England and Wales Court of Appeal (Civil Division) Decisions

Court of Appeal

		23 January 1991

1. Giving judgment, LORD DONALDSON OF LYMINGTON MR said: This appeal is a cautionary tale for landlords who are minded unlawfully to evict their tenants by harassment or other means.
2. The facts are these. Miss Tagro was the residential tenant of a first floor front-room in premises at 116 Landor Road, Stockwell, London SW9. That was a bed-sitting-room and she had the use of the kitchen, bathroom and toilet jointly with the occupier of another room on that floor. Mr Cafane was Miss Tagro's landlord. He was the tenant of the whole building, the ground floor of which was used for his second-hand furniture business. The first floor, to which I have already referred, was used to provide these two bed-sitting-rooms, and there was a second floor which was similar to the first floor. The freehold owner of the premises was Lambeth London Borough Council and they had let the whole premises to Mr Cafane on a tenancy, which was determinable on one month's notice, subject always, of course, to the effect of the Landlord and Tenant Act 1954.
3. Mr Cafane appeals against a judgment of His Honour Judge Simpson, given in the Lambeth County Court on November 24 1989, whereby he awarded £ 31,000 damages to Miss Tagro for unlawful eviction, those damages being claimed by her under sections 27 and 28 of the relatively new Housing Act of 1988. In addition, he awarded her £ 15,588.28 damages for trespass to her personal belongings which were on the premises. This latter judgment was also given against the second defendant, a Mr Patel, who was the agent of Mr Cafane. Mr Patel does not appeal in respect of that part of the judgment, nor does Mr Cafane. The appeal is limited to the judgment for £ 31,000, which was solely against Mr Cafane because he alone was the landlord.
4. The defendants were not represented below, but we have been greatly assisted by the fact that Mr Cafane has been represented in this court by Mr Robert Carnwath QC and Mr William Geldart, who have put in an admirable skeleton argument which, of course, Mr Carnwath has supplemented orally.
5. The further facts are these. It was in August 1989 that war really broke out, but some mention should be made of the previous history because it obviously affected the reaction of the tenant. For example, on one occasion she had been woken up at two o'clock in the morning with a demand for rent. There was some dispute as to whether the rent was due, but it really does not matter because two o'clock in the morning is not a time at which any landlord is entitled to demand rent from his tenant or even remind the tenant that rent is due. On another occasion there was even more outrageous conduct. Miss Tagro was visiting the lavatory, which was situated in the bathroom, and the landlord, or somebody on his behalf, came and kicked the door down. She complained previously of having been referred to as a black bastard and of loud music being used to disturb her enjoyment of the flat and so on. That was the background.
6. On August 3 she returned to the room to find herself locked out and the locks changed. There has been no challenge in this court, and there could not be any serious challenge, to the fact that the locks were changed with the intention of evicting her. There was some suggestion at one stage that a number of keys had been floating around and got into the possession of various other people and that the lock was changed for security purposes. The judge rejected that on his assessment of the evidence in view of the fact that it was some days later before Miss Tagro was ever offered a key which actually fitted the lock.
7. Faced with that situation, on August 4, the next day, she obtained an ex parte injunction to readmit her to the premises and allow her access to her belongings. That injunction was very properly for a limited period, being given ex parte, and it came up for renewal on August 7, when it was continued, Mr Cafane having taken no step whatever to comply with it in the meantime. The application to continue the injunction was coupled with an application to commit for contempt of court.
8. On August 8 or 9 - it matters not which - Mr Cafane relented to the extent that he offered Miss Tagro a key. Her evidence about this I can take from her affidavit:

I collected the key late morning on Wednesday August 9 1989 in the office of Messrs Mohabir & Co and went to the building. The lock to the front door was broken and, in fact, I did not need the key to enter. I went upstairs to the premises. Everything inside was in chaos. Many things were broken. A large amount of my belongings were stolen. On the advice of my solicitor I called the police, who arrived, then had to leave on an emergency call. They said they would be back to take fingerprints and that I should not touch anything shiny or any door or wardrobe or handle until they were able to return which at the time of swearing this affidavit they have not done although I have been reminding them. In the late afternoon my solicitor's surveyor arrived to take photographs and draw up a schedule of broken items.

