Landlord and Tenant Act 1954, Part II–Question as to construction and application of section 23(4)–Covenant in lease that a garage was to be used for a private car only–Evidence of business use in breach of covenant–Whether immediate landlord or his predecessor in title consented to breach or immediate landlord acquiesced in it–Part II of Act not applicable where business use is in breach of covenant in the absence of such consent or acquiescence–Issue relevant to validity of notice to quit which was not in the form required by Part II–Difference between ‘consent’ and ‘acquiescence’–For Part II to apply it is sufficient if immediate landlord ‘acquiesces’ in the breach, but predecessor in title must ‘consent’–Immediate landlord’s attitude not relied on, so that question was whether predecessor had consented–While ‘acquiescence’ can be passive, with merely an absence of objection, ‘consent’ means something of a positive affirmative kind–No evidence of such consent–Part II of Act not therefore applicable–Notice to quit accordingly valid and effective–Landlord’s appeal in respect of possession of garage allowed
This was an
appeal by the plaintiff landlord, John Arnaud Bell, from that part of a
decision of Judge Leslie at Bloomsbury and Marylebone County Court which
dismissed the plaintiff’s claim for possession of a garage at 9 Devonshire
Close in West London. The action in the county court had included a claim in
respect of a flat against the second defendant, David Blank. The present
appeal, however, against the first defendants, Alfred Franks & Bartlett Co
Ltd, related only to the garage. There was no appeal against the dismissal of
the plaintiff’s claim for possession of the flat.
Andrew Pugh
(instructed by Manches & Co) appeared on behalf of the appellant; J J Davis
(instructed by Franks, Charlesly & Co) represented the respondents.
Giving the
first judgment at the invitation of Megaw LJ, SHAW LJ said: This is an appeal
from that part of a judgment of His Honour Judge Leslie given on January 11
1979 at the Bloomsbury and Marylebone County Court which dismissed the
plaintiff’s claim for possession of a garage at 9 Devonshire Close in the west
of London. At the hearing, a flat in proximity to the garage was also the
subject-matter of the litigation, but this appeal is concerned only with the
garage. The matter in contention was whether that garage had been occupied by
the first defendants for business purposes. That issue arises because the
plaintiff purported to give a notice to quit which was not in the form required
by the Landlord and Tenant Act 1954 in relation to a business tenancy and,
therefore, would have been abortive if the garage had in fact been occupied for
business purposes.
The history
which was dealt with by the county court judge is a long one and it is not
necessary to recount it in the detail with which it was necessary for Mr Pugh
to present it to this court. As long ago as the end of 1949 a gentleman named
Ward, who occupied 94 Harley Street (which is adjacent to 9 Devonshire Close)
let the garage there to the first defendants (whom I shall call ‘the defendant
company’). In 1954 Mr Ward assigned, or agreed to assign, the lease to a
gentleman named Allen, who was a dental surgeon practising at no 94, and in
1964 Mr Allen, by a written agreement, let the garage in question together with
the flat to which I have referred to the first defendants. The term was for
three and a quarter years beginning in September 1964 and therefore it expired
by effluxion of time somewhere at the end of December 1967. The agreement, by
clause 2, paragraph (4), setting out the tenant’s covenants, provided that the
tenant undertook to ‘use the said garage for standing a private car only’ and
then, since the agreement comprised the flat also, it went on to say ‘and the
flat only as and for a private dwelling-house.’
It is important to note that the same word ‘private’ is used in relation
to the car and also in relation to the dwelling-house, because the question
arises as to whether ‘private car’ was merely a description of the character of
the vehicle or was a reference to the nature of the use to which it would
normally be put.
In September
1975 there was an assignment of Mr Allen’s lease to the plaintiff. By that time
the covenant to which I have just referred had been relaxed because it was
amended so as to provide that two private motor cars might stand there instead
of one. For some long time before the assignment to the plaintiff there is no
question but that a Mr Franks–who was a moving spirit in the defendant
company–had used the garage from time to time to take in and store samples
collected for his company’s business. Two cars which were put there–one a
Bentley and another a Rolls-Royce–were used, so the evidence went, in order to
assist the objects of the company by carrying prospective customers to and fro
and also for the purpose of conveying samples. That was the business use which
was relied upon in order to establish the character of the occupation of the
garage as being for business purposes within the provisions of section 23 of
the Landlord and Tenant Act 1954.
The plaintiffs
having been given the notice to quit, discontinued the action which they had
started. It was not until December 15 1977 that the action under which the
present appeal arises was begun. In that action the plaintiff claimed
possession of the flat (which is not now in issue) and also of the garage. This
was on the ground that the agreement under which they held, made in 1964, had
expired at the end of December 1977. The defence, in general terms, was that
the notice was ineffective because it was not such a notice as is required in
the case of a business tenancy by the Landlord and Tenant Act 1954. In that way
the critical issue from the standpoint of this appeal is as to whether the
learned judge was right in finding (as he did) that the occupancy of the garage
was within the Act of 1954.
