England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE CCRTF 97/0067

(HIS HONOUR JUDGE COMPSTON )

Royal Courts of Justice

Strand

London WC2

Thursday, 22nd October 1998

B e f o r e:

LORD JUSTICE SIMON BROWN

LORD JUSTICE PILL

LORD JUSTICE THORPE

- - - - - -

LONDON BOROUGH OF WANDSWORTH

Appellant

- v -

OSEI-BONSU

Respondent

- - - - - -

(Transcript of the Handed Down Judgment of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 421 4040

Official Shorthand Writers to the Court)

- - - - - -

MR J MANNING (Instructed by Judge & Priestley of Justin House, 6 West Street, Bromley BR1 1JN) appeared on behalf of the Appellant

MR J LUBA (Instructed by Anthony Gold, Lerman & Muirhead, New London Bridge House, 25 London Bridge Street, London SE1 9TW) appeared on behalf of the Respondent

JUDGMENT

(As approved by the Court )

©Crown Copyright

Thursday, 22nd October 1998

JUDGMENT

LORD JUSTICE SIMON BROWN: This appeal raises a number of difficult issues under ss. 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 20th March 1989 the appellants (Wandsworth) granted to the respondent and his wife a joint secure tenancy of 166 Coteford Street, SW17, a 2-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 ^th 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 ^nd 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 ^th February.

On 9 ^th 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 this:

“(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 ^th February, the wife issued committal proceedings for hearing on 22 ^nd February. On 21 ^st February, however, the respondent did vacate, handing the keys to his wife’s solicitors. Accordingly on 22nd 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 ^th February Wandsworth “caged” the property (i.e. secured it against intruders and squatters) and set in train the wife’s transfer to alternative accommodation.

On 8 ^th March the respondent’s solicitors told Wandsworth of their intention to apply for the ouster injunction against him to be discharged.

On 30 ^th April the wife served a notice to quit to expire on 14 ^th 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 s.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 ^th May, as earlier forewarned, the respondent applied for the ouster order to be discharged.

On 20 ^th May a new tenancy was granted to the wife in Roehampton.

Shortly afterwards, i.e. about a week after 14 ^th 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 ^th 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 child). Wandsworth’s officers took advice from their lawyers and concluded that the wife’s short notice to quit had validly determined the tenancy and that they were accordingly entitled to re-let the property as proposed.

On 2 ^nd July 1990 the property was duly let to Ms Jackson.

On 23 ^rd August 1991 the respondent commenced proceedings seeking a declaration that he remained a joint tenant of the property. That action was dismissed on 1 ^st 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 ^nd March 1993, however, the Court of Appeal decided the identical point to contrary effect in Hounslow LBC 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 on 28 ^th October 1993 ordering:

“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.”

Meantime, on 1 ^st July 1993, Wandsworth had caused the wife to serve a second notice to quit, this one giving the full 28 days required, a notice expiring on 2 ^nd August 1993.

In September 1994 Ms Jackson’s tenancy ended and in December 1994 the property was again re-let.

The present proceedings were begun, again in the 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 ss.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 18th 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 are 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 9 ^th 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 9 ^th 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 member 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 by 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 s.27(9) to have the same meaning as in s.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 Arden QC fully accepts that Wandsworth’s refusal to re-admit the respondent to the property on 18th 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 s.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 s.81 of the Housing Act 1985:

“8l. 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 [i.e. 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 1410 and Megarry on the Rent Acts 11 ^th Edition at pages 245 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 ^th May 1990 i.e. some weeks before 18 ^th June 1990 when the respondent became free of the ouster order and thus, vis-a-vis his wife, entitled to resume physical occupation of the property. Even then Wandsworth should have obtained a court order. S.3 of the 1977 Act provides:

“3(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 re-admit him to the property on 18 ^th June 1994 did indeed constitute his unlawful eviction within the meaning of s.27(1) and thus prima facie it gave rise under s.27(3) to a claim for statutory damages to be assessed under s.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 s.27(8)(a), alternatively

2. that any award of statutory damages should have been found mitigated by the respondent’s conduct pursuant to s.27(7)(a),

3. that in any event the damages were plainly wrongly assessed under s.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,

5. that in any event this respondent’s tenancy was effectively determined by the wife’s second notice to quit given on 1 ^st July 1993.

Let me examine these successive contentions in turn.

