Landlord and tenant — Landlord and Tenant Act 1954, Part II — In this case there had been a ‘tangled history’ of previous disputes and litigation, but the issues in the present appeal arose under section 30(1)(c) of the 1954 Act — Appellant was a trainer or breeder of greyhounds who carried on this enterprise on land belonging to the respondent — There had been a dispute as to his exact status on the land, but it had been decided that he had a business tenancy subject to an express term prohibiting him from living on the land — He had been ordered to remove himself and a van from the land and he had eventually removed the van but had placed it outside the respondent’s premises about 100 yds away from the kennels, near enough to enable him to carry on his breeding activities — The van’s precise location was not clear but was said to be on a grass verge on or near the highway and its position might have been unlawful — Respondent served a section 25 notice on the appellant terminating his tenancy and notifying opposition to the grant of a new tenancy on the ground stated in section 30(1)(c) of the 1954 Act — Appellant made a cross-application for a new tenancy — County Court judge held that no breach of obligations under the tenancy had been proved, but that the appellant’s action in keeping his van unlawfully on the verge was an act which brought the second limb of section 30(1)(c) into operation, as a reason ‘connected with his use or management of the holding’ for not granting him a new tenancy — The Court of Appeal upheld the judge’s decision on this point, although arriving at it on the basis of a different process of reasoning, but then went on to consider whether the judge had exercised his discretion correctly in deciding that in all the circumstances the appellant should not be granted a new tenancy — Held that, in exercising his discretion, the judge should have asked himself whether the respondent’s interest as landlord was likely to be prejudiced by the matters relied on under section 30(1)(c) — The judge had given no indication of the matters which he took into account, apart from the question of illegality, which was not material to the exercise — In these circumstances the case would have to go back to the judge to look at the matter again, as the Court of Appeal did not have sufficient information to exercise the discretion themselves — Appeal allowed to this extent
This was an
appeal by William Beard from a decision of Judge Taylor, at Bishop’s Stortford
County Court, in favour of the respondent, Mrs Hilda Daphne Williams, the owner
of land at Great Hallingbury, Bishop’s Stortford, in proceedings under the
Landlord and Tenant Act 1954, in which the judge decided that the appellant
should not be granted a new tenancy of certain fields and stables which he had
been using for breeding and training greyhounds.
A E M Cooper
(instructed by Pellys, of Bishop’s Stortford) appeared on behalf of the
appellant; J Brooke-Smith (instructed by Nockolds, of Bishop’s Stortford)
represented the respondent.
Giving the
first judgment at the invitation of Fox LJ, MUSTILL LJ said: This is an appeal
against the judgment of His Honour Judge Taylor given at the Bishop’s Stortford
County Court on February 21 1985. The appeal raises a short question on the law
relating to landlord and tenant which has been well and succinctly argued on
both sides.
The history of
the matter is as follows. The appellant, William Beard, has at all material
times been either a trainer or a breeder of greyhounds. The respondent, Mrs Hilda
Daphne Williams, was the proprietor of land and premises at Great Hallingbury,
Bishop’s Stortford. During 1971 the appellant moved on to the land of the
respondent and set up a business of training greyhounds in certain stables and
on certain fields belonging to the respondent. Three months later he took over
an additional 5 acres of the respondent’s land at a rent of £20 per week, which
had been agreed should be paid for the occupation of the premises, but the rent
was then increased to £25 per week.
Disputes arose
between the parties, and during March 1983 the respondent gave the appellant an
informal notice to quit. During June of that same year a summary application
for possession was made, essentially on the ground that the appellant had been
allowed on to the land as an act of kindness; that he was, accordingly, a
licensee, and that proper notice had been given to terminate the licence. That
application was supported by various complaints about the conduct of the
appellant — including the placing of a decrepit van on the land in question.
The
application elicited an affidavit in response, asserting that the arrangement
between the parties amounted not to a licence but to a business tenancy.
Thereafter the dispute proceeded in the shape of a possession action, with
pleadings being delivered, and the matter eventually came to judgment before
His Honour Judge Taylor on April 12 1984.
In essence,
the learned judge determined in favour of the present appellant, that the
nature of the relationship was that of a business tenancy, comprising the use
of certain fields, but that the tenancy was subject to an express term
prohibiting the appellant from living on the land.
