Kent and another v Millmead Properties Ltd

Rent Act 1977 — Question whether a registered rent for an unfurnished dwelling applied when the same dwelling was let furnished — Held, upholding decision of county court judge, that it did not — Substance of decision in Metrobarn Ltd v Gehring followed, although that decision has been generally treated as bound up with transitional provisions of the Rent Act 1974 — Important new principle formulated that, if there has been a material change in the specification of the dwelling-house or in the particulars with regard to the tenancy, the rent registered does not apply because it is in respect of ‘a different tenancy’ — Wide effect of new formulation — No reference to the change of circumstances principle in section 67(3) of the 1977 Act or the distinction between this and the ‘material change’ now referred to — Old case of De Jean v Fletcher discussed — Appellants in present case not ‘to enjoy for the price of £5 a week the tenancy of a furnished flat for which, in 1980, the fair rent was considered to be £22.50′ — Appeal dismissed This was an appeal by David Alan Kent and Sharon Ann Kent, tenants of a furnished flat at 7 Clifton Road, Brighton, from a decision of Judge Wingate at Brighton County Court, rejecting the tenants’ claim that a fair rent of £5 a week registered in 1974, when the flat was unfurnished, applied. The flat had been let to the tenants fully furnished at £28.50 per week in 1978, and subsequently, in 1980, a fair rent of £22.50 was registered for the flat in its fully furnished state. The landlords, the present respondents, were Millmead Properties Ltd. S S Coltart (instructed by Turner Peacock, agents for Edward Harte & Co, of Brighton) appeared on behalf of the appellants; S J P Widdup (instructed by Day Whately & Co, of Godalming, Surrey) represented the respondents. Giving judgment, ORMROD LJ said: This is an appeal by the defendants from a judgment given by His Honour Judge Wingate on July 6 at Brighton County Court. He had before him an action which in form was a claim by the tenants, Mr and Mrs Kent, for repayment of rent which they claimed was in excess of the registered rent. The learned judge rejected their claim and gave judgment for the landlords (the defendants) Millmead Properties Ltd, for the amount outstanding of the contractual rent. The facts of the case are in short compass. The property concerned is flat 7, Clifton Road, Brighton, which is a ground-floor flat comprising two rooms, kitchen, bathroom and wc. On March 20 1974 the question of the rent of these premises was referred to the rent officer and a registration of a fair rent was made on that date in the sum of £260 a year, or £5 a week. The particulars of the tenancy, as set out in the register, show that it was a weekly tenancy, the tenants being responsible for internal repairs and decorations as limited by the Housing Act 1961; the landlords responsible for all other repairs; ‘other terms of tenancy taken into consideration to determine fair rent — none’; and when one turns to the second page of the registration form it is plain that no furniture was provided by the landlords. On August 14 1974 the Rent Act 1974 came into force which had the effect of bringing furnished lettings under the provisions of the Rent Acts generally. In May 1977, the landlords having changed, this particular flat became vacant and was fully furnished by the landlords. That is common ground. On August 23 1978 the flat was let to the present plaintiffs at a rental of £28.50 per week and subsequently, on June 20 1980, a fair rent was registered in respect of these premises as furnished premises in the sum of £17.50 for the premises plus £5 a week for the furniture. The tenants having discovered that there was a registered rent for these premises far less than the rent that they had agreed to pay, withheld the excess rent and they claimed, until the registered rent was altered in accordance with the statute, to be entitled to occupy these premises at the 1974 registered rent in respect of unfurnished premises. The question is whether they are right as to that. The county court judge, in a long and careful judgment, held that they were not so entitled and he based his judgment largely on a decision of this court in the case of Metrobarn Ltd v Gehring [1976] 3 All ER 178. The learned judge recognised that the facts of that case were not wholly in line with the facts of the present case, but he followed the broad principles which had been adopted by this court in that case. In Metrobarn Ltd v Gehring the premises had been let furnished shortly before the 1974 Rent Act came into force and the issue was whether the previously registered rent of those premises on an unfurnished basis continued to control the rent, notwithstanding the subsequent furnishing of them. This court held that that proposition was not correct. The court arrived at that conclusion by a route which is not directly open to this court in this particular case. The basis of the Metrobarn decision was that under the Rent Act 1968 furnished and unfurnished premises were dealt with quite separately so far as the registering of rents was concerned. Unfurnished premises were dealt with under section 43 onwards, Part IV of the 1968 Act, in which the rent was fixed by the rent officer or the rent assessment committee, whereas so far as furnished premises were concerned, a different system of control was then in force, namely by reference to a rent tribunal, and that was governed by Part VI of the Rent Act 1968. This court said in the Metrobarn case that a registration of rent under Part VI of furnished premises was not the same as a registration under Part IV of the premises so far as unfurnished premises are concerned and consequently it was a letting on a furnished letting basis, that is Part VI, which controlled the rent in that particular case. The court referred to the transitional provisions which had been inserted in the 1974 Act which were designed to provide that where a rent tribunal had fixed a rent of furnished premises under Part VI of the 1968 Act, that that Part VI rent should be deemed thereafter for all purposes to be the Part IV registration rent. This case is not quite the same because the dates are different. In this case the furnished letting in question took place after the 1974 Act came into force and so we have to approach the case looking now entirely at the provisions of the Rent Act 1977, which was the operative Act at all material times so far as this particular tenancy is concerned. This does raise a point of considerable difficulty. The