Lloyd v Sadler and others

Rent Acts–Conditions for acquisition of a statutory tenancy–Important decision likely to affect many tenants, particularly young people joining to share accommodation–Flat let to two joint contractual tenants–One ceases to reside before contractual term expires–Whether remaining tenant qualifies as a statutory tenant on expiry of term–Cases reviewed–Howson v Buxton followed by analogy–Remaining joint tenant entitled to statutory tenancy This was an appeal by the plaintiff landlord from a decision by Judge McIntyre at West London County Court in proceedings for possession of a top-floor flat at 22 Cottesmore Gardens, London W8. The landlord claimed that Miss Gloria Sadler was not entitled to remain in possession of the flat as a statutory tenant following the expiry of a fixed term because the term had been granted to Miss Sadler and a Miss M Lunt as joint tenants and Miss Lunt had left the flat in order to get married before the expiry of the term. Judge McIntyre rejected the landlord’s submission and dismissed the action for possession. David Neuberger (instructed by Halsey Lightly & Hemsley) appeared on behalf of the appellant; William Birtles (instructed by Tyrer, Roxburgh & Dawson) represented the respondents. Giving judgment MEGAW LJ said: The relevant facts are simple. The question of law which arises on them is of importance, with possibly wide-ranging effects. By an agreement in writing a tenancy of the top-floor flat, 22 Cottesmore Gardens, London W8, was granted by Mr J M Lloyd to Miss G Sadler and Miss M Lunt from December 27 1975 to December 25 1976. The tenancy was a protected tenancy under the Rent Act 1968. About October 28 1976 Miss Lunt left the flat in order to get married. She did not intend to resume, and she did not in fact resume, occupation of the flat. Miss Sadler remained in occupation of the flat during the remainder of the contractual tenancy, and she continued in occupation after December 25 1976 when the contractual tenancy ended. In January 1977 the landlord, Mr Lloyd, started proceedings in the West London County Court, claiming possession of the flat. The defendants were Miss Sadler and three other ladies whom Miss Sadler had brought in to live in the flat as her licensees. No separate question arises as to them. Their right to stay in occupation stands or falls with that of Miss Sadler. So much for the relevant facts. The question of law also can be simply stated: was Miss Sadler a statutory tenant and thus entitled to the security of tenure given to statutory tenants by the Rent Acts, despite the fact that Miss Lunt, before the contractual tenancy had ended, had ceased, permanently, to occupy the flat? The contractual tenancy was a joint tenancy of Miss Sadler and Miss Lunt. The contractual tenancy ended on December 25 1976. The right of Miss Sadler to remain in possession thereafter, if it existed at all, could exist only because she had become the statutory tenant under section 3 (1) of the Rent Act 1968. (That was the statute in force at the time. The corresponding provision of the new Act, section 2 (1) of the Rent Act 1977, is identical.) Section 3(1)(a) of the Rent Act 1968 provides: After the termination of a protected tenancy of a dwelling-house the person who, immediately before that termination, was the protected tenant of the dwelling-house shall, if and so long as he occupies the dwelling-house as his residence, be the statutory tenant of it. . . . The landlord contended that the contractual, admittedly protected, tenancy was a joint tenancy; and that, as a result of the doctrine of joint tenancy in the law of property, anything that had to be done in connection with the joint tenancy, to have any legal effect, had to be done by the joint tenants: that is, by all the individuals acting collectively. One of the joint tenants, it was submitted (otherwise than when in law one joint tenant could be treated as acting as agent for them all) could not achieve any result recognised by law–he could not act validly–by anything which he himself did as an individual. Hence Miss Sadler’s continuance in occupation of the flat after the end of the contractual tenancy did not, in law, produce the result that ‘the protected tenant occupies the dwelling-house as his residence.’  