Landlord and tenant — Tenants in arrear with rent — Notice to quit said to have been given by landlord — Conflict as to facts — Tenants leaving flat and returning to find locks changed and belongings moved — Flat let to new tenant who moved in and has remained in occupation ever since — Mandatory injunction obtained by tenants on ex parte application — On an application by landlord to discharge injunction and by tenants to continue it, assistant recorder decided to discharge it, relying on guidance given in American Cyanamid Co v Ethicon Ltd — Tenants appealed, with partial success
the Court of Appeal criticised the time taken by the parties to bring the
appeal from an interlocutory order before the court, with inevitable further
delay before the trial of the action — The appellants (plaintiffs below) were
tenants of a flat owned by the respondent — Initially they paid the rent but
fell into arrear — There was a conflict as to whether they had received a
notice to quit given by the respondent landlord and a further conflict as to
whether a sum for rent had been given to a neighbour to pay over to the
respondent — There were other inconsistencies as to events — On returning from
a visit the appellants found access to the flat denied to them, the locks
having been changed — A second attempt to obtain access was also unsuccessful —
On advice the appellants applied for and obtained ex parte a mandatory
injunction to restore their access to the flat and to provide them with
ancillary relief — The flat was by this time occupied by the new tenant
introduced by the respondent — The respondent was given liberty to apply to
discharge the mandatory order and he made such an application — The appellants
claimed that they had suffered unlawful eviction and were entitled to damages
for loss as well as exemplary damages in addition to the relief under the order
recorder who heard the case inter partes discharged the mandatory order and
refused to continue the injunction — He relied on the well-known guidance given
in American Cyanamid Co v Ethicon Ltd — He had been influenced by the fact that there was now
a new occupant in possession of the flat, to whom it had been let by the
respondent and against whom there would have to be an order for possession if
the appellants were allowed to return — The assistant recorder concluded that
the balance of convenience was in favour of awaiting a decision in the main
action — The tenants appealed
Appeal considered that the evidence filed did not establish that there was a
serious issue as to the right of the appellants to occupy the flat — In these
circumstances it was unnecessary to consider whether the assistant recorder had
correctly addressed himself in other respects in following the guidelines of the
American Cyanamid case — The question was as to what order should now be made —
It was conceded that even if the court made the order sought by the appellants
it could not be enforced, as the respondent landlord could not evict the
present occupant of the flat — Accepting that the respondent had acted in good
faith and without intention to contravene the Protection from Eviction Act
1977, the correct way to deal with the matter was as follows — A declaration
would be made in the appellants’ favour that as against the respondent they
were entitled to possession of the flat on an assured tenancy — Liberty would
be given to both parties to apply — If the appellants applied to add the
present occupant of the flat, for the purpose of obtaining possession of the
flat, as they had been declared to be entitled, the court would then consider
the matter — Appeal allowed
The following case is referred to in this
report.
American Cyanamid Co v Ethicon Ltd [1975]
AC 396; [1975] 2 WLR 316; [1975] 1 All ER 504, HL
This was an appeal by Michael Love and
Vanessa Lugg, to whom the respondent, Peter Herrity, had let the upper flat at
30 Northcote Road, Southsea, near Portsmouth, from the decision of Mr Assistant
Recorder Trethowan discharging an order for a mandatory injunction granted ex
parte to the appellants by Judge Griffiths at Portsmouth County Court. The
order was to restore the appellants’ access to the flat and granted other
relief.
Paul McCormick (instructed by Anderton
& Co of Portsmouth) appeared on behalf of the appellants; Martin Rodger
(instructed by Cousins Burbidge & Connor) represented the respondent.
