Landlord and tenant — Housing Act 1988 — Purported determination of tenancy — Damages for unlawful eviction — Whether defence to damages — Whether correct basis of valuation — Whether tenant must elect between damages under 1988 Act or reinstatement into possession
In March 1989 the appellant council granted the
respondent and his wife a joint tenancy of residential premises. The tenancy
was a secure tenancy under Part IV of the Housing Act 1985. In January 1990,
after allegations of violence, the wife left the premises. Following the making
of an ouster injunction against him, possession of the premises was obtained
from the respondent, although he refused to surrender the tenancy. On 30 April
1990 the wife gave the council notice to quit expiring on 14 May. The council
accepted this notice, notwithstanding that it was not for the minimum of 28
days as required under the tenancy agreement, and the respondent’s wife was
granted a tenancy elsewhere. The council recovered possession of the premises
without a court order. Following the discharge of the ouster injunction against
the respondent on 18 June 1990, the council refused his request to be
readmitted to the premises as they had been offered to J, to whom they were
later let.
In October 1993 the
Court of Appeal allowed, by consent, an appeal by the respondent, and declared
in proceedings that he remained a joint tenant of the premises as the tenancy
had not been validly determined. On 1 July 1993 the council caused the wife to
serve a second notice to quit expiring on 2 August. The respondent commenced a
second set of
sections 27 to 28 of the Housing Act 1988. In the court below the judge awarded
the respondent damages of £30,000, common law damages for additional
accommodation expenses of £282.94 and interest of £50, and declared that the
respondent was, and remained, a tenant of the premises. The council appealed,
contending that: (1) they had a defence to the claim under section 27(8)(a) of
the 1988 Act; (2) any award of statutory damages should have been mitigated by
the conduct of the respondent pursuant to section 27(7)(a); (3) the damages
were wrongly assessed because the valuers did not have regard to the
precariousness of the tenancy; (4) an evicted occupier cannot properly be
entitled both to an award of damages and a declaration that he remains a tenant
of the property; and (5) in any event, the respondent’s tenancy was effectively
terminated by the wife’s second notice on 1
allowed in part. The award for statutory damages was reduced to £10,000 and the
declaration that the respondent’s tenancy continued was discharged. The defence
under section 27(8) failed; the council had no ‘reasonable cause’ for their
belief that the first notice to quit was valid. The respondent’s conduct was
not merely deserving of condemnation but also precipitated the course of events
leading logically to his dispossession. That amply satisfied the requirements
of section 27(7)(a) and made it appropriate to mitigate damages substantially
to £10,000. In carrying out the valuations required under section 28(1), what
was being valued was the interest of the landlord in default, not the abstract
interest of a notional willing buyer. Although the concept of a willing buyer
helped to fix the respective valuations, one postulated the landlord’s
continuing ownership in fact. In any event, it was not open to the council to
take a point on valuation in the Court of Appeal. A tenant cannot be entitled
to both damages and reinstatement into possession; he must elect between the
two remedies at trial. There was no contractual relationship between the
respondent and the council. The second notice was effective to determine the
tenancy and did not have to be served on J, with whom the respondent had no
contractual relationship.
The following cases are
referred to in this report.
Associated Japanese Bank (International) Ltd v Credit du Nord SA [1989] 1 WLR 255; [1988] 3 All ER 902,
QB
Cooper v Phibbs
(1867) LR 2 HL 149
Crawley Borough Council v Ure [1996] QB 13; [1995] 3 WLR 95; [1996] 1 All ER 724;
(1996) 71 P&CR 12; 27 HLR 524, CA
Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478; [1991] 3 WLR 1144; [1992] 1 EGLR 65;
[1992] 09 EG 135, HL
Henderson v Henderson
(1843) 3 Hare 100
Hounslow London Borough Council v Pilling [1993] 1 WLR 1242; [1994] 1 All ER 432; (1993) 91
LGR 573; 66 P&CR 22; [1993] 2 EGLR 59; [1993] 26 EG 123
King v Jackson
[1998] 1 EGLR 30; [1998] 03 EG 138; (1998) 30 HLR 541, CA
Melville v Bruton
(1997) 29 HLR 319; [1996] EGCS 57, CA
Newlon Housing Trust v Al-Sulaimen [1998] 3 WLR 451; [1998] 4 All ER 1, HL
Pursell v Railway
Executive [1951] 1 All ER 536
R v Phekoo
[1981] 1 WLR 1117; [1981] 3 All ER 84, CA
Regalgrand Ltd v Dickerson
(1997) 29 HLR 620; [1996] EGCS 182, CA
Rowling v Takaro
Properties Ltd [1988] AC 473; [1988] 2 WLR 418; [1988] 1 All ER 163, PC
Tagro v Cafane
[1991] 1 WLR 379; [1991] 2 All ER 235; [1991] 1 EGLR 279, CA
Tickner v Hearn
[1960] 1 WLR 1406; [1961] 1 All ER 65, CA
West Wiltshire District Council v Snelgrove (1998) 30 HLR 57, QB
Westminster City Council v Haywood [1996] 3 WLR 563; [1996] 2 All ER 467
This was an appeal by the
defendants, Wandsworth London Borough Council, from a decision of Judge
Compston in Wandsworth County Court, who, on 18 December 1996, awarded damages
to the plaintiff, Osei-Bonsu, in proceedings under the Housing Act 1988.
Andrew Arden QC and Jonathan Manning (instructed
by Judge & Priestley, of Bromley) appeared for the appellant council; Kim
Lewison QC and Jan Luba (instructed by Anthony Gold, Lerman & Muirhead)
represented the respondent.
