Licence — Eviction — Protection from Eviction Act 1977 — High Court possession proceedings against occupant of property on ground of termination of licence — Whether occupant entitled to revocation of possession order on ground that section 3(1) of 1977 Act applying and only county court having jurisdiction to enforce owner’s right to possession — Whether revocation application abuse of process where basis of application inconsistent with basis on which possession proceedings defended
The defendant and his family occupied a property pursuant to an oral licence granted by the claimant, which owned the property in its capacity as trustee of a family trust settled by the defendant’s wife. The couple divorced and the wife moved out in 1996. The claimant then served notice to quit on the defendant and brought a possession claim in the High Court. It contended that the defendant was in occupation without permission since the former licence had been granted in favour of his wife and that it had terminated when she moved out. The defendant defended the proceedings on the basis that he had beneficial ownership of the property, title by adverse possession or a life interest granted by oral agreement. The claimant’s claim was allowed by a master. Briggs J dismissed the defendant’s appeal in the High Court but ordered that possession should not be enforced provided that the defendant complied with certain conditions. The defendant applied for permission for a further appeal.
Meanwhile, the defendant breached the conditions of the court order and the claimant took possession. The defendant applied for revocation of the possession order on the ground that it had been made without jurisdiction. He contended that: (i) he was entitled to the protection of section 3(1) of the Protection from Eviction Act 1977 since he had, at least until 1996, been in lawful occupation of the property pursuant to a licence granted for money or money’s worth within the meaning of section 3A(7)(b); (ii) accordingly, the claimant could not enforce its right to possession other than by proceedings in the relevant county court and the High Court lacked any enforcement jurisdiction. The claimant submitted that the defendant’s application was an abuse of process because it was inconsistent with his case on the merits.
Held: The application was allowed. The defendant’s application was not an abuse of process. The facts proved by the claimant in support of its claim for possession brought the claim within the 1977 Act. The fact that the defendant’s application was inconsistent with his case on the merits was irrelevant in those circumstances. The licence granted to the defendant’s wife up to 1996 was not excluded from the 1977 Act since it had been for money’s worth: it had contained an obligation to insure and repair, compliance with which was a valuable benefit to the claimant and was the quid pro quo for the licence. The defendant had been a lawful occupant under that licence until it came to an end in 1996 on his wife’s departure. Neither he nor the children had ever become licensees in their own right. Accordingly, the 1977 Act applied, the defendant was entitled to the protection of section 3(1) and the parts of the order relating to enforcement had been made without jurisdiction. That did not render the entire possession proceedings of no effect. Issues as to whether the claimant had any relevant right of possession, as to the true ownership of the property, and as to whether it should be sold were all suitable to be determined in the High Court. The court’s ruling on the defendant’s claims of beneficial ownership, life interest and adverse possession remained binding upon the parties; the issues of enforcement would be transferred to the county court.
The following cases are referred to in this report.
Borzak v Ahmed [1965] 2 QB 320; [1965] 2 WLR 1155, QB
Bostock v Bryant (1990) 61 P&CR 23; [1990] 2 EGLR 101; [1990] 39 EG 64; 22 HLR 449, CA
Munks v Munks [1985] Fam Law 131, CA
Polarpark Enterprises Inc v Allason [2007] EWHC 22 (Ch)
West Wiltshire District Council v Snelgrove (1998) 30 HLR 57
This was the hearing of an application by the applicant, Rupert Allason, as the defendant to possession proceedings brought by the claimant, Polarpark Enterprises Inc, for revocation of an order of Briggs J in those proceedings on the ground that the High Court lacked jurisdiction.
Timothy Fancourt QC (instructed by Eversheds LLP) appeared for the claimant; Julian Gun Cuninghame (instructed by RA Rosen & Co) represented the defendant.
Giving judgment, Briggs J said:
[1] This is an application by the defendant in the proceedings, Mr Rupert Allason, under CPR 3.1(7), that I should revoke part of an order made on 22 January of this year as having been made without jurisdiction: see [2007] EWHC 22 (Ch).