Hence there was no statutory tenant. Miss Sadler did not achieve that status in law. That submission by the landlord was rejected by Judge McIntyre in his judgment delivered on May 16 1977. The plaintiff landlord appeals to this court. This case has brought to light two remarkable facts. First, the Rent Acts through all their long history have never made any relevant express provision relating to joint tenants or joint tenancies, whether protected or statutory. Secondly, and perhaps even more strangely, there seems to have been no previous case decided by any court, or at least no reported case, in which a question such as falls to be decided in the present case has been raised for consideration on section 3 (1) of the 1968 Act or its predecessors. Yet there must have been, over the years, thousands of instances in which one of two joint tenants has ceased to occupy the dwelling-house before the end of the contractual tenancy, and the other original joint tenant has continued to live there, on the assumption that he has become the statutory tenant. If the landlord’s submission is right, that assumption has been wrong. Similar instances must have arisen thousands of times where two or more persons have duly become ‘the statutory tenant,’ and thereafter one or more of them has, or have, died or ceased to occupy the house as his, or their, residence. What is the effect on the legal status of the person, or persons, remaining in occupation?  Does the statutory security of tenure cease? I do not think that the absence of previous litigation helps one way or the other towards a decision of the issue. But the fact that there are likely to be very many cases with facts similar to those of the present case shows the practical impor- tance of this issue. Whatever the answer be, it must affect many people, landlords and tenants, in a matter of great importance to them. If the landlord’s submissions in the present case are wrong, the result may be a measure of prejudice to landlords. It would mean that a landlord who looked to two persons as both being liable to him for the rent might find that when the contractual tenancy ended there was only one person who was liable to him for the rent. On the other hand, if the landlord’s submissions are right, the potential prejudice to joint tenants would be very much more serious: that is, the value of their legal rights as compared with what those legal rights would be if the landlord’s submissions are wrong. In view of the importance of the issue, it may be helpful to set out the landlord’s submissions as they were conveniently summarised by Mr Neuberger in nine propositions, in the course of his very clear and careful argument: 1. The grant to Miss Sadler and Miss Lunt of a contractual tenancy resulted in Miss Sadler and Miss Lunt being joint tenants. 2. Therefore ‘the tenant’ under the contractual tenancy was Miss Sadler and Miss Lunt. 3. The contractual tenancy was a protected tenancy. 4. Therefore ‘the protected tenant’ was Miss Sadler and Miss Lunt. 5. On the determination of a protected tenancy a statutory tenancy can only arise ‘if . . . he occupies the dwelling-house as his residence.’ 6. The ‘he’ in the above quotation clearly refers to ‘the person who . . . was the protected tenant.’ 7. On the determination of the protected tenancy in this case it cannot be said that Miss Sadler and Miss Lunt were occupying the dwelling-house as their residence. 8. Therefore the protected tenant was not occupying the premises in question on the determination of the protected tenancy in this case. 9. Therefore no statutory tenancy can arise. If the ordinary law as to joint tenancy, as it affects rights of property, is to be treated as applicable in all its strictness to section 3(1)(a) of the Rent Act 1968, the logic of Mr Neuberger’s propositions appears to me to be unassailable. I agree with the view expressed by Judge McIntyre that section 1(1)(b) of the Interpretation Act 1889 is not of assistance one way or the other. I have come to the conclusion that, on the true construction of section 3(1)(a) of the Rent Act 1968, the ordinary law as to joint tenancy does not have to be, and ought not to be, applied in all its strictness. I base that opinion, primarily at least, on the judgment of Scrutton LJ in Howson v Buxton (1928) 97 LJKB 749. It is not a direct authority. There is no direct authority. There are various decided cases to which we were properly referred as providing guidance by analogy, or as illustrating the general rule as to a joint tenancy. Some of them, or dicta in them, certainly lend support to the submissions on behalf of the landlord; but I find the most helpful guidance in Howson v Buxton. It appears to me to decide that, where an Act of Parliament refers to ‘the tenant,’ and the letting is to two or more persons jointly, it is permissible for the court to hold, if so to do makes better sense of the relevant statutory provision in its particular context, that one of those persons, by himself, may for certain purposes be treated as being ‘the tenant.’  