Giving the judgment of the court, SIMON BROWN
LJ said: This appeal raises a number of difficult issues under sections 27
and 28 of the Housing Act 1988. Before these can even be identified, however,
it is necessary, first, to set out the essential facts of the case. They are as
follows.
On 20 March 1989 the appellants (Wandsworth)
granted to the respondent and his wife a joint secure tenancy of 166 Coteford
Street, London SW17, a two-bedroom council house (the property). Having moved
in initially with their two children, the respondent and his wife were joined,
in about October 1989, by the wife’s three other children, who had been living
until then with her sister in Ghana.
On 9 January 1990 the wife and five children left
the property and moved into bed and breakfast accommodation. She complained
that the respondent had been violent towards her for some time, that she was
frightened of him and that she could no longer continue to live with him. The
following day she obtained ex parte relief against him, and, then, at an
inter partes hearing before Judge White on 22 January, an order that he
should not assault, threaten or molest her, together with an ouster injunction
requiring him to leave the property by 5 February.
On 9 February Wandsworth wrote to the wife’s
solicitors stating:
This Council would not be prepared to effectively
create two tenancies by allowing [the wife’s] former co-habitee to remain at
166 Coteford Street and transferring her to alternative accommodation. I would
be prepared to recommend that she be offered a transfer to alternative
accommodation only if an order from a court is made either assigning the
tenancy to her or requiring her former co-habitee to quit the premises thus
enabling her to give us vacant possession of same.
The tenant’s obligations under the lease included:
(19) domestic
violence
Not to do or cause to be done or threaten to do
or cause to be done any act of violence which may or will prevent a joint
tenant… or the children of any such person, from continuing peaceably to live
in the dwelling. It shall be conclusive evidence of a breach of this condition
if a Court Order is made (otherwise than on an ex parte application)
restraining a tenant permanently or temporarily from living in the dwelling or
from assaulting or otherwise molesting the other joint tenant…
Following the respondent’s failure to vacate the
property as ordered on 5 February, the wife issued committal proceedings for
hearing on 22
vacate, handing the keys to his wife’s solicitors. Accordingly, on 22 February,
no committal order was sought. Although at court that day the wife’s solicitors
returned the keys to Wandsworth, the respondent expressly refused to surrender
the tenancy.
On 26 February Wandsworth ‘caged’ the property (ie
secured it against intruders and squatters) and set in train the wife’s
transfer to alternative accommodation.
On 8 March the respondent’s solicitors told
Wandsworth of their intention to apply for the ouster injunction against him to
be discharged.
On 30 April the wife served a notice to quit to
expire on 14 May 1990. This was, of course, short notice, less than the 28 days
required to be given under the general conditions of the tenancy agreement and
specified also by section 5(1)(b) of the Protection from Eviction Act
1977 (the 1977 Act). Given, however, that the respondent was, at the time,
subject to an ouster injunction and that the wife and children were in bed and
breakfast accommodation awaiting permanent transfer, Wandsworth treated the
notice as valid and accepted it.
On 11 May, as earlier forewarned, the respondent
applied for the ouster order to be discharged.
On 20 May a new tenancy in Roehampton was granted
to the wife.
Shortly afterwards, ie about a week after 14 May
when the short notice to quit expired, Wandsworth formally repossessed the
property. There remains a dispute as to whether, at the time, the respondent
still had any effects in the property.
On 18 June the ouster order was discharged by
consent whereupon the respondent attended at Wandsworth’s offices and asked to
be readmitted to the property. His request was refused. The property had
already been offered to a Ms Jackson (an unmarried mother with a
the wife’s short notice to quit had validly determined the tenancy and that
they were accordingly entitled to relet the property as proposed.
On 2 July 1990 the property was duly let to Ms
Jackson.
On 23 August 1991 the respondent commenced
proceedings seeking a declaration that he remained a joint tenant of the
property. That action was dismissed on 1 December 1992 by Miss Assistant
Recorder Presiley Baxendale QC, who held that Wandsworth had been entitled to
accept the wife’s short notice to quit. On 22 March 1993, however, the Court of
Appeal decided the identical point to contrary effect in Hounslow London
Borough Council v Pilling [1993] 1 WLR 1242*, with the result that
the respondent’s appeal from Miss Baxendale’s decision was allowed by consent,
Mr Registrar Adams ordering on 28 October 1993:
That it be and is hereby declared that until 2
August 1993 the applicant was and remained the joint tenant of 166 Coteford
Street which tenancy had not prior to that date been validly determined by
notice to quit or otherwise howsoever.
* Editor’s note: Also reported at [1993] 2 EGLR
59
Meantime, on 1 July 1993, Wandsworth had caused
the wife to serve a second notice to quit, this one giving the full 28 days
required, expiring on 2 August 1993.
In September 1994 Ms Jackson’s tenancy ended and,
in December 1994, the property was again relet.
The present proceedings were begun, again in
Wandsworth County Court, in September 1995. The claim this time was for
damages. These were sought both at common law for trespass and also pursuant to
sections 27 and 28 of the Housing Act 1988 (the 1988 Act). They included
aggravated and exemplary damages. The respondent alleged, too, that he had lost
a variety of possessions through being locked out of the property and claimed
some £4,000 on this account.
Judgment was given by Judge Compston on 18
December 1996 after a three-day hearing. The plaintiff was awarded statutory
damages of £30,000, common law damages for certain additional accommodation
expenses of £282.94 and interest of £50. His claim for loss of possessions was
adjourned with liberty to restore and reserved to the same judge. In addition,
it was ‘declared that the plaintiff is and remains a tenant of 166 Coteford
Street, London SW17’.
