Tenant’s claim for repayment of rent paid after making of closing order under Housing Act 1957–Money paid under illegal contract–Tenant continued to reside in house until order for possession was made more than five years after closing order–Tenant’s failure to complete appropriate forms for rehousing by council–No intention of leaving unless compelled–Claim dismissed–Claim for damages for breach of implied covenants to repair also dismissed
This was a
case arising from a closing order made in respect of premises at 72 Kings Road,
Teddington, Middlesex. The tenant was William G Edwards and the landlord was
Mrs Doris Upton, whose interest was represented by Messrs A H Sneller, who
became managing agents in 1971.
The plaintiff
claimed the return of all moneys paid by him as rent since the date of the
closing order, on the basis that it was rent paid under an illegal contract. He
further claimed that the landlord was in breach of implied covenants to repair
by allowing the house to fall into disrepair so that the closing order was made
whereby he lost the protection of the Rent Acts and possession and that
therefore he was entitled to damages for that breach. The defendant
counterclaimed for arrears of rent amounting to £109.60.
K Raftery
(instructed by Myers, Ebner & Deaner) appeared for the former tenant; T R G
F Ryland (instructed by Sherwood Cobbing & Williams) represented the
landlord.
Giving
judgment His Honour JUDGE MARK SMITH said: This is perhaps an unusual case in
that the plaintiff Mr Edwards was a tenant of a property upon which,
unfortunately, a closing order was made by Richmond upon Thames Council under
section 27(1) of the Housing Act 1957 as a result of which he had to leave. He
was found other accommodation by the council. He was given the appropriate money
by way of disturbance allowance. Nevertheless, he says that is not enough, that
he is entitled to damages, indeed £2,000, and one can but sympathise with him.
In 1939 he
became the tenant of the ground floor at 72 Kings Road, Teddington, Surrey, a
house owned by the defendant’s father. In 1952 the plaintiff remarried, and his
second wife went to live there with him. In 1957 Mrs Upton’s father transferred
the house to her and she became the landlady. In 1969 the plaintiff took over
the whole house at a rental which was then £5 11s, inclusive of rates. On April
14 1972 the closing order was made. By virtue of that, the defendants should
have left the premises at once, because section 27(1) of the Housing Act 1957
says that a closing order should be an order prohibiting the use of premises in
respect of which the order is made for any purpose other than one approved by
the local authority and any person who, knowing that a closing order had become
operative and applies to any premises, uses those premises in contravention of
the order or permits them to do so shall on summary conviction be liable to a
fine and so on.
The plaintiffs
knew of the closing order very soon after it had been made, probably because
Mrs Edwards heard about it from a neighbour. They did not leave, Mrs Upton did
not tell them to leave and the council turned a blind eye, and it is abundantly
clear from the evidence of Mr Sneller that it was the council’s policy, and is
the policy of councils throughout the country, to turn a blind eye and give a
period of grace so that either they can rehouse the tenant or he can find
somewhere else to live. I am in no doubt that Mr Edwards knew the council would
rehouse them when the time came when they would have to leave their home.
The defendant
sympathised with the plaintiff’s predicament and for a long time allowed him
and his wife to stay. Mr Sneller made it clear to the Edwards that he would
help them by approaching the council and assisting their claim for rehousing
and he telephoned the council on their behalf at least once every six months.
What they really wanted was to stay permanently at 72 Kings Road, but they
could not, as they knew sufficient work would have to be done to satisfy the
council that the closing order should be revoked. They knew from Mr Sneller
that Mrs Upton would not evict until the council did rehouse them. They would
not be homeless, and I have no doubt this partly motivated their thinking, and
for some years they did not complete the appropriate forms, which Mrs Edwards says
was her fault, as the form contained questions about private matters which as a
matter of principle she could not answer.
Eventually Mr
Sneller found out that the forms were not being completed and told Mr and Mrs
Edwards that under the circumstances, five years or more having elapsed since
the closing order, proceedings for possession would be taken, which they were,
and as a result the Edwards were rehoused. They do not like the new house and
Mr Edwards in his claim says that but for Mrs Upton’s failure to keep the house
in sufficient repair they would not be in this situation, and that has caused
them great distress and inconvenience. As a matter of pleading by his advisers
I would say one might think that credit would be given for the payment made by
the council for disturbance.
Mr Edwards
also says in his claim that the contract under which he paid weekly what I
shall refer to as rent was an illegal contract immediately the closing order
was made, ie after April 14 1972, and therefore he says he is entitled to the
return of moneys paid as rent. Regarding that illegality, I say in passing that
two applications were made to the rent officer after April 14 1972 for him to
fix a fair rent and I am satisfied he knew on both occasions that there was a
closing order in existence, but neither he nor anyone else thought that what
was happening was in any way illegal. Mr Sneller said the policy of leaving
tenants in possession until further accommodation was found was a humane
gesture by the council which benefited the tenant, as he kept a roof over his
head, and enabled the landlord to draw some money during a period when he did
not have the use of the house.
