Restrictive covenants –– “Right to buy” –– Private dwelling-house restriction –– Holiday lets –– Whether use for holiday purposes occupation for dwelling-house purposes
The appellant council were the owners of two dwelling-houses previously occupied by tenants. In 1982 and 1983, respectively, the dwelling-houses were sold to their then tenants under the “right-to-buy” provisions of the Housing Act 1980. Each purchaser covenanted, inter alia, “not to use or permit to be used the property for any purpose other than that of a private dwellinghouse…”. The council brought proceedings against the respondents, the present owners of the respective properties, alleging that their use of the properties was for holiday purposes only and was in breach of the restrictive covenants. The properties were occupied by holidaymakers under tenancies for short periods and the respondents made only occasional use of the properties themselves. In the court below, the judge concluded that the properties were being used as private dwelling-houses. The council appealed.
Held: The appeal was allowed. The holidaymakers’ occupation of the properties was not for the purposes of use as a private dwelling-house and was therefore a breach of the restrictive covenants. A person using one of these properties as a tenant for short holiday lets, lasting some one or two weeks, was not using the property as a private dwelling-house. The concept of using a property as a private dwelling-house involved its use, at least in some way, as a home. The properties were not being used as private dwelling-houses, but as holiday houses. The council had not acted irrationally in seeking an injunction to restrain the breaches of covenant.
The following cases are referred to in this report.
C&G Homes Ltd v Secretary of State for Health [1991] Ch 365; [1991] 2 WLR 715; [1991] 2 All ER 841; (1990) 62 P&CR 69; [1991] 1 EGLR 188; [1991] 06 EG 170, CA
Curl v Angelo [1948] 2 All ER 189, CA
Rolls v Miller (1884) 27 ChD 71
Skinner v Geary [1931] 2 KB 546, CA
This was an appeal by the claimants, Caradon District Council, from a decision of Judge McKintosh, sitting in Bodmin County Court, in proceedings by the claimants against the defendants, Fiona Pamela Paton and Andrew Arthur George Bussell, for breach of covenants.
Roger Kay QC and Guy Adams (instructed by the solicitor to Caradon District Council) appeared for the appellants; Damian Falkowski (instructed by Stafford Young Jones) represented the respondents.
Giving the first judgment, Latham LJ said: The appellants, a local housing authority, were at one time the owners of two properties in Polruan: 23 Fore Street and 6 Greenbank. On 26 April 1982 the appellants sold 23 Fore Street to their then tenants, Mrs and Mrs Salt, and, on 21 November 1983, they sold 6 Greenbank to their then tenants, Mr and Mrs Jensen. Both sales were made pursuant to what are colloquially known as the “right-to-buy” provisions of the Housing Act 1980, which entitled council tenants to purchase the freehold of council houses that they occupied.
Each of the purchasers took title under conveyances that were subject to identical restrictive covenants. The relevant provisions to the dispute before us today were as follows.
(2) … the purchaser here by covenants with the council…
(b) for the benefit of the Council’s land or any part thereof to observe and perform covenants, restrictions, stipulations and conditions specified in the 5th Schedule hereto…
The 5th Schedule before referred to
(New covenants restrictions and conditions)
2. … not to use or permit to be used the property for any purpose other than that of a private dwelling house and no trade or business or manufacture of any kind shall at any time be permitted to be set up or carried on on any part of the property or in any building now or hereafter within the perpetuity period erected thereon…
At the time these proceedings commenced, 23 Fore Street had been conveyed to the respondent, Miss Fiona Paton, and 6 Greenbank had been conveyed to the respondent, Mr Andrew Bussell.
There is no dispute that each of the respondents took title to their respective properties subject to the restrictive covenant to which I have already referred.
The appellants became concerned that the two properties in question were being used merely during the summer months. They further became concerned that they were being used for holiday purposes only. Both properties had signs in the window advertising holiday lets. As a result, a councillor, Mr Kevin Castle, reported to the council, and ultimately gave evidence to the court, to the effect that his watch on the properties established that the pattern of occupation suggested that they were occupied simply for short-term holiday use, ie one or two weeks at a time. An affidavit was sworn by him to that effect.
