Samrose Properties Ltd v Gibbard
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE MORRIS,LORD JUSTICE PEARCE |
| Judgment Date | 03 May 1957 |
| Judgment citation (vLex) | [1957] EWCA Civ J0503-1 |
| Court | Court of Appeal |
| Date | 03 May 1957 |
[1957] EWCA Civ J0503-1
In The Supreme Court of Judicature
Court of Appeal
the Master of the Rolls (Lord Evershed),
Lord Justice Morris and
Lord Justice Pearce.
Mr. R.E. MEGARRY, Q.C. and Mr. E. ASHLEY BRAMMALL (instructed by Messrs. Neaby & Co.) appeared on behalf of the Appellant Plaintiffs.
The Respondent Defendant did not appear and was not represented.
: The sole question raised in this appeal is whether the rent payable in respect of certain premises known as 117 Waterloo square, Lomond Grove, Camberwell, (which were the subject of a tenancy made in August 1955) was less than two-thirds of the rateable value of the premises. It is not in doubt for the purposes of this appeal that the rateable value of the premises is or was at all relevant dates 7 per annum; so that if the rent payable in respect of the tenancy was less than two-thirds of %7, then the inevitable effect of subsection (7) of section 12 of the Increase of Rent and Mortgage Interest (restrictions) Act, 1920, is that the tenant cannot claim, as he has sought to do, the protection of the Rent Acts. The tenant is a Mr Kenneth Gibbard, by profession a lorry driver; and, having succeeded before His Honour Judge Clothier in the County Court, he has not thought it necessary to appear in person or by Counsel to support the Judgment in this Court. Mr Megarry has therefore been in what is inevitably the somewhat embarrassing situation of having no opponent; and he has very properly and of course drawn our attention to a number of authorities which might be thought to help or which do help in deciding questions of this kind. We are indebted to him for the care with which he has presented the case and for him are sorry that his advocacy has perhaps been in some degree under restraint; but - I hope not for that reason - I have myself come to the conclusion that we cannot disturb the conclusion at which the County Court Judge arrived.
I have stated that the premises consist of a flat known as 117 Waterloo Square, Lomond Grove, Camberwell; but even that description might be thought to be in some degree euphemistic, for the subject-matter of the tenancy appears to have been two rooms in that building, the tenant having the right to share with other occupants the kitchen and the lavatory. The subject-matter being of this somewhat meagre character, the lorry driver, Mr Gibbard, must, I think. If he reflected upon it, have been somewhat surprised by the extraordinary elaboration of the arrangements for the letting with which he was presented. The documents which we have to look at were three in number, and a period of a weak separated the second from the first and the third from the second. Anticipating for a moment the oral evidence which was given before the learned Judge, this elaboration was the declared policy of the Plaintiff Company, samrose Properties Limted., and, as the second of the three documents plainly and quite properly declares, their object was to avoid the Impact upon the premises in question of the rent restriction legislation. But it is plainly a matter to which this Court must properly address itself in matters where the Rent Restriction Acts might be said to apply, whether the transaction, viewed as a whole and according to the substance of it, is in truth one which, to use Mr Megarry's phrase, is on that side of the line which frees the premises from the impact of the Act, or whether, so regarded, the transaction is one which is of the mischief which the Acts were designed to avoid.
My authority for that view I take from the language of Lord Justice Cohen, as he then was, in one of the cases, ( Regor Estates Limited. v. Wright 1951, 1 K.B., 689). The particular passage was cited in this Court by me in another case of ( Woods v. Wise 1955, 2 Q.B., 29) at page 40. I think it unnecessary to read again the passage which I cited there and which I took from page 698 of 1951, 1 King's Bench; but I may perhaps venture to refer to my own language rather later in the Woods v. wise case at page 44, which the learned County Court Judge in this case also invoked. "In eases", I said, "under the ordinary law, unaffected by the Rent Acts, the question, how much rent should be payable under, and what other considerations there should be for, a demise were matters for free bargaining. A Landlord might charge any sum that he could get for rent. If he preferred, he could charge a low rent and demand a 'premium' or lump-sum payment. There was no such purpose as now exists in any attempt to disguise the one in the shape of the other. In these circumstances, the word 'rent', even though not confined to the old common law meaning of that for which distress might be levied, would naturally and ordinarily be used to signify the periodic payments under a demise in contrast to lump-sum or other kinds of consideration." And then a little later, after considering whether a lump-sum payment called a "premium" might none the less be rent, I said: "I cannot, for my part, think that the arm of the law would be so short as to disable it from dealing appropriately with such a case as that last suggested, if it appeared that the so-called premium was, in truth and substance, nothing more or other than the rent qualified and provided for in 'an abnormal form'."