Mrs Upton in
answer says she did nothing wrong, that she and her father did practically
everything the tenants asked them and that is not doubted apart from some sash
cords, which old Mr Upton used to see to, not being repaired when
added which the defendant paid for. She paid a bill of £844 for that and added
£1.50 to the weekly rent, which seems to be within the 12 1/2 per cent then
permitted by law to be added to rent in respect of improvements. I should
mention that at the date of the closing order the rent had risen to £4.53 per week.
I have no doubt, on the evidence that I have heard, that the defendant, her
father, and Mr Sneller did everything the tenants asked them to do and I am
also quite sure the Edwards asked for work to be done only if it was really
necessary.
Both counsel
agree that after April 14 1972 the contract under which the plaintiff remained
in the premises was an illegal contract and I shall approach the matter on that
basis. It may help if I say what happens to money paid under illegal contracts.
I need not go into the cases read to me, as in my view they fall within, and
indeed are the basis of, the principles as I understand them. Money which has
actually been paid under an illegal contract can be recovered only in certain
specific circumstances: (i) if the money has been paid in ignorance of the
facts which created the illegality; (ii) if statute specifically provides that
the money should be returned; (iii) if the parties are not in pari delicto
and it is not against public policy for the money to be returned; and (iv) if
there is a course of action which does not depend upon the illegal contract. It
is the third ground which is applicable here.
The situation,
as I see it, is this. That if anything the defendant is in a stronger position
than the plaintiff for two reasons. Firstly, she genuinely believed it would
only be a short time before the plaintiff and his wife would be rehoused and
she was acting out of kindness in allowing them to stay for what she thought
was a short period, whereas the Edwards were not intending to leave at all
unless compelled. Secondly, the effect of a closing order is to impose upon a
tenant the duty of leaving–they have to go; they did not, but the defendant did
not encourage them to stay, nor did she make them believe they were entitled to
stay. It was the plaintiff who was responsible for the fact that he stayed so
long. He should have filled in the forms properly; that he left it to his wife
and she did not is no excuse. The blame, if that is the right word, is on him;
but even if no fault be attached to him, equally none can be attached to the
defendant and that is sufficient to dispose of that course of action and there
is no basis for the recovery by the plaintiff of any sums which he paid to the
defendant.
Turning to the
implied covenant, section 32 of the Housing Act reads: ‘In any lease of a
dwelling-house being a lease to which this section applies there should be
implied a covenant by the lessor (a) to keep in repair the structure and
exterior of the dwelling-house. . . .’ Subsection
(3) says ‘in determining the standard of repairs . . . regard is to be had to
the age, character and prospective life of the dwelling-house and the locality.
. . .’ As already stated, the defendant
and her father did all repairs necessary as a result of matters of which they
had knowledge. In my view she had no notice of sash cords needing repair, and
it would be contrary to justice to saddle her with the consequences of not
putting right something she did not know about. On the basis of what I have
heard about the house I have the gravest doubts whether in order to comply with
section 32 she would have had to do anything more than she did even if other
defects had been brought to her notice. It follows that she is not in breach of
that implied covenant and even if she were, the fault would lie at the
plaintiff’s door for not telling her what work needed doing. The plaintiff’s
claim alleges further that there should be another implied term to the effect
that the defendant would not cause or permit the condition, design or other
characteristics of the premises to be or become such that a closing order under
section 27 of the Housing Act 1957 would be made. When statute specifically
sets out what covenant is to be implied in relation to a particular subject-matter,
there is no room, save possibly in special and exceptional circumstances, for
there to be an implied term dealing with that same subject-matter. The implied
term alleged here is so wide as to be almost breathtaking in its implications.
What control would a landlady have over natural disasters or acts of war? That implied term is so wide it could not
possibly be implied. There comes a time when any house reaches the end of its
useful existence, and no landlord/lady can be expected to pour money into it
practically to rebuild it to ensure the accommodation remains suitable for a
tenant, and that is precisely, as I understand it, what section 32(3) is there
for in determining the standard of repair required by the lessors’ repairing
covenant.
The only
matter I have not dealt with is the situation as it was after the council’s
letter of January 20 1972 which they sent to the defendant’s agents, Messrs.
Sneller, enclosing a schedule of defects saying the house was unfit for human
habitation having regard to the standards which are set out in section 4 of the
Housing Act 1957 and saying it could not be rendered fit at a reasonable
expense. The plaintiff argues that the defendant therefore knew about the
repairs from that date and ought to have done them. My view is that those
repairs go far beyond what is envisaged in section 32 and she was under no duty
to do them. In all those circumstances the claim must be dismissed.
There is a
counterclaim under which £109.60 is claimed allegedly as arrears of rent from
December 5 1977 to April 5 1978 at £6.34 per week. I doubt if the moneys
claimed can properly be described as rent, and while a court may or may not
help a party to reclaim money paid under an illegal contract in certain
circumstances I cannot believe that it will assist anybody to obtain the
repayment of money due or allegedly due under the illegal contract and our
rather simplistic approach to the counterclaim. I dismiss the counterclaim as
well.
Claim
dismissed with defendant’s costs Scale 4. Counterclaim dismissed with
plaintiff’s costs Scale 1. Order that both costs be set off against each other.
