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Walsh v Lonsdale (1882) 21 ChD 9

Whether equitable leases must comply with common law requirements.

Facts:

The defendant, Lonsdale, agreed to grant the claimant, Walsh, the lease of a mill for seven years, the rent to be paid quarterly in arrears with a year’s rent payable in advance if demanded. The parties did not execute a deed for the grant of the tenancy, but the claimant moved in and paid rent quarterly in arrears. The defendant then demanded a year’s rent in advance. The claimant refused to pay.

Issues:

The claimant argued that under common law rules a lease had to be created by deed to be legal. This had not been done, therefore the lease was not legal.

Held:

The Court of Appeal found in favour of the defendant landlord. The Judicature Acts 1873-1875 had fused the two separate legal systems of common law and equity into one system. In any conflict, the rules of equity should prevail. According to the equitable maxim ‘Equity looks on as done that which ought to be done’ the parties were treated as having a lease enforceable in equity from the date of the agreement to grant the lease. Such a lease was held under the same terms and the court could order specific performance of it. Lord Jessel stated [at 14-15]:

‘The tenant holds... under the same terms in equity as though the lease had been granted... He cannot complain of the exercise by the landlord of the same rights as the landlord would have had if a lease had been granted.’

Consequently the landlord was allowed to distrain the tenant’s goods in satisfaction of the debt.


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