Later in her affidavit, she stated:

9. I did not sleep at the premises on the night of Wednesday August 9 1989. This was partly because the police told me not to touch any of the objects in the premises including everything which was shiny and partly because the lock to the front of the building was damaged and would not 'lock', leaving me with greatly reduced security. The main reason however was that I had by then become too frightened of the defendants. I have not returned to the premises to sleep and do not intend to do so. After the recent events outlined above I cannot conceive of returning to the premises.
10. I would add that the state of the premises to which Miss Tagro swore in her affidavit was attributed by the landlord to the fact that there had been a burglary. The learned judge wholly rejected the suggestion that there had been a burglary. It is perhaps inherently unlikely that there was one, in that the damage done to the flat was not the sort of damage that one would expect from a burglar who was intent upon removing goods. Such an intruder does not smash the goods and the flat itself. Any judge would be entitled to take judicial notice that that was an unusual way of proceeding. At all events, the judge clearly formed the view that this so-called burglary never took place and that what had happened was that, having locked Miss Tagro out, Mr Cafane or those acting on his behalf were determined to make certain that under no circumstance would she be prepared to return even if they were eventually obliged to let her in again as a result of the court order; and of course, they were brilliantly successful.
11. One other date needs to be mentioned because it is relevant to Mr Carnwath's arguments and that is August 25 1989. The proceedings originally were in support of the ex parte injunction and claimed an injunction ordering the defendants to readmit the plaintiff to the building and premises forthwith and to deliver keys to the building to the plaintiff and further restraining the defendants, their servants or agents or otherwise from further interfering with the plaintiff's quiet enjoyment of the premises and from further interfering with the plaintiff and from further trespassing on the premises or the plaintiff's goods and for damages. There was no claim under, or for damages under, section 27 of the Housing Act 1988. That claim was introduced by fairly extensive amendment on August 25 1989.
12. As I have already made clear, this is a claim under the Housing Act and the defences raised also arise under that Act. The principal defences arise under section 27(6)(b) and section 27(7)(b) of the Act. So let me turn to the wording of the Act itself. Section 27 is headed 'Damages for unlawful eviction' and provides:

(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.

13. I do not think I need refer to subsection (2) save to say that it provides for similar treatment where there is what might be described as constructive eviction of the residential occupier as contrasted with an actual eviction, namely conduct which is such that the occupier cannot reasonably be expected to remain, although physically he or she could remain, and the occupier accordingly gives up his occupation of the premises. The subsections continue:

(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.

(4) Any liability arising by virtue of subsection (3) above --

(a)   shall be in the nature of a liability in tort; and

(b)   subject to subsection (5) below, shall be in addition to any liability arising apart from this section (whether in tort, contract or otherwise).

(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;

and, for the purposes of paragraph (a) above, proceedings to enforce a liability are finally disposed of on the earliest date by which the proceedings (including any proceedings on or in consequence of an appeal) have been determined and any time for appealing or further appealing has expired, except that if any appeal is abandoned, the proceedings shall be taken to be disposed of on the date of the abandonment.

I will come to subsection (7) in a moment. I would like first of all to deal with the argument on subsection (6).

14. Before doing so I ought to mention that in subsection (9) ''residential occupier', in relation to any premises, has the same meaning as in section 1 of the 1977 Act', that is to say the Protection from Eviction Act 1977, which in subsection 1(1) provides:

In this section 'residential occupier', in relation to any premises, means 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.

There is no dispute, of course, that Miss Tagro was a residential occupier, and immediately after August 3 she was a former residential occupier.

15. Mr Carnwath says in relation to subsection (6) that, in the case of Miss Tagro, the court made an order as a result of which she was reinstated as mentioned in para (a), that is to say she was reinstated in the premises in question in such circumstances that she again became the residential occupier of them. He says it cannot seriously be suggested that a tenant who has been unlawfully evicted and who the landlord is able and willing to reinstate simply has an option whether to accept reinstatement or not.
16. There are two quite separate questions there. As to the first - was Miss Tagro actually reinstated? - for my part I have no doubt or hesitation in saying that she was not and could not be at that stage. Reinstatement does not consist in merely handing the tenant a key to a lock which does not work and inviting her to resume occupation of a room which has been totally wrecked. Therefore, on the facts of this case, that is an argument which simply does not run.
17. On the question of whether the tenant has a right to choose whether to accept the offer, subject to a point which arises under a later subsection, I think, for my part, that the tenant has. Mr Carnwath says that cannot be right because it means to say that a tenant who is unlawfully evicted, perhaps for a relatively short period, is able to achieve some enormous financial reward which is only available to him if he does not accept the offer of reinstatement. There is, of course, a good deal to be said for Mr Carnwath's argument, as there always is for Mr Carnwath's arguments, but there is no indication in the statute that the tenant does not have that choice. It is difficult to see how you can reinstate a tenant who does not wish to be reinstated. The apparent intention of Parliament is not as unreasonable as it might appear at first when you take into account the fact that, under section 28, to which I will come in a moment, the damages are designed to be equal in amount to the benefit which the landlord gets by having had the tenant removed from the premises, namely the increase in the value to him of the premises. It is therefore quite intelligible that Parliament should have said: 'Well, if the tenant does not choose to go back, at least the landlord shall not benefit by it', and to have proceeded on that basis. So, for my part, I think that the argument that there is any defence for Mr Cafane under subsection (6) is quite untenable.
18. I turn, therefore, to subsection (7), which provides:

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, or

(b)   that, before the proceedings were begun, the landlord in default offered to reinstate the former residential occupier in the premises in question and either it was unreasonable of the former residential occupier to refuse that offer or, if he had obtained alternative accommodation before the offer was made, it would have been unreasonable of him to refuse that offer if he had not obtained that accommodation,

the court may reduce the amount of damages which would otherwise be payable to such amount as it thinks appropriate.

19. Let me say straightaway that para (a) has no application whatever to this case. No suggestion has ever been made that Miss Tagro's conduct was such that it could be criticised and would make it reasonable to mitigate the damage. The two paragraphs seem to me to involve two quite different concepts.

Para (a) is dealing with what one might describe as a contributory negligence concept, although contributory negligence, in the context of an unlawful eviction, is clearly not a happy phrase. But it is the idea that in some measure, although not in such measure as in any way to excuse the conduct of the landlord, the tenant has brought the problem on his own head and the paragraph enables the court to mitigate the consequences for the landlord.

Para (b) seems to me to borrow something from the concept of the defence of tender in relation to a debt, a defence which is only available if tender takes place before the proceedings are begun. It is, therefore, necessary to consider what is meant by the phrase 'before the proceedings were begun' in para (b). It will be remembered that subsection (7) begins with the words, 'If, in proceedings to enforce a liability by virtue of subsection (3) above . . .'

20. Mr Neuberger would have argued, if he had been given the opportunity of doing so, that that meant the totality of the proceedings which were begun at the beginning of August with the claim for an injunction and that, therefore, there is no question here of any offer of reinstatement before the proceedings were begun. Mr Carnwath argues strongly that these were not proceedings to enforce a liability until an amendment took place later in August and that para (b), with its reference to 'before the proceedings were begun', cannot be referring to proceedings which had nothing whatever to do with the enforcement of a liability under subsection (3).
21. I am bound to say that, for my part, although I have to accept that it is an obiter expression of opinion on the facts of this case, I think Mr Carnwath is wholly correct in his argument. I say it is obiter because the question would arise as a matter of decision only if Mr Carnwath could make good his argument that there was an offer to reinstate the former residential occupier in the premises in question at any time and, on the facts as I see them, there never was any such offer. All that was on offer was to give her the key and to readmit her. Certainly, there was no suggestion that the room was put into proper order, the locks repaired or any offer made to Miss Tagro to allow her to resume occupation in any realistic sense of the word. But, had it arisen, as I say, and it may arise in other cases, my view would have been that the subsection is referring to a time before there is a claim in the proceedings under sections 27 and 28 of the Act.
22. So much for the appeal in respect of liability. But Mr Carnwath, on behalf of Mr Cafane, has also addressed arguments to us on the subject of quantum. That is governed by section 28 and I think I need only read subsections (1) and (2):

(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.

(2) In relation to any premises, any reference in this section to the interest of the landlord in default is a reference to his interest in the building in which the premises in question are comprised (whether or not that building contains any other premises) together with its curtilage.

On the facts of this case, the learned judge was concerned to consider not the value of the room which had been let to Miss Tagro but the value of the whole building, including four bed-sitting-rooms and the business premises below.

23. Miss Tagro, or those acting on her behalf, called a surveyor, who was an associate member of the Royal Institution of Chartered Surveyors, to give evidence. He had earlier given them a valuation before the judge and he had revised his valuation because he thought there had been a change in market conditions by the time of the hearing. In this he was wrong because the relevant time is immediately before the residential occupier ceased to occupy the premises (subsection (1)). He then gave oral evidence, and his evidence was, first of all, as to a freehold value, which was really immaterial because Mr Cafane was not a freehold owner, and he went on to consider the rental value of the whole building, including the shop. He capitalised a profit rental and he considered the extent to which the value of Mr Cafane's interests would be reduced by the presence of Miss Tagro. He said:

I start with freehold with occupancy ie £ 89,000 then made deduction of £ 45,000 ie amount of rent × 10 being capital value of Mr Cafane's interest. This produces £ 44,000 which represents value of leasehold interest with Miss Tagro as sitting tenant. £ 75,000 [which was the figure that he had valued Mr Cafane's interest with vacant possession] minus £ 44,000 equals £ 31,000. This represents the difference in value of the leasehold interest with or without Miss Tagro. £ 31,000 is my final figure for damages.

