Bruton v London & Quadrant Housing Trust

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE KENNEDY,LORD JUSTICE MILLETT,SIR BRIAN NEILL
Judgment Date31 July 1997
Judgment citation (vLex)[1997] EWCA Civ J0731-2
Date31 July 1997
Docket NumberNo CCRTI 96/1763/E

[1997] EWCA Civ J0731-2

4IN THE SUPREME COURT OF JUDICATURE IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM ORDER OF HIS HONOUR JUDGE C P JAMES

Royal Courts of Justice

Strand

London WC2

Before:

Lord Justice Kennedy

Lord Justice Millett

Sir Brian Neill

No CCRTI 96/1763/E

Bruton
and
Quadrant Housing Trust

MR D WATKINSON and MISS M JONES (Instructed by G L Hockfield & Co of London) appeared on behalf of the Appellant

MR T GALLIVAN (Instructed by Devonshires of London) appeared on behalf of the Respondent

LORD JUSTICE KENNEDY
1

The facts are set out in the judgment of Sir Brian Neill, but my conclusions are the same as those of Lord Justice Millett for the reasons that he gives. It seems to me that common sense rebels against the suggestion that a homeless person who is housed by a Housing Association in residential accommodation which he knows that the Association does not own thereby becomes a tenant, just because he agrees in writing to make regular payments, he is given exclusive possession, and he is not a lodger.

2

In Street v Mountford (1985) 1 AC 809 Lord Templeman recognised at 823E that although in any ordinary case an occupier of residential accommodation at a rent for a term is either a lodger or a tenant, an occupier who enjoys exclusive possession is not necessarily a tenant. He may be a lodger or a service occupier or fall within the other exceptional categories mentioned by Denning L.J. in Errington v Errington and Woods (1952) 1 KB 290. That case was concerned with occupiers in exclusive possession who had been held to be not tenants but only licensees. Denning L.J. gave a number of examples and then said at 298 :—

"The result of all these cases is that, although a person who is let into exclusive possession is prima facie to be considered a tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy. Words alone may not suffice. Parties cannot turn a tenancy into a licence merely by calling it one. But if the circumstances and the conduct of the parties show that all that was intended was that the occupier should be granted a personal privilege, with no interest in the land, he will be held to be a licensee only."

3

That passage was cited with approval by Lord Templeman in Street v Mountford at 820H, and he went on to say that in Errington and the cases to which it referred there were "exceptional circumstances which negatived the prima facie intention to create a tenancy notwithstanding that the occupier enjoyed exclusive occupation," as, for example "where the owner, a requisitioning authority, had no power to grant a tenancy." As Millett L.J. has explained in his judgment it would seem that it had no power because it did not possess any legal estate. Why then can it not be said that the present case is also an example of exceptional circumstances which negative the prima facie intention to create a tenancy? Both parties knew that the Housing Association did not have and had no chance of acquiring any legal estate. They expressly proceeded on that basis, and there would seem to me no obvious reason why in law they should not be assumed to have meant what they said. This is not a case in which their actions must be said to have been at variance with reality. Here what they described as a spade was in fact a spade.

4

In A G Securities v Vaughan (1990) AC 417 and in Aslan v Murphy (1990) 1 WLR 766 the question whether occupiers were to be regarded as tenants or licensees was re-considered by the House of Lords and by the Court of Appeal respectively. Nothing of significance for present purposes was added to what had been said in Street v Mountford, save that in Aslan's case Lord Donaldson M.R. said at 772 H :—

"The judge was, of course, quite right to approach the matter on this basis that it is not a crime, nor is it contrary to public policy, for a property owner to licence occupiers to occupy a property on terms which do not give rise to a tenancy."

5

That observation was no doubt considered to be necessary because, unlike the present case, so many of the earlier cases were concerned with blatant attempts to avoid the provisions of the Rent Acts.

6

I recognise that in Family Housing Association v Jones (1990) 1 WLR 779, where the facts were very similar, this court held that a tenancy was created, but the case for the Housing Association does not seem to have been presented on the basis that to the knowledge of both parties there was no present or prospective legal estate from which a tenancy could be created. The focus seems to have been on the exclusivity of the occupier's right to possession ( see Balcombe L.J. at 789 B-D and Slade L.J. at 792 D), so in my judgment we are free to decide the present case on the point which has now been raised. Although Family Housing Association v Jones was considered by the House of Lords in Westminster City Council v Clarke (1992) 2 AC 288 no consideration seems to have been given to the part of the decision which for present purposes is material.

7

I would therefore dismiss this appeal.

LORD JUSTICE MILLETT

This case raises a familiar problem in an unusual setting. The question is whether a document which purports to grant a licence to occupy residential accommodation nevertheless takes effect in law as the grant of a tenancy. The feature which distinguishes the present case from the commonplace is that the grantor had, and was known to the grantee to have, no title to the land.