[2] I made the order in question after giving judgment, dismissing Mr Allason’s appeal against an order by Master Moncaster, made on 7 July 2006, for possession of residential premises known as Croftdown, Aldworth, Berkshire, pursuant to the summary procedure provided for in CPR 55.5 and 8.
[3] I am asked to revoke paras 2 and 3 of my order, by which I permitted Polarpark Enterprises, the claimant in the proceedings, to issue a writ of possession, not to be enforced before 22 February 2007 or thereafter for as long as Mr Allason complied with certain conditions connected with seeking permission, and thereafter prosecuting an appeal. In the event, although Mr Allason has instituted an application for permission to appeal, he failed to comply strictly with those conditions and possession was taken by bailiffs on behalf of Polarpark, on 22 March 2007, by executing a writ of possession.
[4] The ground of the application is that Mr Allason was a lawful occupier of the property on the termination, in December 1996, of a licence granted for money’s worth to his former wife, Mrs Nicole Allason. He says that, in those circumstances, section 3(1) of the Protection from |page:86| Eviction Act 1977 (the 1977 Act) protects him from enforcement by Polarpark of its right to recover possession of the property, otherwise than by proceedings in the relevant county court.
[5] Although the post-judgment hearing at which I made the orders now complained of was attended by leading counsel on both sides, the jurisdiction point now raised was not then taken, nor was I referred to the 1977 Act. No complaint against Polarpark’s pursuit of its claim in the High Court had ever been made by Mr Allason even though possession was the relief primarily claimed.
[6] It is common ground that notwithstanding Mr Allason’s pending attempt to appeal, if I am satisfied that I had no jurisdiction to permit the issue of a writ of possession, I should set aside paras 2 and 3 of my 22 January order and transfer the proceedings to the appropriate county court for the purposes of execution. (See in relation to setting aside orders made without jurisdiction: Munks v Munks [1985] Fam Law 131.)
[7] I turn to the facts. Polarpark became the owner of the property on 25 June 1980, pursuant to a tax-saving scheme under which its shares were held by trustees of a discretionary settlement dated 14 June 1980. The settlor was Mrs Allason and the trustees were the Bank of Bermuda Ltd and Bermuda Trust (Far East) Ltd. The main beneficiaries were Mr and Mrs Allason’s children. Mr Allason was to become a beneficiary only in the event of his wife’s death.
[8] Clause 10(e) of the settlement provided as follows. It gave a power to the trustees:
To permit the Settlor or any discretionary object to reside in and to occupy any real property or land or building which may at any time form part of the Trust Fund for such period or periods and on such terms as the Trustees shall in their absolute discretion think fit but so that during such period or periods as they shall be so permitted the Settlor or such discretionary object shall maintain and keep the said property in good and substantial repair and condition and shall pay any rates taxes assessments impositions or outgoings which may at any time be levied charged or imposed thereon, or in respect thereof and shall keep the same property insured against fire damage and other perils to the full insurable value thereof in some insurance office approved by the Trustees.
[9] Mrs Allason, her husband and their children used the property as one of their homes with the oral permission of the trustees until Mr and Mrs Allason separated and divorced in 1996. She then left the property but he remained there, sometimes with their two children with him.
[10] After inconclusive correspondence, Polarpark issued High Court proceedings on 2 February 2006. In the particulars of claim, after reciting its ownership of the property and that the property included a dwelling-house, Polarpark continued:
Before the divorce of the Defendant and his ex-wife, Nicole Allason (decree absolute granted on 13 December 1996) the directors of the Claimant permitted the Property to be occupied by Mrs Allason. Mrs Allason lived in the Property with the Defendant and their two children as one of their homes.
After the divorce, the Defendant continued to occupy the Property as a home for himself and the two children without any express consent or permission from or on behalf of the Claimant.
[11] The pleading then recites the giving of a notice to quit to Mr Allason expiring on 24 May 2002. It then denies that Mr Allason was a licensee as at that date but asserts that the notice was, in any event, sufficient to determine any licence that he might have had.