Section 23,
which is the first section in Part II of the Act, which is headed ‘Tenancies to
which Part II applies,’ by subsection (1) provides:
Subject to
the provisions of this Act, this Part of the 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.
If a business
is carried on in contravention of a covenant excluding such user, subsection
(4) provides as follows:
Where the
tenant is carrying on a business, in all or any part of the property comprised
in a tenancy, in breach of a prohibition (however expressed) of use for
business purposes which subsists under the terms of the tenancy and extends to
the whole of that property, this Part of this Act shall not apply to the
tenancy unless the immediate landlord or his predecessor in title has consented
to the breach or the immediate landlord has acquiesced therein.
Thus if a
breach of the prohibition has occurred but it can be said to have been
acquiesced in by the immediate landlord the activity constituting the breach
will nonetheless give rise to a business tenancy. If the acquiescence of the
immediate landlord is not relied upon–and it was not in this case, as is conceded–one
has to look back to his predecessor in title (which in the present case was Mr
Allen) and whether he consented to that use. Mere acquiescence by a predecessor
in title would not be sufficient to confer upon the tenant the protection of
the Act of 1954 to a tenant of business premises.
Mr Allen–who
is unfortunately now deceased–had a long and friendly association with Mr
Franks. Mr Allen carried on his practice as a dentist at 94 Harley Street and
he very often was in the vicinity of the garage; he was able to observe what
was going on there; he was able to see that from time to time there were
parcels containing samples left there; and he also saw from time to time one or
other of the vehicles which the company used, namely the Rolls-Royce or the Bentley,
but not a van, or a lorry, or anything of the nature that might be called a
commercial vehicle. It is contended that, as over this long history Mr Allen
did not require that activities of that kind in the garage should stop as being
in contravention of the tenant’s covenants in the agreement, that amounts to
consent.
That is really
the short point which the learned judge had to decide so far as the occupancy
of the garage was concerned. Two matters were relied upon before him by counsel
on behalf of the defendants to show that there was a business user of the
premises and that there had been consent to them. One was the presence of
cartons containing samples for the business, fortified by conversations–which
were part of the evidence–between Mr Allen and Mr Franks and which had
reference to the contents of the cartons, such as sunglasses and things of that
kind. The other was the fact that the cars themselves were used in order to
convey customers of the defendant company as well as goods belonging to it.
The first
question is did either of those activities constitute a business use? There can be no doubt that the bringing in of
samples in cartons, and so forth, might well constitute such a business use
even though it was intermittent and not continuous. The evidence suggested that
there was nearly always something of that kind there–and the learned judge held
that that was in this respect such a use. He made no finding as to the effect
of the presence of these motor cars from time to time. That prompted Mr Davis
to submit, on the basis of his cross-notice, that he should have found that the
motor cars were there for business purposes, so that upon that foundation also
the premises were occupied for such purposes and, therefore, there existed a
business tenancy which was protected under the Landlord and Tenant Act 1954.
It is
convenient to deal with that part of his submission first because it raises the
narrow question of interpretation of the meaning of the word ‘private’ car in
the context of the agreement under which the defendant company held the garage.
It seems to me that in conjunction with the sentence which follows it, which
refers to the use of the flat as a ‘private’ dwelling-house, ‘private’ there
must mean used for some personal or domestic purpose; not merely a car which is
constructed for such purpose, but which is indeed used for such purpose. A
dwelling-house, of course, is a house which people normally dwell in. A
‘private’ dwelling-house is one actually used for domestic purposes. So construing
that agreement, one has got to take note of the conjunction of the use of that
word in two different aspects, one relating to the garage and the other
relating to the flat, no 9. It would follow that use of the word ‘private’
there means for private purposes. The fact that it used the phrase ‘for
standing two private cars’ did not mean two private cars used for business
purposes thus introducing the element of business occupancy into the letting of
the garage any more than it did into the letting of the flat at the same time.
So I would hold against Mr Davis’s submission on that matter under his
cross-notice.
That leaves
for decision only the question whether there had been at some stage in the
history a consent to the use of the garage against the prohibition contained in
the agreement. This is a semantic and philosophical question which requires
definition of the distinction between acquiescence and consent. It is quite
clear that what section 23(4) intended was to ensure that the immediate
landlord should not be bound by mere–and I use that word deliberately–‘mere’
acquiescence on the part of the immediate predecessor in title, because that
goes far to giving to the tenant a protection and exposing the immediate
landlord to an undue risk to which he ought not to be exposed. What is meant by
acquiescence? It may involve no more
than a merely passive attitude, doing nothing at all. It requires as an
essential factor that there was knowledge of what was acquiesced in. In this
case it is not in controversy that there was such knowledge on the part of the
plaintiff’s predecessor in title that the garage was used in the way in which
it was.
