F W Woolworth & Co Ltd v Lambert    Landlord and Tenant – Improvements – “Without licence or consent” – Unreasonable
withholding – Demand of sum of money considered excessive by lessees – Counter-offer of
lesser sum as compensation – Power of court to order reference to official or special referee –
Improvements from tenants’ point of view – Demised premises as part of composite premises
– Landlord and Tenant Act 1927 (c 36), s 19(2), (3).
In a lease in which the respondents were the lessors and the appellants were the lessees, the
appellants covenanted, inter alia, that they would not make any structural alterations on the
demised premises without the previous consent in writing of the landlords, and would not
commit, or permit to be committed, waste, and that they would use and occupy the demised
premises as a first-class shop. The appellants acquired a lease of a piece of land behind the
demised premises, and desiring to erect one large shop over the whole property, they
proposed pulling down the back wall of the shop on the demised premises, moving the main
staircase, lavatories and ventilating apparatus, and making other structural alterations. The
respondents would only grant their consent upon payment by the appellants of the sum of
£7,000. The appellants regarded this sum as unreasonable and offered instead: (a) a covenant
to reinstate the premises at the expiration of the lease; (b) an insurance with an insurance
company to be approved by the respondents to secure the fulfilment of such covenant; and (c)
payment of a sum equalling any diminution in value of the demised premises, “whatever sum
a court thinks reasonable and proper to be paid.” Upon the respondents refusing to agree to
these terms, the appellants sought a declaration under the Landlord and Tenant Act 1927,
s 19(2), that the respondents were unreasonably withholding their consent and that the
appellants were entitled to make the proposed alterations without further request for consent
or licence subject to: (a) an undertaking to reinstate the demised premises at the expiration or
sooner determination of the term in the condition in which the premises now are; (b) securing
the performance of this undertaking by a policy of insurance; and (c) paying to the
respondents such sum (if any) as the court shall deem to be reasonable:—