Rothschild v Bell (A Bankrupt)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BUXTON,LORD JUSTICE MUMMERY,LORD JUSTICE HIRST |
| Judgment Date | 18 February 1999 |
| Judgment citation (vLex) | [1999] EWCA Civ J0218-16 |
| Docket Number | CCRTF 98/1189/2 |
| Court | Court of Appeal (Civil Division) |
| Date | 18 February 1999 |
[1999] EWCA Civ J0218-16
Lord Justice Hirst
Lord Justice Mummery
Lord Justice Buxton
CCRTF 98/1189/2
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
(HIS HONOUR JUDGE MEDAWAR QC)
Royal Courts of Justice
Strand
London WC2
MR E JOHNSON (Instructed by Messrs Radcliffes Crossman Block, London, SW1P 3SJ) appeared on behalf of the Appellant
MISS J BAKER (Instructed by Messrs Wedlake Bell, London, WC2E 9HF) appeared on behalf of the Respondent
Thursday 18 February 1999
Introduction
This is an appeal from a judgment of His Honour Judge Medawar QC determining certain preliminary issues in a dispute between the plaintiff landlords of premises at 11 Bryanston Mews East in the London Borough of Kensington and Chelsea [the premises] and the first defendant, whom I will describe, without prejudice to what follows, as the tenant of the premises. Before stating what those issues were, it will be convenient to set out the facts. These were very helpfully agreed or conceded for the purposes of this Appeal. I should however record that some of these matters are in fact in dispute, even though not in respects that affect the answers to the questions asked of the court, and the following recital implies no concession by either party in respect of those matters.
The facts
The premises were demised for a fixed term of forty years with effect from 25 December 1956 to a Mrs Samuelson. On 6 January 1982 she assigned that lease to the defendants as joint tenants. The defendants were then man and wife, but were divorced on 5 November 1984, the second defendant not having resided in the premises or any part thereof since September 1983. The contractual term expired on 25 December 1996 [the determination date], the first tenant being then resident in the premises. He was declared bankrupt on 14 January 1997, and by section 306 of the Insolvency Act 1986 his "estate" (a term the meaning of which is in dispute in this case) automatically vested in the Official Receiver. The Official Receiver disclaimed the lease on 22 May 1997.
The lease having determined by effluxion of time, the only right of the first defendant to remain in the premises has to be found in provisions for statutory protection. On the determination date the lease was a tenancy at low rent as defined in section 5 of the Rent Act 1977 [the 1977 Act], and therefore was not a protected tenancy within the meaning of section 1 of the 1977 Act. Accordingly, he has no right to remain in the premises, and is a trespasser there, unless he can bring his case within the provisions as to security of tenure for occupying tenants of residential property let at low rents that are to be found in Part I of the Landlord and Tenant Act 1954 [the 1954 Act].
The issues
The judge's order from which the Appeal is brought was in form of a declaration that
1. The Lease did not determine for all purposes on the Determination Date.
2. Neither the Lease nor any interest therein was capable of forming part of the bankrupt estate of the First defendant which vested in the Trustee.
3. Neither the Lease nor any interest therein subsequently formed part of the bankrupt estate of the Trustee which vested in the Trustee.
However, in order fully to understand the case, particularly as it was expanded before us by Mr Johnson and Miss Baker in their admirable arguments, it is necessary to explain in some little more detail what lies behind those declarations.
The case resolves itself into three questions. They are
I. Did the first defendant have any right to remain in the premises after the determination date? The landlords say that Part I of the 1954 Act does not apply to a case such as the present where the contractual tenancy is held by joint tenants, but only one of them is resident at the premises when that tenancy expires by effluxion of time. If the landlords are right on that point, they are entitled to possession without more.
II. If the first defendant is given a right to remain in the premises by Part I of the 1954 Act, what is the nature of that right? Is it, as the first defendant claimed, simply a continuation of the contractual tenancy, with the first and second defendants still both being joint tenants? Or is it, as the judge held and the landlords contend under this question, a right held by the first defendant alone?
