Lazarus Estates Ltd v Beasley

JurisdictionEngland & Wales
CourtCourt of Appeal
JudgeLORD JUSTICE DENNING,LORD JUSTICE MORRIS,LORD JUSTICE PARKER
Judgment Date24 Jan 1956
Judgment citation (vLex)[1956] EWCA Civ J0124-1

[1956] EWCA Civ J0124-1

In The Supreme Court of Judicature

Court of Appeal

Before:

Lord Justice Denning

Lord Justice Morris and

Lord Justice Parker

Lazarus Estates Limited
and
Beasley

MR R. GAVIN FREEMAN (instructed by Mr Robert K. George) appeared on behalf of the Appellant (Defendant).

MR H. HEATHCOTE-WILLIAMS, Q.C. and MR GEORGE DOBRY (instructed by Messrs Chancler & Creeke) appeared on behalf of the Respondents (Plaintiffs).

LORD JUSTICE DENNING
1

Lasarus Estates Limited own a block of flats called The Palatinate in the New Kent Road. Some years ago they let flat No. 13 to Mr R.C. Bessley. He died and his widow, Mrs Violet Beasley, remained in the flat as statutory tenant at a rent of 18s. 8d. a week. In October, 1954, the landlords desired to increase the rent under the new Housing Repairs and Rents Act, 1954. They served three documents each dated 9th October, 1954. The first was a notice of election un der section 30 (3) of the Act by which they deisclaimed anyresponsibility for keeping the interior of the premier in good decorative repair. The second was a declaration in which they declared (1) that the conditions justifying an increase were fulfilled (namely, that the premises were in good repair and reasonably fit for occupation), and (ii) that they had done work of repair so as to qualify them for an increase. The third was a notice of repairs increase by which they said that the existing rent of 18s. 8d. a week would be increased by 4s. 1d. a week as from the 20th November, 1954. Mrs Beasley has not paid the 4s. 1d. increase of rent. The landlords seek in this action to recover it from her.

2
3
4

No other objections were taken in the Country Court to the documents, but I do not wish it to be assused that this Court approves of them. The statutory forms require the documents to be "signed by the landlord, but the only signature on these documents (if such it can be called) was a rubber stamp "Lesarue Estates Limited" without anything to verify it. There was no signature of a secretary or of any person at all on behalf of the company. There was nothing to indicate who affixed the rubber stamp. It has been held in this Court that a private person can sign a document by impressing a rubber stamp with his own signature on it: see Goodman v. Eban, 1954, 2 weekly Las Reporter, page 581: but it has not yet been held that a company can sign by its printedname affixed with a rubber stamp. Another point which is very material is that the declaration failed to specify any of the works of repair which had been done. The statutory form requires that a schedule to the declaration should contain a general description of the work done under such heading. The schedule in this case gave no such description. The headings "External Decorative Repairs" and "Internal Decorative Repairs" were bracksted together and put at 2266. 6s.2d, with nothing to say that was done. The heading "Other repairs wholly for the benefit of dwelling-houses comprised in the building" was put at £300 without a word to say what those repairs were. So objection was taken in the Country Court that the declaration was invalid on this ground. We cannot therefore go into it and must approach the case on the facting that that declaration in matters of form complied with the statutory requirements.

5

I turn, therefore, to the substance of the case. The tenant seeks to say that the declaration was false and fraudulent. She says that it was quite untrue for the landlords to say that they had spent £300 on "other repairs wholly for the benefit of dwelling-houses comprised in the building". She alleges that no such works were carried out at all. The judge has held,however, that she cannot go into that matter at all. She had 28 days, he says, in which to do it after the notice was served. As she did not challenge the declaration within that time, he says she cannot now challenge it at all. The tenant appeals to this Court.

6

In order to justify an increase, the Act requires the landlord to produce "satisfactory evidence" that he has done work of repair to the required value during the appropriate periods see section 23(1)(b); and he must produce it "in accordance with the Second Schedule". Inasmuch as the tenant is the person who is to pay the increase, the landlord must, I think, produce the evidence to the tenant. Apart from the Second Schedule (which I will consider in a moment) the evidence, in order to be satisfactory, ought, I think, to be such as to satisfy the tenant that the required work has been done; or if he takes unreasonable objection to it it ought to be such as would satisfy a reasonable tenant. I do not think it would be satisfactory for the landlord to rely simply on his own word, uncorroborated and not on oath, as evidence that he had done the required work. The tenant could reasonably require the landlord to produce his con temporaneous records, builders' accounts, duly receipted, and so forth.