As applied to this respondent’s unlawful eviction, the s.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 LBC 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 which 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 ^th 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”.

Mr Lewison QC for the respondent takes issue with this argument at almost every turn. Amongst 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; third, that even had the short notice effectively determined this tenancy, Wandsworth would still not have been justified in refusing to re-admit the respondent without a court order to exclude him.

I confess to having found this a difficult issue. One must recognise that the s.27(8)(a) defence precisely mirrors that to be found within s.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. S.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 s.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 s.27(8)(a) defence. By the same token that an error of law will not necessarily be held negligent ( Rowling v Takaro Properties Limited [1988] AC 473) nor to amount necessarily to maladministration (see Westminster City Council v Hayward [1996] 3 WLR 543), so too, submits Mr Arden, should it be held capable of founding a reasonable belief for s.27(8)(a) purposes. As was stated in R v Phekoo [1981] 1 WLR 1117 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) LR2HL 149 at 170:

“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 (1997) 30 HLR 57 at 63:

“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 successfully have invoked the Phekoo defence. They knew full well all the relevant facts ... No doubt a mistaken belief as to whether or not they were contravening the statute would have been highly relevant by 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 paragraph 17-22 of Archbold (1998 edition) 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 which 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 which 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 s.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 page 1246 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 page 1249 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 s.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 amongst them that the s.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 s.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.

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 an approach to s.27(7)(a).

As Aldous LJ made plain in Regalgrand Limited v Dickerson & Wade (1996) 29 HLR 620 at 625, 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 cooperative 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 damage under s.28(1), i.e. £10,000.

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 i.e. 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 s.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 ^th 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 s.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 s.37 of the Matrimonial Causes Act 1973 seeking a transfer of the joint tenancy into his sole name. It now seems plain, however, that neither course would have been available to him: the Court of Appeal’s 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 Alsulaimen [1998] 4 AllER 1 (given on 29 ^th 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 s.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, (iii) such a buyer would not have the same ability as Wandsworth to secure the wife’s cooperation 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 s.28 cases, Melville v Bruton 29 HLR 319 and King v Jackson 30 HLR 541. In Melville v Bruton the rival valuers assessed the s.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 page 325 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 s.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 s.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 s.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.”

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 s.28 purposes of £11,000. At trial the judge rejected the landlord’s argument that no damages should be awarded under s.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 s.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 AER 536 in which an injured plaintiff was held not 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 there 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 378, 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 18th 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 cooperation 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 s.27(7)(a): that would be to penalise the respondent twice over for the same conduct.

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 brought two successive sets of proceedings, the first for a declaration that he remained a tenant of the property (proceedings which ended in the consent order of the Court of Appeal on 28th 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 115 and the many cases following - it is difficult to see how it could have been resisted. But the point never was 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 of 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 be exercised 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 s.27(3) expressly refers to the tenant’s “loss of the right to occupy the premises”, just as s.28 itself assumes that he “has ceased to have that right,” the very basis of damage assessment under s.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 in necessarily implicit in s.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 s.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 s.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 s.27(5), was awarded in addition to statutory damages but is not appealed).

The declaration made by agreement in the Court of Appeal on 28th October 1993 that the respondent remained a joint tenant of the property until 2nd 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 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 2nd 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 plc v Credit du Nord SA [1989] 1 WLR 255 at 268 - 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.

LORD JUSTICE PILL: I agree

LORD JUSTICE THORPE: I also agree.

ORDER: Application refused, with no order as to costs.

(1) Appeal allowed to the extent that the following variations be made to the order of HHJ Compston made on 18 December 1996:-

(a) In paragraph 1 of that order the words

"£30,282.94 (thirty thousand two hundred and eighty two pounds and ninety four pence). And interest of £50.00 totalling £30,332.94"

shall be replaced by the words

"£10,282.94 (Ten thousand two hundred and eighty two pounds and ninety four pence). And interest of £50 totalling £10,332.94".

(b) Paragraph 2 shall be deleted and the declaration thereby granted is discharged.

(2) Respondent's liability to pay costs assessed at £10,332.94.

Appellant's costs of the appeal to be paid by the Respondent only to the extent of the Appellant's liability. No statutory charge to apply to the said sum.

(3) Order in payment of Appellant's costs by Legal Aid Board refused.

Legal aid taxation of the Respondent's costs.

(Order not part of approved judgment)