So here Miss Sadler can be treated, and should on the facts be treated, as having been ‘the protected tenant’ immediately before the termination of the contractual tenancy, and as being ‘the statutory tenant’ thereafter. Hence she has the security of tenure under the Act. I do not propose to discuss at length the cases which I have mentioned. I shall refer to them briefly. In Fairclough (TM) & Sons Ltd v Berliner [1931] 1 Ch 60 Maugham J held that, where there are joint trustees, relief against forfeiture cannot be granted on the application of one person only. Otherwise, the joint tenant, who did not join in the application for relief, might find himself saddled with the continuance of obligations under an onerous lease, from which he would prefer to be free. In Lloyds Bank Ltd v Jones [1955] 2 QB 298, a covenant in a lease of a farmhouse and cottages provided that the tenant should ‘at all times personally inhabit the farmhouse and cottages with his family and servants.’  ‘The tenant’ was defined to include the named tenant’s executors and assigns. The lessee died. His trustees were his widow and another. The widow resided in the farmhouse until her death. The other trustee did not. It was held that this was a breach of covenant. In McIntyre v Hardcastle [1948] 2 KB 82 another decision of this court, it was not the tenant, but it was the landlord, who was joint. The joint landlord consisted of two sisters. The case concerned what is now, in the 1968 Rent Act, Case 8 in Part I of Schedule 3: ‘the dwelling-house is reasonably required by the landlord for occupation as a residence for (a) himself, or (b) any son or daughter of his . . ., or (c) his father or mother. . . .’  It was held, following a dictum of Asquith LJ in Baker v Lewis [1947] KB 186, at p193, that, where there were joint landlords, ‘himself’ in (a) should be read as ‘themselves’; ‘any son . . . of his’ in (b) should be read as ‘any son . . . of theirs’; and so on. That was a strict construction of ‘the landlord’, adverse to the interest of landlords. Not unnaturally, Mr Neuberger, for the landlord in this case, says in effect (though he did not put it so inelegantly) ‘What is sauce for the landlord is sauce for the tenant.’ In Turley v Panton (1975) 29 P & CR 397 a Divisional Court of the Queen’s Bench Division held that a rent tribunal did not have jurisdiction to determine an application made by one person alone, he being one of a number of joint lessees under Part VI of the 1968 Rent Act. The possibility of an unfair result to the others of the joint lessees, if such an application could validly be made without their concurrence, was stressed by the court. Jacobs v Chaudhuri [1968] 2 QB 470 was a decision of this court. It was a decision, not in relation to security of tenure of living accommodation under the Rent Acts, but in relation to security of tenure of business premises under the Landlord and Tenant Act 1954. The letting of the business premises was to two persons who were in partnership. During the currency of the contractual lease the partnership was dissolved, and one of the two partners by agreement between them (the landlord not being a party to the agreement) took over the business as his own. He applied, in his own name alone, for a new tenancy under section 26 of the 1954 Act. It was held by a majority, Harman LJ and Winn LJ, Davies LJ dissenting, that the county court had no jurisdiction under the 1954 Act to entertain such an application, made by one individual, when the contractual tenancy had been granted as a joint tenancy to two persons. The majority distinguished Howson v Buxton. Davies LJ thought that, though of course Howson v Buxton was not direct binding authority in relation to this different statute and these different facts, the principle of Scrutton LJ’s judgment was applicable by analogy. The legislature promptly amended the 1954 Act. The Law of Property Act 1969 introduced two new sections into the Landlord and Tenant Act 1954. By section 13 it introduced a new section 43A to overcome a technical defect in the county court jurisdiction, using the draftsman’s normal wording to achieve that purpose: the same form of wording (though I do not think this was called to the court’s attention in a recent case) as is used in section 1(1) of the Domestic Violence and Matrimonial Proceedings Act 1976. The other new section introduced by the 1969 Property Act was section77 41A, which showed that, to put it very broadly, Parliament preferred the view of Davies LJ to the view of the majority. But the fact that Parliament thought it right to include in the new section 41A a detailed code of provisions affecting joint tenants of business premises makes it probable, I