Hewitt v Lewis

Rent Act 1977, Schedule 15, Case 11 and Rent (Amendment) Act 1985 — Retrospective effect of latter Act — Application to pending actions — Appeal by owner from decision of county court judge dismissing claim for possession of dwelling-house — Appellant or a member of his family lived in the house from 1965 until October 1982, but the house was unoccupied from October 1982 until February 1983, when it was let on a regulated tenancy to the present respondent for a term of 13 weeks — Appellant gave respondent the notice required by Case 11 that possession might be recovered under this Case, but at the end of the 13 weeks the respondent remained in the house — Appellant brought an action in the county court for possession — Judge, relying on the decision of the Court of Appeal in Pocock v Steel, dismissed the action on the ground that the appellant did not occupy the house immediately before the grant of the regulated tenancy to the respondent — The judge’s decision was given before the Rent (Amendment) Act 1985, which was passed to reverse the effect of Pocock v Steel, became law — Appellant now claimed that his appeal should be allowed as a result of the 1985 Act, which provided that Case 11 applied where the owner-occupier had occupied the house as his residence ‘at any time before the letting’ — It was clear that the 1985 Act was intended to have some retrospective effect, as section 1(4) provided that Case 11 in Schedule 15 to the 1977 Act should apply to tenancies granted and notices given before, as well as after, the commencement of the 1985 Act — The question was, however, whether the retrospective operation applied to pending actions — The fact that the decision in the court below was given before the 1985 Act became law was immaterial because the present appeal was by way of a rehearing — Held that the only realistic interpretation of the 1985 Act was that it was intended to apply to pending actions such as the present one — National Real Estate & Finance Co v Hassan distinguished This was an appeal by the plaintiff, Mr Hewitt, owner of a freehold dwelling-house in Horsham, Sussex, from a decision of Judge MacManus at Horsham County Court dismissing his action against the respondent, Mr Lewis, defendant in the action, for possession of the house. J C Harper (instructed by Robbins Olivey & Blake Lapthorn) appeared on behalf of the appellant; Miss C Jones (instructed by Capel Cure Peachey & Bates, of Brighton, Sussex) represented the respondent. Giving judgment, FOX LJ said: This is an appeal by the plaintiff, Mr Hewitt, from an order of Judge MacManus at Horsham County Court, dismissing his application for possession of a dwelling-house in Horsham of which he is the freehold owner. Mr Hewitt first occupied the house in 1965, when it had just been built. He lived there with his wife and children until June 1977, when he went to live in Holland. He was accompanied by his wife and three of the children. The other child, David, who was then aged 17, was completing his education in England. He continued to live in the house until October 1982. Mr Hewitt paid all the outgoings (including household bills and the mortgage payments). From time to time he went back to the house — sometimes by himself and sometimes with his whole family. In October 1982 David finished his education. Mr Hewitt decided to let the house and contacted estate agents, King & Chasemore; we do not know precisely when this decision was made. The property, however, was unoccupied from October 1982 to February 1983, when it was let furnished to the defendant, Mr Lewis, for a term of 13 weeks. Prior to the commencement of the tenancy, Mr Hewitt gave to Mr Lewis a notice under Case 11 of Part II of Schedule 15 to the Rent Act 1977. That is recorded in clause 25 of the tenancy agreement, which is dated February 24 1983. Mr Lewis went into occupation under that tenancy in February 1983. The tenancy expired on May 20 1983. Mr Lewis remained in possession. In June 1983 a further tenancy agreement seems to have been prepared (but was not signed) by Mr Hewitt. However, Mr Lewis remained in occupation as a tenant. The tenancy was at all times a regulated tenancy for the purposes of the Rent Acts. On September 27 1984 Mr Hewitt sought an order for possession on the ground that he had previously occupied the premises as a residence and that they were now required as a residence for Mr Hewitt’s son Richard, who resided with Mr Hewitt when he last occupied the house as a residence. Notice to quit was served on Mr Lewis on September 15 1983. The Rent Act 1977 specifies certain ‘Cases’ in which an order for possession may be made. One of these is Case 11 in Part II of Schedule 15 to the Act. The Case (as amended) so far as material was in the following terms prior to the Rent (Amendment) Act 1985: Where a person who occupied the dwelling-house as his residence (in this Case referred to as ‘the owner-occupier’) let it on a regulated tenancy and — (a) not later than the relevant date the landlord gave notice in writing to the tenant that