The tenant negotiated with the landlords for the lease of six shops. Prior to the parties entering into the leases, the landlords served notices on the tenant so as to render valid agreements to exclude the security of tenure provisions in the Landlord and Tenant Act 1954. The tenant subsequently executed statutory declarations acknowledging receipt of the notices and confirming that it understood and accepted the consequences of entering into the agreements to exclude security of tenure. Clause 1 of the prescribed form of declaration set out in paragraph 8 of Schedule 2 to the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 required the tenant to insert the date on which the term commenced. Since the leases had not been executed, the tenant’s declarations referred to the term commencement date variously as “the access date under the agreement for lease”, “a date to be agreed by the parties”, and “a date on which the tenancy was granted”. When the leases expired, the landlords refused to renew them. The tenant contended that since its statutory declarations did not include the date of grant of the relevant leases, the declarations were not “substantially” in the prescribed form set out in the 2003 Order, therefore, the agreements to exclude the security of tenure provisions were, by section 38A of the 1954 Act, void. The tenant sought declaratory relief that the 1954 Act did not apply in respect of two of the six leases. The landlords subsequently brought a claim in respect of the other four leases, for a declaration that the Act did apply. The judge allowed the landlord’s claim for a declaration as to the applicability of the protection in the 1954 Act and dismissed the tenant’s, holding that the purpose of clause 1 in the prescribed form of statutory declaration was to identify the tenancy in respect of which the landlord’s notice had been given so that the tenant confirmed, by the declaration, that he or she understood that the proposed tenancy would be excluded from the protection of the 1954 Act. Since all the prospective leases were adequately identified by the declarations in question, they were therefore “substantially” in the correct form. The tenant appealed on grounds, inter alia, that (i) the words “for a term commencing on ...” referred to the date when the “term of years certain” commenced and was a deliberate echo of that phrase in section 38A(1) of the 1954 Act, (ii) the declaration had to state the date on which the proprietary interest created by the lease would commence, which could not be earlier than the date of the lease itself; (iii) accordingly, since the form of words used in each declaration did not identify the date when the lease actually commenced or even the date of which it was contractually agreed to commence, the words were not in the prescribed form.
On the tenant’s appeal—
Held, appeal dismissed. A declaration would be “in the form or substantially in the form” prescribed if the declaration as a whole fulfilled all the essential purposes of the prescribed form and, despite the use of apparently mandatory language, Parliament was not to be taken to have insisted on an interpretation which was contrary to commercial sense. The essential purposes of the declaration as a whole were clear. They were that the tenant should acknowledge (1) that the proposed lease excluded the security of tenure provisions of the 1954 Act, (2) that the landlord had served a warning notice in proper form, and (3) that the tenant had read the warning notice and accepted the consequences of entering into the lease. Those matters, which were the substance of the declaration, were dealt with in paragraphs 2 to 4. Paragraph 1 of the declaration served to identify the lease by stating the name of the tenant, the address of the premises (which did not need to be mentioned in the warning notice) and the date on which the term would commence. If in the circumstances the way in which paragraph 1 as a whole was completed left no room for doubt as to the lease which was the subject of the declaration, its essential purpose had been fulfilled. It did not have any other purposes. The word “term” was not a deliberate echo of the phrase “term of years certain” in section 38A(1) of the Landlord and Tenant Act 1954. The phrase “for a term commencing on …” did not invite the tenant to reflect on whether the lease would be for a “term of years certain”, but were capable of referring to the date from which the term was calculated as well as the date when the interest under the lease commenced. Further, the purpose of stating the commencement date could not have been to ensure that the declaration was made before the lease was entered into or before the tenant became contractually bound to enter into the lease. It would be obvious from comparing the date on the declaration with the date on the lease (or agreement for lease) whether it had been entered into before that occurred. Nor could it be to encourage the tenant to consider whether it would have 14 days’ notice between receipt of the warning notice and committing itself to the lease. That purpose was fulfilled by the terms of the warning notice which the tenant had to declare that it had read. It followed that there was no reason why the declaration should not be completed by inserting a formula (such as “from the access date…”) or even by words such as “from a date to be agreed”, provided that the declaration read as a whole was sufficient to identify the lease in question. In the present case there was no doubt which leases the declarations referred to and in each case the declaration made clear that the tenant had received a warning notice and understood and accepted that the lease would have no security of tenure. Accordingly, the declarations made by the tenant were in the form or substantially in the form prescribed and the parties had validly contracted out of the security of tenure provisions of Part II of the 1954 Act (paras 39–45, 51, 52, 53).
Joanne Wicks QC and Mark Galtrey (instructed by DLA Piper UK LLP) for the tenant.
Wayne Clark and Joseph Ollech (instructed by Shoosmiths LLP) for the landlords.