Henry Smith’s Charity Trustees v Wagle and another

Rent Act 1977 and Landlord and Tenant Act 1954, Part II — Whether premises which had been let as, and for some years used as, an artist’s studio, ie for professional or business purposes, but had been used purely as a residence since 1977, had become a protected tenancy — On a reference to a rent officer a fair rent had been registered on the footing that the tenancy had become a regulated tenancy — Appeal from county court decision that the tenancy was not a protected tenancy under the 1977 Act — The recorder sitting in the county court had found as a fact that no consensual change in the status of the tenancy had taken place It was argued on behalf of the appellant tenants that a tenancy which ceased to be within Part II of the Landlord and Tenant Act 1954 because the relevant business had been discontinued thereby ceased to be excluded from the definition of ‘regulated tenancy’ in the Rent Act; it was already within the definition of ‘protected tenancy’ unless so excluded — It was suggested that contrary views expressed by Lord Denning MR in Cheryl Investments Ltd v Saldanha were obiter and in any case wrong — The appellants’ argument was essentially the same as one put forward in an earlier text of the 28th edition of Woodfall, but subsequently revised in the light of the decision in Pulleng v Curran — It was, however, submitted on behalf of the appellants that the court should not regard itself as bound by the decision in Pulleng v Curran Held, rejecting the appellant tenants’ submissions, that, so far as the Court of Appeal was concerned, it was bound by the decisions in Pulleng v Curran and Russell v Booker (although the latter was concerned with a possible conflict between the Rent Act 1977 and the Agricultural Holdings Act 1948, not the Landlord and Tenant Act 1954) —- The appellants’ submissions were supported by the statutory provisions and cases up to 1957, and possibly 1965, but the history of the matter after that was as stated by Lord Denning in Cheryl Investments Ltd v Saldanha — The meaning of the phrase ‘let as a separate dwelling’ had contracted and no longer included partial use for business — Appeal dismissed The following cases are referred to in this report. Cheryl Investments Ltd v Saldanha [1978] 1 WLR 1329; [1979] 1 All ER 5; (1978) 37 P&CR 349; 248 EG 591, [1978] 2 EGLR 54, CA Epsom Grand Stand Association Ltd v E J Clarke (1919) 35 TLR 525; [1919] WN 170 Pulleng v Curran (1980) 44 P&CR 58, CA Wolfe v Hogan [1949] 2 KB 194; [1949] 1 All ER 570, CA This was an appeal by Miss Asha Wagle and Mr William Bruce Tippett against an order made by Mr Recorder Russell, at West London County Court, on the application of the Trustees of Henry Smith’s Charity, the landlords of premises at 8 Sydney Close, London SW7, declaring that the lease under which they held as tenants was not a protected tenancy within the meaning of the Rent Act 1977. Derek Wood QC and Timothy Fancourt (instructed by Bailey Shaw & Gillett) appeared on behalf of the appellants; David Neuberger QC and John Furber (instructed by Denton Hall Burgin & Warrens) represented the respondents, but were not called on by the court. Giving judgment, DILLON LJ said: At the outset of this appeal, I anticipated that the court would wish to reserve judgment because a case on a very similar point has been recently argued before another division of the Court of Appeal which has reserved judgment on that point*. Having heard, however, Mr Wood’s careful and very helpful exposition of the successive Rent Acts and of the principal authorities, I have reached the firm conclusion that this court is bound by previous Court of Appeal decisions to dismiss this appeal. Accordingly, no useful purpose would be served by reserving judgment, and we have not felt it necessary to call on Mr Neuberger for the respondents. *Editor’s note: Webb v Barnet London Borough Council, reported at p 49 ante. The appeal is from an order dated March 23 1988 of Mr Recorder Russell, sitting in the West London County Court. By that order he declared that a lease dated May 2 1972 of certain premises known as 8 Sydney Close, South Kensington, London SW7, was not a protected tenancy within the meaning of the Rent Act 1977. The present appellants, Miss Wagle and Mr Tippett, are the current assignees of that lease. The Trustees of Henry Smith’s Charity are the landlords. They are the respondents to this appeal, and they had applied in the county court for a declaration that the lease was not a protected tenancy within the meaning of the Rent Act 1977, that is to say the declaration which the recorder made. The lease was originally granted by the then trustees to a Miss Barbara Ann Nichols. The demised premises are described as: ALL THAT Studio known as Number 8 Sydney Close, South Kensington, London SW7 (hereinafter called ‘the Premises’) . . . as delineated on a plan. The premises were granted with certain rights of access exercisable by the tenant only in connection with the user of the premises as a studio. The lease was granted for a term of 17 1/4 years from March 25 1972 at a rent payable quarterly. There was provision for rent review at the end of the seventh or the 14th year of the term, and there was a