Basingstoke & Deane Borough Council v Paice
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WAITE,LORD JUSTICE MILLETT,LORD JUSTICE STUART-SMITH |
| Judgment Date | 17 March 1995 |
| Judgment citation (vLex) | [1995] EWCA Civ J0317-4 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 March 1995 |
| Docket Number | No CCRTI 93/0949/E |
[1995] EWCA Civ J0317-4
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
On appeal from order of His Honour Judge Brodrick
Before: Lord Justice Stuart-Smith Lord Justice Waite Lord Justice Millett
No CCRTI 93/0949/E
MR K WYLIE (Instructed by Messrs Doggett Hawke Wright of Basingstoke, Hampshire) appeared on behalf of the Appellant.
MR J WIDDUP (Instructed by Legal Department, Basingstoke & Deane Borough Council) appeared on behalf of the Respondent.
( )
This appeal is brought by the tenant of a dwelling-house owned by a local authority. His tenancy was not originally granted to him by the council. It was created by a private landlord who was the holder as intermediate lessee of a business tenancy —comprising larger premises of which the dwelling house formed only a part —from the council as head lessor. The time came when the intermediate lessee surrendered the mesne tenancy to the council, with the result that the appellant became, by operation of law, the direct tenant of the council. He claimed that, having thereby acquired a local authority as his landlord, he was entitled to have his tenancy treated as a secure tenancy under the Housing Act 1985. The council obtained a declaration from His Honour Judge Brodrick in the Basingstoke County Court on 18 February 1993 that he was not a secure tenant, from which declaration the tenant now appeals to this court.
The facts are not in dispute. By a lease dated 10th April 1984 ("the lease") the plaintiff council ("the council") demised to Mr Jacques L'Heureux ("the mesne landlord") garage premises at Coronation Road Basingstoke ("the main premises") for a term of 15 years from August 1980 at an annual rent (subject to periodic review) of £6000. The lease included a covenant by the mesne landlord not to underlet the main premises or any part thereof and to use them only for the purposes of a garage business. The main premises were business premises within Part Two of the Landlord and Tenant Act 1954.
In the course of the year 1985 the mesne landlord, in breach of covenant and without (at first) the council being aware of it, converted part of the office portion of the main premises into a residential flat ("the flat"). He allowed the appellant Mr Paice into occupation of the flat at a rent which was payable weekly. The flat was a dwelling-house for the purposes of the Rent Acts and accordingly Mr Paice became a protected tenant of the flat as against the mesne landlord under the Rent Act 1977.
In November 1990 the mesne landlord surrendered the unexpired term of the lease of the main premises to the council. By then the council had become aware of Mr Paice's occupation, and knew that the mesne landlord had made unsuccessful efforts to regain possession of the flat. They had served a S 146 notice on the mesne landlord relying on the unlawful sub-letting, but they did not in the end take any steps to forfeit the lease. Instead they decided to negotiate a termination of the lease by way of surrender. Once the surrender had been effected, the council sought at first to treat Mr Paice as a trespasser. On 11th January 1991 they brought these possession proceedings against him. While the hearing was still pending, they served him with a notice to quit on 29th August 1991.
By the date of the hearing the council had become willing to accept that Mr Paice was not a trespasser, and were prepared to concede that following the surrender of the lease he had become their direct tenant, holding over as a weekly tenant. There were three issues in the proceedings at first, but two of them (a question of possible estoppel and an issue as to the validity of a notice to quit served after action brought for possession) have been disposed of and do not concern this appeal. It was undisputed that Mr Paice could not set up statutory protection under the Rent Acts against the council. The sole relevant issue, therefore, for the judge at the hearing under appeal was —what kind of tenancy did Mr Paice enjoy? Was it a secure tenancy under the 1985 Housing Act; or was it a simple weekly tenancy capable of being brought to an end by one month's notice at common law?
Until the coming into force of the Housing Act 1980, tenants of local housing authorities had no statutory security of tenure. That Act introduced (and the 1985 Act continues) an entirely new statutory creature which (as is pointed out in Woodfall on Landlord and Tenant para 25.001) imported elements from the Rent Act 1977 but differed from that code in important respects. The distinctive features of secure tenancies include the fact that although the security is non-assignable it may be made the subject of an exchange. Security carries with it the right to buy the demised premises on favourable terms. They are subject (in the case of periodic tenancies) to a wide power in the landlord council to impose variations of the terms of the tenancy unilaterally upon the tenant.
There is another distinguishing feature between the two codes which is directly relevant to the present case. The Rent Act 1977 contains, but the Housing Act 1985 does not, express provision to deal with the situation where sub-tenants become tenants of the head lessor on the determination of the intermediate lease. In particular...
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