24. Mr Cafane, who, I imagine, knows something about properties, was invited to cross-examine and asked whether the valuation took account of disrepair because, in the indirect way in which judges normally take notes of evidence, the following sentence appears:

Cross-examined -- this takes into account disrepair as in my report.

Then there was a re-examination on the same point.

25. Mr Cafane called no evidence to dispute this figure. Mr Carnwath is therefore reduced to saying that the learned judge can be faulted on the footing that no reasonable judge could have accepted that evidence. That submission he made simply and with force and with slightly more difficulty when Russell LJ said, 'Well, what should he have done?' It is true, I suppose, that he could have adjourned the hearing and urged the landlord to call expert evidence. But is difficult to see how he could have said, 'I am not satisfied that any damages are due on this evidence' and, if he is not to say that, then he would have in some way to reduce the surveyor's figure on the basis, I suppose, of what he (the judge) thought were proper values. Had he done so, this court would probably have quashed his decision on the grounds that he was acting not upon evidence and not upon something of which a judge should take judicial knowledge but upon some extraneous view as to a matter of fact.
26. But, essentially, what Mr Carnwath concentrates upon is his submission that there is no evidence that the judge fully appreciated that this was only a monthly tenancy as far as Mr Cafane was concerned and that, had he appreciated that, he could not have accepted this evidence. The difficulty about that argument - apart from any other difficulties and there are many - is that the surveyor was entitled to have regard to the realities of the situation and to have regard to the extent to which Lambeth Council were likely to be minded to serve any notice to quit and would be successful in any event, bearing in mind the provisions of the Landlord and Tenant Act 1954. If the surveyor, applying his local knowledge and professional expertise, came to the conclusion that the lease, other things being equal, notwithstanding that it could be theoretically determinable on a month's notice, would go on virtually for ever, there could be no possible faulting of that aspect of his valuation.
27. He also says that the surveyor should have approached the matter on the basis that the value of the property without Miss Tagro would have been virtually nil because the lease contains prohibitions against assignments and subletting and, says Mr Carnwath, if we were deciding what Mr Cafane could have got for premises without Miss Tagro, no one would have bought it because, as soon as they took an assignment, they would be faced with an application for forfeiture by Lambeth London Borough Council.
28. There is the scintilla of a point of law there in that clearly the court would have to have regard to what was the interest of the landlord whose value had to be determined under section 28(1)(b), but they would have had some guidance from section 28(3), which provides:

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;

(b)   that neither the residential occupier nor any member of his family wishes to buy; and

(c)   that it is unlawful to carry out any substantial development of any of the land in which the landlord's interest subsists or to demolish the whole or part of any building on that land.

29. I do not understand that section to contemplate, as Mr Carnwath's argument contemplates, that the premises will be treated as virtually inalienable and having no value in consequence. Subsection (3) clearly contemplates that there shall be no increase in the damages because the effect of the tenant being dispossessed is that it enables some very valuable development to take place. But the whole concept of the landlord in default selling his interest on the open market to a willing buyer assumes that he can sell it on the open market to a willing buyer, and that involves the subsidiary proposition on the facts of this case that the willing buyer would take a lease from Lambeth Council on a monthly basis subject to the Landlord and Tenant Act with a covenant against subletting or assignment in exactly the same way as Mr Cafane had done. In my judgment, there is nothing in that point.
30. I accept that the damages do seem to be high, but I have to warn myself against using any knowledge that I may have gained in other ways to support that view, and I am quite unable to say that the judge was at fault. If we were to interfere on this ground, it could only be on the basis of sending it back for a rehearing designed to enable Mr Cafane to call valuation evidence. It is not clear to me why he should have a second opportunity to call valuation evidence when he had the opportunity originally and did not choose to avail himself of it.
31. Accordingly, and for those reasons, I would dismiss the appeal.
32. RUSSELL and NOLAN LJJ agreed and did not add anything.

The appeal was dismissed with costs, such order not to be enforced without further order. Legal aid taxation was ordered.

The electronic text of this judgment was provided by Estates Gazette, whose assistance is gratefully acknowledged.