There was an
appeal by the present appellant to another division of this court against that
part of the judgment of Judge Taylor which had deprived the appellant of the
right to live on the land — and in particular to keep his van there. That
appeal was dismissed in June 1984.
Immediately
thereafter the respondent served on the appellant a notice under section 25 of
the Landlord and Tenant Act 1954 to terminate the tenancy with effect from
January 31 1985, and the grant of any further tenancy was opposed on the basis
of the grounds set out in section 30(1)(c) of the 1954 Act.
In addition
there were proceedings brought by the respondent in the nature of an
application for an injunction to cause the appellant to move himself and his
van from the respondent’s land. Final orders were made to that effect during
August and October 1984. In response to those orders, the appellant did move
his van from the respondent’s land. However, this apparently caused him to lose
his licence to train greyhounds, because it is a condition of the grant of such
a licence that the trainer shall reside on the premises where the training is
carried out. But he still carries on the business of breeding dogs — he has
some 30 animals still on the respondent’s land.
His van was
removed from the respondent’s land and was placed outside her premises at a
location which is apparently some 100 yds away from the stables. At that point
he is sufficiently near (so he says) to the place where the dogs are kept for
him to be able to carry on his breeding activities satisfactorily.
It appears to
be his contention that he cannot move substantially further away without
imperilling his business. However, where exactly the van is located has not
emerged clearly from the evidence. It is said to be on the grass verge on or
near the highway; and it is also said that the appellant has been told by a
police officer that the van should not be there. In spite of this warning, the
van remains on the grass verge, and apparently no steps have been taken, either
by the police authorities or by other public authorities or private persons, to
have it removed. There the matter rests, at least for the time being.
In response to
the application by the respondent for an order under section 25, the appellant
on his part made a cross-application to the court for a new tenancy for seven
years at a rent of £25 per week.
It will be
convenient at this stage if I read the relevant parts of the statute. Section
29 provides:
(1) Subject to the provisions of this Act, on an
application under subsection (1) of section 24 of this Act for a new tenancy
the court shall make an order for the grant of a tenancy comprising such
property . . .
By section
30(1) it is provided:
The grounds
on which a landlord may oppose an application under subsection (1) of section
24 of this Act are such of the following grounds as may be stated in the
landlord’s notice under section 25 of this Act or, as the case may be, under
subsection (6) of section 26 thereof, that is to say . . .
then omitting
subparas (a) and (b):
(c) that the tenant ought not to be granted a new
tenancy in view of other substantial breaches by him of his obligations under
the current tenancy, or for any other reason connected with the tenant’s use or
management of the holding.
In response to
the application by the appellant for a new tenancy, the respondent answered
with grounds of opposition which consisted in the main of allegations that the
conduct of the appellant amounted to breaches of express or implied terms of
the tenancy agreement. If such breaches had been established, they would have
fallen within the first part of subpara (c) of section 30(1).
In addition,
by ground (v) of the answer to the application, the respondent alleged as
follows:
By the
express terms of the tenancy the applicant is not entitled to reside on the
land and it is therefore impracticable for the said business to be managed
properly or at all and for the applicant to be granted a new tenancy in the
terms sought by the originating application herein.
That
contention was prefaced by the factual assertion that the appellant was
precluded by the previous judgment of Judge Taylor from living on the land and
that there was nowhere in practice where he could live within such proximity to
the land as to enable his business to be carried on in a proper and efficient
manner.
That was the
position when the matter came again before Judge Taylor. Evidence was given on
both sides, on the lines which I have briefly summarised, and the respondent
also sought to support by evidence the allegations of breaches of the tenancy
agreement, to which I have already referred.
At the
conclusion of his judgment, the learned judge dismissed all the allegations of
breach, saying that he was not satisfied that they had been proved by the
landlord. Nevertheless, he did decide the case in favour of the respondent on
grounds which are set out in an agreed note of his judgment, in the following
terms:
Mr Beard says
that this (ie the present arrangement) is an illegal arrangement and has been
told as much by the police, but that the police are keeping a blind eye and he
wishes to continue living there. Thus if I grant his application he will be
carrying on his business in a manner which he says is illegal and has been told
so by the police.
I now look at
section 30(1)(c), where the landlord’s right of opposition to a new tenancy is
on the grounds ‘that the tenant ought not to be granted a new tenancy in view
of other substantial breaches by him of his obligations under the current
tenancy, or for any other reason connected with the tenant’s use or management
of the holding’. I disregard the first limb of that paragraph because there are
no substantial breaches. However this case comes four square within the terms
of the second limb of this paragraph. This applicant is enjoying an illegal
residence on the grass verge and in my view this is well within terms of the
Act. In my discretion I hold that paragraph 1(v) is proved and I do not grant
the tenant’s application.
