Subtenant of farm cottage is not protected against superior landlord though not a service tenant and not subject to eviction by his immediate landlord–Decision of importance both inside and outside the sphere of agricultural holdings–Meaning of ‘premises’ in section 18 (5) of Rent Act 1968
This was an
appeal by Mr and Mrs Ilmar Olins, of 2 Hallsannery Cottages, Hallsannery Farm,
Bideford, Devon, from a decision of the Court of Appeal (Edmund Davies, Cairns
and Lawton LJJ) on February 21 1974 allowing an appeal by Mrs Nesta Gwendoline
Maunsell from a decision of Judge Stansfield at Bideford County Court on July
26 1973 and awarding her possession of 2 Hallsannery Cottages.
Mr R H
Bernstein QC and Mr S L Tuckey (instructed by Cripps, Harries, Willis &
Carter) appeared for the appellants, and Mr D A Wood (instructed by
Macfarlanes) represented the respondent.
In a speech
with which Lord Reid and Lord Dilhorne in effect concurred, LORD WILBERFORCE
said: The appellants claim the protection of the Rent Act 1968 in respect of
their occupation of a cottage situated on a 106-acre farm in Devonshire. They
are not employed on the farm. The question raised is of general importance both
to owners of farms and to cottage occupiers. As will be seen, it is not easy to
decide. The respondent is the freehold owner of the farm. The main buildings
are approximately in the centre of the holding and include a farmhouse and two
cottages. The cottage occupied by the appellants forms, together with the
farmhouse itself, a semi-detached pair of dwelling-houses. The other cottage is
separate, but nothing in this appeal depends upon any distinction between the
physical situation of the one cottage or the other. The farm was let for many years
to Mr Ernest Beer on a tenancy protected by the Agricultural Holdings Act 1948.
Mr Olins was employed on the farm for some time and lived in the other cottage,
but in 1955 he took other employment and in 1959 Mr Beer let the cottage in
question to both appellants on an unfurnished tenancy for £1 a week. On April
30 1963 the tenancy agreement between the respondent and Mr Beer, which had
previously been oral, was replaced by a written agreement in the standard
‘short form.’ Under this agreement the
farm was let to Mr Beer from March 25 1963 for one year certain and thereafter
from year to year at a rent of £400 pa. Clause 4 (12) of the tenancy agreement
provided that the tenant ‘will reside in the farmhouse and will use the farm
for agricultural purposes only and will not assign underlet or part with
possession of the farm or any part thereof except the two cottages which may be
sublet on monthly tenancies.’ The
appellants were, of course, already in occupation of their cottage under a
subtenancy. They continued to live in the cottage and it is not disputed that
they were protected tenants vis-a-vis Mr Beer. He died on March 15 1971,
and the respondent served a notice to quit upon his legal personal
representatives terminating the head tenancy on March 25 1973. On June 15 1973
she started these proceedings against the appellants for possession of the
cottage. There is no doubt that at common law this claim must succeed, since
the appellants’ subtenancy could not survive the termination of the tenancy.
But the appellants claimed the protection of the Rent Act 1968, section 18 (5).
The claim succeeded in the county court on the ground that the cottage formed
physically part of the farm buildings, a circumstance supposed to distinguish
the case from Hobhouse v Wall [1963] 2 QB 124 CA. On appeal to
the Court of Appeal, this distinction was rejected and the court followed its
earlier decision. The appellants in this House abandoned any attempt to
distinguish this case from Hobhouse v Wall on the facts. So they
are faced with the task of contending that two decisions of the Court of Appeal
are wrong. It is fair to say that more than one of the learned judges whose
judgments are under review have found difficulties in interpreting the
statutory provisions, and the section is certainly one which admits, almost
invites, opposing constructions.
As I have
stated, the provision actually relied on is section 18 (5) of the Rent Act
1968. This Act is a Consolidation Act, so that it is legitimate to look to the
origin of the subsection in question. That is to be found in section 41 of the
Housing Repairs and Rents Act 1954. There are some differences in the language
of these two provisions, but, in agreement with the Court of Appeal, I do not
find them significant. I shall quote, at the present stage, the earlier
section–I quote the present section later–because the next step will be to
ascertain what was its legal background at the time of its enactment: it was
also the section interpreted in Hobhouse v Wall. It read as
follows:
Where a
dwelling-house to which the Act of 1920 applies (hereinafter referred to as
‘the sublet part’) forms parts of premises, not being such a dwelling-house,
which have been let as a whole on a superior letting, then from the coming to
an end of the superior letting the operation of the Rent Acts in relation to
the sublet part shall be the same as if in lieu of the superior letting there
had been
like purposes as under the superior letting, and at rents equal to the just
proportion of the rent under the superior letting.