Before us now is Wandsworth’s appeal against that
order. What is at issue are: (a) the statutory damages award; and (b) the
declaration that the respondent still remains a tenant of the property.
Before finally turning to identify the specific
grounds of appeal, it is convenient next to set out the critical provisions of
the 1988 Act in play:
27. (1) This
section applies if, at any time after 9th June 1988, a landlord (in this
section referred to as ‘the landlord in default’) or any person acting on
behalf of the landlord in default unlawfully deprives the residential occupier
of any premises of his occupation of the whole or part of the premises.
(2) This section also applies if, at any time
after 9th June 1988, a landlord (in this section referred to as ‘the landlord
in default’) or any person acting on behalf of the landlord in default —
(a) attempts unlawfully to deprive the
residential occupier of any premises of his occupation of the whole or part of
the premises, or
(b) knowing or having reasonable cause to believe
that the conduct is likely to cause the residential occupier of any premises —
(i) to give up his occupation of the premises or
any part thereof, or
(ii) to refrain from exercising any right or
pursuing any remedy in respect of the premises or any part thereof,
does acts likely to interfere with the peace or
comfort of the residential occupier or members of his household, or
persistently withdraws or withholds services reasonably required for the
occupation of the premises as a residence,
and, as a result, the residential occupier gives
up his occupation of the premises as a residence.
(3) Subject to the following provisions of this
section, where this section applies, the landlord in default shall, by virtue
of this section, be liable to pay to the former residential occupier, in
respect of his loss of the right to occupy the premises in question as his
residence, damages assessed on the basis set out in section 28 below…
(5) Nothing in this section affects the right of
a residential occupier to enforce any liability which arises apart from this
section in respect of his loss of the right to occupy premises as his
residence; but damages shall not be awarded both in respect of such a liability
and in respect of a liability arising by virtue of this section on account of
the same loss.
(6) No liability shall arise by virtue of
subsection (3) above if —
(a) before the date on which proceedings to
enforce the liability are finally disposed of, the former residential occupier
is reinstated in the premises in question in such circumstances that he becomes
again the residential occupier of them; or
(b) at the request of the former residential
occupier, a court makes an order (whether in the nature of an injunction or
otherwise) as a result of which he is reinstated as mentioned in paragraph (a)
above;…
(7) If, in proceedings to enforce a liability
arising by virtue of subsection (3) above, it appears to the court —
(a) that, prior to the event which gave rise to
the liability, the conduct of the former residential occupier or any person
living with him in the premises concerned was such that it is reasonable to mitigate
the damages for which the landlord in default would otherwise be liable, …
the court may reduce the amount of damages which
would otherwise be payable to such amount as it thinks appropriate.
(8) In proceedings to enforce a liability rising
by virtue of subsection (3) above, it shall be a defence for the defendant to
prove that he believed, and had reasonable cause to believe —
(a) that the residential occupier had ceased to
reside in the premises in question at the time when he was deprived of occupation
as mentioned in subsection (1) above or, as the case may be, when the attempt
was made or the acts were done as a result of which he gave up his occupation
of those premises; or
(b) that, where the liability would otherwise
arise by virtue only of the doing of acts or the withdrawal or withholding of
services, he had reasonable grounds for doing the acts or withdrawing or
withholding the services in question…
The measure of damages
28.(1) The basis
for the assessment of damages referred to in section 27(3) above is the
difference in value, determined as at the time immediately before the
residential occupier ceased to occupy the premises in question as his
residence, between —
(a) the value of the interest of the landlord in
default determined on the assumption that the residential occupier continues to
have the same right to occupy the premises as before that time; and
(b) the value of that interest determined on the
assumption that the residential occupier has ceased to have that right…
(3) For the purposes of the valuations referred
to in subsection (1) above, it shall be assumed —
(a) that the landlord in default is selling his
interest on the open market to a willing buyer;…
‘Residential occupier’ is defined by section 27(9)
to have the same meaning as in section 1 of the 1977 Act, namely:
a person occupying the premises as a residence,
whether under a contract or by virtue of any enactment or rule of law giving
him the right to remain in occupation or restricting the right of any other
person to recover possession of the premises.
Although it is not perhaps immediately obvious
that the respondent continued to be a residential occupier of the property once
he had left it pursuant to the court order, such is conceded to be the case.
More, indeed, is conceded. Mr Andrew Arden QC fully accepts that Wandsworth’s
refusal to readmit the respondent to the property on 18 June 1990, once the
ouster injunction against him had been discharged, involved ‘unlawfully
depriv[ing] him of his occupation… of the premises’ within the meaning of
section 27(1) of the 1988 Act. It is important to understand why. The
respondent and his wife’s joint tenancy was, as stated, secure: it satisfied
the tenant condition provided for by section 81 of the Housing Act 1985:
The tenant condition is that the tenant is an
individual and occupies the dwelling-house as his only or principal home; or,
where the tenancy is a joint tenancy, that each of the joint tenants is an individual
and at least one of them occupies the dwelling-house as his only or principal
home.
As Wandsworth’s own policy document at the time
recognised:
Where an exclusion order is obtained against the
tenant it is unlikely that the Council could deem that security had been lost
as [ie on the ground that] the tenant is no longer using the premises as his
only or principal home. The tenant is only absent from his home in compliance
with a Court Order which would not be a legitimate reason for possession.