It is against
that decision that the present appeal is now brought. It is common ground that,
for the purposes both of the exercise to be performed by the learned judge at
first instance and for this appeal, two distinct questions must successively be
considered: First, whether or not the manner in which the appellant chose to
arrange his living accommodation and hence chose to supervise the carrying on
of the business on the holding was capable of being a reason, in the words of
section 30(1)(c), ‘connected with the tenant’s use or management of the
holding’.
Second, if the
matter complained of is capable of being such a reason, whether, in all the
circumstances, the tenant ought not to be granted a new tenancy, this matter (it
being acknowledged on both sides) being a question for the discretion of the
trial judge. I shall consider these two questions in turn.
As to the
first question, two distinct ways of approaching the respondent’s case must be
identified. The first is the ground relied on by the learned judge.
Essentially, what underlay the decision now under appeal was the proposition
that the keeping of the van on the verge was an illegal act and that,
accordingly, there is a sufficient
to require the court, ipso facto, to decline any suggestion that a new
tenancy should be ordered.
The only
reported case brought to our attention which comes anywhere near the present
matter is the decision of another division of this court in Turner &
Bell (trading as Avro Luxury Coaches) v Searles (Stanford-le-Hope) Ltd
(1977) 33 P & CR 208.* In that case
the premises in question were used by the tenant as a depot in connection with
the business of coach transporters. The local planning authority served on the
tenant an enforcement notice requiring them to discontinue the use of the
premises for the operation of the coach business. An appeal against the notice
was unsuccessful, and an extension of time which had been granted for
compliance was allowed to expire without any steps being taken to discontinue
the business. The continued operation of the business was a criminal offence,
albeit no prosecution was ever brought in respect of it. The landlords served a
notice under section 25 and the tenant served a counternotice. In answer to the
application for the new tenancy, the landlord relied on section 30(1)(c).
*Editor’s
note: See also (1977) 244 EG 1023, [1977] 2 EGLR 58.
The trial
judge held that no new tenancy should be ordered, and that decision was upheld
in this court. Two grounds may be identified in the judgment; the first is
exemplified by the following passage from the judgment of Bridge LJ at p 211:
It seems to
me that the short answer to this appeal is that, quite independently of the
express provisions of the statute, this is a case where the court would be
bound to refuse the relief claimed on the simple ground that if the court were
to order a new tenancy in the circumstances indicated it would be ordering the
parties to enter into an illegal contract which the court could not enforce
because the illegal purpose of the tenant was clearly known to both parties.
That would be an absurdity.
The second
ground, which was closely allied to the first, was simply that the matter fell
within the words of section 30(1)(c) because the fact that the premises were
being used and were intended to be used for an unlawful purpose was manifestly
an ‘other reason connected with the tenant’s use . . . of the holding’.
In my
judgment, this decision provides little guidance in the circumstances of the
present case. There the illegality question was directly concerned with the use
of the land. It would have been impossible for the court to enforce the
business tenancy without enforcing the user of the land, which was illegal. The
illegality was implicit in the proposed new tenancy. But nothing of that kind
exists here. The user of the land is not illegal; the appellant has done
nothing to suggest that the manner in which he conducts his business of
breeding greyhounds will be carried on otherwise than in accordance with the
law. Any unlawful character of the arrangements which he makes to put himself
into the position of performing the subject-matter of the tenancy agreement is,
in my judgment, in a quite different category from the kind of illegality which
was under consideration in Turner & Bell v Searles.
So much for
the ground upon which the learned judge principally relied.
Mr
Brooke-Smith, who appears on behalf of the respondent, has, however, been able
to draw attention to his original grounds of opposition to the new tenancy,
from which I have already quoted. He naturally concedes that, in the ordinary
course of events, the living arrangements of the tenant would not be connected
with the use or management of the holding; but he maintains that this
particular business demands a particular type of living arrangement — namely,
one which is adjacent to the place where the dogs are kept. Accordingly, so the
argument runs, since the possibility of the tenant’s living on the land has
already been eliminated by the prior judgment of Judge Taylor, the business on
the holding cannot be conducted in a proper manner. Hence (so the argument
concludes), in the exceptional circumstances of this case, the appellant’s
living arrangements do constitute a matter ‘connected with the tenant’s use or
management of the holding’.