think, that it was, indeed, an inadvertent gap which the legislature had left in the earlier legislation, rather than that the court had misinterpreted the meaning actually intended by Parliament to be expressed by the words used in the 1954 Act. If that assessment is right, it tends, in my opinion, strongly to support the view that the absence of express provisions in the Rent Acts as to the effect of joint tenancies is also, equally, an inadvertent gap. If so, and if this court’s decision in this case accords with what Parliament would have enacted, had its intention been directed to the particular problem which has arisen in this case, it would, I firmly believe, be far better in the general interest that those parts of the gap which still remain–I suspect that those which remain are neither few nor unimportant, particularly as regards statutory joint tenancies–should be filled as the legislature would wish by an early and comprehensive Act of Parliament. They should not be left to be filled in, piece-meal, by the courts over the years, at random as cases happen to arise and happen to be taken to various stages of appeal. Such a code of judge-made law, however admirable it might prove to be in the end, would be built up slowly, probably erratically (because the various problems would not come up for decision in any logical order), and, most certainly, at no small cost in terms of human stress and anxiety and, in some cases, financial hardship to a large number of individual persons, who, to their misfortune, would happen to be the litigants upon whose troubles the edifice of judge-made law would be built. In my opinion, there can be no doubt which would be the more efficient, sensible and humane way of filling any remaining gaps in the law as to the effect of joint tenancies in the Rent Acts. The decision in Jacobs v Chaudhuri is no longer law. But that does not necessarily mean that the reasoning of the majority in that case is to be disregarded when the court has to interpret other statutory provisions in respect of which it is suggested that there is an analogy. However, in the present case I think it tends rather in the other direction. It is not, I believe, fanciful to suggest that the reaction of the legislature to the decision in Jacobs v Chaudhuri tends to show that the legislature’s approach to the problem of joint tenants in the 1954 Act, if it had specifically directed its mind to the problem at that time, would have been consonant with Scrutton LJ’s approach in Howson v Buxton. Before coming to Howson v Buxton, I should mention another case, very recently decided, to which we were referred: Newman v Keedwell (1977) 244 ESTATES GAZETTE 469. It was a case arising under section 24(1) of the Agricultural Holdings Act 1948. Fox J delivered, if I may say so, a very clear and careful judgment, in the course of which he discussed Jacobs v Chaudhuri and Howson v Buxton. But, by reason of the nature of the issues in that case, I do not think that it assists on the issue which we have to decide. Howson v Buxton was a case which arose under section 12 of the Agricultural Holdings Act 1923, under which ‘the tenant’ of an agricultural holding was given certain rights of compensation in the event of a termination of the tenancy. In Howson v Buxton there was a joint tenancy. It was held that, notwithstanding the doctrine of joint tenancy, a claim for compensation founded on a notice given by one only of two joint tenants was valid so as to give jurisdiction to the statutory arbitrator; and that one of the two joint tenants was entitled to recover compensation in respect of a loss which affected him alone, and did not affect also the other of the joint tenants. The relevant provisions of section 12 of the 1923 Act (the emphasis is mine) are: (1)  Where the tenancy of a holding terminates by reason of a notice to quit given by the landlord, and in consequence of such notice the tenant quits the holding, then . . . compensation for the disturbance shall be payable by the landlord to the tenant. . . . (6)  The compensation payable under this section shall be a sum representing such loss or expense directly attributable to the quitting of the holding as the tenant may unavoidably incur upon or in connection with the sale or removal of his household goods, implements of husbandry. . . . (7)  Compensation shall not be payable under this section . . . (b) unless the tenant has . . . given notice in writing to the landlord of his intention to make a claim for compensation. . . . The subject-matter obviously differs greatly from the subject-matter of section 3(1)(a) of the Rent Act 1968. But the relevance is the statutory reference to ‘the tenant,’ ‘his goods,’ ‘his intention,’ coupled with the same absence of any specific provision for cases where the tenancy is joint. In Howson v Buxton it was held by Scrutton LJ, with the concurrence of Sankey LJ, who expressly agreed ‘for the reasons given by Scrutton LJ,’ that it was permissible for the court to hold that the statutory requirements which had to be fulfilled by ‘the tenant’ could validly and effectively be fulfilled by the individual act of one of the joint tenants. Thus, one of the two joint tenants could, acting by and for himself alone, give the requisite statutory notice. He could, without the concurrence or co-operation of the other participant in the joint tenancy, become entitled to the compensation which under the statute was payable to ‘the tenant.’  Even though it was a joint tenancy, ‘his goods’ could be construed to mean ‘the goods which belong exclusively to one of the two joint tenants.’  It did not have to be read as though, whether by the operation of the Interpretation Act or otherwise, it said ‘their goods.’  It will be remembered that in proposition 7 of Mr Neuberger’s propositions, set out above, it was asserted as a step in his argument that the statutory tenancy could arise only if the dwelling-house could be said to be ‘their dwelling-house’–that is, the dwelling-house occupied by Miss Sadler and Miss Lunt. Yet in Howson v Buxton ‘his goods’ (the goods ‘of the tenant’) applied to goods in respect of which the other joint tenant had no right of ownership. In my opinion, the judgment of Scrutton LJ in Howson v Buxton shows that, where the strict application of the doctrine of joint tenancy would lead to unreasonable results, or results which the legislature is unlikely to have intended, it is permissible for the court to conclude that the legislature did not so intend: but that, instead, in such a case, the phrase ‘the tenant,’ where there is a joint tenancy, is to be read as meaning ‘the joint tenants or any one or more of them.’ There is thus authority that the doctrine of joint participation by joint tenants is not a sacrosanct or immutable doctrine of statutory interpretation, where such phrases as ‘the tenant’ and ‘the tenancy’ are used. Where, then, is the line to be drawn?  When does a suggested exception become a heresy?  In the present case I believe that, for the purposes of section 3(1)(a) of the Rent Act 1968 the freedom from strict doctrinal restraint should, as in Howson v Buxton, be held to apply. I would therefore hold that Miss Sadler became a statutory tenant on the expiration of the contractual tenancy on December 25 1976, and that she so remains. I would dismiss the appeal. Agreeing, LAWTON LJ said in the course of his judgment: The object of the Rent Act 1968 was to give security of tenure to persons; and one of two joint tenants might have wanted it and the other might not. The mischief for which Parliament provided a remedy was eviction for reasons other than those which the Act deemed good. If Miss Sadler has to leave the flat because Miss Lunt did not want to stay there any longer that is not a reason which was specified in the Act. I am satisfied that section 3(1)(a) can be construed so that one of two joint tenants can become ‘the statutory tenant.’  Any other construction would defeat one of the objects of the Act.78 In deciding as I do, I have not overlooked the fact that under the contractual tenancy the plaintiff could look to both Miss Sadler and Miss Lunt for payment of the rent. On my construction he can only look to Miss Sadler; but if she fails to pay she loses her personal right to security of tenure and the plaintiff will be able to get possession. The Rent Act 1968 took away many of a landlord’s rights at common law and was intended to do so for the benefit of tenants. The loss of a right to sue one of two joint tenants after the termination of a contractual tenancy is a minor matter compared to the restriction of the right to possession which the Act imposes on landlords. I too would dismiss the appeal. Also agreeing, SHAW LJ said that if a joint tenant died during the term of a protected tenancy his survivors would unquestionably be entitled to qualify as statutory tenants although the potential sources for payment of rent would have been reduced in number. Moreover the ultimate recourse of the landlord where a statutory tenancy arose and there was default by the tenant or tenants was an action for possession. The prospect of some possible detriment to a landlord was not sufficiently formidable to deflect the interpretation of section 3(1)(a) from its plain objective. The appeal was dismissed with costs. Leave to appeal to the House of Lords was refused.