That clearly was a correct view: the temporary
absence of a tenant who intends to return to live in the premises within a
reasonable period will not deprive him of the protection of the Rent Acts,
provided always that there is ‘a real hope coupled with the practical
possibility of its fulfilment within a reasonable time’: see Tickner v Hearn
[1960] 1 WLR 1406 at p1410 and Megarry on the Rent Acts 11th ed at
pp245 and 249.
It was, of course, Wandsworth’s belief at the time
that the wife’s short notice to quit had effectively determined this tenancy on
14 May 1990, ie some weeks before 18 June 1990, when the respondent became free
of the ouster order and, thus, vis-à-vis his wife, entitled to resume
physical occupation of the property. Even then, Wandsworth should have obtained
a court order. Section 3 of the 1977 Act provides:
(1) Where any premises have been let as a
dwelling under a tenancy… and
(a) the tenancy… has come to an end, but
(b) the occupier continues to reside in
the premises…,
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.
There can, accordingly, be no doubt that
Wandsworth’s refusal of the respondent’s request to readmit him to the property
on 18 June 1994 did indeed constitute his unlawful eviction within the meaning
of section 27(1) and, thus, prima facie it gave rise under section 27(3)
to a claim for statutory damages to be assessed under section 28(1).
What, however, Wandsworth contend on this appeal
is:
1. that they should be held to have established
the statutory defence to such a claim under section 27(8)(a); alternatively
2. that any award of statutory damages should have
been found mitigated by the respondent’s conduct pursuant to section 27(7)(a);
3. that, in any event, the damages were plainly
wrongly assessed under section 28(1);
4. that an evicted occupier cannot properly be
entitled, as this respondent has been held to be, both to an award of statutory
damages and a declaration that he remains a tenant of the property; and
5. that, in any event, this respondent’s tenancy
was effectively determined by the wife’s second notice to quit given on 1 July
1993.
Let me examine these successive contentions in
turn.
Issue 1: the section 27(8)(a) defence
As applied to this respondent’s unlawful eviction,
the section 27(8)(a) defence raises essentially this question: did Wandsworth
reasonably believe that the respondent had ceased to reside in the property?
Mr Arden submits that they did. As I understand
his argument, it runs essentially as follows. As the House of Lords held in Hammersmith
and Fulham London Borough Council v Monk [1992] 1 AC 478*, one of
two or more joint tenants may serve a notice to quit effective to determine the
tenancy (even a secure tenancy) without the consent of the other(s). That
decision, therefore, retrospectively sanctioned the practice that Wandsworth
were following in the instant case of seeking such a notice from a joint tenant
who required to be housed elsewhere. Although, ultimately, the Court of Appeal
was to hold in Pilling that a short notice to quit could not suffice for
this purpose, that was not appreciated by Wandsworth at the time. Indeed, it is
plain that Wandsworth regarded the wife’s short notice here as having
successfully ended this joint tenancy. That being so, and the respondent, as
they believed, having accordingly no right to return to occupation of the
premises (irrespective of whether the ouster injunction remained in force), he appeared
no longer to qualify as a residential occupier within the statutory definition.
As at 18 June he was not actually in occupation and on Wandsworth’s then
understanding of the legal consequences of the short notice, he was not
entitled to resume occupation and cannot, therefore, properly have entertained
‘a real hope coupled with a practical possibility’ of doing so. In short,
Wandsworth believed him to have ‘ceased to reside in the premises’.
* Editor’s note: Also reported at [1992] 1 EGLR
65
Mr Kim Lewison QC, for the respondent, takes issue
with this argument at almost every turn. Among his more fundamental objections
to it are, first, that it depends upon a mistake of law, which, Mr Lewison
argues, cannot, in any circumstances, avail the landlord; second, that it was,
in any event, an unreasonable mistake to have made; and, third, that even had
the short notice effectively determined this tenancy, Wandsworth would still not
have been justified in refusing to readmit the respondent without a court order
to exclude him.
I confess to having found this a difficult issue.
One must recognise that the section 27(8)(a) defence precisely mirrors that to
be found within section 1(2) of the 1977 Act, which itself re-enacts
legislation going back to 1964 (the Rachman era) when illegal eviction and
harassment of tenants were first criminalised. Section 1(2) provides:
If any person unlawfully deprives the residential
occupier of any premises of his occupation of the premises or any part thereof,
or attempts to do so, he shall be guilty of an offence unless he proves that he
believed, and had reasonable cause to believe, that the residential occupier
had ceased to reside in the premises.
If, therefore, Wandsworth fail in their section
27(8)(a) defence, it follows that they must have been guilty of a criminal
offence in what they did here.
With that thought in mind, submits Mr Arden, the
court should adopt a generous approach in deciding upon the true scope of the
section 27(8)(a) defence. By the same token that an error of law will not
necessarily be held negligent (Rowling v Takaro Properties Ltd [1988]
AC 473) nor to amount necessarily to maladministration (see Westminster City
Council v Haywood [1996] 3 WLR 563), so, too, submits Mr Arden,
should it be held capable of founding a reasonable belief for section 27(8)(a)
purposes. As was stated in R v Phekoo [1981] 1 WLR 1117 at
p1127A, when finding the statutory defence established in a harassment case
under the 1977 Act:
the requirement of this specific, guilty intent
does, or ought to, when the issue is raised, comprise proof of intent to harass
someone who is known or believed by the offender to be a person who, in effect,
is not just a ‘squatter’.