I there fore approach the present cage with that matter of principle to guide me. I, of course, fully accept the proposition which Mr Megarry made the foundation of his case, that a landlord is entitled so to arrange his affairs that the legal result will bring him outside the statutory provisions; but, on the other hand, merely giving a label to a particular type of payment will not by any means necessarily have the effect indicated by the label; for the truth and substance, in cases of this kind, must be examined. There are, I think, three circumstances which convince ma that the learned Judge here was well entitled to reach the conclusion he did. The first is the disproportion which the arrangements made appear to me to bear to the subject-matter of that arrangement. I am dealing here with two rooms, and for a term, a period of occupation, which was limited to 12 months. This is not a cage of a lease of some piece of land or a house for 14 years or some other long period at a ground rent upon payment of a sum designed to produce the effect that the periodic rent will be small; we are not dealing with that kind of case; and, tempting though Mr Megarry's arguments always are, I do not find it necessary to indicate where any line should be drawn. We are hero dealing with a period of one year - no more - and with two rooms, but with the right to share the kitchen and the lavatory, in Waterloo square, Lomond Grove, Camberwell. That is the first point.
The second point Is that, when you examine it, the vital document upon its face seems to have not only Indeed the declared object which it is intended to serve, but also an important inconsistency in itself. And, third, I think that on further examination it is seen that this vital second document in truth is very largely if not altogether unnecessary. I shall, of course, elaborate in a moment those reasons, but the cumulative effect of them is, as I think, to justify the Judge's conclusion. Let as however repeat that I am not for a moment suggesting that there is any deception or impropriety on the part of these landlords. They acquired these premises (it appears) in 1952, and they adopted this method of procedure which they instructed their agents to require from all proposed tenants, in the hope, belief and expectation, if you will, that thereby they would not be within the scope and restrictive effect of the Rent Restriction Acts. If they fall, that does not therefore reflect upon the ethics of their business methods.
Now, in order to make clear those grounds which I have indicated, I can do no better than refer in such detail as is necessary to the three documents which were executed and which form the throe stages of this elaborate superstructure for the meting of two rooms together with the use of the kitchen and lavatory in Waterloo squre. The first was a document called "Application for Tenanacy", signed by Mr Gibbard, and bearing the date the 16th August, 1955. It is addressed to the agents of the Plaintiff Company: "I hereby apply for a tenancy of a flat at Waterloo Square, Lomond Grave, Camberwell". He gave his name in full and his present address. Me said how long he had been where he was he said he was carried and had one son aged 5 years living with him. He stated that he required two roams; that his occupation was that of a lorry driver; he gave the name and address of his employer, his weekly wages, the income of his wife, and the name and address of his present landlord. finally, he stated the rent which he was then paying and gave two references. It will be observed that the questions which ware asked enabled the Plaintiffs to obtain quite a lot of Information about the proposed tenant's status and circumstances; but, moat important of all, the proposed tenant gave the names and addresses of two referees. A week then passed, and on the 23rd August the document, which is the real foundation of the Appellants' case, was executed. The form of that is as follows: "An agreement made the 23rd day of August One thousand nine hundred and Fifty Five between" the Plaintiff Company and the lorry driver. It recites: "(l) The Applicant Is desirous of being granted a lease of the premises hereinafter mentioned. (2) The Company is not willing to grant a lease such that the Rent and Mortgage Interest (Restrictions) Acts would apply to the said...
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