Metropolitan Properties Co Ltd v Cronan and another

Rent Act 1977 — Position of former wife after divorce where no application had been made by her under section 7 of the Matrimonial Homes Act 1967 — Appeal by ex-husband and ex-wife against possession order granted to landlords — Husband and wife and a son of the marriage lived in a flat, no 26, of which the husband was the tenant, until matrimonial difficulties arose and the husband moved out — He took a tenancy of another flat, no 66a, from the same landlords — When tenancy of flat 26 was about to expire, the husband took a further three-year tenancy of it, while still continuing to live at no 66a — Wife and son continued to live at flat 26 — Eventually, after the contractual tenancies of both flats had expired, the wife obtained a divorce, an order for joint custody of the son being made, with care and control to the wife — Landlords sought possession of flat 26 — It was the wish of both the husband and the wife that she should remain in flat 26 and they both appealed against the county court judge’s order for possession — Court’s review of case law beginning with Skinner v Geary — Submissions by appellants that, although the husband had been the nominal tenant, the wife was the real tenant, and that there should be an ‘abandoned child’ exception to the Skinner v Geary rule, analogous to the ‘deserted wife’ exception, both rejected — In the absence of an order under section 7 of the Matrimonial Homes Act 1967, the wife had no claim to remain in occupation after the divorce — Appeal against possession order dismissed This was an appeal by John Barry Cronan and his ex-wife, Mrs Cronan, from a decision of Judge Bolland at Westminster County Court granting an order for possession to the respondents (plaintiffs in the action), Metropolitan Properties Co Ltd, in respect of a flat at 26 Carlisle Mansions, Carlisle Place, London SW1. Peter Millett QC and Daniel Pearce-Higgins (instructed by Piper, Smith & Basham) appeared on behalf of the appellants; David Neuberger (instructed by Memery & Co) represented the respondents. Giving the first judgment at the invitation of Cumming-Bruce LJ, MAY LJ said: This is an appeal from the order made by His Honour Judge Bolland in the Westminster County Court on May 1 1981 that the respondents should recover possession against each of the appellants of the flat at 26 Carlisle Mansions, Carlisle Place in London. The brief facts of the case are as follows. The respondents were and are the owners of a block of residential flats known as Carlisle Mansions, which is situated behind Victoria Street in south-west London. On May 19 1971 the first appellant, Mr Cronan, took a lease of the flat numbered 26 Carlisle Mansions. This was for a term of three years. At some stage during this demise the second appellant, Mrs Cronan, began to live with Mr Cronan and they were ultimately married in April 1973. On some date between then and February 8 1974 a son was born to them. Unfortunately marital difficulties developed between Mr and Mrs Cronan and on February 8 1974 the former took another three-year lease of 66a Carlisle Mansions. He moved out of no 26 and has ever since lived in no 66a as his residence. It is quite clear that thereafter he had no intention of returning to no 26. Be that as it may, when the three-year term of no 26 granted to him in 1971 was about to expire, he was offered and accepted a further three-year lease of this flat from June 1974. Although this fresh lease contained a covenant on his part to use the flat only as a private residence occupied by him and his own immediate family and not for any other purpose, there is no doubt that ever since 1974 Mr Cronan was living in 66a Carlisle Mansions and his wife and son have been living in no 26. Further, it is also clear, and the learned county court judge so held, that by their servants or agents the respondents were at all material times well aware that this was the situation. This continued not only during the currency of the contractual tenancies of both 26 and 66a Carlisle Mansions but for a time thereafter. Towards the end of 1977 Mrs Cronan instituted divorce proceedings against her husband and the decree nisi was made on November 18 1977. At the same time an order for joint custody of the son was made, with care and control to Mrs Cronan. On January 3 1978 the decree nisi was made absolute. At some stage thereafter more senior members of the respondents’ organisation became aware that Mr Cronan was the nominal tenant from them of both 26 and 66a Carlisle Mansions and the respondents accordingly instituted proceedings against him for possession of no 26. These were originally on the basis that as he was living in no 66a and not in no 26, there was clearly a breach of the covenant concerning occupation to which I have already referred. As I have105 said, however, at all material times other servants of the respondents more directly concerned were well aware that Mr Cronan was not living in no 26 and consequently, having received rent in those circumstances there was no doubt that the respondents had waived their right to rely upon any such breach and that they would not have been entitled to possession on this ground alone. However, the true state of the relationship between Mr and Mrs Cronan and the fact that a decree absolute had been granted only became fully known