possession be recovered under this Case, and (b) the dwelling-house has not, since . . . (ii) 14th August 1974, in the case of a regulated furnished tenancy . . . been let by the owner-occupier on a protected tenancy with respect to which the condition mentioned in paragraph (a) above was not satisfied, and (c) the court is of the opinion that of the conditions set out in Part V of this Schedule one of those in paragraphs (a) and (c) to (f) is satisfied. The conditions set out in Part V of Schedule 15 include: (a)  the dwelling-house is required as a residence for the owner or any member of his family who resided with the owner when he last occupied the dwelling-house as a residence. . . . If the case comes within Case 11, the court would be obliged, in the present case, to make an order for possession (Rent Act 1977, section 98). The relevant date is the date of the commencement of the tenancy in question (Schedule 15 Part III para 2). Para (a) of Case 11 is therefore satisfied. Para (b) is also satisfied. As regards para (c), the question before us was the applicability of condition (a) in Part V of Schedule 15, which I have already set out. In Pocock v Steel [1985] 1 WLR 229*, the Court of Appeal held that, upon the true construction of Case 11, a landlord claiming to be the owner-occupier had to have occupied the dwelling-house as his residence immediately before he let it to the statutory tenant. On the basis of that decision, Judge MacManus, in the present case, held that Mr Hewitt did not succeed in bringing the case within the provisions of Case 11, because immediately before the grant of the tenancy in February 1983, Mr Hewitt was not, himself, personally residing in the property — nor did he do so immediately prior to the separate grant (if any) of a subsequent letting. Accordingly, the judge dismissed the claim for possession. *Editor’s note: Also reported at [1985] 1 EGLR 115. Pocock v Steel (supra) was decided on November 16 1984. Parliament intervened very quickly. On May 23 1985 the Rent (Amendment) Act 1985 was enacted. Section 1(1) provides: In Case 11 in Schedule 15 of the Rent Act 1977 . . . for the words from the beginning to ‘tenancy’ (where it first appears) there shall be substituted the words ‘Where a person (in this Case referred to as ‘the owner-occupier’) who let the dwelling-house on a regulated tenancy had, at any time before the letting, occupied it as his residence’. Section 1(4) provides: Case 11 in Schedule 15 to the Rent Act 1977 and Case 11 in Schedule 2 to the Rent (Scotland) Act 1984, as those cases have effect by virtue of this section, apply to tenancies granted and notices given before, as well as after, the commencement of this Act. Judgment in the present case was given on February 15 1985. The notice of appeal was dated March 12 1985; we gave leave, with consent, to Mr Hewitt to amend it, adding the contention that the appeal should be allowed as a result of the enactment of the Rent (Amendment) Act 1985. The first question is whether the retrospective provision of section 1(4) of the 1985 Act applies to this case, notwithstanding that judgment in the court below was given before the statute became law. If it does, then that disposes of the case, because Mr Hewitt had undoubtedly at some time previous to the letting occupied the house as his residence. It is not in dispute that any necessary notice under Case 11 was given at the proper time. The general rule is that statutes are construed as operating only in cases or on facts which came into existence after the statute was enacted, unless a retrospective effect is clearly intended. In the present case there is no doubt that a retrospective effect was intended; that is evident from section 1(4). The question is whether the 1985 statute was intended to apply to pending actions. I do not think that, in this case, the fact that the hearing at first instance was before the passing of the statute determines the matter. This appeal is by way of rehearing (see RSC Order 59, rule 3), and the statute plainly has a retrospective effect so the matter resolves itself into the issue whether, if the hearing at first instance had been immediately after the statute was enacted, the provisions of section 1(1) would have applied to it. I do not think that the decision at first instance gave to the defendant anything in the nature of a vested right. And the appeal (as I have said) is a rehearing. In A-G v Vernazza [1960] AC 965 Lord Denning, at p 978, said that it was: clear that in the ordinary way the Court of Appeal cannot take into account a statute which has been passed in the interval since the case was decided at first instance, because the rights of litigants are generally to be determined according to the law in force at the date of the earlier proceedings. . . . But it is different when the statute is retrospective either because it contains clear words to that effect, or because it deals with matters of procedure only, for then Parliament has shown an intention that the Act should operate on pending proceedings, and the