Grosvenor Estates Belgravia v Diana Cochran
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RALPH GIBSON,LORD JUSTICE NOURSE,LORD JUSTICE LLOYD |
| Judgment Date | 03 May 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J0503-4 |
| Court | Court of Appeal (Civil Division) |
| Date | 03 May 1991 |
| Docket Number | 91/0448 |
[1991] EWCA Civ J0503-4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE WEST LONDON COUNTY COURT
(HIS HONOUR JUDGE PHELAN)
Royal Courts of Justice
Lord Justice Lloyd
Lord Justice Nourse
Lord Justice Ralph Gibson
91/0448
MR NORMAN PRIMOST and MR JAMES GUTHRIE, instructed by Messrs Conway Thomas & Co., appeared for the Appellant (Defendant).
MR KIRK REYNOLDS, instructed by Messrs Boodle Hatfield, appeared for the Respondent (Plaintiff).
Miss Diana Cochran, the appellant, appeals from the decision of His Honour Judge Phelan given on 5th March 1990 in West London County Court whereby he ordered that Grosvenor Estate Belgravia ("the landlords") should recover possession of the basement flat at 15/16 West Halkin Street, SW1.
The judge was greatly concerned at the apparent injustice to the appellant which the rules of law might have worked upon her in the unusual circumstances of this case. He said that she was an innocent victim of very bad advice. On his view of the law she had no right to remain in her flat even if, contrary to his findings upon the facts, she had at the relevant time been in occupation of the flat as her residence. She had spent capital, in the order of £35,000, upon the landlord's property but had no right to remain in possession under the Rent Acts or under Part 1 of the Landlord and Tenant Act 1954. The question as to how many of the items of furniture and equipment purchased by the appellant may be removable by her has not been examined.
This state of affairs has come about, if the judge was right, because of the working of a long established principle of the common law relating to landlords and tenants upon the provisions of statutes intended to protect tenants in the occupation of their homes. The principle to which I refer is that where there is a grant of a subtenancy for a term equal to or in excess of the remainder of the term vested in a mesne landlord, the subtenancy operates as an assignment by operation of law of the lease vested in the mesne landlord: Milmo v. Carreras [1946] K.B. 306. If the appellant had been a lawful subtenant in occupation of the flat as her home she would have had a right to remain in it. As an assignee of the head lease as to the basement flat she had no right to remain, according to the decision of the judge, even if she was resident in it as her home at the material date.
In my judgment, for the reasons which follow, the learned judge was correct in his view of the law and this appeal must fail.
The facts and the proceedings
(i) By a lease dated 20th August 1925 ("the head lease") the Duke of Westminster let to a Mrs Wood property described as 15 and 16 West Halkin Street and 16 Halkin Mews for a term of 63 years expiring on 25th December 1987 at a rent of £500 per annum. It was provided in the lease that the demised premises should be used as private residential flats. It is common ground that the premises were then divided into flats, although there has been some change in the division over the years; and that by that lease neither the premises as a whole, nor any part thereof, were or was let as a separate dwelling. The lease prohibited assignment by deed of the premises or any part thereof without written consent, but there was no prohibition on subletting.
(ii) The reversion was assigned by the Duke to the landlords in 1940. In June 1985 the head lease was assigned to Conway Associates Limited ("the company"). The premises were at that time divided into some thirteen flats. In November 1987 the basement, which at one stage had been divided into two flats, was empty. The company was in negotiation with the landlords for the surrender of the head lease and for some compromise upon a payment for dilapidations in respect of which a notice had been served in 1986. The negotiations were broken off. The basement flat was offered to the appellant by Mr Conway, a director of the company. She decided to take it and made arrangements for substantial works of improvement to be carried out. On 16th November 1987, some thirty-nine days before the end of the head lease, the company let to the appellant the basement, described as flats L and M, at the premises for a term of three years at a rent of £2,400 per annum. The letting was made by an agreement in writing and not by deed.