On the basis of that evidence, the appellants sought injunctions against both respondents on the basis that they were in breach of the covenant to which I have referred.
At the trial, it was accepted on behalf of the appellants that, on that evidence, the occupants were to be treated as tenants, albeit holding tenancies only for very short periods. The judge, having heard full argument, came to the conclusion that the properties were being used as private dwelling-houses, and, on 19 May 1999, dismissed the appellants’ claim. The appellants appeal to this court with permission from the judge.
Before us, each side has deployed essentially the same arguments as those before the judge. Putting them, for the moment, shortly, the appellants submit that the respondents are in breach of the covenants in two separate respects. First, it is said that the use of the properties for
Second, it is submitted that the use the respondents are making of the properties is for the purposes of the business of holiday lets, and, indeed, that the business of holiday lets is being carried on on those premises.
The respondents, on the other hand, submit that the use being made of the properties is clearly that of private dwelling-houses, as opposed to business premises. The occupants are tenants and have all the property rights of tenants; they are using the properties for the period of the letting in the same way as they would use their own homes. It is submitted that there could be no objection to the properties being let, for example, for six months, and it is therefore submitted that it would be illogical to conclude that they were not being used as private dwelling-houses, simply because the letting period was shorter.
This is the argument that attracted the judge, who also considered that there was no business use being made of the premises, nor was there any business use taking place or being carried on on the premises.
The issue that we have to resolve in this appeal is one that curiously raises an argument that has not been subject to any direct authority previously. That is surprising, because the question raised by holiday lets is one that is of wide interest, and the form of the covenant that was used in the present case is a well-recognised form of covenant.
The evidence before the judge established that there was no use being made of the premises by the respondents themselves. It has been said on their behalf that the truth of the matter is that, on occasions, they do in fact occupy the premises, but, as the evidence stands, there is no material upon which the court could conclude that they did in fact occupy the premises at all.
It follows that the question we have to determine is whether or not, first of all, the occupation of the tenants for holidays only can constitute the use of the property as a private dwelling-house. Second, if the respondents are able to persuade us of that, the next question that would arise is whether or not, none the less, the use being made of the properties would amount to a business for the purposes of the covenant, or, alternatively, the carrying on of a business on or in the properties, again for the purposes of the covenant.
There are many people who have holiday homes to which they go as and when they can, and a significant proportion will let their properties on holiday lets when they do not want or need to use them. For my part, if the matter were free from authority, I would have no difficulty in concluding that, in so far as someone uses his or her own property for a holiday, they are using that property as their second home, and that there would be no difficulty in coming to the conclusion that they were using it as a private dwelling-house. Again, if the matter were free from authority, I would conclude that any use being made of that property by their family would, essentially, fall into the same category.
However (and again apart from authority), I have difficulty in accepting the proposition that where there is a commercial transaction, by which property is let on a holiday let, the use of the property for that purpose can properly be described as use of the property as the holidaymaker’s own private dwelling-house.
Although there is no direct authority on the meaning of the phrase “use as a private dwelling-house” in the context of holiday lets, there is authority to which we have been referred dealing with the phrase in other contexts.
The authority that seems to me to best identify the nature of the question that is raised by the phrase is that of C&G Homes Ltd v Secretary of State for Health [1991] 2 All ER 841*. In that case, the Secretary of State had purchased two properties on a new residential estate with the intention of using them to provide supervised housing for a small number of former hospital patients who had suffered from mental disability and who were to be returned to the community under the “care in the community” policy. The Secretary of State purchased the houses subject to a number of covenants that restricted the user by precluding the purchaser, at any time within 10 years of the date of transfer, from carrying on at or from the property any trade or business and from using the dwelling-house “for any… purposes other than those incidental to the enjoyment of a private dwelling house”.