Before we try
to interpret this we must look at its context. The Act in which it appears
deals with two separate subjects. Part 1 is essentially a housing enactment
dealing with slum clearance and fitness for habitation, and contains a number
of amendments of Housing Acts. Part II, in which section 41 appears, is
essentially rent legislation. After 10 sections (23-32) dealing with the
increase of rents on account of repairs, it proceeds from section 33 onwards to
introduce some miscellaneous amendments to previous Rent Acts and also to
Housing Acts. Section 41 is one of these amendments; it seems to stand by
itself as an independent provision not reflecting or forming part of some wider
change in policy. Rather it seems, as we know is common in rent legislation, a
section of a piecemeal or patching character. A first reading of the provision
does not, to my mind, convey an impression of conspicuous clarity, particularly
as to its general scope. I think I would not be alone in finding that the key
word ‘premises’ invites reflection. It is true that it is a general word, or
rather, a word of some generality, but I know of no rule of construction which
requires general words to be interpreted literally regardless of their context.
If appeal is made to the principle that the plain meaning of a word should be
taken, unless at least some other indication appears, it must be said that a
word does not necessarily have a plain meaning just because it appears to be
general–certainly not such a word as ‘premises.’ We know that this is a word of conveyancing
jargon, meaning, strictly (and pace Viscount Hailsham in Whitley
v Stumbles [1930] AC 544, 546) everything in a deed which precedes the habendum.
From this it has passed into the vernacular, at least a quasi-legal vernacular,
as referring to some sort of property, but not with any precise connotation. A
reference to Stroud’s Judicial Dictionary shows that a number of different
meanings have been acquired of which the most central appears to be buildings
or some kinds of buildings, but it would be far too much to say that there is
any prima facie, still less any grammatical meaning from which one
should start.
The appellants’
main argument was that if the word is not itself a general word equivalent to
property, it is given the general meaning in this subsection of any property
which can be or has been let. This is said to follow from the phrase ‘part of
premises . . . which have been let as a whole. . . .’ But this is a confusion of thought. A
relative clause merely qualifies that to which it is relative, and does not
define it or help in its definition. What kind of property (which has been let)
is meant must be ascertained aliunde. I am not, myself, able to solve
this problem by a simplistic resort to plain meaning. Most language, and
particularly all language used in rents legislation, is opaque: all general
words are open to inspection, many general words demand inspection, to see
whether they really bear their widest possible meaning. As Viscount Simonds
said in A-G v Prince Ernest Augustus of Hanover [1957] AC 436,
461:
For words,
and particularly general words, cannot be read in isolation: their colour and
content are derived from their context. So it is that I conceive it to be my
right and duty to examine every word of a statute in its context, and I use
‘context’ in its widest sense, which I have already indicated as including not
only other enacting provisions of the same statute, but its preamble, the
existing state of the law, other statutes in pari materia, and the
mischief which I can, by those and other legitimate means, discern the statute
was intended to remedy.
A first stage
in this inspection might be to ask whether, to an ordinary man, ‘premises’
would be regarded as equivalent to ‘land’ or ‘property.’ I doubt very much whether a farmer would
accept the word as a description of his farm land, or whether the local hunt
would use it when asking for permission to hunt over his land. I note with
interest that the tenancy agreement of this farm does not use the word
‘premises’ at all: what is let, and referred to in the covenants, is ‘the
farm.’ This tenancy agreement, moreover,
was made in the standard short form which applies to many holdings all over the
country. So the reader of this section is bound to ask himself what the word
does include: has it some lesser meaning than property or than leasehold
property: is it coloured by the references to dwelling-houses: why is it used
in preference to something more precise: is there perhaps a drafting reason for
it? It certainly seems to facilitate the
later words ‘the remainder of the premises.’
And in the same line of thought, what is meant by ‘forms part of,’ ‘for
the like purposes as under the superior letting’? In sum, what is the section trying to do?
We do not have
to look far for a clue. In 1949 the Court of Appeal decided Cow v Casey
[1949] 1 KB 474. That case was concerned with a subtenancy of a dwelling-house
which was not subject to the Rent Acts. The decision was that the subtenant was
not entitled as against the superior landlord to the protection of the Acts.