The importance of this point for the first defendant is that if his continuing right is in the nature of a joint tenancy, the first defendant would argue that the tenancy is held by the tenants on the statutory trusts for sale under the Law of Property Act 1925, and thus, being property held on trust, was precluded by section 283(3)(b) of the Insolvency Act 1986 [the 1986 Act] from vesting in the trustee in bankruptcy. That conclusion was challenged by the landlords. I shall not seek to resolve that latter dispute, because for reasons that I shall shortly explain below I am satisfied that the interest conferred on the first defendant by Part I of the 1954 Act is an interest or right, whatever its actual nature may be, that is held by him alone, and not by him as a joint tenant.
III That makes it necessary to proceed to the third question, which involves consideration of whether that interest is part of the (bankrupt) first defendant's property forming part of his estate for the purposes of section 283(1)(a) of the 1986 Act. If so, it was thus vested in the trustee in bankruptcy, and was available to be disclaimed by him.
I deal with those questions in turn. First, however, it will be convenient to examine an issue that affects the construction of Part I of the 1954 Act, and thus the answer to question 1, namely the relationship between Part I of that Act, dealing with Security of Tenure for Residential Tenants, and Part II of that Act, dealing with Security of Tenure for Business, Professional and Other Tenants. It is inescapably necessary to set out a substantial part of the statutory provisions, which I do before addressing the issue of construction.
The immediately relevant parts of Part I of the 1954 Act are the following.
1. Protection of residential tenants on termination of long tenancies at low rents
On the termination in accordance with the provisions of this Part of this Act of a tenancy to which this section applies the tenant shall be entitled to the protection of the Rent Act subject to and in accordance with those provisions.
2. Tenancies to which s 1 applies
(1) The foregoing section applies to any long tenancy at a low rent, being a tenancy as respects which for the time being the following condition (hereinafter referred to as "the qualifying condition") is fulfilled, that is to say that the circumstances (as respects the property comprised in the tenancy, the use of that property, and all other relevant matters) are such that on the coming to an end of the tenancy at that time the tenant would, if the tenancy had not been one at a low rent, be entitled by virtue of the Rent Act to retain possession of the whole or part of the property comprised in the tenancy.
3. Continuation of tenancies to which s 1 applies
(1) A tenancy which is current immediately before the term date and is then a tenancy to which section one of this Act applies shall not come to an end on that date except by being terminated under the provisions of this part of this Act, and if not then so terminated shall subject to those provisions continue until so terminated and shall, while continuing by virtue of this section, be deemed (notwithstanding any change in circumstances) to be a tenancy to which section one of this Act applies.
(2) Where by virtue of the last foregoing subsection a tenancy is continued after the term date, then—
(a) if the premises qualifying for protection are the whole of the property comprised in the tenancy, the tenancy shall continue at the same rent and in other respects on the same terms as before the term date;
(b) if the premises qualifying for protection are only part of the property comprised in the tenancy, the tenancy while continuing after the term date shall have effect as a tenancy of those premises to the exclusion of the remainder of the property, and at a rent to be ascertained by apportioning the rent payable before the term date as between those premises and the remainder of the property, and in other respects on the same terms (subject to any necessary modifications) as before the term date.
4. Termination of tenancy by the landlord
(1) The landlord may terminate a tenancy to which section one of this Act applies by notice given to the tenant in the prescribed form specifying the date at which the tenancy is to come to an end (hereinafter referred to as "the date of termination"), being either the term date of the tenancy or a later date.
6 Application of Rent Acts where tenant retains possession
(1) Where a tenancy is terminated by a landlord's notice proposing a statutory tenancy the Rent Act shall apply, subject as hereinafter provided, as if the tenancy (hereinafter referred to as "the former tenancy")—
(a) had been a tenancy of the dwelling-house, as hereinafter defined, and
(b) had not been a tenancy at a low rent and, except as regards the duration of the tenancy and the amount of the rent, had been a tenancy on the terms agreed or determined in accordance with the next following section and no other terms.
12 Grounds for resumption of possession by landlord
(1) The grounds on which a landlord may apply to the court for possession of...
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