Smith's (Henry) Charity (Trustees of) v Willson
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ORMROD,LORD JUSTICE SLADE,LORD JUSTICE GRIFFITHS |
| Judgment Date | 28 May 1982 |
| Judgment citation (vLex) | [1982] EWCA Civ J0528-8 |
| Date | 28 May 1982 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 82/0237 |
[1982] EWCA Civ J0528-8
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE WEST LONDON COUNTY COURT
(His Honour Judge Corcoran)
Royal Courts of Justice
Lord Justice Ormrod
Lord Justice Griffiths
and
Lord Justice Slade
82/0237
8112325
and
and
MR. A. J. SEYS LLEWELLYN (instructed by Messrs Warrens, solicitors, London) appeared on behalf of the Appellants (Plaintiffs).
MR. JOHN M. MALE (instructed by Messrs. Wilde Sapte, solicitors, London) appeared on behalf of the Respondents (Second and Third Defendants).
Lord Justice Slade will read the first judgment in this case.
This is an appeal by the Trustees of Henry Smith's Charity against an order made by His Honour Judge Corcoran on 19th November 1981 in the West London County Court in a possession action. The applicants were the plaintiffs in the proceedings. The three defendants were respectively Mr. Willson, Mr. Spraggon and Mrs. Blakeney. The action concerned premises known as Flat 9, 11 Onslow Square, South Kensington, London, which I will call "the flat". By his order the learned judge made an order for possession of the flat in favour of the appellants against Mr. Willson, but refused to make an order for possession in their favour against Mr. Spraggon and Mrs. Blakeney. The appellants now appeal against this refusal. Though the notice of appeal is addressed to all three defendants, Mr. Willson has not been represented before this court; Mr. Spraggon and Mrs. Blakeney are the only effective respondents and have appeared by the same counsel.
The relevant facts are more or less common ground and, I think, may be sufficiently summarised as follows. By a lease dated 13th January 1972 ("the Lease"), the Trustees of Henry Smith's Charity demised the flat to a Mr. Neale for a term of eight years from 29th September 1971 at the rent therein specified, which was to be payable quarterly in arrears. By Clause 3(24) of the Lease the tenant covenanted with the landlords in the following terms:
"Not to assign mortgage charge underlet or otherwise part with possession of the whole of the premises to any person or persons without the previous consent in writing of the Landlords or their Treasurer for the time being (such consent not to be unreasonably withheld in the case of any respectable and responsible person or persons), PROVIDED that no such consent shall be required for a furnished sub-letting for a term not exceeding six calendar months in any one year."
Clause 3(25) obliged the tenant ( inter alia) within one calendar month of any assignment or sub-letting of the tenant's interest to give particulars thereof and to produce the instrument effecting the same to the landlords. Clause 5 contained a common form proviso for re-entry in the event of non-payment of rent or any breach of any of the tenant's other covenants.
On 29th April 1977 the residue of the term was assigned to Mrs. Willson, the first defendant's wife. A few days before 29th September 1979 Mrs. Willson assigned the residue of the term to Mr. Willson. It is not disputed that the appellants gave their licence to this assignment, though the correspondence suggests that formal notification of it was not given to them until about 19th September 1980. The validity of the assignment has not been questioned on this appeal.
On 29th September 1979, the contractual term under the lease having expired, Mr. Willson became a "statutory tenant" of the flat, within the meaning of section 2 of the Rent Act 1977 (the 1977 Act").
At this point in the judgment, I think it may assist clarity if I embark on a brief excursion into the law. The nature of the right or interest of a statutory tenant is "that of a personal right of possession on the terms partly of the original contract of tenancy and partly derived from the statutes": see Oak Property Co. Ltd. v. Chapman (1947) 1 KB 886 at p.894 per Somervell L.J., who was in that case delivering the judgment of the court prepared by Evershed L.J.
It follows from the personal nature of a statutory tenancy that it cannot be assigned: see for example the Oak Property case at p.894; Roe v. Russell (1928) 2 KB 117 at p.126 per Scrutton L.J., at p.134 per Sargent L.J. and at p.139 per Eve J.). Paragraph 13 Schedule 1 to the 1977 Act contains a provision which enables an agreement in writing to be made between a statutory tenant and a person proposing to occupy the house with the effect that the new occupier is deemed to be the statutory tenant of the dwelling as from the agreed transfer date. But paragraph 13(2) specifically provides that such an agreement shall not have effect unless the landlord is a party thereto. Further-more paragraph 14(1) renders it an offence for any person to require the payment of any pecuniary consideration for entering into such an agreement.