Quite obviously section 41 was intended to deal with that situation and to
bring about the opposite result. It frequently happens that legislative changes
are made in order to reverse decisions of the courts: sometimes, indeed, the
courts themselves invite the change. The decision is then the occasion of the
enactment. The question may consequently arise whether the new enactment is
confined to dealing with the particular situation with which the court was
concerned or whether it goes further and covers a wider field, and if so, how
much wider. There is no general rule or presumption as to this. Often
Parliament, or its expert advisers, may take the opportunity to review the
whole matter in principle and make broad changes (see for example Smith
v Central Asbestos Co Ltd [1973] AC 518 as to the Limitation Acts).
Legislative time is a precious commodity, and it is natural that opportunities,
when they arise, will be used. Or, and this happens in the fiscal field, the
draftsman, faced with some loophole in a taxing Act which the courts have
recognised, will not merely close the particular loophole but will use general
language extending much more widely, sometimes so as to sweep the honest and
conscientious taxpayer up in the same net as the evader. On the other hand,
there may be cases where Parliament takes a narrow and piecemeal view of the
matter: time may not admit of an extensive review which may involve wide policy
questions, or necessitate consultation with other interests. All these
possibilities must be taken into account by courts in assessing the legislative
intention. In performing that task here, I think that help is to be gained from
setting down the two main elements which the draftsman must have had in mind:
the pre-existing law and the decision in Cow v Casey. The
pre-existing law is section 15 (3) of the Increase of Rent and Mortgage Interest
(Restrictions) Act 1920:
Where the
interest of a tenant of a dwelling-house to which this Act applies is
determined, either as the result of an order or judgment for possession or
ejectment, or for any other reason, any subtenant to whom the premises or an
part thereof have been lawfully sublet shall, subject to the provisions of this
Act, be deemed to become the tenant of the landlord on the same terms as he
would have held from the tenant if the tenancy had continued.
The decision
in Cow v Casey, as reported in the headnote in the Law Reports,
reads:
Held, dismissing the appeal, that the dwelling-house, the subject of the
original demise, not being a dwelling-house to which the Rent Restriction Acts
applied, section 3 of the Rent and Mortgage Interest Restrictions (Amendment)
Act 1933 did not apply to the subtenancy of a part of the premises so as to
protect a subtenant from ejectment. On the determination of his subtenancy the
defendant became at common law a trespasser. Section 15, subsection 3 of the
Increase of Rent and Mortgage Interest (Restrictions) Act 1920, under which
(where the interest of a tenant of a dwelling-house to which the Act applied
was determined) any subtenant to whom any part of the premises had been
lawfully sublet was to be deemed to have become the tenant of the head
landlord, only applied to the case where the head tenant, whose tenancy had
been determined, was tenant of a dwelling-house to which the Acts applied. The
defendant accordingly was not entitled to the protection of the Rent
Restriction Acts.
The
coincidence of language between the holding in Cow v Casey and
section 41 conveys to my mind a strong impression that section 41 is a section
of limited effect, dealing primarily with subleases of dwelling-houses or, at
the most, with subleases of property in the same field. And this fits in with
the context–a section on the face of it piecemeal, included in what is
throughout housing legislation.
The effect of
the change on the previous law can well be seen by looking at the Consolidation
Act, which now sets out the old provision and the new as two subsections of the
same section:
18.–(2) Where a protected or statutory tenancy of a
dwelling-house is determined, either as a result of an order for possession or
for any other reason, any subtenant to whom the dwelling-house or any part of
it has been lawfully sublet shall, subject to the provisions of this Act, be
deemed to become the tenant of the landlord on the same terms as he would have
held from the tenant if the tenant’s protected or statutory tenancy had
continued.
. . .
(5) Where a dwelling-house:
(a) forms part of premises which have been let
as a whole on a superior letting but do not constitute a dwelling-house let on
a protected tenancy; and
(b) is itself let on a protected tenancy, or
subject to a statutory tenancy,
then, from
the coming to an end of the superior letting, this Act shall apply in relation
to the dwelling-house as if, in lieu of the superior letting, there had been
separate lettings of the dwelling-house and of the remainder of the premises,
for the like purposes as under the superior letting, and at rents equal to the
just proportion of the rent under the superior letting.
