Pittalis v Grant

JurisdictionEngland & Wales
JudgeLORD JUSTICE NOURSE
Judgment Date10 March 1989
Judgment citation (vLex)[1989] EWCA Civ J0310-2
Docket Number89/0256
CourtCourt of Appeal (Civil Division)
Date10 March 1989
Kyriacos John Pittalis

and

Erato Pittalis
Appellants (Plaintiffs)
and
John Forsyth Grant

and

Mrs John Grant
Respondents (Defendants)

[1989] EWCA Civ J0310-2

Before:-

Lord Justice Slade

Lord Justice Nourse

and

Lord Justice Stuart-Smith

89/0256

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE BARNET COUNTY COURT

HIS HONOUR JUDGE GOLDSTONE

Royal Courts of Justice

MR. ENGELMAN (instructed by Messrs Simon Wakefield & Co.) appeared on behalf of the Appellants (Plaintiffs).

MR. D.J. READE (instructed by Messrs Henry Wimborne) appeared on behalf of the Respondents (Defendants).

1

JUDGMENT OF THE COURT

LORD JUSTICE NOURSE
2

This is a rent act case in which the substantive question is whether, on the determination of a superior tenancy, a statutory subtenancy of part of the premises continued to qualify for protection under section 137(3) of the Rent Act 1977; cf. Maunsell v. Olins [1975] A.C. 373. The point which is now relied on by the landlords was not raised before the county court judge. And so we must also decide whether it can be raised now; cf. Smith v. Baker & Sons [1891] A.C. 325.

3

By a head lease dated 9th December 1882 the dwelling-house and shop now known as 92 High Road, East Finchley, London N.2 ("the property") was demised to the lessee therein named for a term of 99 years from 24th June 1882 at a yearly rent of £10. The head lease contained a lessee's covenant against carrying on or permitting to be carried on the trade or business of a tavern-keeper, inn-keeper, victualler or beer-house keeper, but no other covenant against user. It did not contain any covenant against assigning, sub-letting or parting with possession of the property or any part thereof.

4

By an agreement in writing made on 17th August 1977, the then head lessees, Bartons (Basildon) Ltd., granted to the first defendant, Mr. John Forsyth Grant, a subtenancy of the upper part of the property ("the flat") for a term of three years from 1st February 1977 at a monthly rent of £26. On 17th May 1979 Bartons (Basildon) Ltd. assigned the head lease to Porter Nash Ltd., who were still the owners thereof when it expired by effluxion of time on 23rd June 1981. It is agreed that the property then included premises (i.e. the lower part) which were occupied by Porter Nash Ltd. for the purposes of a business carried on by it, so that the tenancy created by the head lease was subject to the provisions of Part II of the Landlord and Tenant Act 1954.

5

Porter Nash Ltd. duly acquired a new lease of the property under the 1954 Act, but on 15th June 1987 they surrendered it to the freehold owners of the property, the plaintiffs Mr. Kyriacos John Pittalis and Mrs. Erato Pittalis. Meanwhile, on 31st January 1980 the subtenancy of the flat had expired by effluxion of time and the first defendant continued in occupation as the statutory tenant thereof. He and his wife are still in occupation. It is agreed that their occupation was protected by the Rent Acts while Porter Nash Ltd. remained the head lessees of the property. But the effect of the surrender of the head lease was to bring them into a direct relationship with the plaintiffs. The substantive question is whether the effect of section 137(3) of the 1977 Act was to continue the defendants' protection as against the plaintiffs.

6

On 13th August 1987 the plaintiffs commenced proceedings against the defendants in the Barnet County Court, seeking possession of the flat and mesne profits from the date of the surrender of the head lease. The action came on for trial before His Honour Judge Goldstone, by whom it was dismissed on 27th November 1987. The plaintiffs now appeal to this court.

7

Section 137(3) of the Rent Act 1977 , as amended by the Agricultural Holdings Act 1986, is in these terms:-

"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, an agricultural holding within the meaning of the [Agricultural Holdings Act 1986]."

