Caldwell v McAteer

Rent Act 1977 — Complicated and anomalous position where a resident landlord died before November 28 1980 — Effect of section 65 of Housing Act 1980, which came into operation on that date — At the end of 12 months from the date of the resident landlord’s death on October 31 1979 (there being no new resident landlord) the tenant became a protected tenant under the law as it then stood — However, on November 28 1980 the period of ‘disregard’ was extended by the Housing Act 1980 from 12 months to two years — If this change had retrospective effect the period of disregard did not end until October 31 1981 — In the meantime the deceased resident landlord’s personal representative had given the tenant a notice to quit expiring on October 17 1981, ie before the end of the period of disregard — Did these circumstances affect the tenant’s status, so that instead of being a protected tenant she became a person entitled to a restricted contract whose contract had been duly determined by a notice to quit before the end of the disregard period?  — Held that this was the effect of section 65(6) and (7) of the 1980 Act, despite the anomaly that if the personal representatives had terminated the then protected tenancy before November 28 1980 the tenant would have obtained a statutory tenancy — Landlords were entitled to an order for possession — Landau v Sloane and Williams v Mate considered — ‘Ill-drafted legislation’ (per Cumming-Bruce LJ) This was an appeal by the landlord, Clive Caldwell, from a decision of Judge Ewart Jones at Aldershot and Farnham County Court holding that the tenant, Eileen McAteer, had become entitled to a statutory tenancy of a top-floor flat at 12 Eggars Hill, Aldershot. The judge consequently refused the appellant an order for possession of the flat. Patrick M Darby (instructed by Dunlavey Rosin, agents for Barstows, of Farnborough, Hants) appeared on behalf of the appellant; Peter St John Langan QC (instructed by Whiteman Packer & Standbury, of Fleet, Hants) represented the respondent. Giving judgment, CUMMING-BRUCE LJ said: This appeal raises a short point on the construction and effect of section 65 of the Housing Act 1980, which amended, and in part repealed, Schedule 2 to the Rent Act 1977. The structure of this ill-drafted legislation has been explained by Lord Wilberforce in Landau v Sloane [1982] AC 490 and further in the analysis and observations of Slade LJ delivering the first judgment in Williams v Mate (1982) 263 EG 883, [1982] 2 EGLR 91. In those circumstances I regard it as unnecessary to repeat, as I otherwise would, the analysis of the legislation which has already been sufficiently explained in those two cases. 90 The facts are short and are not in issue. In 1964 Mrs Nellie Caldwell, as landlord, let the top-floor flat at 12 Eggars Hill, Aldershot, to her tenant, the respondent, on an oral weekly furnished tenancy. The landlord was and remained during her lifetime resident on the ground floor. On August 14 1974 the Rent Act 1974 came into effect. Mrs Caldwell was resident and so the respondent was not a protected tenant. The Rent Act 1977, section 12(1), and Sched 24, para 6, succeeded the Rent Act 1974. On October 31 1979 Mrs Caldwell died and so, under the legislation then enacted, upon the vesting of her estate in personal representatives there was a 12-month period of disregard with the consequences explained by Lord Wilberforce in Landau v Sloane. On August 7 1980 probate was granted to personal representatives (the appellant in this case). On October 31 1980, the period of disregard under Schedule 2 to the Rent Act came to an end. It is not contested in this court that the consequence on the status of the tenant was that she became a protected tenant. The basis of the learned judge’s judgment was that on that day she became a statutory tenant. With respect to the judge, that was not right because, having regard to the provisions of section 2 of the Rent Act 1977, a statutory tenancy can come into existence only upon the termination of a protected tenancy and so, as is accepted by counsel on both sides before us, the consequence of the legislation upon the death of Mrs Caldwell was that at the end of the period of disregard under the 1977 Act the tenant became a protected tenant but not a statutory tenant. On November 28 1980 the Housing Act 1980, section 65, came into effect. On September 14 1981 the personal representative gave notice to quit to the tenant, which expired on October 17 1981. The question for decision in the possession action brought in the county court by the personal representative was the effect of section 65 of the Housing Act 1980 upon the rights, if any, of the tenant. The appellant in this court relied upon the dictum of Slade LJ in Williams v Mate (1982) 263 EG 883, [1982] 2 EGLR 91, and I observe before quoting the relevant dictum that the issue in that case