There seems to
be a relation between these two subsections. They cover similar ground–broadly
that of tenancies of dwelling-houses. There is no indication that they extend
any wider. So what should ‘premises’ be taken to mean? One view, the narrowest view, would be that
it simply means ‘dwelling-houses.’ I
find this, linguistically, a perfectly possible construction: the phrase
‘premises, not being such a dwelling-house’ meaning premises being a
dwelling-house but not a protected dwelling-house: the exclusion qualifies and
colours the preceding generality. A less narrow view would be to say that
‘premises’ includes not only dwelling-houses in the normal popular sense, but
premises, which, for the purposes of the Rent Act, are treated as
dwelling-houses. Everybody knows, and the draftsman must be taken to have
known, that protection under the Rent Acts is given not merely to single,
identifiable, pure dwelling-houses or dwelling units, but also to units of a
mixed character–houses let with a garden or a yard or a garage or a paddock,
houses part (even a substantial part) of which is used for business purposes.
This is, of course, an untidy situation and it means that no clear definition
of a dwelling-house entitled to protection can be given. (We note that a
distinction is made between a house let together with land and land let with a
house). But it reflects the reality of life, and the county courts are used,
and skilful, at solving what are inevitably questions of degree. We should
recognise this and, as between the narrow and the less narrow meaning, I would
apply to ‘premises’ the latter, which would include any premises which, as a
matter of fact, applying accepted principles, would be held to be a
dwelling-house for the purposes of the Act.
But the
alternatives must be considered. One suggested alternative is to give to
‘premises’ a general meaning but to exclude from it any property forming part
of an agricultural holding. The basis for this would be that agricultural
holdings have a code of their own (see Megarry, the Rent Acts, 10th ed pp
107-8), and should not be brought under the general provisions of the Rent
Acts. I see the force of this, but I think that a particular exception limited in
this way would have received specific legislative mention, and this is not to
be found. The only real alternative seems to me to be to give to ‘premises’ a
universal meaning–and that is in effect the appellants’ contention. The effect
of this would be to give protection not only to subtenants of individual
dwelling-houses in the middle of agricultural holdings but to subtenants of
individual dwelling-houses in other complexes, industrial or business, or in
any large estate of any kind. To do this would represent a very great
enlargement of the rights of subtenants as compared with the situation
pre-1954. No doubt Parliament might think fit to take this course, but it is
obvious that a number of problems and policy considerations would arise–quite
distinct from those which relate to subtenants of ‘housing properties’ (I use
this expression for convenience to refer to what I think is within the
section). An indication that such problems exist and were recognised is to be
found in the Agricultural Holdings Act 1948, section 26 (1) (c) of which
confers on the Minister power by regulation to safeguard the interests
of subtenants of agricultural holdings–a power which had been partially, but
not relevantly, exercised prior to 1954 (see Sherwood v Moody
[1952] All ER 389). Nobody can be unaware that the law relating to tenancies of
agricultural land is one of considerable political import and delicacy, and I
am very reluctant to believe that the particular aspect of this law which
relates to subtenancies, treated with evident circumspection in 1948, would
have been dealt with in a general provision such as appears in section 41 of
the Act of 1954. I cannot finally help noticing that although the Court of
Appeal decided in 1963 (in Hobhouse v Wall) against protection of
subtenants of premises in an agricultural holding, Parliament, normally quick
enough to react in this field, has not disturbed the decision. The changes made
by the Rent Act 1965 (not directly affecting the point at issue, but relating
to agricultural tenancies) cannot affect the construction of a provision
enacted in 1954.
It remains to
say a few words on the judgments in the Court of Appeal. The leading judgment
is that of Upjohn LJ in Hobhouse v Wall. The learned Lord Justice
clearly felt difficulty about the case, as who does not? Certainly the word ‘premises’ was not clear
in its meaning to him; but after a thoughtful consideration of the issues he
reached the conclusion with which, broadly, I agree. I do not read him as
saying that ‘premises’ means ‘buildings,’ though, as I have pointed out, the
word has been given this meaning in other contexts, but as saying that his
interpretation would in effect cover only buildings. His reference, on the
other hand, to ‘what are essentially dwelling-houses’ seems to reflect the
conception which I would favour. He did not attempt any definition of
‘premises,’ but contented himself with the negative conclusion that the section
did not apply to agricultural holdings. I sympathise with his caution, but I
think that now in this House we must, unless we are to accept a universal
meaning of premises, risk the attempt to draw a dividing line. I have attempted
to do so in this opinion. In the present case, Lawton LJ might be taken perhaps
as equating ‘premises’ with (conventional) dwelling-houses, but I do not think
that in his reference to large Victorian houses he was using more than an
illustration. I regret that a matter which is really one of impression should
have needed so many words to dispose of, but we have heard some well balanced
arguments and the case is not one for quick solution. On the whole I would
dismiss the appeal.
