Should it stay or should it go? Mark Galtrey www.falcon-chambers.co.uk www.falcon-chambers.co.uk
Overview Darling you got to let me know Should I stay or should I go now? Should I stay or should I go? Should I stay or should I go now? If you say that you are mine If I go there will be trouble I'll be here 'til the end of time And if I stay it will be double So you got to let me know So come on and let me know Should I stay or should I go? Should I stay or should I go? It's always tease, tease, tease This indecision's bugging me You're happy when I'm on my knees If you don't want me, set me free One day it's fine and next it's blacks Exactly whom I'm supposed to be So if you want me off your back Don't you know which clothes even fit me? Well come on and let me know Come on and let me know Should I stay or should I go? Should I cool it or should I blow? www.falcon-chambers.co.uk
If you say that you are mine… Ownership of chattels • Tenant’s chattels are the property of the tenant • Torts (Interference with Goods) Act 1977 • Notice + reasonable time to collect • Otherwise sell and net proceeds to tenant • Landlord’s chattels are the property of the landlord • Trover – action for the value of the removed chattels • Armory v Delamirie (1722) 1 Strange 505 www.falcon-chambers.co.uk
If you say that you are mine… Ownership of fixtures • Recap: fixtures form part of the land for as long as they are affixed • Therefore owner of the land owns the fixtures while they are affixed • s.62 of the Law of Property Act 1925 provides that a conveyance of land is deemed to include all fixtures • Cannot be ousted even by express agreement of the parties: Melluish (Inspector of Taxes) v BMI (No.3) Ltd [1996] A.C. 454 • Different question from rights or obligations to remove fixtures during or at the end of the lease www.falcon-chambers.co.uk
If you want me off your back… Obligation to remove chattels • Almost always an express or implied covenant to yield up possession at the end of the lease • Chattels must be removed by tenant prior to end of lease to prevent breach of this covenant • Damages for breach are reasonable costs of removal of the chattels • If follow Torts (Interference with Goods Act) process, no double recovery allowed • Also implications for vacant possession (see later) www.falcon-chambers.co.uk
If you want me off your back… Obligation to remove fixtures • Landlord’s fixtures remain with the land • Part of the land and revert to the landlord with the land at the end of the term • Tenant’s fixtures: general rule is no obligation to remove: Never-Stop Railway (Wembley) Ltd v. British Empire Exhibition (1924) Inc [1926] Ch 877 • Logic is that tenant’s fixtures are also part of the demised premises, which returns to landlord at the end of the term: Elitestone v Morris [1997] 1WLR 687 www.falcon-chambers.co.uk
If you want me off your back… Obligation to remove fixtures • There are exceptions to the general rule • Express obligation to remove in lease or in licence for alterations • Might be implied from premises being defined to exclude fixtures, but might just preserve the tenant’s right to remove the fixtures (see later) • Might be implied from covenant to give vacant possession (also see later) • Combination of these two used to justify decision in Riverside Park v NHS Property Services [2017] L&TR 12 www.falcon-chambers.co.uk
If you want me off your back… Obligation to remove fixtures • Might be implied from a covenant to deliver up in good and tenantable condition: Shortlands Investments Ltd v Cargill [1995] 1 EGLR 51 • Clips on heating unit rendered the unit not in good and tenantable condition • Redundant halon fire extinguishers rendered whole premises not in good and tenantable condition • Might be obliged to remove fixture installed in breach of covenant – but breach is installation not failure to remove, so need to think about limitation www.falcon-chambers.co.uk
Well come on and let me know… Problems with notices: notices to remove • Assumes express obligation to remove on notice in lease or licence • Westminster City Council v HSBC Bank [2003] 1 EGLR 62 • Service of schedule of dilapidations deemed to be sufficient notice • But try to avoid Mannai arguments • Probably need not give notice before end of lease but must give reasonable time to comply: Scottish Mutual Assurance Society Ltd v British Telecommunications Ltd www.falcon-chambers.co.uk
