Greater London Council v Connolly
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD PEARSON,Sir GORDON WILLMER |
| Judgment Date | 13 January 1970 |
| Judgment citation (vLex) | [1970] EWCA Civ J0113-5 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 January 1970 |
[1970] EWCA Civ J0113-5
In The Supreme Court of Judicature
Court of Appeal
Appeal from a decision of the Judge of the Bow County Court ordering possession of a dwelling-house No. 39 Waverton House, Candy Street, 3.3.
The Master of the Rolls (Lord Denning)
Lord Pearson and
Sir Gordon Willmer
Mr. RAYMOND WALTON, Q.C, and Mr. GEORGE AVGHERINOS (instructed by Kr. James Goudie) appeared on behalf of the Appellant.
Mr. H.E. FRANCIS, Q.C., and Mr. BENJAMIN LEVY (instructed by Mr. E. Kelsey, Solicitor to the Greater London Council) appeared on behalf of the Respondent.
The Greater London Council own some quarter-of-a-million houses. In the Autumn of 1968 they increased the rents of the tenants by amounts which average 7/6d. a week, but there were no increases exceeding ten shillings a week. The great majority of the tenants, 97½% of them, paid the increase. But the remaining 2½ refused to pay. Some months later the Chairman of the Housing Committee of the Greater London Council said at one of their meetings' I have decided to give the defaulting tenants due notice that unless they clear the arrears within three weeks, the Council will issue notice to quit and on expiry thereof will take proceedings in the County Courts for the recovery of possession. In consequence, the Director of Housing for the Greater London Council prepared and served notices to quit. He sent them under cover of a letter of the l4th August, 1969, In which he said. As no payment has been made by you in response to my letters urging you to pay the arrears of rent due to the Council, I have no alternative but to serve on you the enclosed Notice to Quit. Unless you now clear the arrears in full before the expiry of the Notice to Quit, the Council's Solicitor will be instructed to commence possession proceedings against you without further warning. Enclosed in that letter was a notice to quit in proper form addressed to each of the tenants. I will read a typical one:
"On behalf of the Landlords, the Greater London Council, I hereby give you notice to quit and deliver up possession of the tenement or premises situate" - describing the address - "which you now hold as a weekly Tenant of the Council, on Monday, the 22nd day of September 1969, or at the expiration of the week of your tenancy which shall expire next after the end of four weeks from the service of this Notice." - dated the 19th August, 1969.
It was signed by Mr. Macey - "Director of Housing and Agent to and on behalf of the Greater London Council, the Landlord, and duly authorised by the said Council to sign this Notice-".
The tenants did not pay the arrears. They did not quit. So the Greater London Council issued proceedings in the County Court for possession of the premises. They did not claim thearrears. They simply claimed possession.
The main point made by the tenants is that the rents were not validly increased; that it was not lawful for the Greater London Council to serve notice to quit when their object was to force the tenants to pay an illegal increase of rent.
I must first mention that the Greater London Council and other local authorities are not bound by the Rent Acts. Council houses are outside those Acts. Until recently the only limitation on local authorities, in regard to rent, was that contained in the Housing Act of 1957, section 111. It said that the authority may make …. such reasonable charges" for the tenancy or occupation of the house as they may determine. That was the only limitation. The charges had to be "reasonable". But the Prices and Incomes Act, 1968, imposed a further limitation. It said that the local authorities could not increase the rents except with the approval of the Minister of Housing. Section 10 said that. "it shall not be lawful for a local authority to charge in respect of any houses to which this section applies rents exceeding the former rents unless the increases accord with proposals submitted to and passed by the Minister under this section."
The Greater London Council satisfied those requirements. The increased rents were reasonable. And the Minister did in fact approve all the increases. The approval was given a few weeks before the Act was passed, but it was nevertheless good because subsection (12) of section 10 so provides.
