Property – Protective trust – Trustees acquiring property for beneficiary – Appellant sharing property and paying part of expenses – Trustees seeking possession – Judge holding appellant having statutory periodic tenancy after expiry of assured shorthold tenancy – Whether appellant becoming assured tenant by operation of statute – Appeal dismissed
A protective trust was set up for the benefit of M, who had a history of mental health problems. In 1994, the respondent trustees purchased a flat (flat 4) to provide a home for M. In December 1996, with the approval of the respondents, M moved into flat 4 with the appellant as her carer; the appellant contributed £65 per week to their joint expenses.
In September 1997, the respondents made an agreement with the appellant, which regularised her position in flat 4 and under which she paid rent. In November 1998, the respondents purchased another flat in the same building (flat 1) and at their request, the appellant moved into that flat. In 2001, she was granted a fixed-term tenancy of flat 1 together with two rooms in flat 4, for a term of 12 months at a rent of £120 per week, payable monthly in advance.
In October 2003, the appellant ceased to be M’s carer. In April 2004, the respondents sought possession of flat 1 and asked the appellant to remove her belongings from flat 4. The appellant claimed that she was an assured tenant of flat 1 and the rooms in flat 4 and that the notice was therefore invalid. Her claim was based upon section 96 of the Housing Act 1996, which came into force on 28 February 1997, and section 19A of the Housing Act 1988. An assured tenancy entered into after that date was, prima facie, an assured shorthold tenancy. This was, however, subject to a number of exceptions including that set out in para 7 of Schedule 2A to the 1988 Act. That exception applied to the case of an assured tenancy created after 28 February 1997 replacing a tenancy between the same parties, which was not an assured shorthold tenancy.
The appellant argued that, following the agreement with the respondents in December 1996, she had an assured tenancy of flat 4 that predated 28 February 1997. She contended that: (i) the old tenancy had been replaced by the tenancy of flat 1, into which she had moved at the respondent’s request; (ii) that was an old assured tenancy when it was granted in August 2001; and (iii) she thus had an assured tenancy of flat 1, not an assured shorthold tenancy.
The judge refused to make a possession order, holding that the December 1996 agreement had not created a tenancy, so that the appellant was a statutory periodic tenant of flat 1 holding over after the expiry of an assured shorthold tenancy. The appellant appealed against the ruling as to her status since, as an assured shorthold tenant, her security of tenure was more limited: possession could be obtained on service of a notice that complied with section 21 of the 1988 Act.
Held: The appeal was dismissed.
On the evidence, the judge had been entitled to conclude that the respondents had not granted the appellant a tenancy of the rooms in flat 4 prior to 28 February 1997. Although exclusive possession was necessary for a tenancy, it did not necessarily mean that a tenancy had been created. A lodger might in fact have exclusive possession of his room but that did not turn him into a tenant: Street v Mountford [1985] 1 EGLR 128; (1985) 274 EG 821 and Moses Toms v Luckett (1847) 5 CB 23 considered.
A rent–free arrangement for exclusive use and occupation would not create a tenancy if the correct inference from the purpose of the arrangement and the surrounding circumstances was that there was no intention to create a landlord and tenant relationship between the parties: Bostock v Bryant [1990] 2 EGLR 101; [1990] 39 EG 64 and Ashburn Anstalt v Arnold (No 2) [1988] 1 EGLR 64; [1988] 23 EG 128 considered.
The judge’s finding that the arrangement was for the continued sharing of expenses of a joint household by two friends made it difficult to infer that it had been intended to grant a tenancy to one of them, when the only other occupant neither had nor needed a tenancy: M was a beneficiary under the trusts upon which the entire flat was held. The judge had provided adequate reasons for her conclusion, which were correct.
Matthew Feldman (instructed by Clifford Watts Compton) appeared for the appellant; Edward Bragiel (instructed by A Oldschool & Co) appeared for the respondents.
Eileen O’Grady, barrister
