Central Estates (Beigravia) Ltd v Woolgar (No. 2)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE CAIRNS |
| Judgment Date | 20 June 1972 |
| Judgment citation (vLex) | [1972] EWCA Civ J0620-3 |
| Date | 20 June 1972 |
| Court | Court of Appeal (Civil Division) |
[1972] EWCA Civ J0620-3
In The Supreme Court of Judicature
Court of Appeal
Appeal by plaintiffs from Judgment of His Honour Judge Stockdale at Westminster County Court on 10th November 1971.
The Master of the Rolls (Lord Denning)
Lord Justice Suckley and
Lord Justice Cairns
Mr. R.H. BERNSTEIN, Q.C., Mr. J.E.S. RICAEDO and Mr. RUEFF (instructed by Messrs. E.B.V. Christian & Co.) appeared on behalf of the Appellant Plaintiffs.
Mr. FRANK WHITWORTH, Q.C., and Mr. GRALME WILLIAIIS (instructed by Messrs. Piper Smith & Piper) appeared on behalf of the Respondent Defendant.
This case is a sequel to a case already reported in the Law Reports: Central Estates (Bulgravia) Ltd. v. Woodlark, now reported in 1972 1 Q.B. 48. In 1930 the Duke of Westminster let No. 13 Denbigh Street, Pamlico, to a lessee on lease for 63 years. So it is due to end in the year 1993. The lease was at a ground rent which is now £40 a year, payable quarterly. The lesson's interest became vested in Central Estates (Belgravia) Ltd. In the lease there was this covenant by the tenant
"…….nor shall any act deed or thing be done in or about the demised premises which shall or may be or become a nuisance (whether indictable or not; or which may be grow or lead to the damage annoyance inconvenience or disturbance of the Landlord or the tenant or occupier of any adjacent or neighboring hereditament s…….".
There was the usual proviso for re-entry in case of breach of the covenant.
In October 1957, Mr. Sidney Woolgar took an assignment of that lease. He was then about 60. He is now 75. He is sick and aged. He is a pensioner from the 1914-18 War. According to a doctor, he is a harmless and ineffectual old man who supports himself by letting furnished rooms in his house. The landlords now seek to forfeit the lease.
On 22nd May, 1970, the police found out that he was keeping a brothel in the house - not for people of opposite sexes, but for people of the same sex - homosexuals. He was summoned, before the Magistrate at how Street under the Acts which make keeping such a brothel - a homosexual brothel - a criminal offence, just as heterosexual brothels areOn 23rd June, 1970, at Bow Street, he was convicted. He pleaded Not Guilty, but he was found guilty it was proved. But he was not punished. He was dischargedconditionally for twelve months.
That conviction imperiled his possession of the premises. His solicitors applied quickly to the landlords' solicitors for permission to sell the premises. But the landlords did not agree to his selling his leasehold interest. Then she landlords' agents, not knowing of the conviction, notified him that they were going to inspect the premises for the purpose of a schedule of dilapidations. Before they had done it, they found out about the conviction
Each side gave a notice which crossed in the post. On the one hand, on 22nd July 1970, the tenant gave notice to the landlords that he wanted to buy the freehold. That was under the Leasehold Reform Act 1967. On the other hand, on 23rd July, 1970 - the date is important - the landlords served notice on Mr. Woolgar complaining that he had been unlawfully keeping a brothel at the premises and had been convicted of the offence. That notice was served under Section 146 of the Law of Property Act 1925 preliminary to a forfeiture.
Seeing that the tenant had applied to buy the freehold, the landlords could not seek to forfeit without the leave of the Court. Leave was granted by the County Court Judge, and, on appeal to this Court, we affirmed the decision So the landlords were entitled to bring an action for forfeiture. They issued proceedings in the County Court which were served on 10th December 1970. The case was heard by the County Court Judge on the claim for possession. Two points arose for decision. First, Had the landlords waived the forfeiture? Second, if they had not waived it, was the tenant entitled to relief? The County Court judge held that there was no waiver, but he granted relief.Both sides appeal to this Court.
