[2024] UKUT 33 (LC)

Where no objection has been received to an application under section 84, the Tribunal’s frequent (but not invariable) practice is to consider the application on paper and to determine it without a hearing. That is what happened in this case. The order of 24 February 2022 was made by a Tribunal member without a hearing, on being satisfied after considering the Tribunal’s file that that was an appropriate course to take.

The Tribunal’s order recited that it had read the application of 8 September 2021 and the lease containing the restrictions. The restrictions which the applicant had applied to have modified were then set out in the form in which they had been identified in a schedule to the application. That schedule stated that the restrictions which the applicant sought to have modified were there set out “in full, word for word”. These extracts did not comprise the whole of the covenants at clauses 3(i), (k), (n), (o) and (p), but only specific parts, and the only inference which can be drawn from the schedule is that only those parts, and not the remainder of the covenants, were the subject of the application.

The application identified the following part of clause 3(i):

“Not to assign any part or parts (as opposed to the whole) of the demised premises …”

The Tribunal modified that text by omitting part of the original and introducing an additional qualification so that in place of the extract above, clause 3(i) would now include the following:

“3(i) Not to assign any part or parts of the premises demised except where all of the following circumstances apply:

(i)

An assignment of part of separate self-contained commercial or residential purposes by way of a sub-tenancy is permitted;

(ii)

any such sub-tenancy must expire before the end of this Lease; and

(iii)

any such sub-tenancy of any commercial premises is not a protected tenancy for the purposes of the Landlord and Tenant Act 1954, Part 2”

No other part of clause 3(i) was modified by the Tribunal’s order and, in particular, the remaining words which had not been identified in the application were not referred to, namely: “… and not without the previous written consent of the Lessor to assign the whole or to underlet (other than by way of mortgage) or part with possession of the demised premises or any part thereof PROVIDED that the consent of the Lessor shall not be required to the underletting of the demised premises for a term not extending three years”

Clause 3(k), the covenant prohibiting alterations, was recited in full in the order, as it had been in the application. It was modified so that the original restriction is now prefaced by the words:

“Save in so far as is necessary to implement the planning permission dated 29.5.2020, ref no. 19/AP5641, or to convert the ground floor of the existing building on the demised premises for residential use …”

Clause 3(n) was also set out in full in the order, as in the application. In place of the covenant requiring the Lessee to keep the premises open as a “licensed victualling house” only, the modified text substituted a covenant defining the permitted uses of the demised premises by reference to the Town and Country Planning (Use Classes) Order 1987. Thus, the ground floor premises were not to be used other than within classes C1 and C3 (i.e. residential) or for commercial purposes within classes E or F1. The upper storey was not to be used other than within classes C1 and C3 only (residential).

The text of clause 3(o), requiring the Lessee to use its best endeavours to obtain a renewal of all licences, was shown in its original form in the Third Schedule of the order and then repeated but with the same text struck through completely in its modified form in the Fourth Schedule. A footnote explained that “for the avoidance of any doubt, the Lease is modified so that clause 3(o) is removed from the Lease”.

The only part of clause 3(p) which had been set out in the application was the first of the eight stipulations as to the manner in which the business was to be conducted. This was repeated in the order as the part which was to be modified, i.e. “So long as the demised premises shall be licensed (i) to use the demised premises as a bona fide refreshment house for supplying food and exercisable and non-exercisable liquors to the public”. Paradoxically, the modified version of clause 3(p) requested by the applicant made no change to that part of the covenant. Nor did the modified version indicate that the remainder of clause 3(p) was to be “removed from the lease” in the manner indicated for clause 3(o). Thus, although it appeared in the schedule of modifications in the application and in the Fourth Schedule to the order, no changes were made at all to that particular stipulation.