[12] The pleading also includes in the alternative, in anticipation of a claim by Mr Allason to a beneficial interest in the property, an application, under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (the 1996 Act), for an order that the property be sold with vacant possession and the proceeds divided between the parties in accordance with their respective beneficial interests. The relief claimed is possession, damages, interest, or, alternatively, an order for sale under section 14.
[13] The proceedings were issued with the support of a certificate under CPR 55.3(2), which sought to justify the issue of the proceedings in the High Court upon grounds, first, that, in correspondence, Mr Allason had asserted that he had a beneficial interest in the property; that the property was held by a Bermuda discretionary trust; there would have to be investigations of facts relating to prenuptial settlements, offshore trusts and tax avoidance schemes, and the parties’ intentions in 1979, and the ownership of bearer shares in the company; there was to be an alternative claim under section 14 of the 1996 Act. Reference is made to the capital value of the property being in the region of £1.2m, and to the damages claim being likely to be in the region of £100,000.
[14] By a defence and counter-claim, Mr Allason asserted, first, beneficial ownership of the property, second, title by adverse possession and, third, a life interest in the property having been orally agreed in May 1980 either on the basis of a contractual right or a right supported by a proprietary estoppel.
[15] Master Moncaster rejected all Mr Allason’s claims on 7 July 2006 and gave judgment for possession to Polarpark on the basis of its verified particulars of claim, staying execution pending Mr Allason’s application for permission to appeal and his diligent pursuit of an appeal thereafter. I gave written permission for Mr Allason to appeal on 3 October 2006, but I dismissed the appeal after hearing full argument on 22 January 2007, essentially for the same reasons as had been given by Master Moncaster.
[16] Both Master Moncaster and I made express reference to clause 10(e) of the deed of settlement, setting out the agreed basis upon which the property was to be occupied by Mrs Allason and her family, including, while they remained married, Mr Allason, because it demonstrated more clearly than anything else why Mr Allason’s claim to a life interest in the property was incredible.
[17] Strictly, the claim was not pleaded by reference to the deed of settlement at all, nor was the property itself held directly on the trusts of the settlement. Rather, it was the sole or main asset of a single-purpose company that was itself the sole or main asset of the settlement. Nevertheless, the settlement deed was proved and heavily relied upon in Polarpark’s supporting evidence. In para 4 of her first witness statement in the proceedings, Ms Carole Peet, a partner in Polarpark’s solicitor said:
The Defendant says that he entered into an agreement with all the other parties in May 1980 confirming his lifetime interest in the Property. In fact the trust deed at CP1 is the only agreement relating to the Property outside the usual conveyancing documents. Clearly neither the Claimant being a property holding company controlled by the trust, nor the trustee would have acted contrary to the terms of the trust by granting the Defendant a lifetime interest.
[18] I turn to the provisions of the 1977 Act relied upon by Mr Allason. Section 3(1) provides as follows:
(1) Where any premises have been let as a dwelling under a tenancy which is neither a statutorily protected tenancy nor an excluded tenancy and
(a) the tenancy (in this section referred to as the former tenancy) has come to an end, but
(b) the occupier continues to reside in the premises or part of them,
it shall not be lawful for the owner to enforce against the occupier, otherwise than by proceedings in the court, his right to recover possession of the premises.
(2) In this section “the occupier”, in relation to any premises, means any person lawfully residing in the premises or part of them at the termination of the former tenancy.
[19] Subsection 2(B), added by amendment, provides that:
(2B) Subsections (1) and (2) above apply in relation to any premises occupied as a dwelling under a licence, other than an excluded licence, as they apply in relation to premises let as a dwelling under a tenancy, and in those subsections the expressions “let” and “tenancy” shall be construed accordingly.
[20] Section 3A(7) provides that:
(7) A tenancy or licence is excluded if
(a) it confers on the tenant or licensee the right to occupy the premises for a holiday only; or
(b) it is granted otherwise than for money or money’s worth.
