Otter v Norman

Rent Act 1977, section 7(1) — Meaning of ‘board’ — ‘Continental breakfast’ — Majority view in Wilkes v Goodwin followed — Appeal by tenant to House of Lords against decision of Court of Appeal affirming possession order granted to landlord in county court on the ground that the rent included payments in respect of board — Part of the consideration for the tenant’s rent of £70 per week was a breakfast comprising two bread rolls with butter, jam and marmalade, unlimited tea or coffee with milk and sugar, additional milk for cornflakes (provided by the tenant himself), and a glass of milk which the tenant took to drink in his room — The tenant had a bed-sitting-room, one of 36 such rooms in the landlord’s large house — The continental breakfast was served in a communal dining-room in the basement where there was also a large kitchen staffed by the landlord’s employees — The tenant’s contention was that ‘board’ required the provision of one main meal in addition to breakfast 129 In his speech Lord Bridge said that he would have agreed with the courts below in rejecting this contention even in the absence of authority, but his view was strengthened by the majority decision in 1923 of the only English authority on the point, Wilkes v Goodwin, and by the subsequent history of Rent Act legislation — The majority in Wilkes v Goodwin (Bankes and Scrutton LJJ) considered that any amount of board which is more than de minimis would suffice to exclude a tenancy from Rent Act protection — Younger LJ in his minority decision expressed the view that ‘board’ meant the daily meals which the tenant would otherwise ordinarily provide for himself — Subsequent Rent Act legislation appeared clearly to have accepted the majority view, by introducing a ‘substantiality’ test for attendance and furniture, but not for board, except in the special case of the 1946 Act contracts (the ‘restricted contracts’ of the 1977 Act) — For many years landlords and tenants have regulated their relationship on this basis, by a genuine contract, not an artificial contrivance to circumvent the Acts — It should be noted that in the view of the House the provision of board ‘includes the ancillary services involved in preparing it and the provision of crockery and cutlery with which to eat it’ — This appears to mean that a basket of groceries left outside the tenant’s room would not be within the definition — Tenant’s appeal dismissed The following cases are referred to in this report. Holiday Flat Co v Kuczera 1978 SLT (Sh Ct) 47 Wilkes v Goodwin [1923] 2 KB 86 This was an appeal by Gerard Norman, tenant of a room in Egerton House, 17-19 Egerton Terrace, London SW3, from the decision of the Court of Appeal dismissing his appeal from orders made by Mr H W Burnett QC, sitting as an assistant recorder in the West London County Court, including an order for possession in favour of the landlord, Charles Alfred Otter, the plaintiff in the county court and the present respondent. Robert Pryor QC and Mark Dencer (instructed by Oliver O Fisher & Co) appeared on behalf of the appellant; David Neuberger QC and Paul de la Piquerie (instructed by Boodle Hatfield) represented the respondent. In his speech, LORD BRIDGE OF HARWICH said: The short question for decision in this appeal is the meaning of the word ‘board’ in section 7(1) of the Rent Act 1977, which provides: A tenancy is not a protected tenancy if under the tenancy the dwelling-house is bona fide let at a rent which includes payments in respect of board or attendance. The appellant was the tenant of a room in a large house in Egerton Terrace, where 36 rooms on five floors are let as bed-stting-rooms. The appellant’s weekly rent at the commencement of the tenancy in 1983 was £50; it was raised in 1985 to £70. Part of the consideration for the rent was the daily provision of a continental breakfast served in a communal dining-room in the basement, where there was also a large kitchen staffed by employees of the respondent landlord. The breakfast comprised two bread rolls with butter, jam and marmalade, unlimited tea or coffee with milk and sugar, additional milk for cornflakes provided by the appellant himself, and a glass of milk which the appellant took to drink in his room. No question is raised as to the bona fides of the letting to the appellant at a rent which included payments for this daily meal. The sole question is whether it amounted to ‘board’ under section 7(1) so as to defeat the appellant’s claim to a protected tenancy. On the respondent’s claim for possession, following notice to quit duly given, Mr H W Burnett QC, sitting as an assistant recorder in the West London County Court, held that it did and gave judgment for the respondent. The judgment was affirmed by the Court of Appeal (May LJ and Waterhouse J) [1988] 2 WLR 250. The appellant now appeals by leave of your Lordships’ House. In the formal notice of appeal to the Court of Appeal three possible meanings of ‘board’ were advanced: (a)  the provision of all meals, (b)  the provision of more than one meal per day, or (c)  the provision of one adequate meal. In the county court it had been argued that the appellant’s continental breakfast was not an ‘adequate’ meal which could amount to ‘board’ if the third meaning was adopted. But this argument was not pursued in the Court of Appeal or before your Lordships. It is rightly conceded that the continental breakfast served to the appellant could not possibly be disregarded as de minimis. Again the suggestion at (a), that ‘board’ means the provision of all meals, which I understand to imply that the requirement of section 7(1) could be satisfied only by the provision to the tenant of three meals a day, has not at any time in this litigation been seriously canvassed. We are left, therefore, with the single submission that ‘board’ requires at least the provision of one main meal in addition to breakfast. This involves the somewhat startling proposition that if a tenant’s