8

As to this provision, there has at all times been agreement on two points. First, the property, while it was let as a whole under the head lease, did not constitute a dwelling-house let on a statutorily protected tenancy. That was because the tenancy created by the head lease was one to which Part II of the 1954 Act applied; see section 24(3) of the 1977 Act. Secondly, the flat was itself a dwelling-house subject to a statutory tenancy. However, in the court below it was conceded by counsel who then appeared for the plaintiffs that the property was "premises" within the contemplation of section 137(3)(a). His only argument was one which was rejected by Judge Goldstone, in our view correctly, as being contrary to the decision of Hallett J. in Cadogan v. Henthorne [1957] 1 W.L.R. 1, a decision which was approved by this court in Legge v. Matthews [1960] 2 Q.B. 37. The learned judge therefore had no alternative but to hold that section 137(3) applied to the flat and to dismiss the plaintiffs' claim for possession accordingly.

9

Mr. Engelman, who now appears for the plaintiffs, has argued that the property is not "premises" within the contemplation of section 137(3) at all, so that the subsection does not apply to the flat and does not protect the defendants' occupation of it. He seeks to withdraw the concession made below and to amend the plaintiffs' notice of appeal accordingly. It is clear, as Mr. Engelman fully accepts, that he seeks to raise a question of law which was not raised and submitted to the county court judge at the trial. Although his ability to do so is, strictly speaking, a preliminary question, the more convenient course is to deal first with the substantive question. Once that question has been identified it will be easier to decide whether it is one which can be raised in this court or not.

10

Mr. Engelman has relied on the decision of the House of Lords in Maunsell v. Olins [1975] A.C. 373, which was not cited below. That case was decided on section 18(5) of the Rent Act 1968, which was for all material purposes in identical terms to those of section 137(3), except that the last paragraph of the later subsection was not included. It was held that the "premises" to which section 18(5) related included any premises "which, as matter of fact, applying accepted principles, would be held to be a dwelling-house for the purposes of the Act": see p.389C, per Lord Wilberforce, with whom the other members of the majority agreed. That case was concerned with the subtenancy of a cottage on a farm which had been let on an agricultural tenancy. The head tenancy having been determined, the freeholder succeeded in his claim for possession of the cottage against the subtenants on the ground that the farm was not "premises" within Lord Wilberforce's test. The effect of that decision in regard to agricultural holdings has now been reversed by the final paragraph of section 137(3), but its authority continues in full force and effect in regard to other types of property.

11

The question then is whether, on 15th June 1987, the property fell within Lord Wilberforce's test or not. Mr. Reade, in a clear and tenacious argument on behalf of the defendants, contended that the question depended on whether the property was, as a matter of fact and applying accepted principles, a dwelling-house or not. He submitted that that was a question which was not decided by the learned judge and could only have been decided on evidence which was not before him, a submission which is of cardinal importance in relation to the plaintiffs' ability to raise the substantive question in this court.

12

We do not think that Mr. Reade's submission is correct. It ignores the requirement that the property must be held to be a dwelling-house "for the purposes of the Act". The supremacy of that requirement becomes clearer from an earlier passage in Lord Wilberforce's speech at p. 388H, where, after stating the narrowest view of "premises", he turned to the narrower view which he favoured:

"A less narrow view would be to say that 'premises' includes not only dwelling-houses in the normal popular sense, but premises, which, for the purposes of the Rent Act, are treated as dwelling-houses. Everybody knows, and the draftsman must be taken to have known, that protection under the Rent Acts is given not merely to single, identifiable, pure dwelling-houses or dwelling units, but also to units of a mixed character—houses let with a garden or a yard or a garage or a paddock, houses part (even a substantial part) of which is used for business purposes".

13

The same point is made in the speeches of Lord Reid and Viscount Dilhorne, at pp. 383C and 384B-C respectively. The converse of Lord Wilberforce's last example is business premises, part (even a substantial part) of which is used for residential purposes. That seems to be what we are concerned with here. Admittedly we do not know the precise facts But what we do know is that on 15th June 1987 the tenancy of the premises was one to which Part II of the 1954 Act applied...

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