Mr Arden further seeks to rely upon Lord
Westbury’s speech in Cooper v Phibbs (1867) LR 2 HL 149 at p170:
It is said, ‘Ignorantia juris haud excusat‘;
but in that maxim the word ‘jus‘ is used in the sense of denoting
general law, the ordinary law of the country. But when the word ‘jus‘ is
used in the sense of denoting a private right, that maxim has no application.
Private right of ownership is a matter of fact; it may be the result also of
matter of law; but if parties contract under a mutual mistake and
misapprehension as to their relative and respective rights, the result is, that
that agreement is liable to be set aside as having proceeded upon a common
mistake.
Mr Lewison submits to the contrary that the
mistake of law made by Wandsworth here was as to the general law — the
effectiveness or otherwise of a short notice to quit to determine a joint
tenancy as against an unwilling tenant. He furthermore relies upon a dictum of
my own in West Wiltshire District Council v Snelgrove (1998) 30
HLR 57 at p63:
The mistaken belief held by the defendant in Phekoo
was as to the basic facts of the situation. The two occupiers there in
question were believed by the defendant to be pure trespassers with no right
ever to have entered upon the land in the first place. He had no notion that
they had been introduced to the land as lawful sub-tenants of his own tenant.
The Court of Appeal drew specific attention to Norton v Knowles [1969]
1 QB 572 as an illustration of the distinction between a mistaken belief as to
the facts and a mistaken belief as to the law, pointing out that the latter
‘is, of course, not relevant or available as a ‘defence”.
If, contrary to the view I have formed, the
[occupants]… were properly to have been regarded in law as ‘residential occupiers’,
then, in my judgment, the respondents could not have successfully invoked the Phekoo
defence. They knew full well all the relevant facts… No doubt a mistaken
belief as to whether
way of mitigation and thus on the issue of penalty. In my judgment, however, it
could not have provided them with a defence to the informations.
Is that a correct view of the law? I admit now to
feeling less sure on the point than when I expressed it.
Certainly, it now seems to me necessary to qualify
the absolute proposition that a mistaken belief as to the law cannot be
relevant or available as a defence. As appears from para 17-22 of Archbold (1998
ed) and the cases cited thereunder, the rule of law that ignorance of the law
does not excuse is a rule only with regard to the criminal law: a mistake as to
the civil law may have the effect of negativing mens rea. Classically
that is so, for example, in a ‘claim of right’ defence to a charge of theft or
criminal damage in respect of property that the accused mistakenly believes is
his own.
What then of the position here, given Wandsworth’s
undoubted belief that, as a matter of civil law, any right that the respondent
might otherwise have had to return to this property ended when his wife’s short
notice to quit took effect?
I have come to the view that this issue must be
resolved in the respondent’s favour, but only on the basis that Wandsworth here
failed to show, as the section 27(8) defence requires, that they had
‘reasonable cause’ for their belief. As Mr Lewison points out, Nourse LJ, in
allowing the tenant’s appeal in Pilling at p1246, found it ‘abundantly
clear that a joint tenant cannot unilaterally determine the tenancy by giving
an inappropriate notice, for example one which does not give the period of
notice required at common law or by the terms of the tenancy’, and at p1249
said: ‘it is obvious that such an agreement cannot deprive the other joint
tenant of the protection to which he is entitled under the Act’.
True, the very experienced circuit judge in Pilling,
just as the assistant recorder here, had earlier reached the contrary
conclusion, but, ultimately, I am persuaded that the terms of Nourse LJ’s
judgment are inconsistent with the view that Wandsworth’s mistake of law was a
reasonable one to have made, and, certainly, there was no question here of ‘a
mutual mistake and misrepresentation’ of the kind referred to by Lord Westbury
in Cooper v Phibbs. Rather, given that the respondent was claiming
a right to be readmitted to the property, I conclude that, in any event,
Wandsworth ought properly to have issued proceedings for possession (or,
perhaps, a declaration) under section 3 of the 1977 Act to determine their
rights. The defence therefore fails.
These conclusions make it unnecessary to consider
Mr Lewison’s further objections to this particular ground of appeal, not least
among them that the section 27(8)(a) defence appears actually to have been
abandoned in the court below, counsel then appearing for Wandsworth advancing
the surprising contention that a defence was instead available to them under
section 27(8)(b). That, clearly, was a hopeless submission. Mr Lewison
suggests, in the result, that no proper findings were invited of the judge as
to which of Wandsworth’s housing officers held what particular beliefs, a
problem compounded by the unfortunate loss of the tape recordings both of the
evidence and the judgment itself. I repeat, however, none of this need now be
further considered.
Issue 2: section 27(7)(a) mitigation
The notes of judgment below on this issue read as
follows:
I find it hard to have to award substantial
damages for plaintiff when defendant doing best to deal with problems. Having
said that only liable from 18 June 1990 when refused hand key back not because
of conduct but because thought tenancy determined. Persuaded no conduct
relevant to mitigate damages… Defendant not party to ouster at all. Ouster
discharged on 18 June anyway. Moreover, even if conduct on cards it too remote.
It only concerned the plaintiff and his wife — not defendant. Some attraction
re clause 19 if case before me is defendant applying to evict because of
ouster… Not reasonable to order outright possession. So it would hardly be
right for court to mitigate when eviction unlawful even though Judge White
found the ouster justified.
That passage, to my mind, suggests an altogether
too narrow and restrictive approach to section 27(7)(a).
As Aldous LJ made plain in Regalgrand Ltd v
Dickerson (1997) 29 HLR 620 at p625, in applying this provision the
court must look at the ‘tenant’s conduct in the light of the surrounding
facts’, and its ‘conclusion will depend upon all the circumstances of the
case’.