primary provision is to be found in section 44(1) of the 1977 Act and that reads as follows: 44(1) Where a rent for a dwelling-house is registered under Part IV of this Act, the rent recoverable for any contractual period of a regulated tenancy of the dwelling-house shall be limited to the rent so registered. When one looks to see what is contained in the register under Part IV of the Act, one finds it set out in section 66(1) and (2). Section 66(1) reads: 66(1) The rent officer for any area shall prepare and keep up to date a register for the purposes of this Part of this Act and shall make the register available for inspection in such place or places and in such manner as may be provided by the scheme made for the area under section 63 of this Act. (2)  The register shall contain, in addition to the rent payable under a regulated tenancy of a dwelling-house — (a)  the prescribed particulars with regard to the tenancy; and (b)  a specification of the dwelling-house. In my judgment it is on the interrelationship of sections 66(2) and 41(1) that the decision in this appeal depends.110 The problem has been touched on in a case which was referred to by the learned judge, De Jean v Fletcher [1959] 1 WLR 341. That was a case which arose under the Furnished Houses (Rent Control) Act 1946 and what had happened in that case was that the contractual rent of the furnished premises had been agreed at £2 a week and the local rent tribunal to which the matter was referred in 1955 had reduced the rent to £1 a week and that was the registered rent. Those tenants then left and the landlord, at the request of the incoming tenants (the plaintiffs in the proceedings), spent about £70, according to the headnote, on bettering the premises and let them to the plaintiffs at £3 a week. Difficulties then arose between them and the question was whether the fact of the landlord having spent £70 on bettering the premises had displaced the registered rent of £1 a week. This court held that it had not. The decision, however, is not particularly helpful to us because it is quite plain from the judgment of Lord Evershed MR that the point we have to decide was (if I may say so with respect) side-stepped by this court on that occasion. At p 344 there is a passage in Lord Evershed’s judgment which reads: We have had, in the course of listening to Mr Elson Rees’ very careful and fair presentation of the matter, some discussion upon what might be comprehended by the word ‘premises’ which occurs in certain of the relevant subsections. To take a simple example: if the subject-matter of the letting is a furnished house, then are the premises, for the purposes of this Act, the same if the house itself is the subject of a later letting, even though there may be some, and even substantial, alterations within it, or even additions to it?  Again, putting it interrogatively: to what extent are the ‘premises’, within the meaning of the Act, liable to be affected by substantial changes in the internal equipment, including furniture? The learned Master of the Rolls then went on: I do not propose to embark on any questions of that kind since, for the purposes of this case, it can, I think, be taken that the subject-matter of the letting to the plaintiffs was the same for all relevant purposes, as the subject-matter of the letting to the Gatens. There had been money spent on redecoration and improving the furniture; but it must be taken, on the facts before us, that the premises were the same in the two cases. It is right to point out that, in the Furnished Houses (Rent Control) Act, in the relevant sections the words ‘the premises’ are used rather than, as in the 1977 Act, ‘the dwelling-house’. It is plain from the passage which I have just read that the court was not considering the issue we have to consider in this case, namely (to quote Lord Evershed): What is the position where the subject-matter of the letting to the plaintiffs is not the same as the subject-matter of the letting to whoever was the tenant at the time when the rent was registered under Part IV in March 1974? The learned Master of the Rolls’ judgment contains references to a number of cases from which, for shortness, one can note that it seems to have been clearly decided in earlier decisions (I think in the Divisional Court or the Court of Criminal Appeal) that where the actual accommodation has been changed (that is, where either an additional room or a room less has been let subsequently), there has been a change in the premises, so that the registered rent would no longer govern the contractual rent that could be charged. The question that we have to decide is whether the effect of furnishing these premises — and it is common ground that they are properly furnished — is such as to displace the rent which had been registered for it in 1974 on the basis of an unfurnished tenancy. One should start from this position that, anybody looking at the rent register in order to discover what the registered rent of these premises was, would see immediately that the registered rent of some £260 per annum was the rent registered in respect of an unfurnished tenancy and so it could not possibly be said that anyone inspecting the register, who was intending to take a furnished tenancy of this flat, could be misled in any way. Going back to the 1977 Act which, as I have said, is the operative Act for our purposes, I think section 44(1) must be read in the light of section 66(2) and that the reference to a ‘rent for a dwelling-house registered under Part IV of this Act’ means the rent for a dwelling-house registered under Part IV of this Act as set out in the register, that is for the premises, and for the type of tenancy described in the register for which the rent was fixed and not otherwise; so that, if there is a material change either in the specification of the dwelling-house, by either adding or subtracting a room or rooms, or a material change in the particulars with regard to the tenancy, then the rent registered in respect of a different tenancy, different in the sense of different in character and incidence, is not the registered rent for the purposes of section 44(1) and so does not operate to enable the appellants in this case to enjoy for the price of £5 a week the tenancy of a furnished flat for which, in 1980, the fair rent was considered to be £22.50. I think the learned judge arrived at the right conclusion and, in those circumstances, I would dismiss the appeal. DUNN LJ and SIR SEBAG SHAW agreed with the reasons given by Ormrod LJ and did not add anything. The appeal was dismissed with costs.111