was very different from the issue in the present case and it may well be that the observations in the dictum I am about to cite are not necessary for the decision in Williams v Mate. Slade LJ said this: In the present case the relevant tenancy was granted before the commencement of section 65 of the 1980 Act. Furthermore, the interest of the landlord under the tenancy vested in the personal representatives of Mrs Whitlock before the commencement of that section. Nevertheless, section 65(6) makes it clear that, subject to subsection (7), the section, except subsection (1), is to apply to the tenancy. Section 65 is thus manifestly intended to have some retrospective effect. The question is how far this effect extends in the present case. Mr Langan on behalf of the plaintiffs submitted that, since subsection (7) states in terms that, in the case of the nature specified therein, Schedule 2 to the 1977 Act applies as if paragraph 2A had not been inserted and paragraph 1(c)(i) had not been repealed, the necessary inference is that Schedule 2 is to apply even to pre-1980 tenancies with the other amendments specified in section 65 — in particular with the substitution of two years for 12 months in subparagraph (c) of paragraph 1 of Schedule 2. Accordingly, he submitted, as from November 28 1980, section 65 of the 1980 Act would have prevented the defendants from claiming that their tenancy was a ‘protected tenancy’ at the date when the notice to quit expired on May 6 1980, because the extended two-year period of disregard following Mrs Whitlock’s death would not yet have expired at that date and the plaintiffs would have been entitled to take full advantage of section 12(1) of the 1977 Act. So far as it goes, this argument seems to me well founded. The learned lord justice continued to explain the necessary ingredients for the creation of a statutory tenancy upon the termination of a protected tenancy. It is quite clear, and it is accepted by Mr Langan before us, that, read literally, para (1)(c) of Schedule 2 reads: any period of not more than two years beginning with the date on which the interest of the landlord under the tenancy becomes, and during which it remains, vested in the personal representatives of the deceased person acting in that capacity. So at first sight, if section 65 is pro tanto to be given the retrospective effect for which the appellant contends, on the literal meaning of the words which give rise to no ambiguity it is clear that at the date when the notice to quit expired, on October 17 1981, the period of disregard, which had originally been a period of 12 months from the death, was continuing having regard to the extension enacted by virtue of the Housing Act 1980, which had the effect of increasing the 12 months to two years. Mr Darby fortified his submission on behalf of the appellant by referring to the decision of this court in Capon v Rees Motors [1980] IRLR 294. The statutory context in which those proceedings took place was, of course, totally different from the statutory context in the Rent Acts, but I quote the headnote which describes the facts: The appellant began work for the respondent company on 5.2.79. He left his employment on 12.10.79 in circumstances which he maintained amounted to constructive dismissal. At that time he had therefore been employed for some 35 weeks. The issue in this case arose because of the Government’s change in the qualifying period of service for claiming unfair dismissal from 26 weeks to 52 weeks, effective from 1.10.79. An industrial tribunal held that the appellant did not have the requisite service at the date of his alleged dismissal for making a complaint of unfair dismissal and that they therefore did not have jurisdiction to hear his complaint. This decision was upheld by the Employment Appeal Tribunal. On appeal to the Court of Appeal, it was argued on the appellant’s behalf that because he had reached 26 weeks’ continuous employment before 1.10.79 he had obtained a vested right not to be unfairly dismissed and that the order increasing the qualifying service to 52 weeks from October I could not and did not deprive him of that vested right. Ackner LJ, delivering the first judgment in this court, said on p 295 of the report: There are really two points made by Mr Griggs. The first is that his client acquired a vested right. I cannot follow the basis of that submission. He was not unfairly dismissed before October 1. He therefore acquired nothing before October 1. All he acquired was a right under the Act as and when unfairly dismissed to invoke the remedies given to him by that Act. One looks at the position as at October 12 and his position is as I have indicated. At first sight there is a very close analogy between the statutory problem which this court was considering in relation to remedies under the employment legislation and the problem in this case as to the remedies