to the respondent landlords when the appellants served their defence in the county court proceedings for possession. I should add that although quite clearly at the time of the decree Mrs Cronan could have made an application under section 7 of the Matrimonial Homes Act 1967 for the transfer to her of the then existing statutory tenancy of no 26, for some reason or other no such application was made. Upon receipt of the defence in the proceedings, the landlords promptly amended their particulars of claim to allege that even though Mr Cronan, and thus Mrs Cronan, might have been entitled to remain in occupation of no 26, at first under a contractual tenancy, and then under a statutory tenancy until January 3 1978, the latter determined upon the grant of the decree absolute and that accordingly they were entitled to possession on this basis also. Notwithstanding various arguments which were addressed to the learned county court judge on behalf of the appellants and have been repeated before us, to which I shall hereafter refer, upon these facts he came to the conclusion that neither Mr nor Mrs Cronan, nor indeed their son, had any right to remain in possession of no 26 and made the possession order accordingly. It is against that possession order that the appellants now appeal herein. I should also add that when questions of maintenance came to be decided between Mr and Mrs Cronan on their divorce, he undertook to continue to pay the rent of no 26 and to allow his wife and son to remain in occupation of that flat. In consequence a nominal order for maintenance in favour of Mrs Cronan was made, coupled with one for periodical payments of £17 per week in respect of their infant son. It is quite clear that both Mr and Mrs Cronan intended that Mrs Cronan should remain in no 26, where she had in fact been living since some date between 1971 and 1973. In so far as the law is concerned, ever since the well-known judgment of Scrutton LJ in Skinner v Geary [1931] 2 KB 546, the basic principle governing the operation of the Rent Acts and the entitlement to security from dispossession which they give is that the latter can be enjoyed only by an occupying tenant and only for so long as he is in occupation of the relevant dwelling-house as his home. See also, for example, per Lord Wright in Hiller v United Dairies (London) Ltd [1934] 1 KB 57, and the Court of Appeal in Cove v Flick [1954] 2 QB 326n. Over the last 50 years a limited number of apparent exceptions to this general rule have been developed by the courts as ’empirical solutions to prevent injustice being done’, per Lord Wilberforce in National Provincial Bank Ltd v Ainsworth [1965] AC 1175 at p 1252. One of these apparent exceptions, for example, is the case of temporary absence — the sea captain who is away on a voyage but intends to return to the relevant dwelling-house. Analogous to this is the case of the man who can properly be said to have two homes, each of which attracts the protection of the Rent Acts — the home in the country and the flat in London which he occupies during the week in order to carry on his business. Another apparent exception to the general rule developed by the courts is that which can briefly be described as that of the ‘deserted wife’: in such cases it has been held that the husband tenant, though absent, must be deemed to be occupying the dwelling-house by his wife with whom he has a duty to cohabit and to whom he owes a duty to maintain. The security of tenure which such a wife enjoys only lasts at least so long as she remains the tenant’s wife: once the marriage has been ended by a decree absolute of divorce, the protection ceases: Robson v Headland (1948) 64 TLR 596, approved and applied by the Court of Appeal in Heath Estates Ltd v Burchell (1979) 251 EG 1173, [1979] 2 EGLR 81. There may also be an apparent exception to the general rule in a case where the landlord knows that the tenant is merely nominal and the real tenant is somebody else. In these circumstances the real tenant may be protected. However, having regard to the basic principle governing the Acts and in the light also of the decisions in S L Dando Ltd v Hitchcock [1954] 2 QB 317 and Cove v Flick I think that this last apparent exception, if indeed it can ever be made good in law, applies only where the landlord grants the tenancy to the nominal tenant as a sham and for the purpose of being free of the burdens of the Rent Acts to which he would otherwise be subject in respect of the ‘real’ tenant. Where by a genuine transaction, albeit that the true facts are known to the landlord, the latter lets a dwelling-house to one person, for instance a father, for the purpose of its occupation by another, for instance that child of that father, then when the contractual tenancy expires I do not think that the occupying child is entitled to the protection of the Rent Acts. It might appear that in such circumstances the landlord was having the benefit of both worlds; during the tenancy he looks to the father for the rent and the due performance of the covenants; at the end of it he is entitled to vacant possession: but one must not forget that prima facie the demised premises belong to the landlord to make what profitable or other use of them he may wish; he is restrained only to the extent that the statutes may restrict his freedom of action in this way. Given that the landlord