Landlord and Tenant Act 1954, Part II — Premises let to a medical school — Flat consisting of four study-bedrooms, with kitchen, sitting-room, bathroom and lavatories — Flat used for residential accommodation for medical students — Landlords claimed possession on expiration of lease and medical school resisted possession on the ground that it occupied the premises for the purposes of a business carried on by it and was entitled to the benefit of the 1954 Act — Held, upholding decision of county court judge, that the school was protected by Part II of the Act — The question was whether the school ‘occupied’ the flat, and, if so, whether it occupied it for the purposes of a business which it carried on — The school did occupy the flat, as was evidenced by the substantial degree of control which it exercised and the furniture and equipment which it provided — It occupied it for the purposes of a business, in the wide sense of an ‘activity’, namely, running a major medical school — The occupation of the flat by students was not merely to provide a residence but to foster a corporate or collegiate spirit in furtherance of their medical education — Chapman v Freeman, where the accommodation of hotel staff in a cottage was merely for housing purposes, distinguished — Appeal by landlords dismissed
This was an
appeal by the landlords, Groveside Properties Ltd, from a decision of Judge
McDonnell at Westminster County Court, refusing them an order for possession of
a flat at 4 St Augustine’s Mansions, Bloomburg Street, Westminster, SW1, which
had been let to Westminster Medical School for seven years from March 25 1975.
Paul de la
Piquerie (instructed by Harold Stern & Co) appeared on behalf of the
appellants; Miss Joanne Moss (instructed by Winckworth & Pemberton)
represented the respondents.
Giving the
first judgment at the invitation of Stephenson LJ, Fox LJ said: This is an
appeal from a decision of Judge McDonnell in the Westminster County Court. By a
lease of February 2 1977 made between St Augustine’s Mansions (Westminster) Ltd
of the one part and the defendant, Westminster Medical School (which I shall
call ‘the medical school’) of the other, a flat called 4 St Augustine’s
Mansions, Bloomburg Street, Westminster, was demised to the medical school for
a term of seven years from March 25 1975. The plaintiffs are the successors in
title of St Augustine’s Mansions (Westminster) Ltd. The medical school is a
body corporate, established under a scheme pursuant to section 15 of the
National Health Service Act 1946. Its objects, inter alia, are
to carry on
Westminster Medical School for the purposes of the education of students of
medicine and research.
The lease
having expired by effluxion of time, the plaintiffs claim possession. That is
resisted by the medical school, which asserts that it is entitled to the
protection of Part II of the Landlord and Tenant Act 1954.
For present
purposes the matter turns on the provisions of section 23 of that Act.
Subsections
(1) and (2) of section 23 are in the following terms:
(1) Subject to the provisions of this Act, this
Part of this Act applies to any tenancy where the property comprised in the
tenancy is or includes premises which are occupied by the tenant and are so
occupied for the purposes of a business carried on by him or for those and
other purposes.
(2) In this Part of this Act the expression
‘business’ includes a trade, profession or employment and includes any activity
carried on by a body of persons, whether corporate or incorporate.
The case of
the medical school is that it occupies the premises for the purposes of a
business or activity carried on by it, namely the provision of residential
accommodation for members of the student body of the medical school. The judge
accepted that; he refused an order for possession and from that refusal the
plaintiffs appeal.
The flat
consists of four study-bedrooms, a sitting-room, a kitchen and bathroom and two
lavatories. The study-bedrooms are furnished by the medical school, which also
provides sheets and blankets, kitchen utensils, a washing machine, refrigerator
and a cooker. The medical school pays all rent and charges under the lease; it
also pays the rates and other outgoings.
The occupants
of the rooms, who at present are four girls who are medical students of the
school, each pay the school about £65 per month for their occupancy. The
medical students at the school will have received their early medical education
either at Oxford or Cambridge or at one of the London colleges. The medical
school provides a three-year clinical course involving lectures, private study
and practical experience at Westminster Hospital itself. The medical school has
substantial premises; the main building is in Horseferry Road and there is a
wing in Page Street. In addition the school has a property called Brabazon
House, which is used for residential accommodation for students. In addition
there are two houses in South London, and the flat with which this case is
concerned, for further residential accommodation for students. The flat is
situate between Vauxhall Bridge and Vincent Square. I should add that the lease
contemplated that the flat would be used for residential accommodation for the
student body.
Mr Forest, the
secretary of the medical school, gave evidence, which was accepted by the
judge, that it was (I quote from the notes of the judgment):
. . . very
important from the point of view of the Medical School and its students (and
the two cannot be divorced since the Medical School exists for its students
save for research and the advancement of medical science) . . . to foster a
corporate collegiate spirit.
