Airways Aero Associations Ltd v Wycombe DC
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Airways Aero Associations Ltd v Wycombe DC Chancery Division 09 July 2010 Case Analysis Where Reported [2010] EWHC 1654 (Ch); Official Transcript Case Digest Subject: Landlord and tenant Keywords: Business tenancies; Estoppel; Local authorities; Rent reviews; Valuation Summary: The starting point in considering a rent review clause in a commercial lease was an assumption that the rental value was to be that of the whole of the demised premises as they existed at the review date. On its proper construction, a lease for a civil airport did not show with suffic ient clarity any intention to depart from that position, and its use of the terms "airfield" and "aerodrome" was largely indiscriminate and did not refer to different parts of the site for the purpose of rent review. Abstract: The court was required to determi ne, as preliminary issues, matters arising from the operation of a rent review clause in a commercial lease. The claimant company (X) had leased a small civil airport from the defendant local authority. The lease ran for 42 years and the annual rent payable by X was reviewable every seven years. At the final review, the parties were unable to agree a rent and activated the procedure in the lease for reference to an expert valuer . X assert ed that that local authority's rent proposal was based on an incorrect interpretation of the review provision and that the authority was, in any event, estopped from seeking any increase in rent attributable to the rebuilding of hangars by X at its own expense, having expressly agreed in writing not to do so before the rebuilding took place. The court held that the question of construction of the lease was a matter for the court and not the valuer . The issues for determinat ion concerned (i) whether X was entitled to a declaration that the valuer was required to determine a rent for an area less than the whole site, excluding the hangars and other buildings; (ii) the extent of the estoppel conceded by the local authority. X contended that as the rent review clause referred to "The Airfield", it was to be construed as referring not to the whole of the demised premises, but to an area excluding the "stores, offices, hangars and other aerodrome buildings" and a bungalo w. It submit ted that the excluded areas, other than the bungalow, were referred to in the lease as "the aerodrome" in distinction from the "airfield". The local authority's position was that the variou s terms used in the lease were merely poor drafting and did not indicate any intention to refer to separate areas, so that the rent should be fixed by reference to the rental value of the whole of the premises actually demised. In relation to the estoppel, X contended that the rent at review should be assessed on the footing that the old hangars had been removed and not replaced. The local authority argued that the assump tion should be that the former buildin gs remained in the condit ion they were prior to demoli tion, subject to a further assumption that up to that date the tenant had complied with its repairing covenant. Preliminary issues determined. (1) The starting point in considering Page1
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Transcript of Airways Aero Associations Ltd v Wycombe DC
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Airways Aero Associations Ltd v Wycombe DCChancery Division
09 July 2010
Case Analysis
Where Reported [2010] EWHC 1654 (Ch); Official Transcript
Case Digest Subject: Landlord and tenantKeywords: Business tenancies; Estoppel; Local authorities; Rentreviews; Valuation
Summary: The starting point in considering a rent review clause ina commercial lease was an assumption that the rental value was tobe that of the whole of the demised premises as they existed at thereview date. On its proper construction, a lease for a civil airport didnot show with sufficient clarity any intention to depart from thatposition, and its use of the terms "airfield" and "aerodrome" waslargely indiscriminate and did not refer to different parts of the sitefor the purpose of rent review.