[21] Section 9(1) provides as follows:
The court, for the purposes of Part 1 of this Act, shall be, subject to Section B, (a) the county court, in relation to premises with respect to which the county |page:87| court has for the time being jurisdiction in actions for the recovery of land and (b) the High Court, in relation to other premises.
[22] It is common ground that section 21(1) of the County Courts Act 1984 gives the county court jurisdiction in relation to claims of possession of this property. I have not been informed as to which specific county court has the relevant jurisdiction but that is of no materiality in relation to the matters that I have to decide.
[23] The effect of those provisions is summarised in the following passage of the current edition of Woodfall on Landlord and Tenant, in para 19.037.3:
Where the section applies it is unlawful not only to evict the occupier without recourse to legal proceedings but also to enforce the right to possession in the wrong court. The court means, in relation to premises in respect of which the county court has jurisdiction in actions for the recovery of land, the county court, and in relation to other premises, the High Court… Where the proceedings are commenced in the wrong court there is nothing to prevent their being pursued to the point of judgment, but execution of the judgment cannot be obtained in that court.
[24] The editors go on to express the opinion that after judgment there is no power to transfer the proceedings to the correct court for the purpose of execution. That sentence was not supported by way of submission, either by Mr Julian Gun Cuninghame, who appeared for Mr Allason, or by Mr Timothy Fancourt QC, who appeared for Polarpark.
[25] Mr Gun Cuninghame did not appear previously in these proceedings. Mr Gun Cuninghame’s submissions in support of Mr Allason’s application may be summarised as follows.
(1) It was clear from clause 10(e) of the trust deed that any occupation of the property by Mrs Allason up to 1996 or, for that matter, by Mr Allason and/or their children thereafter, was as licensee with an obligation to repair, insure and discharge outgoings.
(2) Mr Allason was in lawful occupation when Mrs Allason left in 1996.
(3) Alternatively, Mr Allason was in lawful occupation thereafter, either as licensee on the above terms so as to enable his children as beneficiaries to enjoy the property, or as the father of the children, they being the licensees, until he was given notice to quit in 2002.
(4) The obligation to repair and insure was money’s worth pursuant to section 3A(7)(b) of the 1977 Act so that the licence was not an excluded licence. Accordingly, he submitted, section 3 of the act applied to enforcement by Polarpark of any right of possession against Mr Allason, and the High Court has no enforcement jurisdiction.
[26] Against that, Mr Fancourt submitted for Polarpark as follows.
(1) Mr Allason’s application was an abuse of process because:
(a) it was wholly inconsistent with his case on the merits,
(b) it depended upon alleging new and inconsistent facts that he chose not to raise earlier, since they would have been destructive of his case, and,
(c) the whole reason why the case was issued in the High Court was because of Mr Allason’s inconsistent claims.
In summary, under this heading, Mr Fancourt submitted that having asserted a case in pre-action correspondence that called for High Court determination, Mr Allason could not now escape the consequences by advancing a contrary case, not only after first instance judgment, but after judgment on appeal.
(2) He submitted that, in any event, there were no proven facts showing that there was any licence for money’s worth that was the only type of licence protected by the 1977 Act. In that context, he relied upon West Wiltshire District Council v Snelgrove (1998) 30 HLR 57. He submitted that the phrase “Otherwise than for money or money’s worth” in section 3A(7)(b) meant that a licence was excluded unless the right to occupy was granted for a valuable contractual consideration, the consideration being the quid pro quo for the right of occupation or possession conferred by the licence.
(3) He submitted that there were no facts showing in any event that any such licence, either to Mrs Allason, or to the children, had ever been terminated. In that context he relied upon Borzak v Ahmed [1965] 2 QB 320 to show that the 1977 Act has no effect until any relevant tenancy or licence has actually been terminated.
(4) Mr Fancourt accepted that the 1977 Act provided protection to any lawful occupier at the time of the determination of the licence, even if not the named licensee.