Although the increases were reasonable and approved, nevertheless they had to be made lawfully. At common law a landlord cannot, in the absence of agreement, increase the rent, against the will of the tenant, unless he gives notice to quit and determines the tenancy. The Prices and Incomes Act, 1968, made a charge. It gave power to a local authority to increase the rent without a notice to quit. Section 12(1)(3) says that the local authority may increase the rent by a notice which gives him four weeks notice of the increases and also tells thetenant that he has a right on his part to terminate the tenancy if he wishes. In this case the Greater London Council gave a notice, but it was not sufficient to satisfy section 12. It did not tell the tenant of his right to terminate the tenancy.
As the notice did not come within the statute, the Greater London Council relied on the conditions of the tenancies. We were told that a leaflet containing these conditions is given to every tenant before he accepts the tenancy. He is asked to read them and sign an acknowledgment. Then the rent book is issued with the conditions printed on the back.
Condition 2 says: "The weekly net rent and other sums as shown on the front cover of the rent-card are liable to be increased or decreased on notice being given."
Condition 3: "The tenancy may be terminated by four weeks' notice to expire on a Monday. If terminated by the Council it shall be by a written notice signed by or under the authority of the Director of Housing and served on the tenant or left for him upon or affixed to the premises four weeks at least prior to the date of termination."
The Council claim that they acted in pursuance of the power given them by Condition 2, and say that the notice of June 1968 is in keeping with that condition. It said this
"Dear Tenant,
"Following the report from the National Board for Prices and Incomes, the Government have approved the Council's new Rent Scheme for rents to rise by an average of 7s. 6d. a week with no increases exceeding 10s. a week. The Council, therefore, proposes to introduce this Scheme on 30 September 1968 and from the same date to replace the Special Aid Scheme by a new Rebate Scheme giving generous rent reductions to tenants in greater need."
The letter goes on to give details. "The increase of rent is 2d, in the shilling", and so forth.
Mr. Walton, on behalf of the tenants, urges that this Condition 2 is bad because it is too uncertain: and therefore, by our law of contract, it is invalid. Further, that the rent is not certain; and, therefore, by our law of landlord and tenant, it is invalid.
At common law, in the absence of agreement, the landlord cannot increase the rent except by giving a notice to quit. He must first determine the tenancy and then get the tenant to agree to pay the increase. Many tenants are frightened by a notice to quit. They do not know what is behind it. To save their feelings, the Council have inserted this Condition 2 so as to enable the to increase the rent without giving notice to quit. In these days money diminishes in value continually. As it diminishes, it is only reasonable that the landlords should be able to increase the rent without going through the form of a notice to quit. That is the object of this condition.
It is said that the condition is too vague. It is too uncertain; and, therefore, invalid by the law of contract. I do not think so. The Courts are always loath to hold a condition bad for uncertainty. They will give It a reasonable interpretation whenever possible. It is possible here. I read this condition as saying that the rent and other sums "are liable to be increased or decreased by the landlord on reasonable notice being given by him." The Court can always say what is reasonable notice. Here, in order to be reasonable, I should have thought that the landlords ought to give a notice of the same length as they would have to give in order to determine the tenancy (that is, four weeks)5 and they ought to add on a week or two so as to enable the tenant to give a counter-notice, in case he wished to leave rather than pay the increased rent. Reasonable notice would, therefore, be five or six weeks. The Greater London Council, in these notices, gave at least two months. The circular was issued in June 1968, and the increase did not take effect till the 30th September, 1968. That was ample notice.
It is next said that the rent is uncertain, and that the condition is, therefore, invalid by the law of landlord and tenant. It is clear law that a rent must be certain. But that does not mean that it must be certain at the date of the lease. Rent is sufficiently certain if it can be calculatedwith certainty at the time when payment comes to he made. Here the notice of increase enabled the rent to be calculated with certainty as at the time when the increase was to operate: i.e., the 30th September, 1968. Next it was said that the increase was not valid if it was dependent on the whim of the landlord. At first I was impressed by that point, But my doubts were resolved by the case of Attorney-General for Alberta v. Huggard Assets Ltd. (1953 A.C. 420), when Lord Asquith of Bishopstone said (at page 440): "It is said in the present case that the royalty" - that is the equivalent of rent here - "is" uncertain' because its amount depends on the whim, from time to time, of the grantor. It seems doubtful whether this quality is fatal....
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