proposes to let the dwelling-house in any event, and thus in all probability be encumbered by a statutory tenant of it in due course, he can, if the opportunity offers and by due negotiation and agreement, let it to one person at the behest of another and still be able to look to that other for the rent and the due performance of the covenants, if the tenant should default, for instance by obtaining that other’s guarantee of the tenant’s obligations. That this is the basic principle, but that there have grown up these apparent exceptions, is clear from the provisions of subsection (1)(a) of section 2 and subsection (3) of the same section of the consolidating Rent Act 1977, which read as follows: (1)  Subject to this Part of this Act — (a)  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 . . . (3)  In subsection (1)(a) above and in Part I of Schedule I, the phrase ‘if and so long as he occupies the dwelling-house as his residence’ shall be construed as it was immediately before the commencement of this Act (that is to say, in accordance with section 3(2) of the Rent Act 1968). In these circumstances, and subject to the two contentions of counsel for the appellants, to which I shall refer, the analysis of the relationships between the various parties in this case in law at relevant times must be this. In June of 1974 the respondents granted a contractual tenancy of flat no 26 to Mr Cronan. The mere fact that they then knew that he was separated form Mrs Cronan, that it would be she and their son who would be living in no 26 and that he would be living in flat 66a, of which they had also granted him a tenancy four months earlier, cannot alter what was the legal position between the respondents and Mr Cronan during the three-year term of that tenancy, namely that they were the landlords and he the tenant pursuant to that contractual demise. When that three-year term ended and until Mrs Cronan ceased to be Mr Cronan’s wife upon the grant of the decree absolute in January 1978, by the apparent exception to the general principle governing the Acts applicable to the case of a deserted wife, Mr Cronan was deemed to remain in occupation of no 26 by his wife and consequently she could not be evicted. Once the decree absolute was pronounced, however, Mr Cronan could no longer be deemed to be in occupation of no 26 and neither he nor she could claim any security of tenure of that flat under the Rent Acts. Mrs Cronan could have preserved her position in and in relation to no 26 had she or those representing her taken the appropriate steps under section 7 of the Matrimonial Homes Act 1967, but neither of them did so. Against this apparently inevitable result on the facts, which were hardly in dispute, counsel for the defendants advanced two arguments with which I shall deal in the reverse order to that in which he presented them. Counsel submitted that in the very special circumstances of this case, although Mr Cronan was what he described as the nominal tenant, nevertheless the actual tenant throughout was Mrs Cronan. He supported this submission by a reference to the covenant which106 there was in the June 1974 tenancy agreement that the tenant should use the flat only as a private residence occupied by him and his own immediate family and not for any other purpose. Quite clearly both sides knew that this would immediately be breached as soon as the tenancy agreement was signed, if Mr Cronan was not in occupation of no 26, and thus the reality of the contractual tenancy between the respondents and Mr Cronan in June of 1974 must have been and, intended to be that Mrs Cronan was the ‘actual’ or ‘real’ tenant and that her husband was a mere nominee for her. I confess first to an unworthy suspicion that when the tenancy was granted in June 1974 it was made on the respondents’ usual printed form and that neither party applied their minds either to the content or effect of the covenant. Even if they did, they may have read the covenant disjunctively — although I do not think that this is an acceptable construction of it — and thus thought that the factual situation thereafter obtaining constituted no breach. Alternatively, if the occupation of no 26 by Mrs Cronan and her son alone after June 1974 was prima facie a breach of the covenant, I have no doubt that, being fully aware of the then facts, the plaintiffs were prepared to accept this and did in truth waive the ex hypothesi breaches of covenant from the start. In the end, counsel for the defendants effectively accepted that in order to make good this first basic submission, namely that from June 1974 to 1977 it was Mrs Cronan who was the ‘actual’ or ‘real’ tenant, he had to contend either that the tenancy agreement of June 1974 was a sham, in the sense that to the knowledge and with the agreement of both parties it embodied an apparent legal and contractual relationship contrary to the true facts, or that throughout in June 1974 Mr Cronan was acting as his wife’s agent. In my opinion not only was there no finding by the learned county court judge that the transaction had been a sham in this sense but also there was no evidence to support any such finding. On the issue of agency, the learned judge below made a specific finding against the defendants. Not only was there material before him upon which he was entitled to make such a finding but also, I think, that any