Giving the first judgment at the
invitation of Taylor LJ, BELDAM LJ said: The respondent to this appeal,
the defendant in the action below, is the owner subject to mortgage of a
freehold property, 30 Northcote Road, Southsea, near Portsmouth. The house is
divided into two flats. The respondent bought the property in mid-1989 with the
aid of a loan of something over 95% of the purchase price of £51,500. The repayments
of that loan and the premium on a collateral policy required forced him to make
monthly payments of £646. But, as his earnings at that time were sufficient to
cover those repayments, he was able to occupy one of the flats himself and to
let the other. Very shortly after acquiring the property, however, he decided
to start in business on his own account as a producer of video recordings. His
future was, therefore, uncertain, as was his income, and he moved into cheaper
accommodation and let both flats. The ground-floor flat was let to a Mr and Mrs
Atrill from July 1989. In August 1989 the upper flat was let to the appellants
(the plaintiffs in the court below) as joint tenants at a weekly rent of £80;
the appellants also paid a deposit of £100. The appellants were then both
working and initially they paid the rent regularly. But after the beginning of
November they fell into arrears. By December 8 they owed the respondent £200 in
back rent. On that day, according to the respondent, he handed to the second
appellant a notice purporting to terminate their tenancy, which was due to
expire in four weeks on January 5 1990. The appellants deny that they were
given any such notice.
It appears that at about this time the
first appellant went to prison and so he did not continue to occupy the flat.
But the second
ever saw the respondent on December 8 and says that on that day, which was the
day on which the appellants were due to pay rent, she gave her rent to Mr or
Mrs Atrill to pay to the respondent. They, however, deny that any such sum was
given to them.
According to the respondent, the notice
which he gave on December 8 purporting to terminate the tenancy was found by
him subsequently in a wastepaper bin at the premises. Again, according to him,
on the occasion when he handed it to her on December 8 the second appellant
said that she would be leaving the flat by the date of its expiry. In fact both
the appellants ceased to occupy the flat, at least temporarily, in about the
middle of December, and certainly after December 8 neither of them paid any
more rent, nor did they contact the respondent. So, on December 29, the
respondent apparently wrote a letter which was exhibited to the affidavit of
the first appellant. It is a letter which, on the face of it, is inconsistent
with his having given to the appellants the earlier notice purporting to
terminate their tenancy but, according to the respondent, it was merely a
letter to remind them that they had been given notice and that it expired on
January 5.
Again according to the respondent, on
December 30 he saw the first appellant at the flat packing up his possessions
and the first appellant said that he would be leaving the flat by the date in
question. This the first appellant denies. The appellants say that on January 3
they had returned to Southsea and found the letter of December 29 stuck to the
door handle, that the lock on the door had been changed and, according to the
first appellant, there was another handwritten note which said that the
respondent was holding the first appellant’s possessions which would be
returned if he paid the outstanding arrears of £440. The first appellant,
having found this state of affairs, apparently went back to Northampton where
he and the second appellant had been staying with the second appellant’s
mother.
On January 5 or 6 the respondent said
that he went to the flat and found the appellants’ belongings or some of them
packed and boxed. They were placed in the kitchen and bathroom and some on the
landing but the appellants were not there. The respondent decided to remove
these possessions and to relet the premises. On January 8 1990 he reached
agreement with a new tenant, a Miss Ward, who was to occupy the flat from
January 12 1990. She moved into the premises on that day and has continued to
occupy them ever since, paying rent to the respondent.
On January 8 both the appellants returned
to Southsea. They went to the flat and tried to enter but the lock on the front
door had been changed and they could not get in. It remains only to say that
the note, which it was said was on the handle of the door and which told the
appellants that their possession could be regained if the first appellant paid
the outstanding balance of rent and arrears of £440, was not, according to the
respondent, in his handwriting nor was it a letter or note which was written on
his behalf.