That enables
students to meet those senior to themselves and assists education by discussion
between students. The school in fact provides residential accommodation for
about one-third of its students.
In section
23(1) of the Landlord and Tenant Act 1954, Parliament draws a distinction, as a
matter of language, between two requirements: first, that the premises should
be occupied by the tenants and, secondly, that the premises should be so
occupied for
degree of relationship between the two but I will deal with them separately as
did counsel for the appellant plaintiffs.
The first
question, then, is whether the medical school occupied the flat. The word
‘occupied’ is not a term of art and has no precise legal meaning; nor, as it
seems to me, can one determine whether somebody is an occupier by itemising the
circumstances found to be present in individual cases where a person was held
in fact to be an occupier, and then determining how many or how few of those
are present in the case to be decided.
In Lee-Verhulst
(Investments) Ltd v Harwood Trust [1973] QB 204, the applicant
carried on in one building the business of letting furnished apartments. Mr
Lee, who controlled the applicant company, exercised a virtually complete
control of the apartments; he was present there most of his time; he lived on
the premises and kept a close watch on everything; he had no other occupation.
In concluding that the company did occupy the whole of the premises, Sachs LJ
said this at p 213:
For reaching
that conclusion it is neither necessary nor desirable to provide a definition
of that word which would deal with all the greatly varying sets of
circumstances that can exist. As a number of elements have been taken into
account, each of a physical nature and each involving a degree of presence on
the part of the tenant personally or by goods under his ownership, it is
however well to observe that it could be proper in some other case to reach the
same conclusion even if one or more of those elements were subtracted.
As was
recognised in that case, one must look at the substance of the whole matter and
take a commonsense approach. Without attempting a definition, control must, I
think, be an important element. I am left with the strong impression in this
case of the existence of a substantial degree of control by the medical school.
It was very restrained and very sensibly exercised, but I think it was of
dominant importance. The students were only there at all because they were
students of the medical school; it was not an ordinary relationship between
persons letting and persons taking the accommodation. Of course, the students
did pay, but the relationship, I think, was simply part of the general
relationship between the medical school and a member of the student body.
Coming to more
detailed matters, I mention the following:
(1) All the furniture and equipment was provided
by the medical school, which was also responsible for the decoration;
(2) Mr Forest selected the students who lived in
the flat and he said that he did that on the basis of ‘will they fit in?’
(3) The medical school kept keys to the flat;
(4) There is no written agreement, but Mr Forest
said that the students knew what was expected of them and would, for example,
ask permission if they wanted to have a party;
(5) Mr Forest visits the flat about once a month
and spends half an hour to an hour there. He says he does that to see what is
going on and to ‘get the feel’ of the place. There is, I think, no reason why
he should go there every day; it is only a single flat.
It seems to me
that the only sensible conclusion from all this is that the medical school does
occupy the premises; it is simply part of the school, and Mr Forest said as
much in his evidence. ‘I do not’, he said ‘distinguish the flat from the rest
of the school’; in my opinion that represents the reality of the matter.
That brings me
to another aspect of the case. It seems to me that, whatever the status of the
medical school is in relation to the flat, its use is simply for the purposes
of the school. If that is right, as to which I shall say more later, it is the
more likely that the school is in truth the occupier.
I come then to
the second question: Were the premises occupied by the medical school for the
purposes of a business carried on by it within the meaning of section
23(2)? That includes any activity
carried on by a body of persons, whether corporate or unincorporate. The word
‘activity’ in the definition in section 23(2) must, in my opinion, extend the
scope of what goes before it (see per Parker LJ in Addiscombe Garden Estates
Ltd v Crabbe [1958] 1 QB 513 at p 530). Precisely what limits one
must put on the word, I need not consider. It seems to me that the running of a
major medical school must be an ‘activity’ within section 23(2).
Was then the
flat occupied for the purposes of that activity? On the evidence I can only conclude that it
was. The activity is medical education. If, as the evidence establishes, the
fostering of a corporate spirit among the students is an important part of
their educational process, and the achievement of such a spirit is materially
assisted by the provision of accommodation in the flat, I think it follows that
the occupation of the flat is for the purposes of the activity carried on by
the school. The occupation of the flat was solely designed to promote the
orderly and contented residence of the students.
Mr de la
Piquerie, for the plaintiffs, has referred us to the case of Chapman v Freeman
[1978] 1 WLR 1298, which was concerned with a residential hotel and restaurant
in a village in Cornwall. Near the hotel there was a cottage. The proprietor of
the hotel took a yearly tenancy of the cottage and used it to house some of the
hotel staff. Then, after some years, the owner of the cottage died, and her
personal representatives sought to determine the tenancy and get possession.
