Landlord and tenant: Business tenancyTenancy of business premises - tenant making request for new tenancy under section 26 of Landlord and Tenant Act 1954 - whether tenant must have genuine intention to make up new tenancy at time of making request - judge holding genuine intention necessary - appeal allowedSun Life Assurance plc v Thales Tracs Ltd and another: Court of Appeal: Lords Justices Waller, Hale, Dyson: 10 May 2001The defendant companies were the tenants of business premises at Raynes Park (the premises) under two leases that were due to expire on 24 December 1998.In 1996 the claimant landlord indicated to the tenants that it would require vacant possession at the end of the leases.

As a result, the tenants decided to purchase adjoining premises, and they exchanged contracts in November 1997.

Completion was deferred until 1 April 1998.However, in January 1998 the tenants served a request for a new tenancy in respect of each lease of the premises under section 26 of the Landlord and Tenant Act 1954.

They served further requests in March 1998.The landlord served counternotices to each request under section 26(6) of the Act, stating that it would oppose a renewal of the leases on the ground that it intended to redevelop the premises.Nevertheless, on 23 April 1998 the landlord offered to renew the leases, and by June 1999 it had withdrawn its ground for opposition.

However, the tenants stated that their plans were too far advanced and did not apply to the court for the grant of new tenancies.

They vacated the premises on 23 December 1998.The landlord subsequently commenced a claim for terminal dilapidations against the tenants.

They, in turn, counterclaimed for statutory compensation under section 37 of the Act.

The issue was whether a tenant of business premises that made a request for a new tenancy under section 26 of the Act had to have a genuine intention to make up a new tenancy at the time it made the request.

The judge found that the tenants did not have the intention of taking up new tenancies when they served their requests as they had decided to move to the adjoining site.

He held that because the proposals contained in the requests were not genuine, they were invalid and the tenants were not entitled to compensation under section 37 of the Act.

The tenants appealed.Held: The appeal was allowed.The evidence of a tenant's state of mind when it served a request for a new tenancy was inadmissible because it was not contemplated by the 1954 Act and was legally irrelevant.

It should not have been admitted in the instant case.

The appeal turned upon the meaning of 'request' in section 26 of the Act and of 'the tenant's proposals' in section 26(3).

The judge had erred in concluding that it was inherently unlikely that parliament had intended the words to be given their ordinary unqualified meaning.

The words were to be given an unqualified objective meaning that accorded with their ordinary meaning and was consistent with the law of contractual offers.

A request was an act of asking for something, and a proposal was something that had been put forward for consideration.

There was no mention of the tenant's intentions or motives in sections 26 or 27 of the Act.

Where the Act required an 'intention', it expressly said so.

That interpretation was not inconsistent with the plain intent of the 1954 Act as a whole.

Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1 QB 529 and Lloyds Bank Ltd v National Westminster Bank Ltd [1982] 1 EGLR 83 applied.

Cadogan v Morris [1999] 1 EGLR 59 considered.Kim Lewison QC and Malcolm Sheehan (instructed by the solicitor to Racal Group Services Ltd) for the appellants; Hazel Williamson QC and Mark Wonnacott (instructed by DLA) for the respondent.