rent entitles him to what is described in hotel literature as a ‘full English breakfast’, his tenancy is protected but if two meals are provided in the form of, say, a continental breakfast plus either a ‘ploughman’s lunch’ or ‘high tea’, the tenancy is not protected. The relevant definitions of ‘board’ in the Shorter Oxford English Dictionary are: ‘food served at the table; daily meals provided according to stipulation; the supply of daily provisions’. With the growing popularity in this country of holidays on the continent, we have grown accustomed to the use of the phrases ‘full board’ and ‘half board’ as corresponding no doubt to the French ‘pension’ and ‘demi-pension’. But if ‘half board’ relates to breakfast plus one additional meal, I can see no reason as a matter of language or logic why breakfast by itself should not amount to partial ‘board’, subject always to the implicit requirement that the provision of the meal to the tenant includes the ancillary services involved in preparing it and the provision of crockery and cutlery with which to eat it. Accordingly, even if there were no relevant authority to consider, I should agree with the courts below in rejecting the appellant’s contention. But my view is greatly strengthened by the only authority in point and the legislative history. The phrase ‘let at a rent which includes payments in respect of board’ first appeared in the proviso to section 2(2) of the Increase of Rent and Mortgage Interest (War Restrictions) Act 1915. It reappeared in proviso (i) to section 12(2) of the Increase of Rent and Mortgage Interest (Restrictions) Act 1920 as follows: Provided that — (i)  this Act shall not . . . apply to a dwelling-house bona fide let at a rent which includes payments in respect of board, attendance, or use of furniture. . . . In Wilkes v Goodwin [1923] 2 KB 86 the question at issue was whether a house let at a rent which included payments in respect of certain linoleum fell within this proviso. Bankes LJ said at p 93: The proviso in question is introduced into the section which defines the dwelling-houses to which the Act shall apply for the purpose of excluding a certain class of dwelling-house from the operation of the Act. It does so by the application of two tests. The one is the bona fides of the letting and the other is that the rent includes payments in respect of board, attendance, or use of furniture. The first test depends upon a question of intention, the second is a question of fact and of degree. In some cases the tests may run the one into the other, in others they may stand independently of each other. I will take the second test first. Three quite common and well understood words are used, board, attendance, furniture. The words are used quite generally and without any limitation. The statute does not indicate whether full or partial board, complete or intermittent attendance, much or little furniture is aimed at. It uses the words quite generally, and in my opinion any amount of board, any amount of attendance, any amount of furniture, will satisfy this second test, which is not ruled out of consideration by the application of the rule ‘de minimis non curat lex’. Scrutton LJ said at p 96: On the rest of the proviso, in my view ‘board’ is not confined to the full board of an ordinary tenant, ‘attendance’ to full attendance, or ‘furniture’ to the complete furniture of a ‘furnished house’. Partial board, partial attendance, or some furniture though the house is not completely furnished, will suffice to bring the proviso into operation. Parliament might have made the other provision, but have not in my opinion done so. If they did intend the other meaning, they apparently have an opportunity this year to make their meaning plain. If some furniture will do, how much will suffice? These two passages express the central ratio of the majority, who concurred in remitting the case to the county court judge to determine as a matter of fact and degree whether the payments in respect of linoleum, assumed to be ‘furniture’, should be disregarded as de minimis. 130 Younger LJ also concurred in the remission of the case to the county court judge, but expressed very different reasons from those of the majority. He accepted that in their literal meaning the words ‘attendance’ and ‘furniture’ were capable of embracing much or little, but he seems to have taken the word ‘board’ as the touchstone for the construction of the proviso. Having referred to ‘attendance’ and ‘furniture’, he said at pp 110 and 111: As a mere matter of words each of these expressions may quite properly be taken to mean very little, although with at least equal propriety they may be taken to connote a great deal more. But in my judgment so much may not be said of the third word ‘board’ with which these two other expressions are associated. The word chosen is, it will be noticed, not ‘food’ or ‘drink’, but ‘board’. ‘Food’ may of course mean much or little; ‘drink’ I hope is entitled to an equally non-committal construction. ‘Board’, however, is a different word altogether. It is defined, I see, in the Oxford Dictionary as ‘daily meals provided in a lodging or boarding house according to stipulation; the supply of daily provisions’. The word without suffix or affix suggests to my mind sufficiency. It could never, I think, be satisfied by the provision, say, of an early morning cup of tea. If you wish to accentuate its abundance you may call it ‘full board’, but if you would convey that it is limited then you must call it ‘partial’ or qualify it by the use of some other adjective of limitation. It appears to me that the natural interpretation of the word as we find it in this exception involves the conception of a provision by the landlord of such food as in the case of any particular tenancy would ordinarily be consumed at daily meals and would be obtained and prepared by a tenant for himself if it were not provided by somebody else. . . . Remembering that the Act applies