If
acquiescence is something passive in the face of knowledge, what does ‘consent’
mean? In the context of the contrast
implicit in the subsection, the only practical and sensible distinction that
can be drawn is that if acquiescence can arise out of passive failure to do
anything, consent must involve a positive demonstrative act, something of an
affirmative kind. It is not to be implied, because the resort to implication
betokens an absence of express affirmation. The only sense in which there can
be implied consent is where a consent is demonstrated, not by language but by
some positive act other than words which amounts to an affirmation of what is
being done and goes beyond mere acquiescence in it. It may lead, in this context,
to a false conclusion to speak of ‘implied consent,’ which is what the learned
judge said was the proper inference to be drawn from the long history of
acquiescence. I would prefer for myself to say ‘consent’ involves something
which is of a positive affirmative kind and that is what is required by section
23(4) if the immediate landlord is to be deprived of the opportunity of taking
advantage of a breach of a prohibition contained in the terms of the tenancy.
The learned
judge, in his very careful judgment, having examined the evidence, expressed
himself in this way in regard to the garage: ‘The question is whether the
plaintiff’s notice to quit was effective to terminate the letting to the first
defendants, and that depends on the use of the garage.’ He then set out what the contentions of the
parties were and went on to say this: ‘It is true that the plaintiff and his
witnesses saw no cartons, but having heard the evidence I find that the
defendants have been using the premises for the purposes of a business, namely
for the storage of cartons containing samples and goods, although contrary to
the lease and contrary to the head lease. Mr Allen’–he was the predecessor in
title of the plaintiff–‘knew of this and must have waived the breach. It is
possible that the plaintiff is entitled to bring proceedings for forfeiture but
that is not what the court is concerned with in the present case.’ Then having set out section 23(4) in his
judgment, he said, ‘and in my view that section applies to this case.’ That was following what he had previously
said, that Mr Allen knew what was going on ‘and must have waived the
breach.’ However, the inference from the
history of Mr Allen’s relationship with Mr Franks and his knowledge of the
activities of the defendant company gives rise, so it seems to me, to no
stronger inference than that there was acquiescence on the part of Mr Allen. An
examination of the evidence as a whole reveals nowhere that any such positive
consent, positive affirmation or permission was actually given at any time. So
far as the immediate landlord is concerned, that appears to be fortified by the
earlier part of the history when Mr Franks–who was himself, incidentally, a
solicitor although he was engaged in business as well–had asked that the tenancy
should be in the name of his company. That was not necessarily because the
company wanted it. There might have been convenience, or financial advantage,
in having the company as the tenant of the garage instead of Mr Franks himself.
I have not
here dealt with the elaborate submissions that Mr Pugh presented before this
court. That is not to say that they were without interest, but it seems to me
that the only ones that really go to the heart of this case are: firstly, the
issue as to whether or not the learned judge was right in coming to the
conclusion that there had been a business use; secondly, whether he was right
in saying that the premises were occupied for the purposes of the business;
and, thirdly, whether he was right in finding, as he did, that there had been a
consent within the meaning of section 23(4). In my view, what is decisive of
the appeal is that there was no acquiescence on the part of the plaintiff and
no consent by Mr Allen. Accordingly, the requirements of the Act of 1954 were
not called into play. The notice to quit was effective to terminate the tenancy
and the plaintiffs are entitled to an order for possession of the garage
premises.
I would allow
the appeal.
Agreeing,
WALLER LJ said: I only add a few words on the question of consent because we
are differing from a very experienced judge on that one finding which he made.
My Lord has
already read section 23 of the Landlord and Tenant Act 1954, and in particular
subsection (4), and I only repeat the last three lines of that section which
say: ‘. . . this Part of this Act shall not apply to the tenancy unless the
immediate landlord or his predecessor in title has consented to the breach or
the immediate landlord has acquiesced therein.’
The learned judge, in considering that part of the case, made the
finding already quoted by my Lord, namely having dealt with the storage of
cartons about which evidence was given by Mr Franks, he said: ‘Mr Allen knew of
this and must have waived the breach. It is possible that the plaintiff is
entitled to bring proceedings for forfeiture, but that is not what the court is
concerned with in the present case.’
So that, in
effect, was the view the judge formed in that paragraph, and then he went on to
consider whether or not the consent had to be formal and said: ‘When a landlord
knows about a breach as Allen did, and the breach clearly goes on for a
substantial period of time, as this one did, and the landlord can even accept a
sample which should not be there, then one can only infer that he did consent. The
parties were on amicable terms and Mr Allen took no steps to cause this
wrongful user to cease and he never even objected. I find, therefore, that the
premises were used for business purposes notwithstanding the prohibition and
that it was consented to by Mr Allen.’
