London Regional Transport v Nicholas Brandt
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SIMON BROWN,LORD JUSTICE HUTCHISON,THE MASTER OF THE ROLLS |
| Judgment Date | 28 February 1996 |
| Judgment citation (vLex) | [1996] EWCA Civ J0228-6 |
| Docket Number | CCRTF/95/0620/G |
| Court | Court of Appeal (Civil Division) |
| Date | 28 February 1996 |
[1996] EWCA Civ J0228-6
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE WEST LONDON COUNTY COURT
(Appeal)
(His Honour Judge Butter QC)
Before: The Master of the Rolls (Sir Thomas Bingham) Lord Justice Simon Brown Lord Justice Hutchison
CCRTF/95/0620/G
MR. J LUBA (Instructed by Messrs. Wainwright & Cummins, DX 42709, Oxford Circus North)) appeared on behalf of the Appellant
MR. E DENEHAN (Instructed by Messrs. Freshfields, DX23, London)) appeared on behalf of the Respondent
Wednesday 28 February 1996
This is the defendant's appeal from the judgment of Judge Butter, Q.C. on the trial of a preliminary issue at the West London County Court on 18th November 1994 ordering delivery up of possession of a residential flat (the flat) consisting of the third and fourth floors at 26, Thurloe Street, Kensington, London SW 7.
The few relevant facts of the case are undisputed and can be shortly told. The Metropolitan Railways Surplus Lands Co. Ltd. (Metropolitan), the plaintiff's predecessors in title, granted a lease of 26, Thurloe Street (the building) to the Medici Society (Medici) for a term of 15 years from 24th June 1975. It was a lease to which Part II of the Landlord and Tenant Act 1954 applied.
On 16th September 1981 Medici sub-let the flat to the defendant for a fixed term expiring on 28th September 1982 and thereafter on a quarterly periodic tenancy until determination upon three months notice. The flat is a dwelling-house to which the Rent Act 1977 applies.
On 21st December 1989 Metropolitan served notice on Medici under section 25 of the 1954 Act specifying 24th June 1990 as the date of termination.
On 19th January 1991 Metropolitan granted a concurrent lease of the building for a term of 999 years to South Kensington Developments Ltd (SKDL), the plaintiffs' immediate predecessors in title.
On 24th January 1992 Medici surrendered to SKDL its leasehold interest in the upper floors (including the flat).
On 15th September 1992 SKDL served notice to quit on the defendant to expire on 17th December 1992. Over a year later, on 19th February 1994, they issued these possession proceedings.
Mr. Jan Luba for the defendant, both below and now again on appeal, has sought to resist the possession claim on two alternative grounds. First, and primarily, he relies upon the surrender of the mesne tenancy and argues that upon the subsequent determination of the defendant's contractual sub-tenancy by notice to quit there arose between him and the plaintiffs a statutory tenancy pursuant to section 2 of the 1977 Act. This I shall call the first argument. Failing that, he seeks to rely on section 137(3) of the 1977 Act (the second argument). It is convenient at this stage to set out both provisions:
"2(1) Subject to this Part of this Act -
(a)after the termination of a protected tenancy of a dwelling house the person who, immediately before that termination, was the protected tenant of the dwelling-house shall, if and so long as he occupies the dwelling-house as his residence, be the statutory tenant of it….."
There is no question but that the defendant's original sub-tenancy was a protected tenancy, and equally no doubt that, if he is now a statutory tenant pursuant to section 2(1)(a), he enjoys security of tenure —see section 98.
"137(3) Where a dwelling-house —
(a)forms part of premises which have been let as a whole on a superior tenancy but do not constitute a dwelling-house let on a statutorily protected tenancy; and
(b)is itself subject to a protected or statutory tenancy,
then, from the coming to an end of the superior tenancy, this Act shall apply in relation to the dwelling-house as if, in lieu of the superior tenancy, there had been separate tenancies of the dwelling-house and of the remainder of the premises, for the like purposes as under the superior tenancy, and at rents equal to the just proportion of the rent under the superior tenancy.
In this subsection "premises" includes, if the sub-tenancy in question is a protected or statutory tenancy to which section 99 of this Act applies, [of certain dwelling-houses let to agricultural workers], an agricultural holding within the meaning of the Agricultural Holdings Act 1986."
