Application under Section 53 — Provisions of Section 19 of Landlord and Tenant Act, 1927, extended to the County Court — Tenant succeeds in application for a declaration that the landlord’s refusal of consent to assignment of tenancy is unreasonable
In the Lambeth County Court on March 17, his Honour Judge Clothier QC granted this application by RM Cole & another (Executors of Agnes Cole, deceased) for a declaration that a refusal of consent by the landlord to assign the tenancy of 46a, Alleyn Park, London, SE21, was unreasonable.
In 1951, the Company, Russells (Tulse Hill), Ltd, purchased these premises, which were, at that time, let to Mrs Cole on a yearly tenancy. In July, 1954, Mrs Cole died and the Executors, who were her two sons, Mr RM Cole and Mr FJ Cole, applied to the Company for permission to assign the property to a Group-Captain Nixon of 52, Horniman Drive, Forest Hill, SE23. The Company refused to grant permission for this assignment and enclosed with this refusal a formal notice to quit, dated October 14, 1954, and to take effect on September 29, 1955.
Thereupon the Executors made an application to this Court under Section 53 of the Landlord and Tenant Act, 1954, for a declaration that the refusal to grant an assignment was ‘capricious and unreasonable.’ Clause 2 of the original agreement between Mrs Cole and the assignors of the property to the Company said that such consent to assignment was ‘not to be withheld capriciously to a respectable and responsible tenant.’ The respondent Company agreed that Group-Captain Nixon complied with the requirements of being a respectable and responsible tenant.
Mr RM Cole, in his evidence, stated that he had lived at 46a, Alleyn Park, London, SE21, for five days a week since the year 1946. He lived in London during the week and returned to his home in Eastbourne every week-end. He said that the house was too large for him, and that if the assignment was allowed it was his intention to go to live in the five-roomed flat which Group-Captain Nixon now occupied and which was part of the estate of his deceased mother, Mrs Agnes Cole. He also stated that his son had now commenced his career as a medical student and had come to London and also lived at 46a, Alleyn Park.
Mr Sydney Albert Brett, secretary of the respondent Company, stated that the Company had purchased the property in 1951. Mrs Cole had been granted a tenancy of the property in 1948 and so the Company took the property subject to Mrs Cole’s lease.
He stated that it was the intention of the Company, if they could get possession of the property and subject to obtaining the permission of the head landlord, to convert the house into three flats.
The Company’s lease had but seven years to run and it was the intention of the Company to approach the head landlord (The Dulwich Trust) with a view to applying for a new lease.
If, on the other hand, possession was obtained and it transpired that the head landlord would refuse to grant a new lease, then it was the intention of the Company to surrender the property with vacant possession in consideration of the head landlord agreeing to forego any claim for dilapidations.
Mr Alidda, counsel for the respondent Company, claimed that the burden of proof of the unreasonableness of the refusal rested on the plaintiffs and cited as authority the case of Berry v The Union Bank of Scotland, [1949] 1 AER 706.
His Honour replied that there being prima facie evidence of Group-Captain Nixon being a respectable and responsible person the burden of proof had shifted from the plaintiff to the respondent.
His Honour Judge Clothier QC, having given the facts of the case, stated that he accepted all the statements made by both the plaintiff and the defendant. The respondent Company were in business as property owners and they, quite naturally, wished to make a profit out of their business. The respondent Company desired to get possession of the property in order that, subject to obtaining the consent of the freeholders, they might reconstruct the house as three flats, which reconstruction would result in a profit for the Company. His Honour stated that it was the claim of the defendants that by this reconstruction they would be providing accommodation for three families instead of one family, and it was their contention that this laudable desire on their part made their refusal to allow an assignment of the tenancy reasonable.
On the other hand, the Executor, Mr Cole, had for some eight years been residing with his mother at this address for five days a week. Naturally he was not a tenant while his mother was alive, but on her death her will left the contractual tenancy which she held in this house to her two sons, and so as soon as she died Mr Cole became a beneficial owner of the contractual tenancy. His Honour found that Mr Cole had in fact occupied and, latterly, had alone occupied this house as a beneficiary.
Mr Cole had two reasons for wanting to remain in this house, namely: (1) His business commitments made it essential that he should have a residence in London; and (2) his son had just started his career as a medical student and he also needed a residence in London.
It had been objected by the respondent that Mr Cole did not want to continue living in the house, that he wanted to exchange this house for the flat now occupied by Group-Captain Nixon. But Mr Cole had also said that if he was not allowed to assign the tenancy he would remain in the house himself. His Honour said that if Mr Cole remained in the house, the assignment having been refused, the Company would get nothing.
If the assignment was allowed the Company would suffer no damage. By assigning the tenancy to Group-Captain Nixon there was no greater risk of the tenancy being extended than if Mr Cole remained in possession, because if the assignment was not allowed, Mr Cole would continue in possession, and in October, 1955, with the termination of the notice to quit, he would become a statutory tenant. If the assignment was allowed, Group-Captain Nixon would become a statutory tenant in October.
His Honour considered that he ought, in this case, to give predominance to the interests of the tenant. He was the person in possession and the respondent Company had not produced sufficient reason to show reasonableness in not allowing permission to assign the tenancy.
His Honour ordered that a declaration be made in favour of the applicants.