decision to the contrary would have been perverse. Although by virtue of subsection (3) of section 2 of the Rent Act, 1977, re-enacting in somewhat different words subsection (2) of section 3 of the 1968 Rent Act, we have to accept and apply to the basic principle which started with Skinner v Geary the various apparent exceptions which the courts had worked out and upheld prior to 1968, I think that the mere fact of the enactment of the Matrimonial Homes Act 1967 makes it more difficult in this or any other case to argue that the apparent and relevant contractual tenancy was in truth otherwise than between landlord and husband. A deserted wife has her rights under the Rent Acts on the decided cases so long as she remains a wife. Coincident with her ceasing to be the wife by virtue of a divorce, she can continue to protect her position by an appropriate application under the 1967 Act. There is no need to postulate, nor I think is there any justification for postulating, the sham or agency situation similar to that for which counsel contended in the present case. Counsel’s second submission was that if Mrs Cronan lost any security of tenure which she previously had as a result of the decree absolute, nevertheless on similar reasoning which gave rise to the apparent exception to the general principle in favour of the ‘deserted wife’, the courts should uphold a similar exception in favour of the ‘abandoned child’. Just as the decisions in favour of the deserted wife rested on the obligation of her husband to maintain her and to provide her with a roof over her head, so also should an infant son be entitled to rely upon his father’s common law obligation to maintain him to support the contention that his, the son’s, continuing occupation of premises within the Rent Acts should in law be considered to be that of his father, and thus attract the protection given by those Acts to a tenant (the father) in occupation of the relevant premises (flat 26) by the son (whom at common law he was bound to maintain). I do not think that such a contention can be validly supported for a number of reasons. First, the mutual duties and rights of parent and child are different from those of husband and wife. Although there is a duty on the husband and father to support his wife and children, there is, in my opinion, absent from the father-child relationship the mutual right and duty of both husband and wife to cohabit. Although the right of a wife to remain in occupation of the matrimonial home even as against her deserting husband is incapable of precise definition and may change overnight by the act or behaviour of either spouse (see per Lord Upjohn in the National Provincial Bank Ltd case at p 1233) it certainly exists as an aspect of the status of marriage. On the other hand, at least in the case of an adult child, he or she is correctly described as a licensee in the parents’ home and such a licence can be withdrawn. Although the court is expecially slow to grant an injunction which will exclude even an adult child from that home, there is power to do so: see Waterhouse v Waterhouse (1905) 95 LT 133, Stevens v Stevens (1907) 24 TLR 20 and Egan v Egan [1975] 1 Ch 218. I cannot think, and at the least we were shown no authority to the contrary, that the legal nature of a child’s position in the parents’ home changes from one of status to that of licensee so soon as the child obtains his or her majority. As at present advised, I think that in law a licence to remain in the parents’ home can be withdrawn even in the case of a minor child, though of course one hopes that this would occur only in very special cases. If such a course of action were adopted, then no doubt the appropriate care and other proceedings would follow under the general legislation relating to children. For present purposes I think that there is therefore a significant difference between the position of a deserted wife on the one hand and an abandoned child on the other vis-a-vis the matrimonial or family home. Secondly, so far as I am aware, this is the first occasion upon which an apparent exception to the basic principle in favour of an abandoned child has ever been contended for. For my part, I would be averse to upholding it unless I were satisfied that not only in this case but in others with similar, though not identical, facts such an exception was necessary to prevent a general injustice. I am not so satisfied. In most cases no injustice will be done to a child, because he or she will throughout be in the care of either the father or the mother in his or her home and if not still a contractual tenant, then a statutory tenant in their own right. Further, the succession provisions in the Acts, now contained in the First Schedule to the 1977 Act, amply protect a child living with its statutory tenant parent if the latter should die. In truth, Mr and Mrs Cronan’s son has been disadvantaged in the present case only because of the omission to make an appropriate application under the Matrimonial Homes Act 1967, and I am sure that I must be on my guard to prevent my natural sympathy for him from leading me to be a party to making bad law. Thirdly, although a father can no doubt in law be in beneficial occupation of premises for rating purposes by the presence therein of an abandoned child (compare Cardiff Corporation v Robinson [1957] 1 QB 39), ex hypothesi he is not