Cases - Bacchiocchi v Academic Agency Ltd
Record details
- Name
- Bacchiocchi v Academic Agency Ltd
- Date
- [1998]
- Citation
- 1 WLR 1313
- Legislation
- Keywords
- Landlord and tenant – business premises – tenant’s entitlement to compensation – occupation of premises for more than 14 years – closure of business before lease end – whether tenant ceases to be in occupation following closure of business – landlord and Tenant Act 1954, section 37
- Summary
-
The tenant was mistakenly advised by his solicitors that his tenancy ended on 29 July 1994, whereas, by operation of section 64 of the 1954 Act, it continued until 11 August. The tenant vacated on 29 July. The landlord argued that the tenant was not entitled to statutory compensation under section 37 of the 1954 Act because the tenant had not been in occupation of the premises for the last 12 days of the lease.
The Court of Appeal held that a period of closure of a business at any stage of the term was to be disregarded in considering occupation, if the closure was incidental to the ordinary course or conduct of business life, provided that the premises were occupied by no other business occupier and were not used for any non-business purpose. A tenant who closed his or her business at the end of the tenancy would, as a normal incident of business life, inevitably cease trading some time before the term came to an end.
Lease renewal - compensation
The tenant was entitled to compensation even though it vacated the holding 12 days before the termination date. Although there was an exclusion agreement in the lease, that agreement was ineffective because the 1954 Act still applied as at the termination date because cessation of the business prior to quitting was incidental to the business activities of the tenant.
It was held that cessation of business activities by the tenant shortly before the termination date was incidental to the ordinary course of a business which involved running down a business to quit on the proper date and therefore was not to be discounted for the purposes of deciding whether double compensation was payable. On this basis, periods of fitting out which are also incidental to a business should not be discounted either. In each case, it will be a question of fact and degree whether the cessation of trading is incidental to the business in question.