Landlord and tenant–Forfeiture of lease–Butcher’s shop with flat over–Question of relief for subtenant of flat–Pre-1974 covenant restricting subletting of flat to a furnished subletting only–Unfurnished subletting in 1976–Unlawful subletting in breach of covenant–Head tenant’s personal representatives failed to pay rent and ceased to run shop–Forfeiture proceedings by landlord–Application by subtenant of flat for relief under section 146(4) of Law of Property Act 1925–Argument that as furnished tenancies had become fully protected landlord was in no worse position than if subtenancy had been furnished and therefore lawful–Relief for subtenant would, however, saddle the landlord with a protected tenant of flat–Judge right to refuse relief–Appeal dismissed
This was an
appeal by John Keogh, the subtenant of a flat above a butcher’s shop in Luton,
against the decision of Judge Kingham at Luton County Court refusing the
appellant relief in forfeiture proceedings brought by Sidney Herbert Clifford
against the personal representatives of Frederick Johnson deceased, who had
been the lessee of the combined premises consisting of the butcher’s shop and
the flat.
S Barstow
(instructed by Knowles, Cave & Co, of Luton) appeared on behalf of the
appellant; J J Wright (instructed by Clappen & Weaver, of Bournemouth)
represented the respondent head landlord (Sidney Herbert Clifford). The
personal representatives of Frederick Johnson deceased, defendants in the
action for possession, were not parties to the appeal.
Giving
judgment, LORD DENNING MR said: Mr Clifford is now about 88 years of age. 20
years ago, in 1959, he let some premises at Luton. They consisted of a
butcher’s shop with a flat above it. He let those premises for 21 years at a
rent of £400 a year. The lease contained a special covenant that the lessee was
not to assign or sublet the shop. But there was this following proviso:
‘Notwithstanding anything hereinbefore contained the Tenant may if he so
desires let the flat forming part of the demised premises Provided That such
letting is effected upon the basis of a furnished tenancy only.’ It is quite obvious why that proviso was put
in. In 1959 furnished tenancies were not protected by the Rent Acts. Mr
Clifford was anxious that there should not be a protected tenant in the flat.
That is why he virtually said, ‘You are not to sublet even the flat above the
shop unless you do it on a furnished tenancy which is not protected.’ That was in 1959.
We all know
that since 1974 furnished tenancies have been protected by the Rent Acts. I
need not pause upon that because in 1976 the then lessee did in fact sublet the
flat. He sublet it to a Mr Keogh at a rent of £50 a month–that is, £600 a year.
So he was making a profit rental. He was paying £400 a year to the landlord and
was letting the flat for £600. The important thing is that the flat was let
unfurnished to Mr Keogh. Therefore, as I read it, it was in breach of that
covenant. It was an unlawful subletting. It was let unfurnished whereas he only
had permission to let it furnished. So it was not a lawful subletting. There
was a breach of the covenant. That was in 1976.
Mr Johnson
(the lessee) died. His representatives did not continue paying the rent as they
ought to have done: and they did not continue running the shop as they could
have done. They thought it was not worth their while to do it. So Mr Johnson’s
representatives simply faded from the picture; and Mr Keogh remained in the
flat above and sought to remain there.
The landlord
took proceedings for possession on the ground that the lease had been forfeited
because of non-payment of rent, among other things, and there is no defence to
that. But he also took proceedings against Mr Keogh. As the lease had been
forfeited, Mr Keogh would not be entitled to be there at common law. The matter
came for hearing before the judge. It is quite plain that Mr Keogh had no
protection under the Rent Acts because it was an unlawful subletting. It was an
unfurnished subletting whereas it should only have been a furnished subletting.
It was an unlawful subletting, so he had no protection under the Rent Acts: and
the judge so found.
Mr Keogh said
that even though he had no protection under the Rent Acts, he would like relief
from forfeiture such as is given by section 146(4) of the Law of Property Act
1925 under which a subtenant, even of a part, can get relief from forfeiture,
but it is a matter of the discretion of the court. The judge refused relief.
Mr Barstow on
behalf of Mr Keogh appeals to this court, urging that the judge was wrong and
ought to have given relief. His main point was that if there had been no breach
of covenant and if Mr Keogh’s tenancy had been a furnished tenancy the landlord
could not have complained. Equally now, under the new Rent Acts, a furnished
tenancy is protected. So Mr Barstow is saying that the landlord is no worse
off. It seems to me that that is too narrow a view to take of the provisions of
the Rent Acts. Mr Keogh has got to come for relief if he is going to get it at
all, and the judge has to consider it.
It does seem
very material here that, if relief were granted, the landlord would be stuck
with a protected tenancy on the top floor. He might be prejudiced in dealing
with the whole of the premises. Furthermore, the position of that top floor
would be very unsatisfactory. The judge said: ‘But I have a discretion; I have
to consider the hardship caused if I order Keogh to go. He is a single man; he
has been unemployed for two years and he has no prospect of work in his field
in the area.’ There it is. Such a man
does not come within any reasonable ground for relief from forfeiture. If he
were allowed to stay after the lease came to an end, it would be a protected
tenancy and so forth. It seems to me in the circumstances that if the landlords
are to deal with the premises properly as one whole unit–perhaps converting
them in the future–it is far better that there should be no relief from
forfeiture in this case, and the landlord should get possession.
I think the
judge was quite right, and I would dismiss the appeal.
LAWTON and
GEOFFREY LANE L JJ agreed.
The appeal
was dismissed with costs. The appellant being legally aided, the order was that
the costs were to be paid out of the legal aid fund unless an objection was
made on behalf of the fund within 10 weeks; legal aid taxation ordered.