7

This brings me to the Second Schedule. This shows that the tenant can insist on satisfactory evidence, at any rate, if he acts within 28 days. Paragraph 4 provides that within 28 days the tenant can apply to the Court to determine whether the required work of repair has been carried out. The landlord must then produce evidence to satisfy the County Court that work of repair was done so as to justify the increase, and unless he does so the notice of increase will be of no effect. The County Court would, I imagine, in most cases insist on the production of records, receipts, and so forth before it was satisfied. Suppose, however, that the tenant lets the 28 days slip by without applying to the County Court. That is what happened inthis case. Mrs Beasley did not comply within the 28 days. The Second Schedule (paragraph 5) then provides that in that case the service of the declaration is itself to be treated as the production of satisfactory evidence that the work specified in it has been done. This means that the landlord can rely on his own word (as contained in the declaration) as satisfactory evidence without supporting it with any records, receipts, or so forth. But does it mean that his word cannot be challenged at all, and that it is conclusive for all purposes? I do not think so. Paragraph 5 goes on to state one particular ground on which the declaration cannot be challenged, namely, that the value of the work stated in it was insufficient to justify the increase. That seems to import that it is open to the tenant to challenge the declaration on any other ground.

8

We are In this case concerned only with this points Can the declaration be challenged on the ground that it was false and fraudulent? It can clearly be challenged in the Criminal Courts. The landlord can be taken before the Magistrate and fined £30: see Second Schedule (paragraph 6), or he can be prosecuted on indictment, and (If he is an individual) sent to prison: see section 5 of the Perjury Act, 1911. But the landlords argued before us that the declaration cannot be challenged in the Civil Courts at all even though it was false and fraudulent; and that the landlords can recover and keep the increased rent even though it was obtained by fraud. If this argument is correct, the landlords would profit greatly from their fraud. The increase in rent would pay the fine many times over. I cannot accede to this argument for a moment. No Court in this land will allow a person to keep an advantage which he has obtained by fraud. No judgment of a Court, no Order of a Minister, can be allowed to stand if it has been obtained by fraud, fraud unravels everything. The Court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved it vitiates judgments, contracts and all transactionsWhatsoever: See as to deeds Collins v. Blantern (1767) 1 Smith's Leading Cases, page 406, as to judgments, The Duchess of Kingston's, case (1776) 2 Smith's Leading Cases, pages 646, 651, and as to contracts Master v. Miller (1791) 1 Smith's Leading Cases, pages 780, 799. So here I am of opinion that if this declaration is proved to have been false and fraudulent it is a nullity and void and the landlords cannot recover any increase of rent by virtue of it.

9

I would therefore allow this appeal and permit the tenant to raise the defence of fraud. I would just add this. We were told that 55 of the tenants in these blocks of flats applied within 28 days to the County Court, and, although there was no hearing in Court, the landlords have not insisted on the increase in those cases but they seek to insist on the increase as against the other tenants who did not apply within 28 days. This failure on the part of the tenants may have been due to ignorance or mistake or some other reasonable excuse. The landlords say that whatever the reason may be once the 28 days have expired the tenants are without remedy, and that there is no power in the Court to extend the time. It la easy to think of cases where strict insistence on the 28 days may work hardship and injustice to tenants. If it be correct that there is no power in the Court to extend the time, the sooner the attention of the Legislature is directed to it the better.

LORD JUSTICE MORRIS
10

A notice, which purported to be a notice in the prescribed form, of the intention of the landlords to Increase the rent pursuant to the provisions of the Housing Repairs and Rents Act, 1954, was served upon the tenant. The notice was addressed to Mr E.0. Brasley as the tenant of No. 13 The Palatinate. The tenant was, however, Mrs Violet Beasley. She had become the tenant after the death of her husband, Mr E.O. Bensley, by the operation of section 12(1) (g) of the Increase of Rent end Mortgage Interest (Restrictions) Act, 1920. The facts were fully known to her, and the fact that the notice referred tothe "tenant" as being Mr E.G. Brasley, whereas she was the tenant as the...

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2 firm's commentaries
  • Fraud Unravels Everything - BVI Courts Fighting White Collar Crime
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    ...completely wrong. The BVI Courts apply a well-known legal maxim originally developed by the English Courts in Lazarus Estates v Beasley [1956] 1 QB 702 at 712: "No Court in this land will allow a person to keep an advantage which has been obtained by fraud... fraud unravels When can fr......
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