Prudential Assurance Ltd v London Residuary Body [1992] 2 AC 386

House of Lords

Basic Facts: The Plaintiff granted the Defendant a lease that would remain in effect until the Plaintiff (a council) decided to widen the road, with a two-month notice period. Rent was to be paid annually. Eventually, the council chose not to widen the road, and both parties assigned their rights to Plaintiff 2 and Defendant 2, respectively. When Plaintiff 2 attempted to give notice to Defendant 2 to terminate the lease, Defendant 2 argued that the lease could only be terminated if the road was actually going to be widened.

Issue for the Court: What are the requirements of a lease regarding the end point?

Held: The court held that an agreement for a periodic tenancy on uncertain terms could not create a valid lease.

Lord Templeman held:

• A lease must grant a clear estate in land.

• The agreement did not create a valid lease due to its uncertain term.

• The arrangement resulted in a periodic tenancy, which could be terminated by notice.

Lord Browne-Wilkinson held:

• The outcome created an impractical situation, highlighting issues with the rule requiring certainty in lease terms.

• There might be better solutions to address these issues in modern contexts.