Having returned from Northampton on
January 8 and found that they could not gain access to the premises, the
appellants, on January 17, sought the assistance of the local housing
authority. As a result, they were put into contact with a solicitor. He advised
them and, in due course, a letter before action was sent in which it was
claimed that the respondent had unlawfully evicted them from the premises and
informing him that unless he permitted them to re-enter the premises they would
take proceedings. Indeed, on Friday January 19 they applied ex parte for
a mandatory injunction to the judge in the Portsmouth County Court. The matter
came before His Honour Judge Griffiths, who, after hearing counsel for the
appellants and reading the first affidavit of the first appellant and on the
plaintiff giving an undertaking in the usual terms to pay damages, ordered that
the respondent permit the appellants access to the premises known as the Top
Flat, 30, Northcote Road, Southsea, and the use of the premises without let or
hindrance, provide the necessary keys, restore to the premises any furnishings
which might have been removed, return any property of the appellants which the
respondent had removed, and restore any electricity or other services which may
have been disconnected; and, further, restraining him from hindering or
impeding the appellants in gaining access to the premises or disturbing them in
quiet enjoyment of the premises.
He gave liberty to the respondent to
apply to discharge the order on 48 hours’ notice. The respondent did apply to
discharge the order on January 24, and on January 25, he served a defence and
counterclaim. The particulars of claim, which were dated January 19, after
reciting the facts, alleged that the appellants’ occupation of the premises was
protected under the Protection from Eviction Act 1977, and that the respondent
had evicted them from the premises. They claimed that they had suffered loss
and damage and claimed to be entitled to aggravated or exemplary damages on the
ground that the defendant’s course of conduct was deliberately designed to
induce them to vacate the premises. The relief claimed was in accordance with
the terms of the injunction which had been sought.
By his defence the respondent admitted
that the occupation of the premises by the appellants was one to which the
Protection from Eviction Act applied. But he denied that he had evicted them.
He set up the case that, having sent the notice to terminate the tenancy (to
which I have already referred), the first appellant had told the respondent
that he was going to leave the premises and at a later date the appellants had
done so; the respondent had then removed the boxed and packed items to safe
custody. The respondent had reasonable cause to believe that the appellants had
ceased to reside in the premises on the expiry of the notice to quit, as it was
termed. Para 7 of the defence said the respondent had relet the flat, on the
same terms and conditions and at the same rate as it had been let to the
appellants, from January 13. In addition, by counterclaim, the arrears of rent
were claimed and there were further claims for cleaning services, broken
windows, damage to furnishings and replacement of an electricity meter. In all
the counterclaim was for £6,763.
The respondent’s application to discharge
the ex parte injunction was heard by Mr Assistant Recorder Trethowan on
February 9 1990. At the same time he heard an application by the appellants to
continue the interim injunction which had been made by Judge Griffiths. After
reading the affidavits and considering the exhibits, the judge discharged the
order and declined to make the order sought by the appellants continuing the
injunction. Against that judgment the appellants now appeal. It is, in my view,
most unfortunate that this appeal, which involves a matter which would
ordinarily be considered of considerable urgency, comes before the court some
nine months after the judgment of the judge. No steps have apparently been
taken by either party to see if the hearing of the action could be expedited
or, indeed, to see when the action could be heard. No further steps by way of
discovery have been taken nor have any directions been sought.
The assistant recorder approached the
case, relying on the guidance given by Lord Diplock in the well-known case of American
Cyanamid Co v Ethicon Ltd [1975] AC 396. He first of all considered
whether there was a serious issue to be tried between the parties, and he came
to the conclusion that there was. He next considered, if the plaintiffs
succeeded at the trial, whether they would be sufficiently compensated by an
award of damages. He concluded that the plaintiffs would have been deprived of
their home and, by implication, that they would not be sufficiently compensated
by an award of damages. He also appears to have concluded that the defendant
would not be sufficiently compensated by an award of damages and being
therefore in doubt, as he said, about the adequacy of the remedies available to
the parties he went on to consider the balance of convenience. He introduced
the position of Miss Ward, to whom the premises had been relet, and in this
context he said:
Supposing the plaintiffs are successful
in this suit, then the defendant may not legally have been able to grant a
tenancy to Miss Ward. If this is the case, it places the defendant in a
position to take possession of proceedings against Miss Ward. No doubt in those
proceedings she could make a counterclaim against the defendant for damages.