* Editor’s note: Also reported at [1991] 1 EGLR 188
The Court of Appeal held that the Secretary of State’s proposed use was not for a purpose incidental to the enjoyment of a private dwelling-house. The leading judgment was given by Nourse LJ. He, having stated the facts, and having examined in detail a number of authorities in which the use of the phrase “private dwelling-house” had been considered, said at p848G:
We were not referred to any judicial definition of a private dwelling house. It seems that judges, no doubt wisely, have been content to say whether, in any given set of circumstances, the description is or is not satisfied. The definition of a private house given in the Shorter Oxford English Dictionary, (1933), is: “the dwelling-house of a [private] person, or of a person in his [private] capacity.” Where the owner himself is in occupation it can usually be said that he is using it as his private dwelling house. But he can still use it as a private dwelling house without occupying it himself, for example where he lets it to another individual for use as his private dwelling house. Use as or for the purposes of a private dwelling house seems to assume that there is at least one private individual who, whenever he chooses, can occupy the house as his own, even though he may not be in actual occupation, for example where he allows his children and some friends to live there.
On p849E he said:
In summary, I would say that if a house cannot fairly be described as someone’s private dwelling house it cannot be said to be being used as such.
There is no definition suggested by Nourse LJ that points to any particular meaning to be given to the phrase that is of direct assistance in this case. These passages, however, seem to me to indicate clearly that the concept that one is seeking is that the house should be being used as someone’s private dwelling-house; and that has to be considered, again, it seems to me, in the context in which the covenant has been imposed.
In the same case, Lord Donaldson of Lymington MR, cited with approval a passage from the judgment of Lindley LJ in Rolls v Miller (1884) 27 ChD 71 at p87, dealing with the approach to be adopted in the construction of such a phrase in a covenant:
Now the first question to be considered is what is the object of this covenant? The covenant must be construed consistently with that object, and on the other hand, something may fall within the scope of the covenant which does not fall within the words. One must look, therefore, at both the words and the object.
What was the context within which the covenant we have here to consider imposed? The covenant was imposed, as I have already indicated, when the properties were being purchased from the appellants’ predecessors in title by the then council tenants. The appellants submit, and I accept, that the purpose of the covenants in question was to protect the amenities of the surrounding neighbourhood, and also to try to ensure that the properties that were being sold remained as part of the housing stock that could be available as homes for people to live in. The concept of a home, therefore, is one that can properly be used in order to determine whether or not, in any given situation, the property in question is being used as a private dwelling-house for the purposes of the covenant.
Mr Damian Falkowski, on behalf of the respondents, seeks to suggest that we should be looking at what might be called the “physical characteristics” of the property and the use being made of it. In other words, we have to look simply at the question of whether or not the house can physically be described as a dwelling-house, and whether the activities that are being carried out in it and from it are what can be described as the ordinary activities of living.
He submits that support for that proposition can be found in the provisions of the Rent Acts and subsequent legislation relating to social housing. Section 1 of the Rent Act 1977 provided:
Subject to this part of the Act, a tenancy under which a dwelling-house (which may be a house or part of a house) is let as a separate dwelling is a protected tenancy for the purposes of this Act.
He submits that these words were clearly considered apt to cover a short tenancy for the purposes of a holiday, because section 9 expressly excluded such a tenancy. Section 9 provided:
A tenancy is not a protected tenancy if the purpose of the tenancy is to confer on the tenants the right to occupy the dwelling-house for a holiday.
He submits that he can obtain further assistance from the provisions of the Housing Act 1988. He referred, in particular, to section 1(1), which provides, so far as material:
A tenancy under which a dwelling-house is let as a separate dwelling is for the purposes of this Act an assured tenancy if and so long as ––
…
(b) the tenant or, as the case may be, at least one of the joint tenants occupies the dwelling-house as his only or his principal home…
Accordingly, he submits, the phrase “dwelling-house” does not necessarily carry with it the connotation of being a home. It follows, he submits, that there can be no distinction between a tenancy for the purposes of a holiday and a tenancy for the purposes of a home, provided that the character of the premises and the character of its use are the same.