Well come on and let me know… Problems with notices: conditional break notices • Conditions must be met precisely: Mannai v Eagle Star [1997] AC 749 • Vacant possession is common condition of exercising break • No VP if tenant is using more than de minimis for own purposes or if physical condition creates a substantial impediment to use of the property (second only exceptionally satisfied) • Legal & General Assurance Society Limited v Expeditors International (UK) Limited [2006] EWHC 1008 (Ch) (unaffected on appeal) • Fixtures are part of the thing of which VP must be given and so their presence cannot be a bar to giving VP • Compare Riverside Park v NHS • Chattels (and keys!) can still be a bar to VP but ordinary rubbish will not: Hynes v Vaughan (1985) 50 P&CR 444 www.falcon-chambers.co.uk
Well come on and let me know… Problems with notices: conditional break notices • Goldman Sachs International v Procession House Trustee [2018] EWHC 1523 (Ch) • Landlord argued that both VP and reinstatement to original layout were preconditions of break clause • Question of construction, but vagueness of drafting of reinstatement clause counted against landlord, as did potential windfall to landlord from trivial breach by tenant • Sceptical about Riverside but did not go as far as saying it was wrong www.falcon-chambers.co.uk
If I go there will be trouble… Tenant’s right to remove fixtures • Tenant’s fixtures are in general removable, landlord’s fixtures are not • Tenant’s fixtures are those that meet three conditions • Annexed to the premises by or on behalf of the tenant • Trade fixture, ornamental and domestic fixture or agricultural fixture • Objectively regarded, annexed with the intention of removing it as and when the tenant so wished • Used to be thought could not oust right to remove tenant’s fixtures except by particularly clear language, based on comments of Vaughan Williams LJ in Lambourn v McLellan [1903] 2 Ch 268 • Wrong, it is simply a matter of construction: Peel Land and Property (Ports No. 3) v TS Sheerness [2014] EWCA Civ 100 www.falcon-chambers.co.uk
If I go there will be trouble… Tenant’s right to remove fixtures • If do remove, must make good so as to leave the premises in a reasonable condition: Mancetter Developments Ltd v Garmanson [1986] 1 All ER 449 • Will mean that have to fill in e.g. large holes left by removal of ducts • Probably don’t need to redecorate after removal • Unclear about de minimis e.g. screw holes • Failure to make good is the tort of waste • Directors can be personally liable • But not clear if this action lies where can instead sue on covenant to yield up in repair www.falcon-chambers.co.uk
If I go there will be trouble… Tenant’s right to remove fixtures • Tenant’s right to remove fixtures continues during his original term, and for so long thereafter as he holds the premises under a right still to consider himself as tenant • If the tenant does not remove his fixtures within this time, they become part of the freehold, and no right to enter onto the land and remove them: Jones v Forest Fencing Limited [2001] EWCA Civ 1700 • If remove fixtures belonging to landlord, may be waste and/or breach of covenant to yield up in repair, and landlord can get injunction for delivery up of severed fixture or even injunction to restrain removal or for return: Phillips v Lamdin [1949] 2 KB 33 • Note the special rules for agricultural tenancies in the AHA 1986 (supplements common law) and ATA 1995 (ousts common law) www.falcon-chambers.co.uk
And if I stay it will be double Willful holding over • Section 1 of Landlord and Tenant Act 1730 • Double value for “willful” holding over after end of term • Must be more than deliberate holding over, tenant must know they are not entitled to stay: French v Elliott [1959] 3 All ER 866 • Could possibly be engaged by obstructive tenant filling property with chattels so as to render it unusable • Rare but worth remembering about and serving notice www.falcon-chambers.co.uk
This indecision's bugging me… Uncertainty around alterations covenants • The installation of a fixture may constitute a breach of the covenant against alterations • Whether it will do so will depend on the terms of the covenant and the nature of the fixture • Installation of trade fixtures will often not constitute a breach of a covenant not to make alterations • Necessary to interpret covenant in a sensible way which allowed the tenant to carry on his business so in Bickmore v Dimmer [1903] 1 Ch 158 the clock was not an “alteration” www.falcon-chambers.co.uk
Falcon Chambers Falcon Court London EC4Y 1AA T: 020 7353 2484 F: 020 7353 1261 Email: clerks@falcon-chambers.com DX: 408 Lond/Chancery Lane www.falcon-chambers.co.uk www.falcon-chambers.co.uk
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