Mr McCormick (who appeared, as he has
done here, for the appellants) has suggested that if I were to make an order in
the terms that he has asked then it would be necessary for Mr Herrity, the
defendant, to take possession proceedings to show his good faith.
Whether or not the defendant would be
entitled to obtain an order for possession against Miss Ward is accepted by
everyone as being dependent upon the outcome of these proceedings.
Therefore the balance of convenience
shows that it is more appropriate to await a decision as to whether or not the
defendants are successful in the claim in the main suit.
And on that basis he declined to continue
the injunction and discharged the ex parte order.
Before us it has been argued that the
learned judge completely overlooked what Mr McCormick describes as important
public policy considerations of an overriding nature which he said required an
approach to the application for an injunction which was entirely different from
the approach recommended by Lord Diplock in
McCormick’s assertion of the policy behind the Housing Act 1988 and the
overriding need to protect tenants from unlawful eviction. No doubt that is a
sound public policy, and it is the public policy behind the Housing Act 1988
and behind much of the housing legislation. But it does not follow that the
court should apply a different approach in every case involving an application
by a tenant to restrain his landlord from excluding him from premises which he
claims. On the ordinary principle, that the court will make an order so long as
it is just and convenient to do so, the approach in American Cyanamid is
just as relevant to cases in which a question of public policy is involved
though, of course, it may be an important consideration.
The second point made by Mr McCormick is
that even if he is incorrect in saying that the ordinary approach does not
apply, nevertheless, in this case the evidence before the judge clearly showed
that there was no substantial issue to be tried as to the right of the
appellants to occupy the premises in question. In my judgment, this is the
stronger of Mr McCormick’s submissions.
At the outset the issue which the judge
had to determine was: had the plaintiffs before him a right to occupy the flat
on the top floor at 30 Northcote Road, Southsea? If there was a serious issue to be tried on
that point, then, in my judgment, the judge was correct to consider the other
questions referred to by Lord Diplock in American Cyanamid. But Mr
McCormick submits that there was no serious issue to be tried because this was
admittedly an assured tenancy within the meaning of that phrase in section 1 of
the Housing Act 1988. It was a tenancy of a dwelling-house let as a separate
dwelling to the appellants, that each of them or at least one of them occupied
it as his only or principal home and the tenancy was not one which fell within
subsections (2) or (6). Furthermore, once it is accepted that this was an
assured tenancy, it could not be determined by any notice given by the
respondent. The appellant’s right could be brought to an end only by the taking
of proceedings for possession under the Act or by the appellants unequivocally
giving up possession of the premises to the respondent. Looking at the evidence
in this case, the tenancy could not be brought to an end by the notice
purported to be given by the respondent on December 8, because that was of no
effect in relation to a periodic assured tenancy. No proceedings had been
started by the respondent to obtain possession of the premises or to obtain an
order of the county court in accordance with the requirements of the Second
Schedule to the Act, and the subsequent evidence of the conduct of the
appellants fell far short of establishing that they had given up the tenancy
which alone could have ended their right to occupy the flat. It could not be
contended that the appellants had given notice to terminate the tenancy. By
section 5 of the Protection from Eviction Act such a notice would have to be in
writing. Consequently, on the evidence which was before the learned judge, the
right of the appellants to occupy the flat continued.
Mr Rodger accepted initially that this
was an assured tenancy. He said that the appellants had ceased to occupy the
premises as their only or principal home and that, consequently, it then ceased
to be an assured tenancy. To establish that they had ceased to occupy, Mr
Rodger pointed to the departure of the appellants for Northampton in the middle
of December and, further, to statements made by them to the respondent of their
intention to depart. In addition, he relied on the affidavit of Mr Atrill, who
said that the second appellant had stated to him in terms that as soon as the
first appellant had been released from his prison sentence they were going to
do a disappearing act, that they had no intention of paying the rent which was
owing and, once they had found other accommodation, they would return to remove
and clear out their belongings.
