Citation
(1999), "Assignment", Property Management, Vol. 17 No. 4. https://doi.org/10.1108/pm.1999.11317dab.003
Publisher
:Emerald Group Publishing Limited
Copyright © 1999, MCB UP Limited
Assignment
Parc Battersea Ltd v. Hutchinson [1999] 22 EG 149
This is an interesting, if rather unusual case, dealing with the effect of an attempt by the head-lessee to grant an oral sub-tenancy for a term longer than the unexpired residue of the head-lease.
The head-lessee held property under a lease which was due to expire on 31 March 1998. The lease contained provisions excluding the statutory protection normally given to business tenancies by virtue of ss.24-28 of the Landlord and Tenant Act 1954, which had been duly approved by the county court before the making of the lease and which were therefore effective. In December 1997, the head-lessee purported to grant to the defendant an oral sub-tenancy of part of the property on terms which included the payment of a monthly rent and an agreement that no notice to quit would be served expiring before 31 March 1999. On the expiry of the head-lease the landlords discovered that the defendant was in the property and sought possession. The defendant claimed that he had a valid oral business tenancy and was protected by Part II of the Act of 1954.
The court agreed that it was possible for a sub-tenant to acquire such protection even though this might be in breach of the terms of the head-lease, citing D'Silva v. Lister House Development Ltd [1971] 1 Ch.17. However, the court also went on to consider the effect of the purported granting of a sub-lease for a term longer than the unexpired residue of the term of the head-lease, and held that by long-established rule such a transaction took effect in law as an assignment of the unexpired residue of the original lease; furthermore, since such assignment took place by operation of law it fell within the exception to the general rule that assignments must be in writing, by virtue of the provisions of s.53(1)(a) of the Law of Property Act 1925. That being the case, the defendant's lease, validly assigned to him by the original tenant, lay outside the protection of Part II of the 1954 Act, and the landlord was entitled to possession.