in occupation of those premises as his residence, or his home, and thus has no protection under the Rent Act 1977, nor would have had under any of its predecessors following Skinner v Geary. Although it was found by the learned county court judge, and has not been disputed before us, that at least after June 1974 the plaintiffs must have known or at least have the knowledge imputed to them that Mr Cronan lived in no 66a and Mrs Cronan with their son lived in no 26, this is not enough to enable the appellants to resist the claim made against them for possession of no 26. Counsel told us that he could not rely upon any form of estoppel based upon this knowledge. In the result, when the contractual term granted in June 1974 in respect of no 26 expired, Mrs Cronan was entitled to statutory protection under the Rent Act only so long as Mr Cronan must in law be considered to have been occupying that flat and doing so as his residence or home. So long as he and she remained married, this was so; as soon as they were divorced, his notional occupation and thus her protection ceased. In S L Dando Ltd v Hitchcock, supra at p 325, Lord Goddard CJ summarised the basic principle governing the operation of the Rent Acts and the anomalous position of the deserted wife in a passage to which we were referred and which I think has particular relevance to this case. He said: . . . I think that the Acts are intended and designed to protect tenants and tenants only. That there has been an inroad into that principle in the cases of107 husband and wife is no doubt true. I cannot help thinking that in those cases the shadow of the old common law doctrine that husband and wife are one in law has possibly, consciously or unconsciously, affected the courts. The Acts put very considerable difficulties in the way of landlords and circumscribe their legal rights to a very great extent. I do not think that we ought by decisions to enlarge the difficulties of landlords or to go further than the declared object and policy of the Acts dictate — that is, to protect tenants — and I think that it cannot be denied that that means tenants who live in these houses. Where there is a personal tenant who does not live in the house, never intends to live in the house, and declares that his intention is never to live in it, I can see no reason why his tenancy should be protected to enable him to keep in the house a manager, or a partner, or anyone else whom it may be convenient to have there. For these reasons I would dismiss this appeal. EVELEIGH LJ: I have had the advantage of reading both the judgments prepared by my Lords; I agree with them both. Agreeing that the appeal should be dismissed, CUMMING-BRUCE LJ said: The appellants failed to avail themselves of the right conferred by section 7 of the Matrimonial Homes Act 1967 to apply for a transfer of Mr Cronan’s tenancy of 26 Carlisle Mansions to Mrs Cronan. The ingenious submissions presented on behalf of the appellants emerge on analysis as no more than a desperate attempt to persuade the court to develop a new extension of the statutory protection conferred by the Rent Act 1977 in order to relieve the appellants of the consequences of that omission. For the reasons stated by May LJ there is no principle to be discovered in the case law upon the scope and effect of section 2(1) of the Rent Act which entitles the court to extend the statutory protection in the manner now claimed. I would add only one consideration to those already explained. Counsel invited the court to erect a new exception upon the foundation of the former husband’s right to joint custody where there was in existence what has been described as a ‘split order’, granting care and control of the child of the family to the mother with joint custody to the mother and father. Such an order by necessary implication deprives the father of the right to claim that his child should reside with him save during periods of staying access. The home of the child is the home of the mother, who has the right and duty to provide the child with care and control. If the parties wanted the mother to maintain her right to live with the child in the former matrimonial home after she ceased to be Mr Cronan’s wife, all that they had to do was to apply before decree absolute to the court by which the decree nisi was granted for an order under section 7 of the Matrimonial Homes Act. Where the court has dissolved a marriage, the Matrimonial Causes Acts, the Matrimonial Proceedings and Property Act, and the Matrimonial Homes Act 1967 together constitute the statutory code which prescribes the rights and duties of the parties to provide for all aspects of the maintenance, including accommodation, of a child of the family. The only provision in this code for continuing statutory protection of a tenancy of a home in which the father formerly resided with his family for the purpose of affording protection for a child in the care and protection of the mother is to be collected from section 7 of the Matrimonial Homes Act 1967. The appeal was dismissed with costs against both appellants, the order for costs against the second appellant not to be proceeded with without an order of the court. It was ordered that possession should be given to the respondents three months from the date of judgments in the Court of Appeal. Leave to appeal to the House of Lords was refused.