Court of Appeal are entitled to give effect to this retrospective intent as well as a court of first instance. I appreciate that a statute may be intended to have some retrospective effect without necessarily being intended to affect pending actions. But in my view the only realistic interpretation of the 1985 statute is that Parliament did intend it to have such effect. Thus, the Act expressly applies to tenancies granted, and Case 11 notices given, before as well as after the Act. As a matter of language it embraces, therefore, the relevant facts of a pending, just as much as a future, action. It is difficult to see any reason why pending actions should be unaffected. This is not a situation where the pre-existing law had been allowed to continue for a long period before the171 intervention by Parliament. The 1985 statute was enacted very quickly to displace the effect of Pocock v Steel, a decision which, as I understand, was thought in the profession to have overturned the law as it was then believed to be. To construe the 1985 statute as not extending to pending actions will, it seems to me, only cause expense and inconvenience because it would immediately be open to the unsuccessful landlord to start a new action for possession in reliance on the new statute. There could be no question of his being defeated by a plea of res judicata because the issue raised in consequence of the provisions of section 1(1) of the new statute would never have been litigated in the previous action. The issues would be quite different. I can see no reason why Parliament, having acted so speedily, should be taken as intending to force upon the landlord a new action on an issue which more easily could be determined in the existing proceedings. If the action had been heard at first instance a few days after the statute became law, I cannot see any reason of policy which could conceivably have excluded the full operation of the statute. We were referred to the decision of the Court of Appeal in National Real Estate & Finance Co Ltd v Hassan [1939] 2 KB 61. Under the Law of Property Act 1925, section 146, a landlord’s right to re-entry or forfeiture for failure to repair could not be enforced by action or otherwise until the lessor served a repair notice on the tenant, and the tenant failed to remedy the breach. By the Leasehold Property (Repairs) Act 1938 the tenant was authorised to serve a counternotice, claiming the benefit of the Act. Where a counternotice was served, the landlord was not permitted to take any proceedings to enforce the right of re-entry without the leave of the court. The Act of 1938 was expressed to apply to leases created, and to breaches occurring, before the commencement of the Act. The plaintiff’s notice under the Law of Property Act 1925, section 146, was served on January 12 1937. The plaintiff’s writ claiming possession was issued on July 13 1937. The Act of 1938 became law on June 23 1938. Croom-Johnson J decided that, in view of the Act of 1938, the claim was bad. The Court of Appeal allowed the landlord’s appeal. Goddard LJ at p 79 said: The argument here is to the effect that an action which had been brought but which did not come on for trial until after the Act of 1938 came into force is defeated because the condition precedent in the serving of the notice did not when served in January 1937 contain a reference to an Act passed in 1938 And earlier, on p 79, he said: But how can it be supposed Parliament meant to say that notices properly served under an Act which was then in force ie section 146 of the Law of Property Act 1925 and which gave a property owner the right to bring an action, ought to be set aside because they did not contain a reference to an Act which had not then been passed? The National Real Estate case seems to me to be far removed from the present. The requirements of the Act of 1938 were simply incapable of application to an action already in existence when the Act was passed. There could be no question of a retrospective effect in the manner contended for by the defendant. We were also referred to Zainal bin Hashim v Government of Malaysia [1980] AC 734, which was a Privy Council decision. That again was a very different case from the present. The retrospective clause in the statute took the form of a deeming provision. The case is material, however, for its emphasis upon a clear indication of an intention that the retrospective effect of the statute should extend to pending actions. For the reasons which I have indicated, it is, in my view, clear that the retrospective operation of the Rent (Amendment) Act 1985 does so extend. On the view which I take of the effect of the 1985 Act, it is not necessary to deal with the alternative contention advanced on behalf of Mr Hewitt that he was in fact occupying the house as his residence immediately before the letting. I would allow the appeal. SIR ROUALEYN CUMMING-BRUCE agreed and did not add anything. The appeal was allowed, the respondent to pay three-quarters of the costs of the appeal; the order for costs below to stand.