The owner of the hotel relied on section 23 of the Landlord and Tenant Act
1954. At the time of the hearing the cottage was used to house the hotel barman
and his family. It was conceded that the owner of the hotel occupied the
cottage, but it was held by the Court of Appeal that he did not occupy it for
the purpose of the hotel business. Lord Denning MR, at p 1300, said that it was
not necessary for the barman to live in the cottage in order to perform his
duties; it was merely convenient. Geoffrey Lane LJ at p 1301 said:
The tenant
must go beyond mere convenience and show that the occupation was in furtherance
of his business activities — in other words, that it was for business reasons
that he was occupying the cottage and not merely for reasons of convenience.
Eveleigh LJ at
p 1302 said:
The servant
is not occupying for the purpose of the hotel business but simply as a
resident.
That decision
does not lead me to any different view of the present case. The user by the
students is not simply for convenience and it is not simply as a residence; it
is to achieve an educational purpose for the advancement of their medical
training, and it is to assist the achievement of the same purpose, and to the
same end, that the medical school occupies the flat.
In my judgment
the school occupies for the purposes of an activity carried on by it within the
meaning of section 23 of the Act of 1954. I think, therefore, that the judge
came to the right conclusion, and I would dismiss this appeal.
Agreeing, KERR
LJ said: Although the wording of section 23(1) appears to require two separate
investigations and conclusions, as to (a) occupation or not and (b) whether for
business purposes or not, I agree with Miss Moss that both questions interact
and that in the end one must look at them together and in the round. Thus, as I
suggested during the argument, if it seems clear that the tenant was using the
premises for his business purposes, so that, to adapt the expression of
Templeman LJ in William Boyer & Sons Ltd v Adams (1976) 32 P
& CR 89 at p 93, he is
not so much
acting as a landlord passively receiving rent but as the manager of a business,
then it seems
to me that this in itself may be a strong pointer in favour of the conclusion
that the tenant also fulfils the requirement of occupation in the sense in
which ‘occupy’ has been interpreted by this court in Lee-Verhulst Ltd v Harwood
Trust. This is a crucial decision for present purposes, since it
establishes that ‘occupy’ must be given a broad meaning, analogous to ‘use’
(see per Sachs LJ at p 214 C) and that the same premises may be ‘occupied’ by A
as the sole resident therein but also co-existentially by B for business
purposes without residing on the premises. This was so held in that case in
relation to the apartments in which only the lodgers or subtenants resided;
similarly, the same may follow in relation to the flat in the present case as
between the resident students and the medical school.
Once that point
has been reached in the interpretation of the section, its application to any
particular case becomes a question of fact and degree. I have found it easier, perhaps
illogically, to ask myself first whether the medical school was using the flat
for the purposes of its business in the sense of the ‘activity’ carried on by
it, that is to say, the education of students of medicine and the provision of
the necessary facilities for this purpose, which — as the learned judge has
pointed out — includes the provision of accommodation for them pursuant to a
scheme under section 15 of the National Health Service Act 1946 (which remains
in force by virtue of Schedule 14, paragraph 4 to the National Health Service
Act 1977). As to this, I am left in no doubt on the evidence. The purpose of
the flat, so far as the school is concerned, and the purpose for which it was
in fact used by the school was (as expressly permitted in the
the students, but to do so in a small collegiate setting, similarly to a
students’ hostel which combines the provision of shelter and accommodation with
a projection of the corporate educational objectives of the institution which
operates the hostel. It is on this ground that I would distinguish the present
case from Chapman v Freeman, where the accommodation of hotel
staff in the cottage was merely ‘for housing purposes’, to use the words of
Lord Denning MR at p 1300G. In this connection Mr de la Piquerie rightly
conceded that the educational activities of the school must fall within the
term ‘business’: see section 23(2) and Addiscombe Garden Estates v Crabbe.
Then, finally,
having got to that stage, I ask myself whether there is here a sufficient
degree of presence and manifestation of control of the medical school in
respect of the flat to constitute ‘occupation’ for these business purposes, in
the sense in which ‘occupy’ has been interpreted in the cases to which I have
referred. In my view the answer is again in the affirmative. The school owns
the furniture and owns and supplies all the fixtures, fittings, bedding,
utensils etc, and it pays all outgoings. The secretary visits the flat once or
twice a month as part of his duties; he selects the students who occupy the
flat on the basis of how each will fit in with the others and with a view to
maintaining a suitable ‘mix’ between students at different stages; he allocates
the rooms and supervises the progressive changing of rooms according to
seniority; and, as part of his duties, he maintains a close relationship with
the students in question as the occupiers of this flat. True, he does not live
in the same building, let alone in the flat itself. But in my view there exists
a sufficient degree of presence and control by the medical school in and over
the flat to satisfy the test of occupation for the purposes of section 23.