In my
judgment, this argument is correct in principle. The learned judge in my
opinion would have been entitled to hold that the precarious nature of the
tenant’s living arrangements, quite aside from any direct impact of illegality
on the proposed tenancy agreement, would have constituted a reason why the
tenant ought not to be granted a tenancy; for, if the tenant was driven away
from his existing place of abode, the business would (so the evidence suggests)
rapidly deteriorate, with the obvious risk of prejudice to the respondent.
Accordingly, I
would hold that the matters complained of are capable of forming reasons
‘connected with the tenant’s use or management of the holding’; and that the
first stage in the process of argument is established.
I should mention
briefly that Mr Brooke-Smith also put forward an alternative approach, to the
effect that one can find in the authorities support for the proposition that a
wider meaning of section 30(1)(c) than the one contended for by Mr Cooper
should be adopted. Mr Brooke-Smith referred to certain passages in the judgment
of Turner & Bell v Searles, and in particular to the judgment
of Roskill LJ, suggesting that any fact which could be said to be relevant to
the use or management may legitimately be taken into account.
I find it
unnecessary to express any concluded view on this argument. As at present
advised, it seems to me that the members of the court were doing no more than
rebutting an argument which had been put forward on behalf of the appellant in
that case, to the effect that section 30(1)(c) was confined to matters which
were directly connected with the relationship of the parties, qua
landlord and tenant. That narrow construction was negatived and I do not at
present find any warrant for giving the judgments a wider meaning than what
they actually say.
Be that as it
may, I conclude that the respondent does bring herself within the words of the
latter part of section 30(1)(c).
The next
question is whether, in the exercise of his discretion, the learned judge
should have concluded that the tenant ought not to be granted a new tenancy. As
I understand the position, it was common ground in the argument before us,
that, as part of the exercise of his discretion, the learned judge should have
asked himself whether the landlord’s interest was likely to be prejudiced by
the occurrence of the matters relied upon as constituting reasons within
section 30(1). Authority for the proposition that such matters should be taken
into account can be found in John Kay Ltd v Kay [1952] 2 QB 258; Lyons
v Central Commercial Properties (London) Ltd [1958] 1 WLR 869 and Eichner
v Midland Bank Executor and Trustee Co Ltd [1970] 1 WLR 1120.
In the present
case, the notes of the judge’s decision give no indication of the matters which
he took into account besides the question of the illegality, to which I have
already referred. For the reasons which I have stated, I regard this question
of illegality as immaterial to the exercise which the learned judge had to
perform; and I am therefore driven to the conclusion that when exercising his
discretion, he took into account material which was not germane. Conversely, it
is impossible to be sure, from the note of his judgment, that he did take into
account other matters which were germane.
In these
circumstances, it appears to me that the discretion was not exercised in the
light of material considerations and no others. It would be open to this court,
in those circumstances, to exercise for itself the discretion which originally
fell to the learned judge below. But we are not confident that we know
sufficient of the facts to enable us to exercise that discretion with any
degree of reliability. We should wish to know more of the nature of the
supposed illegality — including the question whether what was described as
‘illegality’ was perhaps no more than a mere unlawfulness constituted by a
trespass. We should need to know exactly how precarious the appellant’s present
place of abode may be said to be. We should need to know what alternative accommodation
may be available if the appellant is really forced to look for it. These are
matters which would have to be investigated by evidence more extensive than is
to be found in the papers before us.
I therefore
feel constrained to hold that, although the discretion may well have been
exercised in an appropriate manner, this case must be remitted to the county
court judge so that he can look at the matter again in the light of the
opinions expressed by this court. He is already well familiar with the tangled
history of this matter; he has a ‘feel’ for the case which this court cannot
obtain merely by reading the notes of the evidence. He will be able to hear
further evidence on the matter and, in the light of all the considerations then
before him, decide whether his original conclusion should be upheld or whether,
on the contrary, in all the circumstances, a new tenancy ought to be granted.
Accordingly it
is to that extent, but no further, that I would allow this appeal.
FOX LJ agreed
and did not add anything.
The appeal
was allowed and the case remitted to the county court judge to reconsider his
decision in the light of the observations of the
appellant’s costs ordered.
