Antoniades v Villiers ; AG Securities v Vaughan

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE FOX,LORD JUSTICE MUSTILL,SIR GEORGE WALLER,LORD JUSTICE BINGHAM,LORD JUSTICE MANN
Judgment Date17 March 1988
Judgment citation (vLex)[1987] EWCA Civ J1221-5
Date17 March 1988
Docket Number88/0246,87/1317

[1987] EWCA Civ J1221-5

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE CLERKENWELL COUNTY COURT

(HIS HONOUR JUDGE ARON OWEN)

Royal Courts of Justice

Before:

Lord Justice Fox

Lord Justice Mustill

Sir George Waller

87/1317

A. G. Securities
(An Unlimited Company)
and
Nigel Vaughan
Roderick Lyons
Simon Russell
Christopher Cook
London Borough of Haringey

MR STEPHEN SEDLEY, Q.C., and MR DAVID WATKINSON, instructed by Messrs Bindman & Partners, appeared for the Appellants (Second to Fourth Defendants).

MR JOHN FURBER, instructed by Messrs I. A. Landy Laufer, appeared for the Respondents (Plaintiffs).

LORD JUSTICE FOX
1

This is an appeal by the second to fourth defendants from an order of Judge Aron Owen declaring that the first to fourth defendants were licensees and not tenants of certain premises at Linden Mansions, Hornsey Lane, London. Linden Mansions is a block of residential flats. The present case is concerned with Flat 25. The flat, which is furnished, consists of six rooms. Of those rooms, four are bedrooms, one is a sitting room and the other is a bathroom and w.c. The flat, so the judge found, can, without difficulty, provide residential accommodation for four persons.

2

Prior to 1974, the plaintiffs, who are leaseholders of Linden Mansions, let the flats on short-term furnished tenancies. Such tenancies did not at that time have full security of tenure under the existing legislation. By the Rent Act 1974, however, residential furnished tenancies were brought into full control. The judge's finding as to the consequences of that were as follows:

"The Plaintiffs took counsel's opinion and were advised to grant short-term licence agreements separately to individual occupiers. The Plaintiffs admit frankly that the purpose of such agreements was to avoid granting tenancies falling within the Rent Acts. Counsel settled the form of agreement which he advised the Plaintiffs to use and from that time the Plaintiffs did use such [a form of] agreement."

3

The form of agreement which the plaintiffs have used and which they used in the present case is as follows:

" THIS AGREEMENT is made the day of BETWEEN A. G. SECURITIES of 116 Stanmore Hill, Stanmore, Middlesex (hereinafter called 'the Owner') of the one part and (hereinafter called 'the Licensee') of the other part.

" WHEREBY IT IS AGREED as follows:—

" 1. THE Owner grants to the Licensee the right to use in common with others who have or may from time to time be granted the like right the flat known as 25 Linden Mansions, Hornsey Lane, N.6 but without the right to exclusive possession of any part of the said flat

" TOGETHER with the fixtures furniture furnishings and effects now in the said Flat for six months from the day of 19 and thereafter until determined by either party giving to the other one month's notice in writing to take effect at any time.

" 2. THE LICENSEE agrees with the Owner as follows:—

"(1) To pay the sum of £per month for the right to share in the use of the said flat such sum to be payable by equal monthly instalments on the first day of each month the first payment to be made on the day of

"(2) Not to damage or cause any damage to the walls or floors of the said Flat or to the fixtures furniture furnishings and effects therein.

"(3) To share the use of the said Flat peacably with and not to impede the use of the said Flat by such other persons not exceeding 3 in number at any one time to whom the Owner has granted or shall from time to time grant Licence to use the said Flat in common with the Licensee and not to impede the use by such other persons of the gas electricity and telephone services supplied to the Flat PROVIDED that each shares the cost of such services.

"(4) If at any time there shall be less than 3 persons authorised by the Owner to use the said Flat in common with the Licensee upon reasonable notice given by the Owner to meet with any prospective licensee nominated by the Owner at the Flat to provide an opportunity to such prospective licensee to agree terms for sharing the cost of services in accordance with Clause 2 (3).

"(5) Not to assign this Agreement nor permit any other person except as licensed by the Owner to sleep or reside in or share occupation of the said Flat or any part of it at any time.

"(6) Not to do or suffer to be done any act or thing which may be a nuisance or cause damage or annoyance to the Owner or to the other users of the Flat or to the tenants or occupiers of any adjoining property or which may vitiate any insurance of the said building against fire or otherwise or increase the ordinary premium thereon.