When one looks
at the evidence on which the judge made that finding, perhaps the high-water
mark is shown in a quotation from the evidence of Mr Franks. He said at the end
of his evidence-in-chief ‘He never objected.’
Although there are other passages which clearly show acquiescence, that
answer is the only one upon which the judge could found the findings that there
was consent.
My Lord has
already mentioned–and I do not wish to repeat it, but I would emphasise–the
distinction which is drawn in section 23(4) between the predecessor of the
landlord and the immediate landlord. In order to avoid being taken out of the
Act the tenant has to show that the immediate predecessor consented to the
breach whereas it would be sufficient for him to show acquiescence on the part
of the present landlord. The contrast between those words is, in my view,
significant. Acquiescence clearly can cover a great many matters, and it seems
to me the words of the learned judge where he says, ‘Mr Allen knew of this and
must have waived the breach’ was very clear evidence of acquiescence, but
acquiescence is something which has to be contrasted with consent and, in my
judgment, consent requires some positive action on the part of the landlord or
his predecessor–usually no doubt in words, perhaps in writing, possibly, if
gestures were absolutely clear, it could conceivably be by gesture, but, in my
view, careful proof of such an intention would be required. Normally one would
look for some express statement, either in writing or oral, by the landlord.
The answer which I have quoted clearly shows something far short of that,
because there is the answer ‘He’–that is Allen–‘never objected.’ In my judgment, having regard to the matters that
I have mentioned, it is not possible to draw an inference from that evidence
that the predecessor consented to the use for business purposes. Accordingly, I
also would allow the appeal.
Also agreeing,
MEGAW LJ said: We did not consider it necessary to trouble Mr Davis to make
submissions on a number of points which had been raised by Mr Pugh for the
appellants in support of the appeal. That was because it was apparent, and
accepted by counsel, that if Mr Davis, for the respondent, were wrong on the
point which he wished to raise in the cross-notice and were wrong on the issue
as to consent, then none of those other issues fell to be decided.
One of those
issues on which we did not hear Mr Davis and on which, therefore, I do not find
it necessary to express anything in the nature of a concluded view, was the
conclusion reached by the learned judge that here it was shown on the evidence
that the premises were occupied for the purposes of the business carried on by
the defendants. I will assume, therefore, without expressing any view on it,
that the learned judge was right in deciding that question in favour of the
first defendants, the tenants. On that assumption, Mr Davis put forward, by
virtue of his cross-notice, as I understood it, the proposition that the case
thus inevitably fell within the purview of section 23(1) and (2) of the
Landlord and Tenant Act 1954, and then he went on to submit that for one simple
reason section 23(4) did not apply to take it out again. Subsection (4) depends
upon the carrying on of a business having been in breach of a prohibition on
use for business purposes; and, said Mr Davis, here there was no covenant in
the relevant tenancy agreement which in any way precluded the first defendant
from using the garage for business purposes. That was a point which depended upon
the construction of subclause (4) of the agreement on September 23 1964, which
imposed an obligation on the tenant ‘To use the said garage for standing a
private car only and the flat only as and for a private dwelling-house.’ Whatever may be the meaning of ‘private’ or
‘private car’ in other contexts, I am satisfied that on the true construction
of the words of that clause, first the keeping of cartons of goods in the
garage was in breach of that covenant to use the garage for standing a private
car only; and, secondly, that the using of the garage in order to keep one or
more cars there which were used to a substantial degree for the business of the
defendants (they being a limited liability company) was an infringement of that
covenant. If a car is used to a substantial degree for business purposes it is
not a private car for the purposes of this covenant any more than the use of a
house for purposes of business would be the using of the house as a private
dwelling-house.
That point
having gone, unless the learned judge was right in the view which he has taken
that there was here consent on the part of the plaintiff’s predecessor in
title, Mr Allen, then the plaintiff was entitled to succeed. I agree with my
Lords that in the context of section 23(4) of the Act, whatever consent or
acquiescence may mean in different contexts, in that context ‘consent’ is put
in plain antithesis to ‘acquiescence’; and that, therefore, if something falls
within the description ‘acquiescence,’ it is not consent. The difference which
is pointed out between the two in this context is that ‘consent’ involves some
affirmative acceptance, not merely a standing by and absence of objection. The
affirmative acceptance may be in writing, which is the clearest obviously; it
may be oral; it may conceivably even be by conduct, such as nodding the head in
a
something more than merely standing by and not objecting.
I agree that
the appeal falls to be allowed.
The appeal was allowed with costs in the Court of
Appeal. The judge’s order in the court below was varied to provide that no
costs should be paid as between the plaintiff and first defendants. The order
stood for the plaintiff to pay the second defendant’s costs in the court below.
The order in favour of the appellant for possession of the garage was stayed
for 28 days.
