It is good to see Guy Fetherstonhaugh QC, in this week’s Estates Gazette (28 February, page 112) joining the ranks of those who disapprove of the decision of the Court of Appeal in the Newham LBC v Thomas-Van Staden case. (For further tempered dissention, see Julie Stobart and Peter Williams in the Estates Gazette, 7 February page 103). Many concerns are being raised by property lawyers regarding the implications of this case as a binding Court of Appeal precedent, given that many other contracted-out leases have been granted with the accidental inclusion of inapplicable wording extending the definition of the term to include a period of holding over.
An easy way to avoid this case is to ignore it as being wrong (which, patently it is) but life in practice is not so simple. In order not to follow a binding precedent, one needs to distinguish it. This, however, should not be difficult. The Newham case interpreted a particular form of wording used in a particular lease. It is unlikely that many other leases will have mirrored the precise form of wording used. Guy Fetherstonhaugh QC concludes that if the wording differs, the landlord “should have little difficulty persuading the court to adopt a different verdict.” Most leases draw a clear distinction between the “Contractual Term” (which is the fixed term of years certain for which the premises are demised) and the “Term” which may be defined, for the purposes of covenant liability, to include a period of holding over. Even where that distinction is not drawn, the way in which the “term” is given its extended definition in the lease will rarely mirror the Newham method.
For a detailed analysis of this case, and suggestions as to why it is not correct, click on the January 2009 CPI Update.