" 3. PROVIDED as follows:—

"(1) If the said sum or any part thereof shall be in arrear or unpaid for at least 14 days after the same shall have become due or

"(2) in the event of any breach of the licensee of the agreements therein contained

"then the Owner may by notice forthwith determine this Agreement but without prejudice to any other remedies of the owner hereunder.

" 4. IF the Flat becomes uninhabitable as a result of fire then the Licensee shall be entitled to terminate this Agreement forthwith.

" 5. THE OWNER AGREES with the Licensee to pay all general and water rates payable in respect of the Flat but not any charges for the supply of gas or electricity or for the use of the telephone.

" 6. THE Licensee shall pay the sum of £ which shall be retained by the Owner until the termination of this Agreement as a deposit to secure to the Owner the performance by the Licensee of the agreements on the part of the Licensee herein contained but without prejudice to the Owner's rights under and in respect of the Agreement. At the termination of this Agreement and upon the Licensee's vacating the said Flat and subject to proper performance by the Licensee of the Licensee's obligations herein contained the Owner will refund the said deposit to the Licensee.

" 7. NOTWITHSTANDING Clause 1 the Licensee shall have the right at any time after the expiration of three months from the date in Clause 1 to terminate this Agreement by giving the Owner one month's notice in writing.

" 8. THE Owner may give notice hereunder to the Licensee by leaving a Notice addressed to the Licensee at the said Flat.

" AS WITNESS the hands of the parties hereto the day and year first before written."

4

Each of the defendants in the present case signed such an Agreement. They signed them separately and at different times. The dates of the Agreements with the various defendants and the monthly amounts paid by them were as follows:

Defendant

Date

Amount

Vaughan (1 st Defendant)

1st August 1982 (?1983)

£86.66

Russell (2n d Defendant)

1st August 1984

£125.00

Lyons (3rd Defendant)

2nd March 1984

£99.00

Cook (4th Defendant)

28th January 1985

£104.00

5

There was great demand for the flats which came from young single people—secretaries, nurses, students and persons working in various capacities in the City or the West End of London.

6

The normal length of an Agreement was six months. But it often happened that the occupier would stay on for a further six months or on a month to month basis. The turnover was large. Prom 1980–85, Flat 25 was occupied as follows:

1978

1980/81

1982

1983

1984

1985

A Abbas

C Bolt

R Lyons

M Clarke

M Ramsey

S Russell

D Clarke

N Vaughan

S Walters

J Adams

C Cooke

7

Thus, in 1980/81 Adams replaced Walters; Vaughan (1st defendant) replaced D. Clarke in 1982. In 1983 Bolt replaced Abbas and Ramsey replaced D. Clarke. In 1984 Lyons (2nd defendant) replaced Bolt and Russell (3rd defendant) replaced Ramsey. In 1985 Cook (4th defendant) replaced Adams.

8

The judge found the following facts regarding the system of letting operated by the plaintiffs:

"(1) Each person who was accepted by the Plaintiffs for a particular flat had to sign a separate agreement and pay a deposit as provided in the agreement. And it would be explained to such person that he was entering into a separate agreement with separate obligations.

"(2) The flat No. 25…has four of its rooms used as bedrooms and the agreements relating to the residential user of this flat strictly limit the total number of occupants to four.

"So this flat would be fully occupied within the terms of the agreement when it contained four residents.

"(3) What happened if, for example, one of the residents left creating a vacancy? In these circumstances Mr Saffrin [a solicitor and director] of the plaintiffs would enquire of the remaining residents whether they had someone whom they would like to fill the vacancy. Sometimes they did. In that case, the person put forward as a prospective new resident would be asked to contact Mr Saffrin who would refer that person to his co-director, Mr Laufer, for an interview.

"(4) Mr Laufer, in conducting the interview, would enquire about the occupation of the applicant and, if a student, what grant was being received. He would inform the applicant about the deposit and the amount of the monthly payment. Such an applicant to fill a vacancy may have known the approximate monthly payments from having been told by the current residents. But the sums paid varied because of the ebb and flow of residents and the monthly payments were from time to time increased by modest sums to provide for rate increases and inflation. Later residents accordingly paid more than earlier ones.

"(5) Where no candidate for a vacancy was proffered by the existing occupiers, the Plaintiffs would themselves find a person to fill the vacancy…

"(6) In the case of a candidate found by the Plaintiffs, Mr Saffrin would get in touch with the current residents of the...

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