It seems to me quite unreal here to say that the
respondent’s conduct concerned only his wife and not Wandsworth and that it was
too remote to be relevant for the purpose of mitigation. The reality rather is
that the respondent’s violence towards his wife broke up this family, and
logically, by way of an ouster injunction and a co-operative notice to quit
served by the wife, led Wandsworth to seek repossession with a view to
rehousing the respondent’s wife and children elsewhere. True, Wandsworth
mistook their rights in law, and are thus liable to a statutory damages award
for wrongful eviction. But that eviction was clearly the culmination of an
unbroken chain of events starting with the respondent’s conduct. Whether or not
that conduct, even though it involved a clear breach of clause 19 of the lease,
would of itself have justified an outright order for possession, may be
doubted: as Judge Compston observed, when Judge White granted the injunction he
apparently described it as ‘not the worst case he had ever heard — a
middle-of-the-road ouster’. But any ouster order postulates grave misconduct,
and if, as I conclude, the respondent’s conduct was not merely deserving of
condemnation but also precipitated the course of events leading logically to
his dispossession, that, in my judgment, amply satisfies the requirements of
this provision and makes it appropriate to mitigate the damages substantially.
The judge below having misdirected himself upon
the proper approach to this provision, this court is entitled to exercise its
own judgment and discretion in the matter. For my part, I would reduce the
damages by two-thirds, and thus award the respondent only one-third of the
£30,000 otherwise agreed as the correct measure of damages under section 28(1),
ie £10,000.
Issue 3: section 28(1) damages
Wandsworth’s argument on this issue involves a
point not taken below and requires leave to add a further ground of appeal to
those already permitted to be added as additional grounds by leave of Hutchison
LJ on 6 March 1998.
The situation below was that each party had
obtained an expert’s valuation report purportedly expressing an opinion on the
mid-1990 open market values for the property respectively with vacant
possession and subject to a joint secure tenancy. The respondent’s figures were
respectively £60,000 and £30,000 indicating, therefore, a difference in value
of £30,000; Wandsworth’s figures were £59,520 reduced by 50% to reflect
occupation by tenants with security of tenure, ie a difference of £29,760.
There was, in short, only £240 between the parties, and, in the event,
Wandsworth were prepared to accept the larger figure.
What Mr Arden seeks to argue, however, is that
both valuations, counsels’ agreement with regard to them and the judgment
itself (which awarded £30,000 by way of statutory damages) all in turn
fundamentally mistook the correct approach to the assessment of damages under
section 28(1). The plain fact is, submits Mr Arden, that both valuers carried
out this exercise without giving the least thought to the actual situation
existing in respect of this property as at 18 June 1990: their valuations
patently assumed that the joint secure tenancy under which the respondent
strictly continued to have the right to occupy the premises was of the usual
prospectively long-term character, whereas in reality, of course, it was at the
time in the highest degree precarious. On any view, all that Wandsworth needed
to do to obtain vacant possession of the property was to ask the wife to give a
full 28-day notice to quit and then, the tenancy having thereby been
determined, issue perfectly straightforward proceedings for possession as
required by section 3 of the 1977 Act.
Mr Lewison sought to submit that Wandsworth’s
rights were by no means as clear-cut as this. He suggested that the respondent
could have obtained an injunction precluding his wife from serving a notice to
quit, either so as to prevent a breach of trust or pursuant to an application
under section 37 of the Matrimonial Causes Act 1973 seeking a transfer of the
joint tenancy into his sole name. It now seems plain, however,
judgment in Crawley Borough Council v Ure [1996] QB 13 is
inconsistent with the former; the House of Lords’ decision in Newlon Housing
Trust v Al-Sulaimen [1998] 4 All ER 1 (given on 29 July 1998, the
day following the hearing before us) defeats the latter.
Nor do I find in the least persuasive Mr Lewison’s
main argument on valuation, which centred on section 28(3)(a). This runs
essentially as follows: (i) any valuation requires the assumption of a
hypothetical sale to a willing buyer; (ii) by definition this buyer will be
someone other than Wandsworth; and (iii) such a buyer would not have the same
ability as Wandsworth to secure the wife’s co-operation in serving a full
notice to quit; unlike Wandsworth, the buyer would not be rehousing the wife
and children elsewhere. The clear answer to this argument, I am satisfied, lies
in Mr Arden’s submission that what is being valued is the interest of the
landlord in default, not the abstract interest of a notional willing buyer.
Although the concept of a willing buyer helps to fix the respective valuations,
one postulates the landlord’s continuing ownership in fact.
Altogether more difficult for Wandsworth, however,
is the fact that, as stated, the measure of damages here was agreed below at
£30,000. Should that figure nevertheless now be amenable to challenge on this
appeal? In contending that it should, Mr Arden relies principally on two
decisions of this court in earlier section 28 cases: Melville v Bruton
(1997) 29 HLR 319 and King v Jackson (1998) 30 HLR 541*. In Melville
v Bruton the rival valuers assessed the section 28 damages
respectively at £15,000 and £13,000. The argument there that both valuers had
proceeded on an incorrect basis was not merely one taken for the first time in
the Court of Appeal but was, in fact, specifically invited by the Court of
Appeal itself. The wrongfully evicted tenant had shared the premises with two
other occupiers and, in any event, enjoyed only an assured shorthold tenancy
for six months. Hutchison LJ (with whom Stuart Smith LJ and Buckley J agreed)
noted that because of the instructions they had received from the respective
solicitors, both valuers ‘assumed vacant possession throughout’, and, in the
result, had ‘treated as irrelevant the existence of the two other occupiers’.