user covenant, which is the only covenant I need mention, by the tenant in covenant 14(a) as follows: Not at any time during the said term without the previous consent in writing of the Landlords use the premises or any part thereof nor permit the same to be used by any other person or persons for any other purpose than that of a Sculptors or Artists Residential Studio and particularly not for any illegal or immoral purpose. It appears that the premises and adjoining premises had been built or converted at the time of the Great Exhibition in 1851 to form two blocks of studios separated by a covered corridor to provide artists or sculptors with studio space and living accommodation. The application by the landlords for the declaration that the tenancy was not a protected tenancy had immediate relevance to the125 rent review at the end of the 14th year of the term, as the appellants, claiming that the tenancy was a protected tenancy as a result of circumstances which I shall mention, had referred the rent to a rent officer, who had registered a fair rent under the Rent Act 1977. That would be irrelevant if the tenancy were not a protected tenancy. There is the further important aspect, which lies slightly in the future, that if the tenancy is not a protected tenancy the appellants will have no security of tenure at all at the expiration of the 17 1/4 years’ contractual term of the lease. There were various assignments of the term which are noted by memoranda endorsed on the lease. There was in September 1977 an assignment by the then assignee, a Mr Millward, to Miss Wagle, who is one of the appellants. Subsequently, on November 9 1982, with the landlords’ consent, she assigned the premises to herself and Mr Tippett, the other appellant, jointly. The judge made certain findings of fact which are not challenged on this appeal. First, he found that when the lease was originally granted it was granted to an artist, that is to say Miss Nichols who, on the balance of probabilities, used the premises for her professional work. Second, he found that the landlords’ representative who interviewed Miss Wagle in 1977 at no time by what he did or said had any intention to vary the terms of the original lease. He was concerned that Miss Wagle understood that she was taking the premises as a business letting, and the judge found that Miss Wagle did understand that. Miss Wagle herself was not a professional sculptor or artist. She had a job as a financial adviser, though she had been an amateur painter in her spare time at one stage. There was apparently in 1977 a contemplation that she would marry a professional artist, but that did not happen. When the premises were assigned by Miss Wagle to herself and Mr Tippett, the position was that Mr Tippett was indeed a professional artist. But he has his studio elsewhere, and the finding of fact of the judge was that since 1977 the premises have not been used for business purposes at all, but merely as a residence originally by Miss Wagle and subsequently by Miss Wagle and Mr Tippett. The judge referred (and the reason why he referred to it will become apparent when I come to some authorities) to the position that the respondents had to satisfy him that a consensual variation in the original purpose had taken place. He found as a fact that there had been no evidence to show any consensual change; that also is not challenged. The relevant statute is the Rent Act 1977. That provides by section 1 that, subject to provisions in that Part of the Act: . . . a tenancy under which a dwelling-house . . . is let as a separate dwelling is a protected tenancy for the purposes of [the] Act. Sections 17 and 18 divided protected tenancies into two categories: controlled tenancies, being those created by leases coming into operation before July 6 1957 and satisfying certain requirements as to rateable value, and regulated tenancies, which were those protected tenancies which were not controlled tenancies. For present purposes it is unnecessary to go through the full history, through which Mr Wood has carefully taken us, of the earlier Rent Acts. There was decontrol under the Rent Act 1957, and that is the explanation of the date in the definition of controlled tenancies. This tenancy created by the lease of 1972 was, of course, not a controlled tenancy at all. If it is a protected tenancy, it is because it is a regulated tenancy. Section 24 of the Rent Act 1977 is crucial. It provides by subsection (1) that: . . . the fact that part of the premises comprised in a dwelling-house is used as a shop or office or for business, trade or professional purposes shall not prevent the dwelling-house from being let on or subject to a controlled tenancy. Then it provides by subsection (2) that: Part II of the Landlord and Tenant Act 1954 (which gives security of tenure to business tenants) shall not apply to a tenancy where the property comprised therein is let under a tenancy which either is a controlled tenancy or would be such a tenancy if it were not a tenancy at a low rent. Those two subsections, being concerned only with controlled tenancies, do not apply to the present case. The controlled tenancy remains subject to the Rent Acts, as it was before 1957 and is consequently not subject to