Accordingly I
would dismiss this appeal.
Also agreeing,
STEPHENSON LJ said: When the medical school’s lease of this flat in St
Augustine’s Mansions from Groveside Properties Ltd expired on March 24 1982 was
the flat premises which were occupied for the purposes of an activity carried
on by the school? That is the question
raised by the school’s plea of section 23 of the Landlord and Tenant Act 1954,
decided by the learned judge in favour of the school by the answer ‘yes’, and
said by the appellant company to have been wrongly decided.
The question
as I have formulated it reduces to a single question what the judge treated as
two questions. And the wording of section 23(1) of the Act justifies the
bisection. For to come within the section the school’s tenancy must comprise
‘premises which are occupied by the tenant and are so occupied for the
purposes’ specified in subsection (1) as defined in subsection (2). A tenant
may sublet premises (as the landlords let this flat) to be used for the
purposes of a business, without occupying them either personally or, if a
corporate or an incorporate body of persons, by a servant or agent. But the
first question cannot be considered or answered in isolation from the second.
I respectfully
agree with the judge that the school maintained occupation of this flat by
fully furnishing it and controlling who lived there. They had a remoter control
than the tenants in Lee-Verhulst (Investments) Ltd v Harwood Trust,
who had a manager living with his wife in one part of the building, of which
all the premises in dispute were the other parts, and rendering the other
occupants of the building many services. Here there was no continuous physical
presence of any member of the school staff but only regular visiting access by
the secretary; and the services rendered by the manager in the Lee case
were rendered here not by servants of the school but by servants of the
landlords.
But there may
nevertheless be occupation by a tenant where one or more of such elements of
control are reduced or missing, as in William Boyer & Sons Ltd v Adams,
in which Templeman J indicated that some degree of presence by the tenant is
required. Here there is less physical presence and remoter control than in that
case also, but the question is: was there enough presence and control to
constitute occupation? It is, as the
cases indicate, a question of degree, and in my judgment there was just enough
in the unchallenged evidence of the secretary as to the ‘large measure of
control’ which he exercised on behalf of the school, coupled with what the
school provided for the flat in cash and furniture, to constitute the school as
occupier of the flat.
For what
purpose does the school so occupy this flat?
Clearly to provide accommodation for four of their students, which the
judge called ‘the primary purpose’. But he went on to hold that they provided
the accommodation ‘for the purposes of the education of students’, the
particular students who occupied the flat from time to time and ‘for the
benefit of the . . . school as a whole and the advancement of the general
object of the education of the medical students’. That secondary purpose is
perhaps more important than the first, both for the school and for the decision
of this appeal.
Section 23(1)
does not require the business or activity carried on to be the sole purpose of
the occupation; the premises must be ‘occupied for the purposes of a business
carried on by (the tenant) or for those and other purposes’. There was
unchallenged evidence from the secretary to support that underlying purpose. It
was in order to get better-educated students by discussion among themselves and
by a development of the corporate spirit that the school provided accommodation
for about one-third of its students, not only in two halls of residence with a
resident warden or bursar, but in student houses and flats like this flat. The
whole arrangement of providing accommodation for students living together is,
as the secretary said, desirable from the school’s point of view.
‘Desirable’,
submits Mr de la Piquerie for the landlords, is not enough. It must be
necessary, not merely convenient, I suppose to provide a flat; for even if it
were necessary to provide halls of residence, it would not be necessary to
provide a flat like this: see Chapman v Freeman. I do not think
that that decision requires us to apply any kind of ‘tied cottage’ or ‘service
tenancy or occupancy’ test to the tenancy of such a body as this school, or to
treat desirable arrangements of this kind as mere matters of convenience. It
may seem odd to treat the school’s tenancy of this flat as a business tenancy
in any ordinary sense, but the heading of Part II of the Act indicates that it
applies to business, professional and other tenants, and taking the broader
approach to what the section means by ‘occupied’ recommended by Sachs LJ in Lee-Verhulst
at p 214 F of the report, and following Parker LJ in Addiscombe Garden
Estates Ltd v Crabbe at p 530 of the report in regarding ‘any
activity’ in section 23(2) as enlarging the scope of what goes before, I agree
with the judge’s answer to both questions and would hold that this tenancy was
protected by Part II of the Act of 1954.
The appeal
was dismissed with costs.
