Baldock v Murray

Rent Act 1977, section 19 — Whether a letting at a rent which included payment for services was a restricted contract–County court judge held that it was a restricted contract and gave judgment in favour of landlord for possession–Tenant contended that the tenancy was a regulated tenancy and thus excepted from the definition of a restricted contract by virtue of section 19(5)(a) of the Act — Held by Court of Appeal, reversing decision of judge, that there was nothing to take the tenancy out of the class of regulated tenancies — The judge had read section 19(5)(a) the wrong way round — It does not provide that if a tenancy is a restricted contract it is not a regulated tenancy; it provides that if it is a regulated tenancy it is not a restricted contract — Suggestion that the contract here constituted a licence only and not a tenancy raised too late to be considered — Appeal by tenant allowed. This was an appeal by the tenant, Niall Murray, from a decision of Judge Slot at Croydon County Court granting possession of a room at 25 Queens Road, Wallington, Surrey, to the landlord, Yvonne Baldock, on the ground that the letting was a restricted contract which had been duly terminated by notice to quit. N C Nardecchia (instructed by Stoneham, Langton & Passmore, of Croydon) appeared on behalf of the appellant; P J H Ralls (instructed by Davies, Arnold & Cooper) represented the respondent. Giving the first judgment at the invitation of Stephenson LJ, SIR DAVID CAIRNS said: This is an appeal from a decision of His Honour Judge Slot in the Croydon County Court giving judgment for possession of a room at 25 Queens Road, Wallington, in the county of Surrey. The plaintiff by her particulars of claim set out that this room was let by her to the defendant on a monthly tenancy, that he was given notice to quit and that he had failed to quit. It was alleged under paragraph 5 of the particulars of claim that the tenancy was a restricted contract within Part V of the Rent Act 1977. A restricted contract is defined in section 19 of the Rent Act 1977. That section provides: 19(1)  A contract to which this section applies is, in this Act, referred to as a ‘restricted contract’. (2)  Subject to section 144 of this Act 71 and that section is irrelevant in these proceedings, this section applies to a contract, whether entered into before or after the commencement of this Act, whereby one person grants to another person, in consideration of a rent which includes payment for use of furniture or for services, the right to occupy a dwelling as a residence. The particulars of claim having alleged that this was a restricted contract, particulars were asked for of that allegation. The particulars set out that it was a contract which included services and a list of the services was added. The defendant denied by his defence that it was a restricted contract and contended that he was a protected tenant within the meaning of section 1 of the Rent Act 1977. The learned judge, finding that it was a contract which included payment for services, concluded that it was a restricted contract within the meaning of section 19. It was contended on the part of the defendant that it was not a restricted contract because of an exception contained in subsection (5) of section 19, which provides: A contract is not a restricted contract if — (a) it creates a regulated tenancy. It is clear that this was dwelling-house within the meaning of the Rent Act, that it was within the rateable value, that the contract had all the qualities which constitute a protected tenancy and entitled it to protection as a regulated tenancy, unless it can be said that being a restricted contract took it out from that category. The learned judge held that it did. In my judgment he read section 19(5)(a) the wrong way round. The Act does not provide that if a tenancy is a restricted contract it is not a regulated tenancy; it provides that if it is a regulated tenancy it is not a restricted contract. This clearly was a regulated tenancy and that takes it out of the definition of a restricted contract. The learned judge said that if that interpretation were accepted it would mean that there would be very few contracts to which the definition of a restricted contract could apply. It is sufficient to say that tenancies within sections 8, 9, 10, 11 and 12 of the 1977 Act are all capable of being restricted contracts. The learned judge’s suggestion that there would hardly be any restricted contracts if section 19(5) were interpreted in the way I have suggested it must be interpreted is, it appears to me, quite wrong. I am quite satisfied that unless, by reason of some of the provisions of Part I (apart from section 19), a tenancy is taken out of the class of regulated tenancy, then if apart from that it is a regulated tenancy, it cannot be a restricted contract. For those reasons I am satisfied that this judgment cannot be upheld on the only grounds which were considered by the learned judge in the court below. Mr Ralls, who appeared in the county court as counsel for the plaintiff, having been only very recently instructed, has felt bound to concede that that is the position, but at the opening of his address to this court, having made that concession, he asked for leave to raise a point which had not been raised before and which was indeed contradictory to what was alleged in the particulars of claim, namely, that this was not a tenancy at all but was a licence. I say simply this, that the whole of this case having proceeded upon the basis that this was a tenancy, and that being a fundamental allegation in the particulars of claim, it is far too late for a contention that it was a licence to be raised at this stage. I am therefore of opinion that it is inevitable that this court should refuse the application on behalf of the plaintiff for leave to serve a respondent’s notice to raise that point and the appeal should be allowed. STEPHENSON and DUNN LJJ agreed. The appeal was allowed with costs.