This is superficially attractive. But the courts have consistently held that the principal object of the Rent Acts was to protect a resident in a dwelling-house from being turned out of his home: see Scrutton LJ in Skinner v Geary [1931] 2 KB 546 at p560. In Curl v Angelo [1948] 2 All ER 189, Lord Greene MR said at p190E:
On the facts as found by the judge, can it be said, as a matter of fair and reasonable construction of simple words in the English language, that these premises were the “home” of anybody?
In the notes to the Rent Act 1977 in Halsbury’s Statutes, discussing the question of what is a dwelling, there is, first, a quotation to this effect at p840:
In its natural meaning, a dwelling is a place where one dwells or lives, in the sense of making it one’s abode as distinct from using it as, eg, an office or warehouse.
Then, at a later point, when discussing the nature of the premises, the editor states:
Since the idea of domestic occupation with some degree of continuity and permanence is essential to the concept of a dwelling-house, it follows that the premises must have the characteristics of a house in which a person can so dwell.
One can see there, both from the citations from authority and from the commentary, that the concept of a dwelling-house as a home is a matter that is of fundamental significance in relation to the protection that is intended to be provided by the Rent Acts.
It follows that there would have been a respectable argument for saying that the use of the phrase “dwelling-house” and the word “dwelling” in the Rent Acts could, even in the absence of section 9, have excluded a tenancy for the purposes of a holiday. Clearly, however, parliament considered that express exclusion was appropriate. That does not, to my mind, afford any assistance to the respondents in relation to the proper meaning to be given to the phrase that we have to consider in the covenants in question, which must be construed in their context.
In the light of all these considerations, I consider that the answer to the question posed by this case is dependent upon whether or not one can properly describe the occupation of those who are the tenants for the purposes of their holiday as being occupation for the purposes of the use of the dwelling-house as their home.
Both in the ordinary use of the word and in its context, it seems to me that a person who is in a holiday property for a week or two would not describe that as his or her home. It seems to me that what is required in order to amount to use of a property as a home is a degree of permanence, together with the intention that that should be a home, albeit for a relatively short period, but not for the purposes of a holiday. It follows from that analysis that the evidence before the judge, and before this court, really permits of only one conclusion, namely, that is, that the occupation of the holidaymakers of these two properties was not for the purposes of use as a private dwelling-house, within the meaning of the phrase in these covenants.
In my judgment, the learned judge was wrong to come to the contrary conclusion. That is sufficient to dispose of this appeal.
The question of whether or not what was happening in relation to these properties amounted to a breach of the covenant, in so far as it amounted either to the use of the properties as a business by the respondents, or the carrying on of a business in or on the properties by a business, therefore does not fall to be decided.
Accordingly, I would, for the reasons that I have given, allow this appeal.
Agreeing, Clarke LJ said: I agree. To my mind the essential question is whether the defendants in each case permitted the property to be used for any purposes other than that of a private dwelling-house. It is common ground that the property was used for short holiday lets. Under the lets, the person taking the property was a tenant, and thus had exclusive possession of it. The lets typically lasted some one or two weeks. As I see it, the question is whether such a person was using the property as a private dwelling-house. If he was not using the property as a private dwelling-house, there can be no doubt that the defendants were in breach of the covenants, because they undoubtedly permitted the use of the property.
Mr Falkowski says that the answer to the question just posed is “yes”. He relies, in particular, upon these factors: the person taking the property has possession of it; he has possessory rights and can, for example, maintain an action in trespass or nuisance; he is using the house for private residence purposes; it is his home, albeit for a very short period. Mr Falkowski asks what is he using the property for if not as a private dwelling-house. He further submits that the judge was right to hold that there is no distinction between a six-month tenancy and a seven or 14-day tenancy, whether for holiday purposes or not.