At p325 he concluded:
I am satisfied that the point belatedly taken by
the appellant is one which entitles him to succeed on this appeal. This is
because the calculation which section 28(1) requires the court to make is a
calculation which must take account of the actual situation in the premises
which are being valued. There is no real reason to think that the Act does not
envisage the possibility that eviction will not materially have increased the
value of the landlord’s interest. In this case the valuers were invited to
proceed on an incorrect basis, by assuming vacant possession for the purposes
of section 28(1)(b). It is clear from the evidence… that, but for that
assumption,… [the] advice would have been that there was no increase in value.
The recorder, quite understandably, assessed damages on a fallacious basis, and
arrived at what she instinctively felt was an unjust result — a result which
involved not depriving the landlord of his profit but in effect fining him
£15,000.
It is not necessary to say more on the subject of
valuations under section 28 but I cannot refrain from reiterating that I am
puzzled as to why, even on the basis of the vacant possession assumption, the
valuers concluded that the eviction of the respondent made such a vast
difference to the value of the landlord’s interest, given the nature and terms
of her tenancy. In the ordinary way, where premises are let at a rack rent on a
shorthold tenancy, it is difficult to see why there should be any significant
difference.
* Editor’s note: Also reported at [1998] 1 EGLR
30
In the event, the court allowed the appeal and
substituted for the award of £15,000 one of £500 for the ‘inconvenience,
discomfort and distress occasioned by the eviction, to avoid the inconvenience
and expense of a new trial’.
In King v Jackson the tenant was
evicted at a time when her right to occupy was limited to a further six days.
That notwithstanding, the only valuation evidence put before the judge was a
letter from a firm of estate agents instructed by both parties indicating a
difference in value, for section 28 purposes, of £11,000. At trial, the judge rejected
the landlord’s argument that no damages should be awarded under section 28 as
the tenant had only six days of her tenancy remaining, and awarded her damages
of £11,000. He indicated, however, that if the award of damages under section
28 was incorrect, then damages should be £1,500 for breach of the covenant for
quiet enjoyment.
In rejecting the respondent tenant’s submission
that it was not open to the appellant landlord to go behind the agreed
valuation of £11,000, the Court of Appeal (Morritt and Pill LJJ) held that the
award was manifestly wrong and substituted for it one of £1,500 for breach of
quiet enjoyment. Morritt LJ observed that ‘it is apparent from the face of the
valuation that it purported to value the property subject to a right to occupy
which did not exist’.
Mr Arden submits that essentially the same
situation arises here: these valuations, too, manifestly took no account of the
ease with which Wandsworth could, in any event, lawfully have dispossessed the
respondent. Not so, contends Mr Lewison; these valuations on their face
ostensibly addressed the correct question, and, that aside, the precise measure
of damage here was specifically agreed, unlike the position in either of the
earlier two cases. With regard to this latter point, he seeks support from the
Court of Appeal’s decision in Pursell v Railway Executive [1951]
1 All ER 536 in which an injured plaintiff was held not to be entitled to seek
to reopen an award of damages made on the basis of an agreed medical report,
despite the doctor having since admitted that his earlier view was
over-optimistic. That authority I have not found especially helpful: clearly,
there was nothing on the face of the report to show that it overlooked some
obviously important circumstance (equivalent to the obvious precariousness of
the respondent’s tenure here). More helpful to the respondent’s case, however,
is the Court of Appeal’s decision in Tagro v Cafane [1991] 1 WLR
379, one of the authorities distinguished by Morritt LJ in King v Jackson.
In Tagro the valuation evidence had not been challenged by the landlord
at trial, whereas in King v Jackson, as Morritt LJ observed,
‘[the] point was taken in some form or other before the judge and was wrongly
rejected by him’.
This issue too I confess to having found a
difficult one. I can readily see the argument that justice demands it;
otherwise, as in Melville v Bruton, the award will have ‘involved
not depriving the landlord of his profit but in effect fining him…’. Yet to
allow the appellant landlord here to take the point as to valuation for the
very first time in this court would, to my mind, go significantly further than
the court went in either of the earlier two cases, and, as I believe, set a
dangerous precedent. Specific agreement on quantum, however unwise, must be
treated as sacrosanct.
For my part, therefore, I would not allow the
appellants to further amend their notice of appeal, but would rule, rather,
that this point is now unavailable to them.
I add this. Had the point been open to the
appellants, it would, in my judgment, have had a very considerable impact upon
the damages. As at 18 June 1990 the respondent’s tenure was in the highest
degree precarious, wholly dependent in law upon his wife not serving a valid
notice to quit, as she was clearly anxious to do. Even giving the respondent
the benefit of all possible doubts as to the true extent to which his
continuing rights in the property reduced its open market value, and
recognising, not least, that he could undoubtedly have put the local authority
to some expense and delay in securing the wife’s necessary further co-operation
and obtaining and executing the necessary court order for possession, I would
have assessed statutory damages here at no more than £2,000. I should add that,
with regard to an award on this basis, it would not have been right to mitigate
the damages under section 27(7)(a): that would be to penalise the respondent
twice over for the same conduct.