[27] Taking those submissions in turn, and, therefore, the abuse of process submission first, although Mr Allason’s case is wholly inconsistent with his case on the merits, which he seeks to pursue even now by way of appeal, the abuse argument, in my judgment, looks through the wrong end of the telescope. I consider that the question for me is whether the facts proved by the claimant in support of its claim for possession bring the claim within the 1977 Act. The fact that the defendant, Mr Allason, asserts, and up to now has failed on, a contrary case, is irrelevant if the claimant’s case does prove such facts. The parties cannot evade the provisions of the 1977 Act by agreement or confer jurisdiction by consent or waiver if prohibited by parliament.
[28] It might be an abuse of process for the defendant to seek the protection of the 1977 Act by asserting for the first time wholly new facts not already proved by the claimant in circumstances where a previous inconsistent case led to the claim being pursued in the High Court.
[29] Accordingly, I approach this case by reference to what the claimant has already proved in obtaining its order for possession and upholding it on appeal, not by reference to any further facts alleged by Mr Allason.
[30] Turning to Mr Fancourt’s second submission that there was no evidence of a qualifying licence, in my judgment, the licence proved to have been granted to Mrs Allason up to 1996 was for money’s worth. Although the licence to her was informal, she was the settlor under the deed of settlement and must be taken to have known of clause 10(e). For example, if she had left the property in disrepair or it had been damaged while uninsured during her occupation of it, she could not have denied liability to Polarpark. In substance, although not strictly in form, clause 10(e) did define the type of licence that Polarpark could grant to her as indeed Polarpark persuaded Master Moncaster.
[31] Having the property kept repaired and insured was a valuable benefit to Polarpark and was the quid pro quo for the licence. In that context, I consider that the contrary decision in West Wiltshire District Council, to which Mr Fancourt refers, is distinguishable. In that case, the payments were for services, namely gas, electricity, heat and food and, as had been held, nothing to do with the occupation of the land. It is sufficient to read from two passages from the judgments of Curtis J and Simon Brown LJ in the Court of Appeal. At p60 Curtis J, says:
On the findings of the Justices, which I have quoted, it is plain to me that subsection (7) operates to exclude such arrangement or licence that was created between the parties in this case. The grant was otherwise than for money within the statute. It is clear from the findings at paragraphs 10 to 12 that such money as passed between the parties was nothing to do with the Laceys’ occupation of the land. The Justices, it should be observed, disbelieved Mr Lacey’s evidence that the small amount of money which did pass between them was rent. They said at paragraph 10:
“it was agreed that payment for the use of the property would be at the rate of £10 per day which payment was for services and utilities such as gas, electricity, heating, immersion heating and water and also for the food. The rate of payment was £10 per day payable at £70 per week but on the understanding that if Mr Lacey vacated the property early he would be re-imbursed at the daily rate.”
They observed that Mr Lacey paid for part of his time in the house but not all of it. The Justices found that it was an informal arrangement and was restricted to payment for facilities, services and food.
In my judgment, the findings of facts by the Justices in this unusual case, between paragraphs 10 and 12, are conclusive of the result of this appeal. The money that did pass, albeit informally, was for services, and clearly, it not being suggested that this was a tenancy, “the licence” that the Laceys enjoyed was not a licence for money.
[32] Simon Brown LJ says, at p62:
The relevant findings of fact by the Justices include the following:
“the arrangement entered into was not a tenancy but was an act of charity towards a person who might otherwise be without accommodation and the |page:88| money paid was for utilities, services and food and not intended to be rent or to create any tenancy.
We were of the opinion that the payment of £10 per day was not for rent but to reimburse Rachel Snelgrove for the use of and consumption of electricity, water, gas, immersion heater, heating and of the food that had been made available to Mr Lacey and his two sons. We were of the opinion that the sum of £10 per day would barely, if at all, reimburse Rachel Snelgrove for the costs of providing those services and the food.
It was a temporary right extended to an otherwise homeless person out of pity in exchange for payment to cover the cost of providing food and certain services for all three adult persons.”
