Zimmerman v Grossman
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DAVIES,LORD JUSTICE WIDGERY |
| Judgment Date | 28 October 1970 |
| Judgment citation (vLex) | [1970] EWCA Civ J1028-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 October 1970 |
[1970] EWCA Civ J1028-1
In The Supreme Court of Judicature
Court of Appeal
(Appeal from Judge Leslie, Bloomsbury and Marylebone County Court, 17th March, 1970)
Lord Justice Davies
Lord Justice Widgery and
Lord Justice Karminski
Mr. M. RICH (instructed by Freeman & Co., Solicitors of London) appeared on behalf of the Respondent/Plaintiff.
Mr. A. BRAMALL (instructed by Boach & Beach, Solicitors of London) appeared on behalf of the Appellant/Defendant.
Lord Justice Widgery will give the first judgment.
This is an appeal from a judgment of His Honour Judge Leslie given in the Bloomsbury County Court on 17th March of this year, whereby he ordered that judgment be entered for the Plaintiff for £300, the balance of the price of certain fixtures and fittings at a flat called 52 Sandringham Court, London, v.9.
At the relevant time the Plaintiff was the outgoing tenant of the flat, and the Defendant was the incoming tenant, and a bargain was struck between them whereby the Plaintiff would sell these fixtures and fittings for a total sum of £300. The learned Judge held, and there is no dispute on this point, that the fair value of the fixtures and fittings in question was only £100, which the Defendant paid. The balance, therefore, was in the nature of a premium payable by the Defendant to the Plaintiff, and the Defendant contended below that it was an illegal premium and therefore not recoverable. The learned Judge held otherwise, and the Defendant appeals.
There is no appeal on the facts, and one must turn to the learned Judge's judgment to see what they were.
Dealing with the situation between the landlord and the Plaintiff, he said this: "The Plaintiff, Mr. Zimmerman was the tenant of a flat No. 52 Sandringham Court, London, W.9. He held it under a lease dated the 9th August 1968 for a term of three years from the 29th September, 1968, but had been the tenant for some years prior to that. In December, 1968, he wished to move elsewhere, and he therefore approached the land- lords and arranged with them that they would accept a surrender from him, and would grant a new lease to suitable tenant if he introduced one to them. As the new lease would be at a higher rent this would benefit both the Plaintiff and the landlords." Mr. Bramall, on behalf of the Appellant, has attached considerable importance to the arrangements there disclosed, relyingparticularly on the submission that it had the effect of enabling the Plaintiff to choose a nominee for the new tenancy of the flat, and thus to control the terms upon which the flat was re-let.
I must say at once that I do not so read the learned Judge's words. It seems to me to be a very simple case on the facts, in which the Plaintiff sought to persuade the landlords to accept a surrender of his lease and the landlords responded by saying that they would do so provided he would accept the burden and expense of finding a new and suitable tenant who was prepared to take the new tenancy. That, in my Judgment, is the substance of the arrangement made between the Plaintiff and the landlord.
As to the arrangement between the Plaintiff and the Defendant, the learned Judge goes on in these terms: "In due course the Plaintiff and the Defendant, Mrs. Grossman, got into touch with one another. The Defendant wished to take a lease of the flat, and on or about the 1st January 1969 the Plaintiff and the Defendant entered into an agreement the terms of which are perfectly clear. The Defendant's husband on her behalf agreed with the Plaintiff that if the landlords would accept the Defendant as the new tenant of the flat she would buy from the Plaintiff certain furniture fixtures and fittings in the flat for £300."
There again the terms of the arrangement, as the learned Judge says, are clear. On the face of the Judgment, it is a purely collateral bargain for the sale of the fixtures in question, the only condition introduced being an obvious condition for the protection of Mrs. Grossman; namely, that the transaction should be conditional upon the landlords accepting her as a tenant. If she was not accepted as tenant, of course she did not want to buy the fixtures.
Now on those simple facts it is said that the premium constituted by the over-charging for the fixtures is an illegalpremium by virtue of Section 85 of the Kent Act of 1938, which is in these terms: Section 85.-(1) t "Any person who, as a condition of the grant, renewal or continuance of a protected tenancy, requires, in addition to the rent, the payment of any premium or the making of any loan (whether secured or unsecured) shall be guilty of an offence under this section. (S) Any person who, in connection with the grant, renewal or continuance of a protected tenancy, receives any premium in addition to the rent shall be guilty of an offence under this section." It is common ground that the tenancy in question granted to the Defendant was a protected tenancy.