Part II of the Landlord and Tenant Act 1954. By contrast, subsection (3) of section 24 of the Rent Act 1977 provides that: A tenancy shall not be a regulated tenancy if it is a tenancy to which Part II of the Landlord and Tenant Act 1954 applies . . . There is a saving in respect of subtenancies which is not relevant. Section 23 of the Landlord and Tenant Act 1954 provides that Part II of that Act applies to any tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by him or for those and other purposes. It is not in dispute that if premises are granted on a tenancy which is a tenancy to which Part II applies, Part II will cease to apply if the premises cease to be occupied by the tenant for the purposes of a business carried on by him or for those and other purposes. In other words, if the business is discontinued (and whether it has been discontinued or not is a question of fact) the protection of Part II will be lost. Conversely, if a tenancy is let as a dwelling-house for residential purposes without any business user but during the continuance of the contractual tenancy significant business user of the premises begins and is continued, that tenancy will cease to qualify for Rent Act protection and will acquire the protection of Part II of the 1954 Act. That was decided by this court in the case of Cheryl Investments Ltd v Saldanha [1978] 1 WLR 1329. The particular case was given by Lord Denning MR in his judgment as the third instance at the foot of p 1333, where he said this: Third, suppose now that the first man decides to give up his office and to do all his work from his home: there being nothing in the tenancy of his home to prevent him doing it. In that case he becomes in the same position as the second man. He ceases to have a ‘regulated tenancy’ of his home. He has only a ‘business tenancy’ of it. Those were the facts of Cheryl Investments Ltd v Saldanha, and what was there said was a matter of decision. What then is the position the other way round, where there is a business tenancy and the business user is discontinued?  That is the fact of the present case. Lord Denning gave that as the fourth instance in Cheryl Investments Ltd v Saldanha. He said, at p 1334: Fourth, suppose now that the second man decides to give up his office at home and to take a tenancy of an office elsewhere so as to carry on his profession elsewhere. He then has a ‘business tenancy’ of his new premises. But he does not get a ‘regulated tenancy’ of his original home, even though he occupies it now only as his home, because it was never let to him as a separate dwelling: unless the landlord agrees to the change. That, in the context of Cheryl Investments Ltd v Saldanha, was obiter. Mr Woods submits that it was also wrong. He places particular reliance on a much earlier decision of the Court of Appeal in the case of Epsom Grand Stand Association Ltd v Clarke, which was decided in 1919 and is reported at 35 TLR 525 and also at [1919] WN 170. Both the reports, however, of the Epsom Grand Stand Association case are somewhat brief. In the well-known case of Wolfe v Hogan [1949] 2 KB 194 Evershed LJ, in giving the leading judgment, commented at p 203 that the statement quoted from the leading judgment of Bankes LJ in the Epsom Grand Stand Association case was incomplete. It seems to me that the briefly reported Epsom Grand Stand Association case cannot really carry much authority, despite the eminence of the members of the court, in view of the very much fuller decisions which have since been reached in the steady flow of decisions under the Rent Acts. Wolfe v Hogan itself is of considerable importance. On the facts of that case the position was that the user contemplated at the time of the letting of the premises in question was as a shop only. Subsequently, the user was in fact changed, partly to that of a dwelling and partly to that of a shop. But there was not, it was held, such full knowledge by the landlord and acceptance of the changed position as to show that the premises had been subsequently let as a separate dwelling, although they had initially been let only as a shop. In his judgment at p 205 of the report, Denning LJ, after referring to the use of the premises as a residence by Miss Hogan, said: What is the effect of that?  In my opinion, it does not give the tenant the protection of the Act. A house or a part of a house originally let for business purposes does not become let for dwelling purposes, unless it can be inferred from the acceptance of rent that the landlord has affirmatively consented to the change of user. Evershed LJ, at p 204, said: . . . But this is a matter of contract, and the terms of the bargain, as the learned judge found them, and the intention of Mr Noller, the landlord, as expressed by him, and believed by the learned judge, make it impossible to say that, at the date of the letting, there was any user contemplated other than as a shop. As I think there has been nothing since occurring which has altered that position in fact, in my judgment, the result is that in this case, as the learned judge himself concluded, though perhaps on somewhat different grounds, the defendant, Miss Hogan, has failed to establish her case that the premises in question come within the ambit of the