Palser v Grinling Property Holding Company Ltd; Property Holding Company Ltd v Mischeff

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeViscount Simon,Lord Thankerton,Lord Porter,Lord Macdermott
Judgment Date19 Dec 1947
Judgment citation (vLex)[1947] UKHL J1219-1

[1947] UKHL J1219-1

House of Lords

Viscount Simon

Lord Thankerton

Lord Porter

Lord Uthwatt

Lord MacDermott

Palser
and
Grinling.

And

Property Holding Co. Ltd.
and
Mischeff.
Viscount Simon

My Lords,

1

These two appeals were heard together. Both appeals involve the construction and application of certain provisions of the Rent Restriction Acts, and especially of Section 3 (2) ( b) of the Rent and Mortgage Interest Restrictions Act, 1939 (2 and 3 Geo. 6, c. 71) and Section 10 (1) of the Rent and Mortgage Interest Restrictions Act, 1923 (13 and 14 Geo. 5, c. 32) as amended by the First Schedule of the said Act of 1939.

2

These Sections are as follows:—

Section 3 (2) ( b) of the Act of 1939 provides:

"(2) The principal Acts" (i.e. the Rent and Mortgage Interest Restrictions Acts, 1920-1925) "shall not, by virtue of this section, apply …

( b) save as is expressly provided in the said Acts, as amended by virtue of this section, to any dwelling-house bona fide let at a rent which includes payments in respect of board, attendance or use of furniture …"

Section 10 (1) of the Rent and Mortgage Interest Restrictions Act of 1923, as amended, provides:

"For the purposes of paragraph ( b) of sub-section (2) of Section 3 of the Rent and Mortgage Interest Restrictions Act, 1939 (which relates to the exclusion of dwelling-houses from the principal Act"—i.e. the Act of 1920—"in certain circumstances) a dwelling-house shall not be deemed to be bona fide let at a rent which includes payments in respect of attendance or the use of furniture unless the amount of rent which is fairly attributable to the attendance or the use of furniture, regard being had to the value of the same to the tenant, forms a substantial portion of the whole rent."

3

It is convenient also to recite, in connection with the second appeal, subsection (3) of Section 15 of the Act of 1920, which is as follows:—

Section 15 (3).

"(3) Where the interest of a tenant of a dwelling-house to which this Act applies is determined, either as the result of an order or judgment for possession or ejectment, or for any other reason, any sub-tenant to whom the premises or any part thereof have been lawfully sublet shall, subject to the provisions of this Act, be deemed to become the tenant of the landlord on the same terms as he would have held from the tenant if the tenancy had continued."

4

PALSER v. GRINLING.

5

In this appeal, the Appellant, Mrs. Palser, is the owner of a block of flats known as Chantrey House, Eccleston Street, in the County of London, and by a lease in writing dated February 16th, 1944, she demised to the Respondent for a term of one year from March 25th, 1944, at a yearly rental of £175, payable quarterly, a flat numbered 13, situated on the fourth floor of the said block of flats. Flat No. 13 contained a sitting room, bedroom, kitchen and bathroom. The lease contained ( inter alia) the following provisions:—

(1) By Clause 1 the Appellant demised to the Respondent the said flat "together with the use in common with the Landlord and persons authorised by her of the entrance hall staircases landings and passages leading to the demised premises and the passenger lift in the said building subject to the regulations in regard to such user set forth in the Schedule."

(2) By Clause 2 the Respondent covenanted ( inter alia) to "observe and strictly conform to such general regulations governing all flats in the said building as may from time to time be adopted by the landlord."

(3) By Clause 3 (A) the Appellant covenanted ( inter alia) to "keep the entrance hall staircases and passages of the said building clean and the lift leading to the demised premises in working order" and subject to certain conditions to "provide and maintain a supply of hot water for reasonable domestic purposes" with a proviso that the Appellant should "have complete discretion with regard to the appointment discharge or removal of any staff including that of a hall porter employed for the performance of the said services."

(4) By Clause 3 (B) the Appellant covenanted to "pay all general and water rates payable in respect of the demised premises." If the rates were increased during the tenancy, the Respondent, by Clause 2 (J) covenanted to pay "such sum by way of additional rent as shall be equivalent to the amount of such increase."

(5) The general regulations referred to were appended to the said lease and included the following:—

1. The main entrance door of the building shall be in charge of the resident porter or other person deputed by the Landlord.

5. Any goods or parcels to be delivered to the Tenants shall in the first instance be delivered to the resident or other housekeeper on the premises to whom the Tenants shall detail all orders for communication to the tradespeople.

6. All coal required by the Tenants shall be sent up to the flats before 10 a.m. by the resident porter or such other person as the Landlord may instruct. Any refuse from each flat shall be placed in a suitable receptacle to be provided by the Tenant which will be emptied and returned by the said porter or such other person as the Landlord may instruct and no such receptacle shall be allowed to remain outside any flat."