Lord Justice Somervell in the Oak Property case observed (at p.894 of the report) that, as a matter of principle and logic, it would appear at first sight necessarily to follow that a sub-tenancy, whether of the whole or any part of the premises, granted by a statutory tenant must, no less than an assignment, fail to confer upon the grantee any such estate in the property. As he pointed out in that case, however, such a wide proposition would not be correct in law. It is well established by decisions of this court, including the Oak Property case itself, and Roe v. Russell, that a "lawful" sub-letting of part of the demised premises by a person who himself retains the status of a statutory tenant at the date of the sub-letting, is effectual to confer on the sub-tenant the rights specified in what is now section 137(2) of 1977 Act. This sub-section provides:
"Where a statutorily protected tenancy of a dwelling-house is determined, either as a result of an order for possession or for any other reason, any sub-tenant to whom the dwelling-house or any part of it has been lawfully sublet shall, subject to this Act, be deemed to become the tenant of the landlord on the same terms as if the tenant's statutorily protected tenancy had continued."
Whether this sub-section is ever capable of affording protection to a sub-lessee of the whole demised premises is a more doubtful question, to which I shall briefly revert later in this judgment. I now resume the narrative of facts.
On 6th June 1980 Mr. Willson entered into a transaction with Mrs. Blakeney in relation to the flat. So far as it was evidenced by any documents, this transaction was recorded only in a letter dated 6th June 1980 written by Mr. Willson to Mrs. Blakeney and in an inventory of furniture referred to in that letter. The letter read:
"Dear Mrs. Blakeney,
I confirm that I am happy to offer you the entire accommodation of the furnished flat at no. 9, 11 Onslow Square, SW7, at a newly registered rent of £75.00 per calendar month, plus rates, service charge, electricity, gas and telephone. The rent is to be paid to me in advance on the first day of each month.
You may move into this flat on June 6th 1980. You will not be allowed to sublet or keep pets, except for a budgerigar.
If you wish to accept this offer and move into the flat on the above terms, please sign the attached copy of this letter and return it to me. I would also like you to sign an inventory which I am preparing.
Yours sincerely,
S. WILLSON"
It is now common ground that Mrs. Blakeney also signed a copy of this letter. On the face of it, this letter embodied the whole transaction. But this was far from the case. First, possibly appreciating the legal restriction on his rights as a statutory tenant which I have already mentioned, Mr. Willson did not in his letter refer to the fact that Mrs. Blakeney had paid, or was to pay him the sum of £13,450 as consideration for the transaction. Secondly, the letter did not reflect the fact that Mr. Willson told her that he had no intention to return to the flat and was giving up his occupation forever. I refer to some important findings of fact made by the learned judge in this context, when he said as follows:
"I think it is important to rehearse what the 3rd Defendant says she was told by the 1st Defendant when he agreed to let the flat to her and at and before the time she paid him the £13,450. She asked the 1st Defendant, "If I wish to sell this flat in years to come would it be all right?", to which she says the 1st Defendant replied "It is your flat. You do what you like". Therefore she said "I thought I had the flat. I thought it was mine to do what I wanted with it. We, (she and her friend 2nd Defendant), thought we had the place ad infinitum paying all that money. We thought it was his place to sell to us." Further, she says: "The 1st Defendant said he had no intention to return to it: none whatsoever. From the moment he signed the agreement he was giving up occupation for ever."
The 3rd Defendant also said that prior to her making the agreement with the 1st Defendant on 6th June 1980 she had no contact with the Plaintiffs or their managing agents. The 1st Defendant did not inform her, nor did she ask him, the name of his landlords or of the terms on which he held the lease of the flat or whether he was a contractual or a statutory tenant. He did not show her, nor did she ask to see the lease or agreement under which he held the flat as a tenant. She says she made no such enquiries nor did she consult a solicitor because she employed an estate agent and thought that would be enough. Perhaps...
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