Walsh v Lonsdale

Mr Lonsdale agreed to lease Mr Walsh a mill for seven years. Rent varied with the number of looms being operated, but there was a minimum dead rent paid yearly in advance on demand. The lease was not in fact granted by deed (as was required for leases over three years), yet Mr Walsh moved in and began paying rent quarterly. Mr Lonsdale demanded payment in advance and levied distress for non payment of rent. If the terms of the agreement were enforceable, then Mr Lonsdale had acted lawfully.

The Court of Appeal held that as it now had jurisdiction to apply equitable principle, it would regard that as done which ought to be done, and so the lease had been effective in absence of the formality. Lord Jessel MR said the following.[1]

There is only one court, and the equity rules prevail in it. The tenant holds under an agreement for a lease. He holds, therefore, under the same terms in equity as if a lease had been granted, it being a case in which both parties admit that relief is capable of being given by specific performance. That being so, 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. On the other hand, he is protected in the same way as if a lease had been granted; he cannot be turned out by six months’ notice as a tenant from year to year.

The Walsh v Lonsdale principle is now embodied in the recognition by the courts of the equitable lease.

• Maxims of equity