LORD REID said
that he agreed with Lord Wilberforce’s speech and would add only a few words.
Section 41 of the original Act, the Housing Repairs and Rents Act 1954, itself
contained a fairly clear pointer to the meaning of ‘premises.’ The section directed one to suppose that in
lieu of the superior letting there had been two lettings, one of the sublet part
and one of the remainder of the property demised by the superior lease, and
then to suppose that the property in each of these lettings had been let ‘for
the like purposes as under the superior letting.’ This caused some difficulty if the purpose of
the superior letting was not residential, but was, say, agricultural. Suppose
that a farm to be let included several cottages all occupied by farm workers.
One would naturally say that the whole original lease, or ‘superior letting,’
had only one purpose, which was agricultural. It would at least be unusual to
say that it had two purposes, residential as regards the farmer’s house and the
cottages, and agricultural as regards the land and the other buildings. He (his
Lordship) would think that if one of the cottages were sublet to a person who had
no connection with the farm, there was a change of purpose. But the section
would not work unless it could be said that there were two purposes in the
original lease, so that the purpose of letting the house and cottage was
residential and not agricultural. While this was not a conclusive argument, it
seemed a fairly clear indication that the draftsman responsible for section 41
did not have in mind any ‘superior letting’ other than a letting for
residential purposes.
LORD DILHORNE
said that he agreed with Lord Wilberforce that the appeal should be dismissed.
The Agricultural Holdings Act 1948 contained a separate code for dealing with
agricultural holdings. It gave power to the Minister to make regulations
dealing with the situation where a tenant of such a holding had
been lawfully determined. No such regulations had been made, and it would be
surprising to him (his Lordship), if Parliament, in an Act dealing with housing
and rents, had intended section 41 to apply to agricultural holdings, that no
reference should be made to such a holding. In his opinion, the word ‘premises’
in section 41 of the 1954 Act and section 18 (5) of the Act of 1968 meant
dwelling-houses, including all properties treated as such for the purposes of
the Rent Acts. But if that was not right, then he thought the word should be
given the slightly wider meaning of ‘buildings.’ It was quite another thing to say that it covered
acres of arable or pasture land, and that just by the use of that one word
Parliament intended the section to encroach upon the sphere of the Agricultural
Holdings Act 1948.
In a joint
speech prepared by LORD DIPLOCK and LORD SIMON OF GLAISDALE in collaboration,
Lord Simon said that it was the first and most elementary principle of
construction that words and phrases of technical legislation were used in their
technical meaning if they had acquired one. If the Rent Act 1968 dealt with
legal technicalities of leasehold tenure on which ordinary citizens consulted
their lawyers, rather than with everyday affairs, ‘premises’ must be construed
as a term of art, ie, as the subject matter of the habendum clause of a lease.
In popular parlance, ‘landlord’ could mean merely ‘inn-keeper,’ but in ordinary
legal parlance, which was the language of legislation dealing with rent
restriction and security of leasehold tenure, ‘landlord’ must be presumed to
mean ‘lessor.’ Similarly, in popular
parlance ‘premises’ could mean ‘building,’ but in ordinary legal parlance it
meant ‘the subject matter of a letting.’
Any presumption there might still be that Parliament did not intend by a
Consolidation Act to alter the pre-existing law could have no operation where
the words of the Consolidation Act were not, as a matter of legal language,
capable of bearing more than one meaning; there was, moreover, no presumption
that in reversing decisions of the courts Parliament confined itself to making
no more alteration in the law than necessary. To restrict the meaning of ‘premises’
in section 18 (5) to ‘a building used predominantly for residential purposes,’
as counsel for the respondents proposed, was unacceptable. In the first place,
this was not a natural meaning of ‘premises,’ either in a popular or in a
technical context. It therefore involved rewriting the subsection, quite
unnecessarily and inadmissibly. In the second place, it produced absurdity and
anomaly. Why should Parliament wish to protect a subtenant of a flat in a block
containing 40 per cent office accommodation and 60 per cent residential
accommodation, but not a subtenant where the percentages were reversed? The case provided a striking example of how
disregard of the first and most elementary principle of construction could lead
to the ascription of a Parliamentary vagary.
