Bentley And Skinner (Bond Street Jewellers) Ltd v Searchmap Ltd

Factual and Procedural Background

This appeal concerns a dispute between the Tenant, a lessee of a high-class jeweller's shop at 8 New Bond Street ("No 8"), and the Landlord, who acquired the reversion of the Lease in December 1999. The Lease, dated 21 July 1992, was for 25 years and protected under Part II of the Landlord and Tenant Act 1954 ("the Act"). The Lease contained an option allowing the Landlord to determine the Lease by giving six months' prior written notice if the Landlord required the premises for redevelopment or refurbishment, with service of a notice under section 25 of the Act sufficing as notice under this clause.

On 19 December 2001, the Landlord served a notice under section 25 invoking section 30(1)(f) of the Act, which permits opposition to a new tenancy if the landlord intends substantial redevelopment requiring possession. The Landlord simultaneously exercised the option to determine the Lease. The Tenant countered by refusing to give up possession and subsequently applied for a new tenancy on 4 March 2003.

A trial was ordered on two preliminary issues: (a) whether there was a scheme of redevelopment sufficient to justify termination of the Lease, and (b) whether the Landlord had a sustainable intention to carry out the redevelopment that required possession. The Landlord sought to prove its intention through evidence of a redevelopment scheme linking No 6, No 7, and No 8, involving demolition and creation of additional retail space, subject to planning and conservation consents. The Landlord provided an undertaking that the works would be carried out as soon as practicable if possession was obtained.

The Judge found in favour of the Landlord on these preliminary issues and dismissed the Tenant's application for a new tenancy. The Lease terminated on 10 October 2002, but the Tenant was allowed to remain until 17 January 2003 by consent.

Subsequently, the Landlord offered the Tenant a new five-year lease outside the Act at an increased rent, which the Tenant accepted. Later correspondence revealed that the Landlord had completed acquisition of alternative premises at Albemarle Street on 24 June 2002, the first day of the trial. The Tenant then sought to appeal the decision on the basis of this new evidence, alleging that the Landlord did not have a settled intention to redevelop No 8 at the time of the trial.

The appeal was granted permission by Laddie J, who considered the new evidence relevant and potentially capable of influencing the outcome. However, the Landlord opposed the appeal, arguing the new evidence was irrelevant and that the Tenant's acceptance of the new lease operated as a surrender of previous rights.

Legal Issues Presented

1. Whether the Tenant is entitled to a new trial on the preliminary issues due to the emergence of new evidence not available at the original trial.
2. Whether the acquisition of alternative premises by the Landlord before the trial negates the Landlord's settled intention to redevelop No 8 as required under section 30(1)(f) of the Act.
3. Whether the Tenant's acceptance of a new lease outside the Act operates as a surrender of rights under the original Lease and precludes a new tenancy claim.
4. Whether the Tenant's allegations of dishonesty and fraudulent inducement related to the new lease offer have any merit or effect on the appeal.

Arguments of the Parties

Appellant's Arguments

• The Tenant argued that new credible evidence had become available after the trial, showing that the Landlord had acquired alternative premises before the trial and thus did not have a genuine settled intention to redevelop No 8.
• The Tenant contended that the Landlord's undertaking to carry out redevelopment was therefore false and that the original notice terminating the Lease was void.
• The Tenant relied on a witness statement asserting that had the true facts been known, the Tenant would have resisted the new lease and the court would have ruled differently on the preliminary issues.
• The Tenant suggested that the Landlord's agent made dishonest statements about the timing and significance of the alternative premises acquisition to cover up the lack of intention to redevelop.
• The Tenant also indicated an intention, if a rehearing were ordered, to pursue proceedings to set aside the new lease on grounds of fraud.

Respondent's Arguments

• The Landlord argued that the alternative premises acquired were office premises and not a substitute for the retail premises at No 8, rendering the acquisition irrelevant to the redevelopment intention.
• The Landlord maintained that the original trial evidence, including the undertaking by the Landlord's managing director, demonstrated a genuine settled intention to redevelop No 8.
• The Landlord contended that the Tenant's acceptance of the new lease outside the Act constituted a surrender of the original Lease and all rights to a new tenancy under the Act.
• The Landlord denied any dishonesty or fraud and submitted that any alleged misstatements by its agent could not undermine the tested evidence given at the trial.
• The Landlord emphasized that the Tenant never sought permission to appeal on grounds relating to dishonesty or to amend the appeal notice to include new evidence about the Landlord's change of intention after the trial.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Gibbs Mews plc v Gemmell [1999] 1 EGLR 43	Principle that grant of a new lease outside the Act operates as a surrender of the original lease and rights under the Act.	The court held that the Tenant's acceptance of the new lease estopped it from reviving rights under the original Lease, rendering any new tenancy claim futile.
Shotley Point Marina (1986) Ltd v Spalding [1997] 1 EGLR 233	Effect of service of a notice under the Act and the postponement of termination pending appeal.	The court noted that although the notice postpones termination pending appeal, the surrender by new lease overrides this effect, terminating the Lease and rights.
Hughes v Singh (CA) 13 April 1989	Court's discretion to admit evidence of events after the judgment appealed from when justice requires.	The court declined to admit late evidence or allow challenge based on post-judgment events, emphasizing the need for sparing exercise of discretion and procedural fairness.

Court's Reasoning and Analysis

The court systematically rejected the Tenant's appeal on multiple grounds. Firstly, the court found that the acquisition of the Albemarle Property was irrelevant to the Landlord's intention to redevelop No 8 because the acquired premises were office premises and not alternative retail premises. Therefore, the non-disclosure of this acquisition at trial could not have influenced the Judge's decision.

Secondly, the court held that the Tenant's acceptance of the new lease outside the Act constituted a surrender of the original Lease and all associated rights, including rights that might have revived on appeal. This estoppel barred the Tenant from claiming a new tenancy under the Act, rendering any relief sought in this appeal futile.

Thirdly, the court found the Tenant's allegations of dishonesty and fraud against the Landlord's agent to be unsubstantiated. The court noted that it was not possible to resolve conflicting accounts of the November 2002 meeting on this application and that no permission to appeal had been granted on grounds of dishonesty. The court also emphasized the procedural impropriety of raising such allegations late in the appeal process.

Finally, the court declined to admit evidence of events occurring after the trial, including the Landlord's decision to halt redevelopment preparations and offer the new lease, as the Tenant had not sought permission to appeal on these grounds nor amended the appeal notice accordingly. The court noted that the post-trial conduct was consistent with the Landlord's case that increased costs made the redevelopment financially unattractive, and that the Tenant's acceptance of the new lease relieved the Landlord from the undertaking to redevelop.

Holding and Implications

The court's final decision was to DISMISS THE APPEAL.

This dismissal means the Tenant's application for a new trial and challenge to the preliminary issues is rejected. The Tenant is bound by the New Lease granted outside the Act, and the original Lease and associated rights are terminated. No new legal precedent was established; the decision reaffirms established principles regarding estoppel by acceptance of a new lease and the court's discretion in admitting new evidence on appeal.