6

The Appellant commenced proceedings by a Specially Indorsed Writ of Summons issued on 30th April, 1945, and by her Statement of Claim thereon claimed possession of the said flat on the ground that the term of one year for which the Appellant had demised it to the Respondent had expired on 25th March, 1945.

7

By her Defence and Counterclaim the Respondent pleaded that the said flat was a dwelling house to which the Rent and Mortgage Restrictions Acts, 1920–1939, applied. The Respondent also counterclaimed £88 14s. 6d. as being rent paid above the standard rent. By her reply the Appellant pleaded that at all times material the said flat was bona fide let at a rent which included payment in respect of attendance and that the payment fairly attributable to the attendance, regard being had to the value of the same to the Respondent, formed a substantial portion of the whole rent.

8

This first case, therefore, depends upon the Appellant's contention that the rent included such payment in respect of "attendance" as took the flat outside the Rent Restrictions Acts. No question of "furniture" is involved. If this contention failed it was not in dispute that the Respondent would also succeed on her Counterclaim.

9

Both the Lord Chief Justice who tried the case, and the Court of Appeal (Morton, Somervell, and Asquith, L.JJ.) decided that the Appellant's contention failed.

10

Property Holding Co. Ltd. v. Mischeff.

11

In this appeal, the Appellants, Property Holding Company Limited, are the owners of a block of flats known as Albion Gate, Hyde Park, in the County of London.

12

By a lease in writing dated the 27th day of January, 1937, the Appellants demised to one Trevor at a yearly rental of £275 with the addition of £1 6s. 3d. per quarter in respect of the basic charge for electricity for the said block of flats from the 1st to the 25th day of March, 1937, and thence for a term of 14 years a flat numbered 19 (hereinafter called "the said flat") situate in the said block of flats. It is alleged by the Appellants that the rent included payments in respect of attendance and use of furniture forming a substantial portion of the whole. Flat No. 19 is on the ground floor, and contains two sitting rooms, three bedrooms, a kitchen and two bathrooms.

13

By a licence dated 5th May, 1942, the Appellants granted to the said Trevor licence to underlet the said flat to the Respondent for a term of 2½ years from 25th March, 1942, with the option on the part of the sub-lessee to determine the tenancy at the end of the first year.

14

By an agreement under seal dated 26th June, 1942, the said flat was sub-let to the Respondent by Trevor for a term of 1 year from 25th March, 1942, with an option to the Respondent (which was exercised) to continue for a further period of 1 year and 6 months from the expiry thereof at a yearly rental of £275 with the addition of the said quarterly basic electricity charge. The period for which the sub-lease was granted did not in form correspond with the period authorized by the licence, but it was not suggested that the granting of the sub-lease was not duly authorized by the licence.

15

Pursuant to a provision of his said lease from the Appellants, Trevor gave a notice determining his said term on the 25th March, 1944.

16

By a deed dated 18th October, 1943, Trevor's tenancy was extended to 29th September, 1944, at a yearly rental of £375 with the addition of a payment of £6 4s. 4d. per annum in respect of the basic electricity charge of the said block of flats. The Respondent contended that as a result of ( a) the exercise by him of his option to continue the tenancy which he held from Trevor—which had the result that his term would not expire till 25th September, 1944; coupled with ( b) Trevor's subsequent exercise of his option to determine his lease—which had the result that Trevor's lease determined on the 24th March, 1944—the sub-lease to the Respondent operated as an assignment to the Respondent of the lease to Trevor. If the Respondent was right in this, the year as at which the furniture should be valued would be 1937 and not 1942. But there is no substance in this contention. At the date of the transaction with the Respondent, there was vested in Trevor a term which extended to March, 1951, and therefore left him a reversion expectant on the Respondent's sub-tenancy, whether or not the Respondent exercised his option to continue his tenancy. The Respondent therefore duly became subtenant of Trevor.

17

The sub-demise by Trevor to the Respondent included exactly the same property as was included in the head-lease, the articles referred to in the sub-lease as "Landlord's fixtures"...

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    ...out of protection, under section 2(3) of the 1968 Act. 18 The word "attendance" was much considered by the House of Lords in Palser v. Grinling, which was reported in (1948) Appeal Cases 291. Lord Simon the Lord Chancellor at pages 310 and 311 said that attendance means "ser......
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    ...out of protection, under section 2(3) of the 1968 Act. 18 The word "attendance" was much considered by the House of Lords in Palser v. Grinling, which was reported in (1948) Appeal Cases 291. Lord Simon the Lord Chancellor at pages 310 and 311 said that attendance means "ser......
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