Finally, he submits that if the council’s submissions were right, an owner could not use the property for his own holidays or those of his family. There is undoubted force in Mr Falkowski’s submissions, but, like Latham LJ, I have reached the conclusion that they cannot be accepted.
It appears to me that the concept of using a property as a private dwelling-house involves the use of it, at least in some way, as a home. I can understand that a person with two houses, who spends his holidays in one of them, may fairly be regarded as spending them in his second home. However, we are not concerned with that situation here. A person renting a holiday house for, say, one or two weeks, is not using it, in any sense, as his home. On the contrary, he leaves his home in order to have his holidays somewhere else. Thus, my answer to the question posed by Mr Falkowski, namely what is the property being used for, if not as a private dwelling-house, is that it is being used as a holiday house. There appears to me to be a significant distinction between, say, an assured tenancy of six months, and a one or two-week holiday let. In the one case, the property is likely to be being used as a home, and in the second case, it is not. In these circumstances, a person taking a holiday let is not, in my judgment, using the property as a private dwelling-house. It follows that the defendants permitted the properties to be used for purposes other than that of a private dwelling-house within the meaning of the restrictive covenants construed in their context.
For these reasons, in addition to those given by Latham LJ, I, too, would allow the appeal. I would allow it only on the narrow basis to
(After further submissions on the question whether an injunction should be granted) our decision that the appeal be allowed follows from our conclusion that the defendants have been in breach of the restrictive covenants in the past. It follows that any attempt to let the properties for holiday purposes in the future would likewise be a breach of the covenant. It further follows that, in principle, it is right to grant an injunction restraining the defendants from breaching the covenant in the future.
It is the duty of litigants to put all relevant matters before the trial judge. The plaintiffs pleaded in para 1 of their particulars of claim, in each case, that they applied for an injunction to enforce a restrictive covenant “as the plaintiff considers action expedient to promote and protect the interests of the inhabitants of its area”.
The plaintiffs were asked for further and better particulars of that paragraph. On 11 January 1999 they answered that the council’s housing and property committee discussed the problem at its meeting on 4 March 1998, and considered that the breach of covenant had resulted in the loss of a permanent residential house in Polruan in respect of a home built at public expense; and that the covenant was granted to ensure the use of the property as a private dwelling-house and to prevent a business use of the property; therefore the committee resolved that proceedings be instituted. Thus, the defendants knew the nature of the plaintiffs’ case in that regard from 11 January 1999 at the latest.
It was not suggested to the judge that the council had acted in any way irrationally in this regard. It is now suggested, for the first time, that the council acted irrationally in deciding to seek injunctive relief against the defendants, while not seeking an injunction against those householders who carry on a bed-and-breakfast business in breach of the same or a similar covenant.
In our view, if the defendants wished to take that point, the time to do so was before the trial judge. Against that, Mr Falkowski has submitted that before the judge, the arguments were, essentially, restricted to the question of construction that has been debated in this appeal. However, while that is so, it appears to us that the time to put in relevant evidence was before the judge. If we had reached the conclusion that there was any real force in the point that the defendants now seek to take, we might take a different view. However, it appears to us that there is nothing arguably irrational about a council seeking an injunction in a case of this kind in order to ensure that the property is lived in as a home, while deciding not to seek an injunction to restrain bed and breakfast. That is for the reasons already given by Latham LJ in the course of his judgment.
It appears to us that it is legitimate for a council to wish to ensure that property is lived in as a home, but also to permit bed-and-breakfast activity, since that, too, may properly be thought to be in the interests of the local community.
In these circumstances, we have reached the conclusion that the right course is to refuse the application that the matter be remitted to the judge, but to grant an injunction in each case in the terms set out in the prayer, namely an injunction restraining the defendant by himself, his servants or agents from using or permitting the use of the relevant property for the purposes of holiday letting.
We do not understand Mr Falkowski to submit that an injunction in those terms would be inappropriate if an injunction is to be granted at all.
Finally, we direct that the respondent pay the appellants’ costs, to be assessed if not agreed.
Appeal allowed.