protection of the Rent Restriction Acts. Mr Wood argues that if one looks at the provisions of section 1 of the Rent Act 1977 stating that a tenancy under which a dwelling-house is let as a separate dwelling is a protected tenancy, and one bears in mind that that franks both the controlled tenancy where there is business user as well as a residential user and the Rent Act is to apply and the regulated tenancy where, if there is business user, the Rent Act is not to apply, the conclusion must be that ‘mixed premises’, as they are called, let partly for business and partly for residence are none the less within the phrase of ‘a dwelling-house let as a separate dwelling’. He argues that there is no reason why the same approach as is adopted on considering section 23 of the 1954 Act should not be adopted in considering section 24(3) of the Rent Act 1977: (3)  A tenancy shall not be a regulated tenancy if it is a tenancy to which Part II of the Landlord and Tenant Act . . . applies . . . A tenancy may start as being a tenancy to which Part II applies, and may then cease to be such a tenancy because the business is, on the facts, discontinued. Mr Wood says that the effect of that is that the tenancy ceases to be excluded from the definition of ‘regulated tenancy’. It is already within the definition of ‘protected tenancy’ unless so excluded. That essentially is the argument which was put forward in an earlier release of Woodfall (28th ed) vol 3, at p 3036, where it is said by the editor: If the tenancy ceases to be one to which the Act of 1954 applies, because the business user ceases or because the business part is sub-let, the tenancy will become regulated. But that passage in Woodfall was rejected as an incorrect statement of the law by this court in the case of Pulleng v Curran, decided in 1980 and reported in 44 P&CR 58. There were, as I read the judgments, two grounds for the decision in Pulleng v Curran. One was that on the facts there had not been a cesser of the business use or, at any rate, the judge had been entitled to reach the conclusion that the business use had not ceased. The other was that even if the business use had ceased, that did not produce the result that the tenancy became regulated. The passage in Woodfall was rejected, and I refer in particular, first, to the judgment of Stephenson LJ at p 74 where he said: There was, in my judgment, just enough evidence to justify the judge’s finding on what was essentially a question of fact and degree. If I am wrong on that point, I am clearly of opinion that, on its true construction, the lease of this ‘messuage or tenement shop and premises’ contemplated the occupation of part of the premises as a shop for the purposes of carrying on a grocery and dairy business and (not ‘or’) part as a dwelling-house for the purposes of a residence. It was not a letting of the property as a residential dwelling, but it included a business tenancy to which Part II of the Act of 1954 applied and which could not be turned into a regulated tenancy by the tenant ceasing to occupy the shop part for the purposes of carrying on that or any other business unless the landlord agreed. This view seems to be right in principle and supported by what Denning LJ said in Wolfe v Hogan in the passage that Cumming-Bruce LJ has read and in Cheryl Investments Ltd v Saldanha . . . Like the judge, I prefer this view to that expressed in the passage from Woodfall, Landlord and Tenant . . . He goes on to say that the landlord had not even known of the discontinuance of the business at various dates which had been suggested. Sir George Baker, who gave the leading judgment, concluded that the judge’s finding of fact, that the business user had not ceased, could not be faulted. He said he would be content to leave the matter there, but he proposed, as there had been considerable argument based on the proposition that the business had ceased, to say a word or two about that. He set forth the proposition that had been put forward by counsel for the tenant, that a tenancy of combined business and residential property could not be a residential tenancy so long as some business use continued, but if the tenancy ceased to be one to which the Act of 1954 applied, for example because the business use ceased, it would become a regulated tenancy. Sir George Baker said, at p 68: I think that this is based on a fallacy. He sets out the fallacy which he had in mind, and I do not propose to go into that. But he then went on, at p 70, to say: In his judgment, the judge referred to some passages in the present edition of Woodfall, Landlord and Tenant, at p 3036. I am not going to refer to them, but they have been introduced for the first time in the current edition. The judge said: ‘I have been referred to Wolfe v Hogan. I find the dicta in that case more convincing than the reference in the text of Woodfall, Landlord and Tenant.’ I am not going to go into Wolfe v Hogan. It is a very well-known case. I agree with the judge, and it seems to me that, both on authority and by the whole scheme of the Act, once the tenancy ceased (if it did cease), the only result is that the tenant would find it very difficult, if not impossible, to obtain a new tenancy on application . . . . Cumming-Bruce LJ (the third member of the court) decided the case, first, on the ground of the judge’s finding of fact and, second, on a slightly more limited view of the second ground of decision that Stephenson LJ adopted. The latest tenancy in Pulleng v Curran had in fact been a tenancy granted under an order of the court, on an application to the court by the tenant under Part II of the Landlord and Tenant Act 1954, on the terms of the previous tenancy, and Cumming-Bruce LJ considered that it was not open to a party to seek to disregard the statutory jurisdiction invoked by the tenant and exercised by the court for the purpose of a claim that the Rent Restriction Acts now apply to the premises which were subject to a lease (or notional agreement for a lease because the actual lease had not been granted) pursuant to the order made under Part II of the 1954 Act. But that really can stand only, it seems to me, if Stephenson LJ’s view is correct; and, in any event, the view of Sir George Baker and Stephenson LJ is a majority view of the court by way of an alternative ground for decision, and so is binding upon us. There is also the decision of this court in Russell v Booker (1982) 263 EG 513, [1982] 2 EGLR 86. The judgment of the court, which included Cumming-Bruce LJ, was given by Slade LJ. The case was actually concerned not with the Landlord and Tenant Act 1954 Part II, but with possible conflict between the Rent Act 1977 and the Agricultural Holdings Act 1948. After reviewing a number of authorities, including Wolfe v Hogan, Slade LJ said: . . . on the authority of Wolfe v Hogan and Whitty v Scott-Russell, we cannot accept that a mere unilateral change or abandonment of user by a tenant, which is not embodied in a new contract between landlord and tenant, express or implied, can operate to take a tenancy which did not begin by being protected by the Rent Acts into the protection of those Acts. In the present case, in view of the finding of the business user by Miss Nichols, this tenancy under the lease of 1972 did not begin as a protected tenancy but as a tenancy within Part II of the Landlord and Tenant Act 1954. I should interject that, though the Rent Act of 1977 was, of course, not there when this tenancy began, provisions identical for all practical purposes to those which I have cited from the Rent Act 1977 were applicable at the time of the grant of this lease by virtue of the Rent Act 1968. Therefore, as the tenancy began within the business tenancy provisions of the 1954 Act and not as a protected or regulated tenancy, and as the judge has made the unchallenged finding that there was no consensual change in the user under the lease and that the landlords’ representative never had any intention to vary the terms of the original lease, it must follow that the tenancy has never become a regulated or protected tenancy. The two decisions of this court in Pulleng v Curran and in Russell v Booker are binding on us and compel that conclusion. Mr Wood’s attractive submissions must be directed, if at all, to a higher tribunal. We are bound by authority to dismiss this appeal, and I would do so. Agreeing, TAYLOR LJ said: Mr Wood’s argument is based upon the phrase ‘let as a separate dwelling’ which first occurred in the 1915 Act and which, he says, must retain the same meaning right up to the present day. He relied upon Epsom Grand Stand Association Ltd v Clarke (1919) 35 TLR 525, but that was also followed by statutory provisions to the same effect. Thus, in the 1920 Act, section 12(2) read, so far as is relevant: This Act shall apply to a house . . . let as a separate dwelling . . . Provided that — . . . (ii)  the application of this Act to any house or part of a house shall not be excluded by reason only that part of the premises is used as a shop or office or for business, trade, or professional purposes; . . . Likewise, the Act of 1939 contained a provision giving that extended meaning to the phrase. It appears in that Act in section 3(3) as follows, so far as is relevant: Subject to the provisions of para (a) of the last preceding subsection, the application of the principal Acts, by virtue of this section, to any dwelling- house shall not be excluded by reason only that part of the premises is used as a shop or office or for business, trade or professional purposes; . . . Those provisions and a number of cases based upon them undoubtedly supported the proposition for which Mr Wood contends up to 1957, at least, and possibly until 1965. However, the history of the matter after that is pithily described by Lord Denning MR in Cheryl Investments Ltd v Saldanha [1978] 1 WLR 1329 at p 1332 where he said: This protection was continued until 1957. There was no break in 1954: for although the Landlord and Tenant Act 1954 (which I will call the ‘Business Tenancy Act’) gave rights to tenants of business premises, it did not apply to tenancies which were protected by the Rent Acts: see section 43(1)(c) of the Act of 1954. But in 1957 there was a fundamental change. By the Rent Act 1957 most houses were de-controlled. Thenceforward the shopkeeper who lived over the shop, and the doctor who had his consulting room in his house, were no longer protected by the Rent Acts. They were only protected by the Business