In my judgment, a landlord who serves a counter-notice opposing the grant of a new tenancy under (e), (f) and (g) presents the tenant with a choice between the doubtful possibility of a new tenancy or the certainty of compensation under section 37. Once such a counter-notice is served, the landlord has no right to recover the demised premises and to avoid payment of compensation. It is not right to treat the tenant as being in no different or worse position than he would have occupied if the landlord had never served a counter-notice."
That was dealing with a case where a counter-notice had been served; there is no dispute between the parties before me but that the case where ground (f) is asserted in a landlord's section 25 notice is indistinguishable.
The defence, as I have touched on already, is that once Lewis' section 26 notice of the 1st March 2001 had been met by the then-landlord's notice to Lewis of the 27th April 2001 opposing a new tenancy on and only on ground (f) then a situation emerged in which if the tenant, Lewis, quit the premises statutory compensation under section 37 would become payable by the landlord. One or other of the five situations to which I have referred as cases in which such compensation becomes payable would have become the fact if Lewis quit, as it would have an incentive – the prospect of compensation – to do. Accordingly, the fact that, ultimately, compensation became payable after the notice served by Norton Rose for Talisman in the incorrect "opposing" form on the 2nd October 2001 was not the infliction on Talisman of a new, added or avoidable liability but one which was merely alternative to a liability which already existed under the earlier Lewis notices. Accordingly, argue Norton Rose, there is no claim by Talisman beyond 40 shillings (or its equivalent) in contract and no complete cause of action in tort for want of loss.
(i) Talisman has a real prospect of showing by way of estoppel that Lewis was not the tenant but that Wyko was and that in turn the notices by and to Lewis were of no effect, leaving the incorrect notice of the 2nd October 2001 as the only effective notice, the notice which ultimately was the one which related to the quitting of the premises by the tenant (Wyko). That Talisman had to pay compensation, argues Mr Livesey, flowed naturally from Norton Rose's negligence in serving the notice in the incorrect form and the compensation that Talisman had to pay accordingly represented loss which completed the cause of action in tort and provided a case for a substantial award rather than one merely nominal in contract;(ii) Even if (which was not accepted) success on the above argument could not be predicated, Norton Rose's negligence effectively denied Talisman the chance of succeeding on that argument and that loss of a chance itself represents a loss for the dual purpose of completing the tort and going beyond nominal damages in contract;
(iii) Even if both (i) and (ii) above fail (which was resisted) service of the wrong form of notice denied Talisman the chance, by negotiation, of avoiding all of the situations in which compensation would have become payable and the loss of that chance of negotiating so as to avoid liability was, again, a loss which completed the tort and grounded a case of substance in contract.
"I am asked what would have been our attitude had an "unopposed" section 25 notice been served on Wyko in October 2001, I believe that Wyko would have continued to maintain that it was the legal person entitled to a new lease and would have sought to negotiate to obtain a deal which allowed us to stay in the premises on as ideal terms as we could obtain. Alternatively, if we did not obtain terms that were satisfactory, we would have thrown in the towel and left. Which of those would have been the result I cannot now say, since the inability to secure compensation would have affected the financial balance that we had to strike."
Wyko had earlier asserted in its 1954 Act proceedings with Talisman that the statement of truth that Lewis had completed stating that it was the tenant was made on incorrect advice and that the Solicitors responsible for it were no longer acting. The incoming Solicitors had asserted to Talisman that Wyko was the tenant.
Moving from what are pleaded as the consequences of the alleged facts to the allegations of fact themselves, it is possible to see a real case emerging such that both Talisman and Wyko could have been obliged to regard Wyko as the tenant. It is admitted on the pleadings that Lewis had ceased trading in 1997 and that Wyko had then commenced occupation of the premises for the purpose of a business carried on by it. On the 29th November 2000 Wyko wrote to the then-landlord's agents saying that "The [premises are] leased by us". That was not contradicted. The then-landlord had demanded rent from Wyko. Wyko paid it and their then-landlord accepted it from Wyko. Time after time between March 2000 and June 2001 Wyko had tendered rent and the then-landlord had accepted it. Insurance rentals, too, had been demanded by or on behalf of the landlord from Wyko. The then-landlord's agents had caused Wyko to be noted as lessee of the premises on the insurance policy for those premises. Talisman's agents directed Wyko to pay all monies including rents, insurance premiums and service charges to its office and Wyko did so. Talisman's agents amended its rent register to show Wyko as the tenant.
"(2) Where a tenancy is held by a member of a group, occupation by another member of the group, and the carrying on of a business by another member of the group, shall be treated for the purposes of section 23 of this Act as equivalent to occupation or the carrying on of a business by the member of the group holding the tenancy; and in relation to a tenancy to which this Part of this Act applies by virtue of the foregoing provisions of this section:-
(a) references (however expressed) in this Part of this Act and in the Ninth Schedule to this Act to the business of or to use, occupation or enjoyment by the tenant shall be construed as including references to the business of or to use, occupation or enjoyment by the said other member;
(b) the reference in paragraph (b)[subsection (1) of] section 34 of this Act to the tenant shall be construed as including the said other member;
(c) an assignment of the tenancy from one member of the group to another shall not be treated as a change in the person of the tenant."
There are difficulties in a literal construction of parts at least of section 42 (2) – see Reynolds & Clark on the Renewal of Business Tenancies (2nd Edition) paragraphs 1.4.5 and 1.6.3. This first argument, though, comes to this; the sort of changes described before the first semi-colon in section 42 (2) do not, by reason of section 42 (2), operate to change the identity of the tenant where both candidates are in the same group.