Protected tenancy – Rent Act 1977 – Possession – Appellant and husband occupying flat for 45 years – Respondent landlord seeking possession – Judge weighing tenants’ reasons for wanting to stay against reasonableness of landlords’ wish to maximise realisation of investment by selling with vacant possession – Judge finding suitable accommodation available and that reasonable to make possession order – Whether judge erring in approach to reasonableness – Appeal allowed
The appellant and her husband had lived in the same flat since 1963 and were protected tenants under the Rent Act 1977. In 1969, the respondent landlord had purchased the flat, together with the garages beneath it and an adjoining house, with her brother and sister in order to provide financial assistance to their mother. The brother and sister shared the beneficial ownership of the properties with the respondent. Following the death of their mother in 2001, they wanted to sell the properties with vacant possession and use the proceeds to fund their pensions. To that end, they purchased another flat around a mile away and offered it to the appellant and her husband, who, however, did not like it and did not want to move from the home and locality in which they had lived for 45 years and where they had strong social ties.
The respondent brought proceedings against the appellant and her husband, seeking possession on the ground that suitable alternative accommodation was available, within the meaning of section 98(1)(a) of the 1977 Act, and that and it was reasonable to make a possession order. At the date of the trial, the appellant’s husband was 79 years old; the appellant was 75. The judge found that most people would consider the alternative flat as an attractive proposition and that it represented suitable alternative accommodation for the appellant and her husband. Considering the question of reasonableness, he balanced the social and emotional consequences of them having to move against the reasonableness of the siblings’ wish to realise their assets and provide for their pensions in later life. He concluded that it was reasonable to make a possession order. Following the trial, the appellant’s husband died. The appellant appealed against the judge’s order.
Held: The appeal was allowed.
Whether it was reasonable to make an order for possession was a question to be determined by the trial judge as an overall factual judgment, taking account of all the relevant circumstances. An appeal court would ordinarily review the judge’s decision only if satisfied that he had acted under an error of principle or that his decision had been plainly wrong. In the instant case, the judge had approached the question of reasonableness on a mistaken basis and his decision should be set aside. The question for the judge had not been whether it was reasonable for the landlords to seek possession, but whether it was reasonable for the court to make an order: Shreeve v Hallam [1950] WN 140 and Brown v Davies [1958] 1 QB 117 applied. That decision could not be made, as the judge had sought to do, merely by a purported balancing of the reasonableness of the tenants’ wish to stay in the flat against the reasonableness of the siblings’ wish that they should vacate. It required the judge to look at the question from all angles and, in particular, to consider the effect upon the landlords and the tenants not merely if an order were made, but also if it were not: Cresswell v Hodgson [1951] 2 QB 92 applied. Such an approach imposed an important discipline upon the evaluation process.
In particular, the judge had failed to address the critical question of the effect upon the siblings if an order were not made. Although they would not, in the foreseeable future, be able to sell the properties with vacant possession of the flat and so raise their maximum value, they had advanced no case of hardship if they could not so sell. They could still sell subject to the tenancy, albeit realising a smaller return; or, if they chose not to do so, their opportunity of obtaining a pecuniary gain would simply be delayed. Further, when they had purchased the properties subject to the tenancy in 1969, they could not have done so with any certainty that they would ever be entitled to evict the tenants in order to realise the maximum value from their investment. By contrast, the case for the tenants was compelling with regard to the emotional and social aspects of the threatened move in removing them from a special local, village-like community in which they had played, and continued to play, important roles, where they enjoyed local friendship and support, and which could not be replicated in the new flat. In all the circumstances of the case, it was not reasonable to make a possession order.
Tracey Bloom (instructed by Hodge Jones & Allen) appeared for the appellant; Daniel Dovar (instructed by Blake Lapthorn) appeared for the respondent.
Sally Dobson, barrister