open and the extent of the vested rights of the tenant during the period that elapsed before section 65 of the Housing Act 1980 came into operation, but Mr Langan submits on behalf of the respondent that in a real and relevant sense the tenant did have a vested right, although it was a vested right of which the tenant could only avail herself upon a contingency, namely the determination of the contractual tenancy. The way in which Mr Langan put it was that, before the Housing Act came into force, the tenant had something more than a protected tenancy because, having regard to the 1977 Rent Act legislation, she had the right upon determination of the protected tenancy to a statutory tenancy. In fact the protected tenancy was not, during that period, terminated, but it remains a contingent vested right which it would be wrong for this court to deprive her of by giving retrospective effect to the 1980 legislation. For the same reasons as those explained by Ackner LJ in the employment case, I do not accept Mr Langan’s submission. There was no vested right and a vested right does not become a vested right by labelling it a ‘vested contingent right’. In my view, the only vested right that the tenant could claim before November 28 1980 was the right of a protected tenant. When the legislation came into force, on its clear terms, what had originally been a 12-month period of disregard was enlarged to a two-year period of disregard and I can see no ground for holding that to construe the section so as to enable a personal representative to avail himself of the enlarged period of disregard will deprive the tenant of any vested right. I therefore reject the first of Mr Langan’s submissions. The second submission was based on an anomaly and for myself I readily understand the force of that submission. It may well be regarded as anomalous that, if the personal representative had terminated a protected tenancy during the interval between the end of the 12-month period of disregard and the date when section 65 of the Housing Act 1980 came into operation, then the tenant would have been able to claim that she had upon determination of the protected tenancy obtained a statutory tenancy and could not, therefore, be forced to give up possession. But I approach the question of anomaly in this legislation bearing in mind the thinking of Lord Wilberforce in Landau v Sloane [1982] AC 490 at p 500. Lord Wilberforce made this observation: I appreciate that it is not easy to offer a convincing alternative to the respondent’s interpretation of the statute except that any alternative to so strange a result is likely to be preferable. But I simply read paragraph 3 as doing what it says, namely giving, for a reason which seemed good to Parliament, an extra period of grace, corresponding to the executor’s year, in a case where no resident landlord has been introduced. Rent legislation is full of compromises, and this may be one. I prefer to interpret the paragraph as an 91 unexplained concession — in the tenant’s favour — to the intense convolutions and potential injustice, of the respondent’s contention.’ Lord Wilberforce then went on to deal with the consequences: If anything, it creates an anomaly which requires correction: in fact it has partly been so corrected by the Housing Act 1980, section 65(5). I would approach the question of construction of section 65 of the Housing Act 1980 in its impact upon the Second Schedule to the Rent Act 1977 in much the same spirit. The words, to me, appear perfectly clear and they are accepted by Mr Langan as to be clear, and it may be regarded as odd that, if the personal representative had terminated the tenancy before section 65 came into force, the tenant would have been able to claim that on termination of the protected tenancy it had been succeeded by a statutory tenancy. In fact that never happened. But when the personal representative did terminate the protected tenancy, by the clear words of the amending Act the period of disregard had been extended to two years and there is no language anywhere in the Acts that gives any ground for the submission that Parliament did not intend a personal representative to avail himself of the right that had been given. For those reasons I would allow the appeal and vary the order of the learned judge by granting the personal representative an order for possession against the tenant. I would only add that we have been materially assisted in grasping the issues in the case by the two notes of skeleton argument presented to us by counsel and I would like to express my admiration to Mr Langan for the conciseness of his argument which, though not successful, lost nothing by reason of its conciseness. One of his difficulties was that he was so successful in persuading us in Williams v Mate. REEVE J agreed and did not add anything. The appeal was allowed and the judge’s order varied accordingly.