King v Earl Cadogan
[1915] 3 K.B. 485(Judgment by: Warrington LJ)
Between: King
And: Earl Cadogan
Judges:
Lord Cozens-Hardy MR
Pickford LJ
Warrington LJ
Subject References:
LANDLORD AND TENANT
Licensed Premises
Lease made before Finance (1909-10) Act, 1910
Increased Licence Duty
Liability of Grantor of Lease to pay Proportion of Increase
'Premium' payable by Lessee
Cost of rebuilding Premises by Lessee pursuant to Agreement for Lease
Surrender Value of prior Unexpired Lease
Legislative References:
Finance Act, 1912 (2 & 3 Geo. 5, c. 8) - s. 2
Judgment date: 7 July 1915
Judgment by:
Warrington LJ
The plaintiff in this case sues to recover a statutory debt - a debt created by the Finance Act, 1912, s. 2. That debt is described in the Act as being "so much of the increased licence duty" - I am putting it shortly - "as is proportionate to the increased rent or premium payable in respect of the premises being let as licensed premises." Now, the plaintiff seeks to make out in this case that there is an increased rent or premium payable in respect of the premises being let as licensed premises by treating as premium, first, moneys expended by the lessee in pursuance of the agreement under which the lease was granted in building the premises comprised in the lease, and, secondly, the value of the unexpired residue of the term which was surrendered on the granting of the present lease. The question we have to determine is whether those items can be treated as premiums.
In my opinion, it is important in considering every statute, and in particular in considering a statute which creates for the first time a statutory debt, to adhere as closely as can be to the words of the statute and not to give conjectural interpretations to the words the Legislature has used. Now the Legislature in expressing its intention has chosen to use two words - "rent" and "premium" - both of which in connection with leases have perfectly well known legal meanings. I need not say anything about the meaning of the word rent, but "premium," as I understand it, used as it frequently is in legal documents, means a cash payment made to the lessor, and representing, or supposed to represent, the capital value of the difference between the actual rent and the best rent that might otherwise be obtained.
It is a very familiar expression to everybody who knows the forms and powers of granting leases. It is in fact the purchase-money which the tenant pays for the benefit which he gets under the lease. Is it possible by any means to give to either of these items, which the plaintiff seeks to bring in, the meaning of the word "premium"? It seems to me that it is quite impossible. The expenditure on the house is not in any sense a "premium," and still less is the value of the surrendered lease, as to which it seems very doubtful whether the landlord ever got the benefit of it at all.
On the whole, therefore, I think the appeal fails and the Divisional Court was right.
Appeal dismissed.
- Solicitors: Crossman, Prichard & Co.; Lee & Pembertons.
[1915] 1 K.B. 821 .
Finance Act, 1912 (2 & 3 Geo. 5, c. 8), s. 2:
"Where the licensed premises are held under a lease or agreement for lease made before the passing of the Finance (1909-10) Act, 1910, which does not contain or import any covenant, agreement, or undertaking on the part of the lessee under such lease or agreement for lease to obtain a supply of intoxicating liquor from the grantor of the lease or agreement for lease, the lessee under such lease or agreement for lease shall be entitled, notwithstanding any agreement to the contrary, to recover as a debt due from, or deduct from any sum due to, the grantor of such lease or agreement for lease so much of any increase of the duty payable in respect of the licence under the provisions of the Finance (1909-10) Act, 1910, as may be agreed upon as proportionate to any increased rent or premium payable in respect of the premises being let as licensed premises, and, in default of agreement, the amount proportionate to such increased rent or premium shall be determined in manner directed by rules of Court by a county court in England or Ireland and by a sheriff court in Scotland.
"The words 'lease,' 'leased,' 'agreement for lease,' and 'lessee' in this section include sub-lease, sub-leased, agreement for sub-lease, and sub-lessee, respectively."
[1914] 1 K.B. 641 ; affirmed [1915] A.C. 241 .
[1914] 1 K.B. 641 , 653.
[1915] 2 K.B. 621 , 638.
[1915] 2 K.B. 621 , 638.