Under Section 90, provision is made for the recovery of premiums unlawfully required or paid, and under Section 92 is the definition of premium in these terms: "»Premium» includes any fine or other like sum and any other pecuniary consideration in addition to rent;-"
That Act is at present the last chapter in a long history of legislation prescribing the control of rent for certain tenancies as a result of the housing shortage which, in various degrees, has been with us ever since the First World War, and it is common ground that one cannot construe those provisions which I have read without, at any rate, some reference to the earlier legislative history.
I start with the first relevant Act, which is the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915.
By Section 1 subsection (3) of that Act: "A person shall not in consideration of the grant, renewal, or continuance of a tenancy of any dwelling-house to which this Act applies require the payment of any fine, premium, or other like sum in addition to the rent, and where any such payment has been made in respect of any such dwelling-house after the twenty-fifth day of November nineteen hundred and fifteen, then the amount shall be recoverable by the tenant by whom it was made from the landlord,I drew attention to the reference to "the landlord" in the concluding sentence because that was accepted later by the Courts as a dear pointer to the fact that the provision there referred to was concerned with premiums paid to and required by the landlord.
One can pass quickly from that to the next statute, which is the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, which contained new provisions, the wording of which is somewhat different. By Section 8(1): "A person shall not, as a condition of the grant, renewal, or continuance of a tenancy or sub-tenancy of any dwelling house to which this Act applies, require the payment of any fine, premium, or other like sum, or the giving of any pecuniary consideration, in addition to the rent. –" There follows provision for recovery of any premiums which have been unlawfully paid, and al so provision making the requiring of an illegal premium a criminal offence.
I need not dwell on the differences in the language between that Act and the preceding one, because the next chronological step in this matter is a decision of this Court in which the terms of the Act of 1920 were specifically considered. The case in question is ( Remmington v. Larchin 1981 3 King's Bench Division, page 404). The head note recites the terms of Section 8 of the Act of 1930, which I have already read, and goes on to state the facts in this way: "The defendant, who was a tenant for a term of three years from March, 1919, of a dwelling house within the Act was, in May, 1930, desirous of giving up his tenancy, and in that month he agreed with the plaintiff that upon payment by the latter to him of a premium he would surrender his tenancy and the landlord would grant the plaintiff a new tenancy for three years at a slightly increased rent. The landlord did not know? that the plaintiff had agreed to pay the defendant a premium. The plaintiff paid the defendant a premium, and the landlord granted the plaintiff a new tenancy for three years. After the Act of 1930 came into operation theplaintiff sued to recover back the premium:– Held, that s.8, sub-s. 1, was reasonably capable of two constructions; that, the section being a penal one, the Court should give it the more lenient construction avoiding the imposition of a penalty; that, construed in this light, the prohibition in the section was limited to the person who required the payment of the premium «in addition to the rent» and «as a condition of the grant, renewal, or continuance» by him of the tenancy, namely, the landlord; end that the plaintiff was not entitled to recover."
I find the facts of Remmington v. Larchin quite indistinguishable from the facts of the present case: indeed, they have an uncanny resemblance one to the other. In this Court each of the learned Lord Justices found the point a difficult one. The judgments are short, but since this is the case which the learned County Court Judge followed, and which we are invited by the Respondent to follow, I must refer to them in a little detail.
First of all, Lord Justice Bankes (at page 407), having dealt with the facts of the case, said: "It is said that s.8 differs materially from the corresponding section in the Act of 1919. No doubt it does, because the section in the Act of 1915 which dealt with the demand of a fine or premium in addition to the rent was aimed in express terms at the landlord; it was the landlord alone who was referred to in that section. I do not however myself derive any...
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Farrell v Alexander
...8(1)) meant "landlord". This holding is sought to be extended to the present Act through a recent decision of the Court of Appeal ( Zimmerman v. Grossman [1972] 1 Q.B. 167). The judge and the majority of the Court of Appeal in the present case followed, as they were clearly bound to follow,......
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Farrell v Alexander
...In my opinion, Remmington v. Larchin is no authority on the interpretation of section 85 of the 1968 Act . 29The second case is Zimmerman v. Grossman (1972) 1 Q. B. 167 , where this Court does seem to have held that a tenant could lawfully demand a premium on a surrender and new leas......
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...reviewed and summed up in the (if I may say so with respect) most illuminating judgment of Lord Justice Widgery (as he then was) in Zimmerman v. Grossman, heard in this Court last October and reported in 1971 2 Weekly Law Reports at page 199. The learned Lord Justice there goes right back t......
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