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Consultation Paper on the General Law of the Landlord and Tenant

Consultation Paper on the General Law of the Landlord and Tenant

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<strong>the</strong> doctrine <strong>of</strong> estoppel. 57 On <strong>the</strong> same basis it would seemappropriate to allow <strong>the</strong> court to hold, if <strong>the</strong> circumstances <strong>of</strong> <strong>the</strong> casejustify it, that not <strong>on</strong>ly may a l<strong>and</strong>lord be estopped from denying thatan assignment has taken place, but also that <strong>the</strong> original tenant isdischarged from liabilities. The Commissi<strong>on</strong> provisi<strong>on</strong>allyrecommends that secti<strong>on</strong> 16 <strong>of</strong> Deasy’s Act should be amended tomake it clear that it does not exclude <strong>the</strong> courts’ jurisdicti<strong>on</strong> to applyequitable principles such as <strong>the</strong> doctrine <strong>of</strong> estoppel.3.16 There is a fur<strong>the</strong>r problem about <strong>the</strong> operati<strong>on</strong> <strong>of</strong> secti<strong>on</strong> 16which is that it is predicated <strong>on</strong> <strong>the</strong> assumpti<strong>on</strong> that <strong>the</strong> l<strong>and</strong>lord’sc<strong>on</strong>sent is required to <strong>the</strong> assignment. It is not uncomm<strong>on</strong> for a leaseto c<strong>on</strong>tain no prohibiti<strong>on</strong> or restricti<strong>on</strong> <strong>on</strong> alienati<strong>on</strong> in which case <strong>the</strong>tenant is free to assign without seeking <strong>the</strong> l<strong>and</strong>lord’s c<strong>on</strong>sent. If <strong>the</strong>tenant does so, it would appear that <strong>the</strong> protecti<strong>on</strong> provided by secti<strong>on</strong>16 is inapplicable – <strong>the</strong> secti<strong>on</strong> purports to apply to “any” assignmentby “any” original tenant <strong>of</strong> “any” lease. Thus a tenant in such asituati<strong>on</strong> would be wise to seek <strong>the</strong> c<strong>on</strong>sent <strong>of</strong> <strong>the</strong> l<strong>and</strong>lord <strong>and</strong> tohave it “signified” as <strong>the</strong> secti<strong>on</strong> requires. 58 Clearly this doubt shouldbe removed <strong>and</strong>, at first sight, it would seem to be undesirable t<strong>of</strong>orce tenants to seek c<strong>on</strong>sent where <strong>the</strong> lease does not require it.However, <strong>the</strong>re are clear dangers in this for a l<strong>and</strong>lord <strong>and</strong> a potentialtrap for an unwary l<strong>and</strong>lord. The l<strong>and</strong>lord may have been prepared toc<strong>on</strong>cede that <strong>the</strong> original lease should c<strong>on</strong>tain no restricti<strong>on</strong> <strong>on</strong>alienati<strong>on</strong> because <strong>of</strong> <strong>the</strong> financial strength <strong>and</strong> attractiveness <strong>of</strong> <strong>the</strong>original tenant. The risk that <strong>the</strong> lease might be assigned to a tenant<strong>of</strong> little substance might be taken precisely because <strong>the</strong> view wastaken that if c<strong>on</strong>sent was not given as prescribed under secti<strong>on</strong> 16, <strong>the</strong>original tenant <strong>of</strong> substance would remain liable. The Commissi<strong>on</strong>takes <strong>the</strong> view that it would be unfortunate if any amendment <strong>of</strong>secti<strong>on</strong> 16 created such a trap. The Commissi<strong>on</strong> provisi<strong>on</strong>allyrecommends that, where a tenant is not required by <strong>the</strong> terms <strong>of</strong> <strong>the</strong>tenancy to seek c<strong>on</strong>sent to an assignment, <strong>the</strong> protecti<strong>on</strong> provided bysecti<strong>on</strong> 16 <strong>of</strong> Deasy’s Act should never<strong>the</strong>less apply <strong>on</strong>ly wherec<strong>on</strong>sent to <strong>the</strong> assignment is given by <strong>the</strong> l<strong>and</strong>lord.3.17 As indicated by <strong>the</strong> previous paragraphs, secti<strong>on</strong> 16 <strong>of</strong>Deasy’s Act applies <strong>on</strong>ly to an assignment by <strong>the</strong> original tenant.5758Paragraph 2.28 above.See Wylie op cit paragraph 21.30.64

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