Tenancy Act 1954: see section 11(7) of, and paragraph 11 of Schedule 4 to, the Act of 1957. In 1965 there was another fundamental change. By the Rent Act 1965 Parliament restored protection for the tenants of dwelling houses who lived at home away from the business. But this time Parliament did not give this protection to the shopkeeper or the doctor who lived over the shop or the consulting room. Parliament left them to the protection of the Business Tenancy Act 1954. From 1965 onwards Parliament divided tenancies into two separate and distinct categories: ‘regulated tenancies’ and ‘business tenancies’. Every tenancy had to be placed into one category or the other. ‘Regulated tenancies’ were dwelling houses protected by the Rent Acts. ‘Business tenancies’ were premises protected by the Business Tenancy Act 1954. This dichotomy was made by paragraphs 1 and 3 of Schedule 1 to the Rent Act 1965, and has been continued by the Rent Acts of 1968 and 1977: see section 9(5) of the Act of 1968 and section 24(3) of the Act of 1977. The result is this. If a house is let as a separate dwelling (without being occupied in whole or in part for business purposes) it is a ‘regulated tenancy’. But, if it is occupied by the tenant ‘for the purposes of a business carried on by him or for those and other purposes’ it is a ‘business tenancy’: see section 23(1) of the Act of 1954. It cannot be both. It is of the first importance now to be able to place a tenancy into the correct category, because the two categories are very different animals. So Lord Denning’s dichotomy, to which he refers in that passage was made, he says, by paras 1 and 3 of Schedule 1 to the Rent Act 1965. What those provisions did was, to put it simply, to excise from the legislation the two clauses which had been contained in earlier Acts: section 12(2) of the 1920 Act and section 3(3) of the 1939 Act. The effect of that, says Mr Wood, was not to change the meaning of the phrase ‘let as a separate dwelling’. It was simply a necessary amendment, in order to give effect to the intention of Parliament, under the new Act in 1965, of (as he put it) ‘preventing ambiguity and showing consistency with the provision under section 1(3) that where the 1954 Act applies there cannot be a regulated tenancy’. He says that if the application of the 1954 Act ceases by the cesser of the business, then the old meaning and the continuing meaning of the phrase ‘let as a separate dwelling’ will bring the tenancy back under the Rent Acts, and the meaning of that phrase has not been changed. Speaking for myself, I can see some force in that argument. But, the fact of the matter is that it has been rejected in the cases which have been referred to by Dillon LJ. Clearly the basis of Lord Denning’s fourth illustration in the case of Cheryl Investments Ltd v Saldanha was that the development of a separate form of protection for business tenancies, from the form of protection which existed under the earlier law only for residential tenancies, has persuaded Parliament to make a clear distinction, and the excision of the extended meanings in the Acts of 1920 and 1939 have the effect that the meaning of the phrase ‘let as a separate dwelling’ has contracted and no longer includes partial use for business; in other words, a mixed residential and business user. For the reasons given by Dillon LJ, this court is bound by the more recent decisions to accept that view and, accordingly, I would agree that this appeal should be dismissed. Also agreeing, SIR JOHN MEGAW said: Mr Wood has made the submission that, as a matter of juridical theory, we should not regard ourselves as being bound by the decision in Pulleng v Curran (1980) 44 P&CR 58. Mr Wood submits that we are not bound in any relevant respect, in relation to the present appeal, by the second basis on which Sir George Baker, in delivering the leading judgment, arrived at his conclusion. The submission begins with the proposition that the second ground to which Sir George Baker referred in giving his reasons was properly to be treated as being obiter dictum and not as ratio decidendi. With great respect to Mr Wood’s submission, I have no doubt that, as a matter both of juridical theory and practical common sense, the second part of Sir George Baker’s judgment is to be treated as a part of the ratio decidendi. It is a second ground which is equally as much a ground of decision as is the first ground. The question then arises whether the other two members of the court are properly to be treated as having also shown their acceptance of that same ground as part of the ratio decidendi. So far as the senior judge of the court, Stephenson LJ, is concerned, I have no doubt that his judgment at pp 74 and 75 shows clearly that he did accept Sir George Baker’s reasoning and conclusion in that respect. So far as Cumming-Bruce LJ is concerned, I note at the beginning of his judgment (at p 70 of the report) the words: I agree with the order proposed for the reasons stated by Sir George Baker. The learned lord justice would not have said that if he were not agreeing as a part of the ratio decidendi with both of the reasons put forward by Sir George Baker. The appeal was dismissed with costs. Leave to appeal to the House of Lords was refused.