Mr McCormick says that none of that was,
in fact, brought to the attention of the respondent and, even if it had been,
it would simply have amounted to a statement of a future intention to depart
and was not such a clear and unequivocal act as would amount to a surrender of
their right to possession and of their periodic tenancy.
In my judgment, Mr McCormick’s
submissions are correct. In this case the evidence filed did not establish that
there was a serious issue as to the right of the appellants to occupy the top
flat at 30 Northcote Road. In those circumstances it is unnecessary to consider
whether the learned assistant recorder correctly directed himself in other
respects in following the guidelines of American Cyanamid. The fact is
that although there was evidence that the respondent may genuinely have
believed that the appellants were going to depart, the fact that they had left
their possessions in the flat and the fact that the respondent felt it
necessary to change the lock on the premises was an indication that he expected
that they might return. No doubt, quite reasonably, he was extremely worried
about the financial position in which he found himself and in which, by this
time, the arrears of rent had amounted to some £440. He was not receiving any
rent for the top flat and his outgoings on the house, therefore, considerably
exceeded the receipts from the ground-floor flat. Thinking that the appellants
were going to depart, he thought that he should relet the premises and he did
so.
It has been submitted by Mr McCormick
that this was a typical case of a landlord trying deliberately to get rid of
tenants in an overbearing and unlawful manner. He conjured up a picture, if the
learned judge’s order refusing an injunction were allowed to stand, of the opening
of floodgates through which landlords would be able to evict tenants, with
additional tenants standing by, and letting a new tenant into the premises
before an application could be made for an order restraining such conduct. I
was quite unpersuaded by this gloomy picture of the consequences of any order
made in this case. It seems to me that the correct approach to this as in any
other case is to approach it upon its own facts. For the reasons I have
indicated, I consider that the learned assistant recorder was wrong in
concluding that there was a serious issue to be tried. The question then is
what order should the court have made on that occasion and what order should
this court now make in the circumstances in which the appeal comes before us
some nine months later?
As to the first question, it was, at
least as recorded by the judge, acknowledged on all sides that, even if the
court made the order sought by the appellants, it could not be enforced so as
to permit the appellants to return to occupation of the flat. It was conceded
that the respondent could not evict Miss Ward from the premises. It would have
been pointless to make an order restraining the respondent from interfering
with possession of the premises which the appellants did not have and could not
obtain without the co-operation of Miss Ward. In the circumstances of this
particular case, accepting on the basis of the affidavit evidence that this was
a case in which the respondent had acted in good faith and without an intention
to get round the provisions of the Protection from Eviction Act, the way of
dealing with this situation was to make a declaration in the appellants’ favour
that as against the respondent they were entitled to possession of the top flat
at 30 Northcote Road on an assured tenancy; that, having made that declaration,
there should be liberty to both parties to apply; and that, if the appellants
applied to add Miss Ward as a party to the proceedings for the purpose of
obtaining possession of the top flat to which the court had declared they were
entitled, the court would then reconsider the matter.
For the reasons I have given, I would
allow the appeal and, in the circumstances as they were at the time of the
judgment and as they are today, I would make the declaration I have indicated,
but I would like hear the parties on the terms of such declaration and any
subsidiary orders which they seek.
TAYLOR LJ agreed and did not add anything.
The appeal was allowed; declaration
granted that as against the respondent the appellants were entitled to occupy
the top flat at 30 Northcote Road, Southsea, Portsmouth, in pursuance of the
agreement dated August 18 1989 pending trial of the action; expedition of trial
of the action; costs reserved to trial judge, legal aid taxation of both parties’
costs.
