Consultation Paper on the General Law of the Landlord and Tenant

new tenancy can be granted to the head-tenant unencumbered by anysub-tenancy. The same position seems to apply in the case ofterminating the head-tenancy by exercise of a break or other option.It was even held in a recent English case that the parties cannot makeexpress provision to counter this, eg a provision in the break option inthe head-tenancy to the effect that, upon its exercise, any sub-tenancyis to remain in place. 2813.10 The Commission has some doubts about whether thereasoning in the English case law is entirely satisfactory, especiallywhere there is the risk of collusion between the landlord and headtenant.It is arguable that in some cases considerable hardship will becaused to a sub-tenant who has acted in good faith. Instead of havinga rigid rule that sub-tenancies are automatically destroyed withoutredress, it is arguable that at least an equitable jurisdiction in thecourts should be available, analogous to that developed in cases offorfeiture. 29 On that basis, whenever a head-tenancy is terminated bya notice to quit or exercise of a break or other option, it would beopen to any sub-tenant to apply for relief and to the court todetermine, as in a case of forfeiture, what form that relief should take.It would be up to the court to lay down what the future relationshipbetween the head-landlord and sub-tenants should be. 30 In passing theCommission notes that the Residential Tenancies Bill 2003 containsprovisions designed to protect sub-tenants, where a head-tenancy isterminated by a notice of termination under the Act. 31 TheCommission provisionally recommends that, where a head-tenancy isterminated by a notice to quit or exercise of a break or other option, itshould be open to any sub-tenant to apply to the court for equitablerelief to be granted at the discretion of the court, unless the position isgoverned by some other statutory provision.28293031PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994. One of thegrounds given by Neuberger J for adopting this ruling in the case was theabsence of an equivalent of section 9 of the 1845 Act (paragraph 13.08above) to indicate the future relationship of the landlord and sub-tenants.There would be neither privity of contract nor privity of estate.Paragraph 13.08 above.This would overcome the difficulty perceived by Neuberger J in the MiltonGate case: see footnote 28 above.Section 32 and Schedule. Note also sections 69-71 (notice procedureswhere sub-tenancies exist).162