8

The case is thus located at the intersection of two settled principles of law. The first is that the grant of exclusive possession of land for a fixed term at a rent creates a tenancy. Whether the arrangements in any particular case create a tenancy or a licence does not depend upon the parties' professed intentions but on the legal effect of the transaction into which they have entered. Save in exceptional circumstances, the only intention which is relevant is the intention to grant exclusive possession. This was decided by the House of Lords in the seminal case of Street v Mountford [1985] AC 809.

9

The second principle is that the grantor of an interest in land is estopped from disputing the validity or effect of his own grant. A man who purports to grant a tenancy is not permitted to deny that he has done so by asserting his own want of title. If he has none, the grant creates a tenancy by estoppel binding on him and those who claim through him, though it cannot of course bind those with a superior title.

10

The question on this appeal is whether these two principles can be combined so that a grantor who has, and is known to have, no title, and who therefore agrees to grant no more than a licence, nevertheless brings into being a tenancy by estoppel if he excludes himself and those claiming through him from possession.

11

In Street v Mountford Lord Templeman gave only three examples of exceptional circumstances where the grant of exclusive possession does not create a tenancy. First, where the circumstances negative any intention to create legal relations at all. Secondly, where the possession of the grantee is referable to some other legal relationship such as vendor and purchaser or master and servant. Thirdly, where the grantor has no power to create a tenancy, as in the case of a requisitioning authority. As I pointed out in London Borough of Camden v Shortlife Community Housing [1992] 25 HLR 330, the first and third of these are not exceptions to a general rule. The relationship of landlord and tenant is a legal relationship. It cannot be brought into existence by an arrangement which is not intended to create legal relations at all or by a body which has no power to create it. The existence of these two categories is due to the fact that the creation of a tenancy requires the grant of a legal right to exclusive possession.

12

The precise scope of the third category is, however, not clear. Is it confined to want of capacity, or does it extend to want of title? Lack of capacity to grant a tenancy would, of course, prevent the creation of a tenancy by estoppel, for the reasons given by Lord Greene MR in Minister of Agriculture and Fisheries v Hulkin (Unreported but cited in Minister of Agriculture and Fisheries v Matthews [1950] 1 KB 148 at p. 154):

"Accepting the view which Mr. Bailleu accepts, that the Minister had no power under the regulations to grant a tenancy, it is perfectly manifest to my mind that he could not by estoppel give himself such power. The power given to an authority under a statute is limited to the four corners of the power given. It would entirely destroy the whole doctrine of ultra vires if it was possible for the donee of a statutory power to extend his power by creating an estoppel."

13

Despite the concession made by the defendant's counsel in that case, which Lord Greene may have accepted only for the sake of argument, the reason a requisitioning authority cannot grant a tenancy of the requisitioned land is not in my judgment due to any want of vires. The cases do not suggest that the requisitioning authority lacked power to hold land or to grant tenancies of land which it owned. The problem was that the requisitioning authority had no power to acquire and did not acquire any estate or interest in the land which it requisitioned. In Lewisham Borough Council v Roberts [1949] 2 KB 608, 622 Denning LJ said:

"It is necessary to consider the nature of the power to requisition land. It is only a power to take possession of land. It is not a power to acquire any estate or interest in land…Once possession is taken the Crown can exercise all the powers incident to possession, such as to licence other people to use the premises: (see Southgate Borough...

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9 cases
  • Bruton v London & Quadrant Housing Trust
    • United Kingdom
    • House of Lords
    • 24 June 1999
    ...issue as to whether Mr. Bruton was a tenant or licensee. After hearing evidence he declared that he was a licensee. The Court of Appeal [1998] Q.B. 834 (Kennedy and Millett L.JJ, Sir Brian Neill dissenting) affirmed his judgment. Mr. Bruton appeals to your Lordships' 13The flat is in a blo......
  • Mexfield Housing Co-Operative Ltd v Berrisford
    • United Kingdom
    • Supreme Court
    • 9 November 2011
    ...rise to a contractual licence if it cannot be a tenancy is somehow inconsistent with the reasoning of the House of Lords in Bruton v London & Quadrant Housing Trust [2000] 1 AC 406. In that case, Lord Hoffmann said that an agreement can give rise to a tenancy even if it does not create ......
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    • House of Lords
    • 8 March 2006
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1 books & journal articles
  • Tenancies and Estoppel ‐ After Bruton v London& Quadrant Housing Trust
    • United Kingdom
    • The Modern Law Review Nbr. 63-3, May 2000
    • 1 May 2000
    ...CJ in Goodtitle d.Edwards vBailey (1777) Cowp. 597.8Lewis vMorelli [1948] 2 All ER 1021.9per Millett LJ in Bruton in the Court of Appeal, [1998] QB 834, The traditional meaning of leasesThe conventional analysis of a lease is that the creation of a lease has two quitedistinct effects, invol......

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