Ms Markus submits that even accepting, as she must, those findings of fact, nevertheless this licence must properly be regarded as being granted for money. The Laceys were only let into occupation of the premises on the terms that they would pay £70 per week. True, that money was attributable to the services, including food, that they were to enjoy in occupation, rather than to the right of occupation itself; nevertheless, she submits, the licence was for money.
I respectfully disagree. It seems to me quite unreal to regard an arrangement whereunder the sole payment is to be made for facilities other than the right of occupation itself as a licence for money within this provision. It cannot sensibly be so described. No authority appears to bear directly or even helpfully upon this narrow issue.
Then, he refers to Bostock v Bryant* in a different context.
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* Editor’s note: Reported at [1990] 2 EGLR 101
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[33] In the present case, although the obligations were not in terms of a fee for occupation, they were necessarily the quid pro quo for occupation since the licensees, that is Mrs Allason and her family, got nothing else from Polarpark for which the repairing and insuring obligations can have been the quid pro quo.
[34] I acknowledge that it is unlikely that occupation of trust property by beneficiaries on typical repairing and insuring terms was in the forefront of parliament’s mind when amending the 1977 Act to include certain kinds of licence within the statutory framework. However, it is commonplace that definitions sometimes catch more than the intended recipients of statutory benefits. In my judgment, there is no basis upon which the licence granted in this case to Mrs Allason can be said to lie outside that simple definition in section 3A(7)(b) of the Act.
[35] As for Mr Fancourt’s third submission, the licence to Mrs Allason had, in my judgment, come to an end within the meaning of section 3 of the Act by 2006 when Polarpark started its proceedings. No other conclusion makes sense on the facts, even though the trustees had not served any notice to quit on her.
[36] No facts proved either to Master Moncaster, or to me on appeal, that Mr Allason had ever become a licensee in his own right. On the facts pleaded and proved, he merely remained at the property after his lawful occupation under Mrs Allason’s licence ended upon her departure in 1996.
[37] Finally, no facts proved the grant of any licence to the children, who were minors in 1996, after Mrs Allason left. Even if there had been a licence for the children, its existence would have been inconsistent with Polarpark’s claim to possession as at the date of the verified claim form. I would interject that had there been any licence to Mr Allason, the same would apply in relation to that.
[38] It follows, in my judgment, that Mr Allason was a lawful occupant of the property when the licence to Mrs Allason came to an end in or around 1996 on her leaving the property. Therefore, since it was not an excluded licence, it follows that the 1977 Act applies, and paras 2 and 3 of my January order were unfortunately made without jurisdiction.
[39] I should add two points. First, I reach this conclusion without any enthusiasm at all and would gladly have found any way of avoiding giving to Mr Allason the benefit of a purely procedural argument that, if it was to be pursued, should have been raised on 22 January this year. Had it been so raised, the case could have been transferred to the appropriate county court for execution purposes in good time before the expiry of the stay that I then ordered had occurred.
[40] Second, I have also considered, and in passing rejected, a more radical but ultimately self-defeating submission by Mr Fancourt that if Mr Allason is right the whole proceedings are, and always have been, unlawful and of no effect. In my judgment, the policy of the Act is about enforcement of a right of possession.
[41] Where it is clear, before proceedings are brought, that there are issues as to whether the claimant has any relevant right of possession, issues that go to the true ownership of the property, issues as to whether it should be sold, and those issues are all suitable determination in the High Court, I do not regard High Court proceedings for determining those issues as infringing the policy of the 1977 Act.
[42] Here, the issues ventilated in pre-action correspondence went far beyond the mere termination of a tenancy or licence and extended to the claims of beneficial ownership, life interest and adverse possession, and to consequential issues as to a sale, under section 14 of the 1996 Act.
[43] I see no reason why the High Court judgment on those issues should not be binding as between the parties, leaving issues of enforcement to be dealt with, as both parties now agree, by a transfer to the county court.
[44] I will hear submissions as to consequential orders for transfer.
Application allowed.