Mr. Luba's central difficulty, to which he has been alive throughout the proceedings, is that both arguments appear to have been clearly decided against him at Court of Appeal level. This, indeed, he accepts with regard to the second argument, although not the first. The judge below dealt with the case only very cursorily, regarding himself as plainly bound to find for the landlord. Before us, however, having on 30th March 1995 obtained this court's leave to appeal, and having on 24th July
1995 successfully resisted the respondents' application to set that leave aside, Mr. Luba developed the first argument and submitted that it was open to this court to accept it.
What essentially the argument comes to is this: At common law, upon determination of a leasehold interest by surrender, any extant sub-tenancy or other interest derived by an occupier from the lessee becomes a tenancy or interest held from and against the head lessor —see Parker v Jones [1910] 2KB 32. That is what occurred here and, indeed, it is reflected in the fact that the landlord accepted rent from the appellant for four quarters and then sought to determine his tenancy by lawful notice to quit served by SKDL as "your landlords". The tenancy having been a protected tenancy within the meaning of section 1 of the 1977 Act remained so until the notice to quit expired whereupon, by operation of section 2, it became a statutory tenancy. Court of Appeal decisions to the contrary Mr. Luba seeks to contend either were decided per incuriam or are distinguishable on their facts.
Although it is only this first argument that needs to be addressed in detail, it has seemed to me sensible, given that most of the relevant authorities touch on both, to sketch in as I review the developing case-law certain legislative changes with regard to the second argument and to indicate why that particular argument is not now open to the appellant short of the House of Lords. First, however, I think it helpful to note how the two arguments inter-relate.
The inter-relation between the two arguments is this: whereas the first argument is founded upon the surrender of the intermediate lease and contends that that event brings the sub-tenant and head tenant into a direct and immediate tenancy relationship entitling the sub-tenant upon its termination to invoke section 2, the second argument postulates that the first argument is wrong and arises irrespective of how the superior tenancy is ended, i.e. is not dependent upon there having been a surrender. Put another way, section 137(3) reserves the rights of occupation of certain sub-tenants whose rights would not otherwise have survived the determination of their head lease whereas the first and main argument is that this appellant's rights did otherwise survive the surrender of his head lease so that section 137(3) is both unnecessary and inapplicable. It is only, therefore, if his main argument fails that Mr. Luba would seek to pursue this alternative route to security of tenure.
The starting point for both arguments is the decision of the Court of Appeal (Lord Greene, M.R. and Wynne-Parry,J.) in Cow v Casey [1949] 1 KB 474. The head tenancy there was of a large house to which the Rent Acts did not apply. Out of that the head tenant created a weekly sub-tenancy of a flat. In compliance with a notice to quit served upon him by the landlord, the head tenant left the premises. As, however, the notice was said to be bad in law and as the matter was being heard as an interlocutory appeal from a summary judgment, the court assumed that the head tenancy had been surrendered. Before leaving, the head tenant had served upon his sub-tenant a notice to quit which expired two days after the surrender. What is now Mr. Luba's first argument was advanced there by Mr. Lionel Blundell. It was described by Lord Greene as "completely misconceived". Lord Greene said:
"The surrender of the head tenancy could not deprive the appellant of the right to those two days at the fag-end of his contractual sub-tenancy, and the notice on him admittedly was not in any way invalidated by the surrender; he held those two days subject to the running of that notice."
And then a little later:
"On the expiration of those two days, at common law he became a trespasser……what possible ground is there for his claiming the protection of the rent restriction acts?"
Lord Greene then roundly rejected the appellant's entitlement to rely on section 3(1) of The Rent and Mortgage Interest Restrictions (Amendments) Act 1933 —the statutory predecessor of what is now section 2 of the Rent Act 1977.
A second argument was advanced in reliance upon section 15(3) of The Increase of Rent and Mortgage Interest (Restrictions) Act 1920 but that inevitably failed: the provision (the precursor to what is now section 137(2) of the 1977 Act) clearly only applied when the head tenancy itself had been of a dwelling-house to which the Act applied.
Section 41 of the Housing Repairs and Rents Act 1954 was enacted specifically to overcome the difficulty confronting the second argument in Cow v Casey. That was the section which fell for consideration by the Court of Appeal in Hobhouse v Wall [1963] 2 QB 124, another surrender case and different to Cow v Casey only in that the head tenant...
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