The first point is whether or no the landlords waived the forfeiture by accepting rent. The dates are these: The landlords by their agents knew of the conviction on 23rd July, 1970. That is the important date of knowledge. The partner instructed the clerks in his office to put a tab on the ledgers so as to make sure they did not accept any rent after knowing of this conviction. He circulated an office memorandum informing his subordinates of the decision and requiring them not to demand or accept any rent from the tenant in the circumstances. Something went amiss in the office. The instructions did not get down to the subordinate clerks in the office, who issued the "demands for rents and received them. In consequence, in the middle of September 1970, the landlords' agents, through their office, sent out a demand for the £10 quarter's rent, which was falling due on 29th September 1970. The tenant, on 22nd September, 1970, paid that £10. A receipt was issued by the agents through their office for that £10. It was quite unqualified: "Received with thanks the sum of £10". That took place about 22nd September, 1970.
The landlords' agents, through some other part of their office, proceeded with the claim to forfeiture. On 10th December 1970, the plaint was issued in the County Court: and it was duly served. (The landlords' agents afterwards did demand and accept rent for one or two quarters, but those payments do not matter. If the landlords were entitled to re-enter when the plaint was served, the later payments do not affect it.) The material, question is whether the demand and acceptance of rent in September 1970 was a waiver of the forfeiture. If it was, the landlordswere not entitled to issue this plaint for possession as they did in December 1970. The Judge held there was not a waiver because, as he found, the tenant when he paid the rent knew full well that the landlord's intention to forfeit the lease remained unchanged.
The cases on waiver are collected in the notes to Dumper's case in Smith's Leading Cases at pages 39 to 44. Those notes show that the demand and acceptance of rent has a very different effect according to how the question arises. If it is sought to say there is a new tenancy by acceptance of rent; for instance, after a notice to quit has expired, the question always is, as Lord Mansfield said: "Quo anime the rent was received and what the real intention of both parties was" - see Doe v. Batten (1775) in Cowper's Reports, page 243; and Clarke v. Grant (1950), 1950 1 K.B. 104. But, if it is sought to say that an existing lease continues in existence by waiver of forfeiture, then the intention of the parties does not matter. It is sufficient if there is an unequivocal act done- by the landlord which recognizes the existence of the lease after having knowledge of the ground of forfeiture The law was well-stated by Mr. Justice Parker in Matthews v. Smallwood (1910) 1 Ch. at page 786, which was accepted by this Court in Oak Property Co. v. Chapman (1947) K.B. at page 898:
"It is also, I think, reasonably clear upon the cases that whether the act, coupled with the knowledge, constitutes a waiver is a question which the law decides, and therefore, it is not open to a lesser who has knowledge of the breach to say it will treat the tenancy as existing, and I will receive the rent, or I will take advantage of my power as landlord to distrait; but I tell you that all I will do will be without prejudice to my right to re-enter, which I intend to reserve. That is a position which he is not entitled to take up. If, knowing of the breach, hedoes distain, or does receive the rent, then by law he waives the breach, and nothing which he can say by way of protest against the law will avail him anything."
I know that Mr. Justice Harman in Creery v. Summer sell and Flowerdew & Co. Ltd. (1949) 1 Ch. 751 at page 761, said that in waiver of forfeiture "the question remains: Quo anime was the act done". But that statement was explained by Mr. Justice Megaw in The Windmill Investments (London) Ltd. v. Milano Restaurant Ltd. (1962) 2 Q.B. 373. He said that it meant only that "it is a question of fact whether the money tendered is tendered as and accepted as rent………. Once it is decided as a fact that the money was tendered and accepted as rent, the question of its consequences as a waiver is a matter of law". Similarly Mr. Justice Sachs in Segal Securities Ltd. v. Thoseby (1963) 1 K.B. 887 said (at page 898): "It is thus a matter of law that once rent is accepted waiver results. The question of quo amino it is accepted in forfeiture cases is irrelevant in relation to such acceptance."
So we have simply to ask: Was this rent demanded and accepted by the landlord's agents with knowledge of the breach? It does not matter that they did not intend to waive. The very fact that they accepted the rent with the knowledge constitutes the waiver. The position here is quite plain. The agents, who had full authority to manage these properties on behalf of the landlords, did demand and accept the rent with full knowledge It may be that the instructions did not get down the chain of command from the partner to the subordinate clerk who issued the demands and gave the receipts for rent. That cannot affect, to my mind, the legal position. It comes within the general rule that the knowledge of the agent - and of his clerks - is theknowledge of the principal. A principal cannot escape the doctrine of waiver by saying that one clerk had the knowledge and the other received the rent. They must be regarded as one for this purpose. The landlords' agents knew the position and they accepted the rent with knowledge. That is a waiver.
I know that the Judge found...
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