Re Midland Railway Co's Agreement

Re Midland Railway Co’s Agreement [1971] Ch 725

Landlord and tenant; notice to quit periodic tenancy not complying with proviso in agreement

Facts

The landlords granted a six-month lease of land to continue from half year to half year until it was determined. Each party could determine the lease by giving the other 3 months’ notice. There was a proviso that the landlord would not terminate the agreement unless and until the land was required for the purposes of his own business. The landlord’s successor served notice but did not require the land for their own undertaking. The tenants sought a declaration the notice was void.

Issues

The landlords argued a lease must be of fixed duration to be valid under Lace v Chantler [1944] KB 368 and the proviso was void because it rendered the lease of indeterminate duration. The proviso should be struck out and the lease upheld as a periodic tenancy which would terminate upon the landlords giving notice. The tenants argued every periodic tenancy is of indeterminate duration because at the outset it cannot be said when it will terminate. The agreement clearly stated the landlord would not give notice unless the land was required for business purposes, and the court should not interfere with contracting parties’ bargains.

Decision/Outcome

The notice was void. As the landlords did not require the premises for their business purposes, the notice was invalid and of no effect. As a matter of justice, it is preferable that parties are held to their clearly expressed bargains. The requirement that the maximum duration of the term had to be ascertained before the lease commences does not apply to periodic tenancies. An express proviso to limit the power to determine a lease could be valid providing it did not prevent the landlord from ever terminating the lease.