Issue 4: inconsistency
Pursuant to the judgment below, the respondent was
awarded statutory damages of £30,000 and also declared still to be the tenant
of the property. Before turning to Wandsworth’s submission that on no view
could he be entitled to both these orders, I feel impelled to say something as
to the overall course of this litigation. In my judgment, there can have been
no good reason here for the respondent to have
remained a tenant of the property (proceedings that ended in the consent order
of the Court of Appeal on 28 October 1993); the second brought two years later
as an action for damages. Had Wandsworth raised the plea of res judicata based
on the wider form of issue estoppel — see Henderson v Henderson (1843)
3 Hare 100 at p115 and the many cases following — it is difficult to see how it
could have been resisted. But the point was never taken, and, indeed, before us
Mr Arden somewhat surprisingly questioned its validity. Accordingly, I say no
more about it.
On the issue of inconsistency, the differences
between the parties narrowed hugely during the course of the hearing. At the
outset I had understood Mr Arden to be contending that the very institution of
a claim for statutory damages itself forfeited the tenant’s continuing claim to
an interest in the premises; Mr Lewison to be arguing on the contrary that the
tenant has a right both to statutory damages and to continue in occupation
under the tenancy. By the end, however, I think both parties had come to agree
that the tenant can ultimately obtain only one form of redress — statutory
damages or a continuing right to possession — the right to elect between those
remedies being his to exercise at trial rather than at any earlier date. This
seems to me to be the correct position. That the tenant cannot be entitled to
both remedies is surely plain. It could not be proper both to strip away from
the landlord the full financial advantage gained by wrongfully evicting the
tenant and yet still leave the tenant with his rights of occupation intact.
Moreover, section 27(3) expressly refers to the tenant’s ‘loss of the right to
occupy the premises’, just as section 28 itself assumes that he ‘has ceased to
have that right’, the very basis of damage assessment under section 28 being
that the right to occupation has been lost. Yet it is plain, too, that the
damages claim itself cannot operate to forfeit the right to possession or
preclude the court from ultimately ordering reinstatement. That indeed is
necessarily implicit in section 27(6), which in terms contemplates proceedings
both for statutory damages and for an order of reinstatement, providing, as it
does, that the former shall fail if the latter succeeds.
Given, therefore, that the respondent elects to
accept the award of statutory damages available to him, that election would be
inconsistent not merely with any entitlement to damages at common law for the
loss of his right to occupy the premises — see section 27(5) — but also with a
declaration that he continues to enjoy rights of occupation. Rather, his
tenancy would properly be deemed to have ended, albeit unlawfully, at the time
of his wrongful eviction.
Theoretically, however, the respondent could elect
to refuse the reduced statutory damage award and accept instead the declaration
of his continued rights of occupation as a tenant, assuming always that such
declaration was otherwise properly made. That, of course, depends upon the
resolution of issue 5. Even, however, were issue 5 to be resolved in his
favour, it is difficult to see how this would advantage the respondent. No
order was or could be made in his favour under section 27(6)(b), and, although
he advanced below a claim for common law damages for being wrongfully kept out
of possession, he was, in the event, unable to prove it (save as to £282.94,
which, somewhat surprisingly in the light of section 27(5), was awarded in
addition to statutory damages but is not appealed).
Issue 5: the second notice to quit
The declaration made by agreement in the Court of
Appeal on 28 October 1993 that the respondent remained a joint tenant of the
property until 2 August 1993 was not, Mr Arden acknowledges, to be read also as
a declaration that the tenancy ceased on that date. Rather, it left open the
question of whether the wife’s second notice to quit was effective to determine
the tenancy.
The rival arguments on this issue can be briefly
stated. Mr Lewison contends that the second notice was ineffective because
(although this time of sufficient length) it was wrongly served on Wandsworth
when it should have been served on Ms Jackson, to whom Wandsworth had let the
property on 2 July 1990. This somewhat surprising argument runs as follows.
Wandsworth granted Ms Jackson her tenancy at a time when, as later became
clear, the respondent’s tenancy still subsisted. Her tenancy, therefore, could
only take effect in law as the grant of a reversionary estate. As the
reversionary tenant it was upon her that the notice to quit needed to be
served.
Mr Arden’s sole argument in response was that as
between Wandsworth and Ms Jackson there was a fundamental mutual mistake of
fact such as to ‘render the subject matter of the contract essentially and
radically different from the subject matter which the parties believed to
exist’ — see Associated Japanese Bank (International) Ltd v Credit du
Nord SA [1989] 1 WLR 255 at p268 — with the result that the grant to Ms
Jackson was void. Clearly, both Wandsworth and Ms Jackson intended the tenancy
agreement between them to be that of an ordinary letting of residential
accommodation for immediate residential occupation, and not merely a
reversionary interest in the premises. If, however, this argument is correct,
it would follow that Ms Jackson was no more than a trespasser in the property,
who could have been evicted at any time and enjoyed no rights against anyone.
As to this I prefer Mr Lewison’s submission, which is that as between
Wandsworth and Ms Jackson she had all the rights of a secure tenant, but as
between her and the respondent he had the better title. He, therefore, could
have dispossessed her as a trespasser, albeit she could then have sued
Wandsworth for damages for breach of their covenant of quiet enjoyment. It does
not, however, follow that Mr Lewison is correct in submitting that the
respondent’s (or rather his wife’s) notice to quit had to be served on Ms
Jackson rather than Wandsworth. There was no contractual relationship between
the respondent and Ms Jackson. There was, however, such a relationship between
the respondent and Wandsworth, and that was what the notice to quit was
designed to end. I would hold it effective for the purpose.
In the result, I would reduce the statutory
damages award to £10,000 and discharge the declaration as to the respondent’s
continuing tenancy.
PILL and THORNE LJJ
agreed and did not add anything.
Appeal allowed in
part.
