Council tenants — Husband and wife exercising right to buy — Son assisting by paying for purchase — Deed that mother and father to live in property for rest of their lives — Whether surviving parent mere licensee — Whether tenancy for life created under Settled Land Act 1925 — Judge finding for the son — Mother’s appeal allowed
Mr and Mrs C had lived in a council house at 16 Bournemead Avenue, Northolt, Middlesex, as council tenants since 1946. In 1985, they took advantage of the right to buy legislation in the Housing Acts and their son, the respondent to the appeal, provided them with the purchase price of £18,500. The transfer took place on April 7 1986 between them and Ealing London Borough Council and a deed was thereafter entered into on December 10 1986 between the son and the parents. By clause 1 the deed stated that Mr and Mrs C held the property or the net proceeds of sale in trust for their son absolutely and agreed that they “will at all times enter into an executed transfer of the said property to such person … or otherwise deal with it [as their son would direct] …, but subject always to the rights granted by clause 2 …”. Clause 2 stated that: “For so long as Mr and Mrs Costello shall desire [their son] will permit [them] to occupy the said property for the remainder of their lifetime free of rent …”. Mr C died in 1989 and relations between the son and mother became strained. The son sought in an action to have the property transferred into his sole name under clause 1 although he stressed that he did not wish to seek her eviction from the property or to determine that license. At first instance, the judge found that the tenant was not a tenant for life under terms of the deed or under the Settled Land Act 1925 and further, by virtue of the deed’s terms, Mrs C was a contractual licensee. Mrs C appealed.
Held The appeal was allowed.
1. If Mrs C had the right to occupy the property as tenant for life for purposes of the Settled Land Act that would entail consequences not envisaged at the time of the deed. She would be entitled to sell the property and the proceeds would go to trustees; alternatively, she could purchase a different property with a right to occupy that for life.
2. The answer depended on the validity of the case of Bannister v Bannister [1948] 2 All ER 133, where it was stated that the defendants, on an oral undertaking by the plaintiff that they could live rent-free for life in a bungalow, could not have their interests determined by the plaintiff’s notice to quit and that they the were tenants for life within the Settled Land Act. It inexorably followed from established law that that was the position in relation to provisions of wills and trust deeds: see, inter alia, Dodsworth v Dodsworth (1973) 228 EG 1115.
3. The true construction of the deed was that Mrs C was accorded a life interest while the interest of her son was also protected and there was no injustice to him. Clause 1 was expressly subject to her right to reside for life and that the power of sale overrode the settlement. Further, there was no question of a mere joint lives occupation. The deed applied to the survivor, Mrs C.
Robert Reid QC and Wendy Fisher-Gordon (instructed by Janet Ali) appeared for the appellant, Mrs C; Graeme Williams QC and Andrew Glennie (instructed by E Edwards Son & Noice) appeared for the respondent.