Abstract: The court was required to determine, as preliminaryissues, matters arising from the operation of a rent review clause ina commercial lease. The claimant company (X) had leased a smallcivil airport from the defendant local authority. The lease ran for 42years and the annual rent payable by X was reviewable every sevenyears. At the final review, the parties were unable to agree a rentand activated the procedure in the lease for reference to an expertvaluer. X asserted that that local authority's rent proposal was basedon an incorrect interpretation of the review provision and that theauthority was, in any event, estopped from seeking any increase inrent attributable to the rebuilding of hangars by X at its ownexpense, having expressly agreed in writing not to do so before therebuilding took place. The court held that the question ofconstruction of the lease was a matter for the court and not thevaluer. The issues for determination concerned (i) whether X wasentitled to a declaration that the valuer was required to determine arent for an area less than the whole site, excluding the hangars andother buildings; (ii) the extent of the estoppel conceded by the localauthority. X contended that as the rent review clause referred to"The Airfield", it was to be construed as referring not to the whole ofthe demised premises, but to an area excluding the "stores, offices,hangars and other aerodrome buildings" and a bungalow. Itsubmitted that the excluded areas, other than the bungalow, werereferred to in the lease as "the aerodrome" in distinction from the"airfield". The local authority's position was that the various termsused in the lease were merely poor drafting and did not indicate anyintention to refer to separate areas, so that the rent should be fixedby reference to the rental value of the whole of the premises actuallydemised. In relation to the estoppel, X contended that the rent atreview should be assessed on the footing that the old hangars hadbeen removed and not replaced. The local authority argued that theassumption should be that the former buildings remained in thecondition they were prior to demolition, subject to a furtherassumption that up to that date the tenant had complied with itsrepairing covenant.
Preliminary issues determined. (1) The starting point in considering
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a rent review clause in a commercial lease was an assumption thatthe rental value was to be that of the whole of the demised premisesas they existed at the review date, Ponsford v HMS Aerosols Ltd[1979] A.C. 63 followed. That assumption could, however, bedisplaced by wording in the lease itself if the factual context gave asufficiently clear indication of a contrary intention. In the instantcase, the review clause did not show with sufficient clarity anyintention that the rent on review should be fixed on an artificial basisof assessing only part of the demised area described as the"airfield". The terminology of "airfield" and "aerodrome" used in thelease did not denote an intention to refer to different parts of the site,but was to be regarded as largely indiscriminate. The court,accordingly, declined to make the declaration as to constructionsought by X. (2) The estoppel alleged, and conceded, was onewhich prevented the local authority from going back on its earlierassurance. The court had no power to impose terms on the partieswhich it considered fair or reasonable by reference to circumstanceswhich might have, but did not, occur, but only to determine whetheran assurance had been given which it would be inequitable for thelocal authority to renege on once X had relied on it to its detriment,and if so, what its terms were. Reliance and detriment had beenconceded, and the assurance sought and given related to the valueof improvements. The value of the old buildings was to be assessedon the footing that the tenant had complied, and continued tocomply, with its repairing covenants under the lease in relation tothem, but no more.
Judge: David Cooke, HHJ
Counsel: For the claimant: Jeffrey Terry. For the defendant: JohnMale QC.Solicitor: For the claimant: Allan Janes. For the defendant: VealeWasbrough Vizards.
Significant Cases Cited Ponsford v HMS Aerosols Ltd[1979] A.C. 63; [1978] 3 W.L.R. 241; [1978] 2 All E.R. 837; (1979)38 P. & C.R. 270; (1978) 247 E.G. 1171; HL; 1978-06-29
All Cases Cited AJ (A Child) (Adoption Order or Special Guardianship Order),Re
[2007] EWCA Civ 55; [2007] 1 F.L.R. 507; [2007] 1 F.C.R. 308;[2007] Fam. Law 387; (2007) 104(8) L.S.G. 38; Official Transcript;CA (Civ Div); 2007-02-06Ponsford v HMS Aerosols Ltd
[1979] A.C. 63; [1978] 3 W.L.R. 241; [1978] 2 All E.R. 837; (1979)38 P. & C.R. 270; (1978) 247 E.G. 1171; HL; 1978-06-29
Legislation Cited Civil Aviation Act 1971 (c.75)Landlord and Tenant Act 1954 (c.56)
Journal Articles Commercial lease - rent review - construction and assumptions- estoppel
Business tenancies; Estoppel; Rent reviews; Rental value; Valuers.
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Comm. Leases 2010, Aug, 1602-1604
Books Handbook of Rent ReviewChapter: Chapter 4 - The Basis of ValuationDocuments: 4.4.1
Handbook of Rent ReviewChapter: Chapter 4 - The Basis of ValuationDocuments: 4.5.1 What is meant by the premises?
Handbook of Rent ReviewChapter: Chapter 4 - The Basis of ValuationDocuments: 4.5.5 Where the premises have been added to by thetenant at its own expense
2014 Sweet & Maxwell
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