to prescribed tenancies, of what I may call for brevity unfurnished and unattended houses, I think it may be properly said that a tenancy is within the exception and is outside the Act if the landlord receives payment for and provides and prepares food for his tenant’s meals, which having regard to all the circumstances of the case the tenant would otherwise ordinarily provide for himself; or provides such attendance as for ordinary household purposes the tenant would in the circumstances otherwise provide for himself; or provides for the tenant’s use so much furniture that when it is in place the house can no longer be fairly described as an unfurnished house. It is not entirely clear to me whether Younger LJ intended by these passages that the proviso should be construed as confined, in effect, to houses let fully furnished or with the provision of full board. I am inclined to think that he did, although this is hardly consistent with his concurrence in the decision to remit the case to the county court judge, rather than indicating that he would simply allow the tenant’s appeal. However, it is quite clear that these judgments, delivered on March 8 1923, must have come to the attention of Parliament before the enactment of the Rent and Mortgage Interest Restrictions Act 1923, which received the Royal Assent on July 31 1923. Section 10(1) of that Act seems to be a direct acceptance of Scrutton LJ’s invitation to Parliament to make their meaning plain. It provides: For the purposes of proviso (i) to subsection (2) of section 12 of the principal Act (which relates to the exclusion of dwelling-houses from the principal Act in certain circumstances), a dwelling-house shall not be deemed to be bona fide let at a rent which includes payments in respect of attendance or the use of furniture unless the amount of rent which is fairly attributable to the attendance or the use of the furniture, regard being had to the value of the same to the tenant, forms a substantial portion of the whole rent. The test of substantiality here adopted with reference to attendance and furniture has never been applied to board as the criterion of exclusion from full protection under the Rent Acts. It was, however, applied in relation to the very different control by rent tribunals first introduced by the Furnished Houses (Rent Control) Act 1946 (see section 12(3)) and which survives in the Act of 1977 in the provisions relating to restricted contracts. Thus, section 19(5)(c) of the Act of 1977 provides: A contract is not a restricted contract if . . . (c)  it is a contract for the letting of any premises at a rent which includes payment in respect of board if the value of the board to the lessee forms a substantial portion of the whole rent . . . Effectively the only control imposed on restricted contracts is to subject the rents under such contracts to review by rent tribunals. One can well understand the legislative rationale for applying such a test of substantiality in relation to otherwise uncontrolled tenancies as a means of subjecting otherwise exorbitant rents to such review. However, the application of the test of substantiality in this context, contrasted with its total absence in the context of the exclusion from protection by section 7(1), seems to me quite inconsistent with the submission that nothing less than the provision of two meals daily can amount to ‘board’ at all. There has been no reported English decision bearing upon the point after Wilkes v Goodwin [1923] 2 KB 86. But Parliament chose not to interfere in relation to ‘board’, and it seems to have been assumed ever since that the majority view in Wilkes v Goodwin, albeit expressed obiter, correctly stated the law, in the words of Bankes LJ, at p 93, that ‘any amount of board’ which is more than de minimis will suffice to exclude a tenancy from statutory protection. Thus, successive editions of Sir Robert Megarry’s standard textbook on the Rent Acts (Megarry, The Rent Acts) have stated that: ‘In practice, the dividing line appears to fall between the early morning cup of tea on the one hand and ‘bed and breakfast’ on the other’: see 10th ed (1967), p 141. The same view has been adopted in Scotland: see Holiday Flat Co v Kuczera 1978 SLT (Sh Ct) 47. My Lords, I think we must assume that for many years many landlords and tenants have regulated their relationships on this basis, and even if I thought that a different construction could reasonably be placed on section 7(1) of the Act of 1977 I would not think it right to adopt it now and to upset existing arrangements made on the basis of an understanding of the law which has prevailed for so long. The courts have consistently set their face against artificial and contrived devices whereby landlords have sought to deny to tenants the protection intended to be conferred by the Rent Acts. I do not believe that anything of that kind is involved here. A bona fide obligation by a landlord to serve even such a modest daily meal as the continental breakfast with which this case is concerned is hardly likely to appeal to the unscrupulous landlord as a soft option. It will necessarily involve not only the cost of the food and drink provided but also all the housekeeping chores which must be undertaken in shopping for provisions, preparation and service of meals on the premises and clearing and washing up after meals. If a landlord and a tenant genuinely contract on terms which impose such obligations on the landlord, it would, to my mind, be surprising if the legislature had provided for the perpetuation of such a contract in favour of the tenant when the landlord wishes to terminate it. I would accordingly dismiss the appeal. Subject to the usual opportunity for objection by the Law Society, the respondent’s costs of the appeal should be paid by the legal aid fund. LORDS BRANDON OF OAKBROOK, TEMPLEMAN, ACKNER and OLIVER OF AYLMERTON agreed with the speech of Lord Bridge of Harwich and would dismiss the appeal.