(iii) The appellant, before taking the tenancy, had obtained estimates for the repair, renovation and redecoration of the basement flat. Her sister lived in another flat in 15/16 West Halkin Street. The appellant moved some of her possessions into the basement flat before the grant of the tenancy, and she moved some or all of them out and in again thereafter depending upon the progress of the works. It was at all times her intention to make her home in the basement flat but, in the view of the judge, she did not go into "actual and personal occupation, residential in quality" at any time before January 1988. Her home before that date was, he held, in her sister's flat.
(iv) On 3rd December 1987 the landlords became aware, through an inspection by their building surveyor, that works were being carried out in the basement. Part of that work constituted breach of the covenant in the head lease which prohibited alterations to any part of the premises and cutting of principal walls. On 8th December 1987 a section 146 notice in respect of those breaches was served on the company. On 14th December 1987 a writ was served by the landlords on the company, claiming forfeiture of the head lease. On 13th January 1988 judgment for possession was obtained in default of defence. On 3rd February 1988 the landlords re-entered upon the basement, which was then apparently unoccupied, being full of builder's materials and of unpacked items of furniture. There were fittings for the kitchen, and for the bathroom, but they had not been installed or plumbed in. The appellant got into occupation, or got back into occupation, of the basement flat on 4th February 1988.
(v) By order of 7th March 1988 the appellant was added as a defendant in the landlords' action against the company; execution was stayed as against her; and the proceedings transferred to the County Court.
(vi) The case for the appellant at the trial was originally that the tenancy agreement of 16th November 1987 operated as an assignment to her of the residue of the term of the head lease in respect of the basement flat to 25th December 1987; on that date her contractual tenancy terminated; and she became a statutory tenant under the Rent Act 1977 pursuant to section 2 and/or section 137(3) of the 1977 Act. There was also a contention that by reason of certain alleged representations the landlords were estopped from denying that the appellant had a valid tenancy. By amendment at the trial the appellant claimed that her tenancy, acquired by assignment by operation of law through the grant of the tenancy agreement, was a long tenancy at a low rent protected by Part 1 of the 1954 Act.
(vii) The allegation of estoppel was rejected by the learned judge and there has been no appeal against that finding. It has not been alleged that the expenditure of money by the appellant upon the flat gave rise to any equity which she could enforce against the landlords.
(viii) The rateable value of the basement flat was at all times within the limits for protection under the Rent Acts.
(ix) Although, as against the company, the head lease was terminated by forfeiture on 8th December 1987, the writ was not then served on the appellant. It has been common ground in this court that the appellant's assigned tenancy of the basement under the head lease came to an end at the term date on 25th December 1987.
The statutory provisions
For examination of the submissions made for the appellant, it is necessary to set out the relevant parts of the 1977 Act and of the 1954 Act. The effect of the tenancy agreement for three years dated 16th November 1987, as vesting in the appellant from that date until 25th December 1987 the tenancy of the basement flat under the head lease, has not been disputed by the landlords. It was accepted by the judge and is plainly right. Upon the coming to an end of that tenancy the appellant became entitled to a statutory tenancy of the basement flat if that tenancy was a protected tenancy and if she was then occupying the dwellinghouse as her residence. The question whether a tenancy is a protected tenancy is to be answered by reference to certain questions which include whether the premises "is let as a separate dwelling" and whether the premises or the tenancy fall within any of the exceptions from protection.
The Rent Act 1977 provides:
"s.1. Subject to this part of this Act, a tenancy under which a dwellinghouse (which may be a house or part of a house) is let as a separate dwelling is a protected tenancy for the purposes of this Act.
s.2(1). Subject to this part of this Act—(a) after the termination of a protected tenancy of a dwellinghouse the person who, immediately before that termination, was the protected tenant of the dwellinghouse shall, if and so long as he occupies the dwellinghouse as his residence, be the statutory tenant of it…"
Section 4 defines exceptions by reference to dwellinghouses above certain rateable values. The details are not relevant. It was common ground that the appellant's tenancy of the basement under the assignment at an apportioned part of the 1925 rent of £500 p.a. was a tenancy at a low rent.
Section 5 deals with tenancies at low rents:
"(1) a tenancy is not a protected tenancy if under the tenancy either no...
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