England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE CCRTF 98/1173/2

Royal Courts of Justice

Thursday, 18th March 1999

Before:

LORD JUSTICE THORPE

LORD JUSTICE POTTER

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SANCTUARY HOUSING ASSOCIATION

Respondent

-v-

DONALD CAMPBELL

Appellant

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(Handed down transcript of

Smith Bernal Reporting Limited

180 Fleet Street, London EC4A 2HD

Tel: 0171 421 4040 Fax: 404 1424

Official Shorthand Writers to the Court)

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MISS J. SMART (instructed by Messrs Martin Shepherd & Co., Enfield) appeared on behalf of the Appellant/Defendant.

MR. A. TANNEY (instructed by Messrs Stafford Young Jones, London, EC4) appeared on behalf of the Respondent/Plaintiff.

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APPROVED JUDGMENT

Crown Copyright

Lord Justice Thorpe:

This appeal raises ultimately the following legal question: Where a contractual tenant surrenders the tenancy by operation of law leaving a co-occupier in possession is the landlord’s ordinary right to possession against the co-occupier in possession frustrated if the co-occupiers were spouses and the co-occupier in possession asserts the rights bestowed by section 1(1)(a) of the Matrimonial Homes Act 1983? It is conceded that had the appellant not been married to the tenant he would have no defence to the respondent’s possession action. So the answer to the question must lie in family law.

The facts of the case are comparatively simple and not in dispute. On 9th April 1990 the respondents granted to Claudia Shaw a secure weekly tenancy of a three bedroom maisonette at 3 Belmont Road, N15. It seems that from the outset she occupied the premises not only with her three children but also with her co-habitee Donald Campbell. The couple married on 22nd July 1995. However on 17th September 1996 Mrs Campbell and the three children left, expelled, as Mrs Campbell asserts, by her husband’s violence. On 11th November 1996 Tottenham Advice Bureau wrote to the respondents on the appellant’s behalf introducing him as the tenant’s husband and offering to pay the rent. The respondents refused this offer saying that they would require vacant possession when their tenant was re-housed. On 16th January Mrs Campbell wrote to the respondents saying that she was re-housed, that she was giving up her tenancy but was not sure what to do about the keys. The respondents informed her that she must first empty the maisonette of all her possessions before returning the keys and that until such time as the keys were returned she would remain liable for the rent. In her reply Mrs Campbell explained that she could not empty the premises because the appellant was still in possession and that he had changed the locks. With that letter she enclosed her keys and asked the respondents to give her the opportunity to clear any of her possessions left behind by the appellant when he vacated. On receipt of Mrs Campbell’s letter the respondents wrote to the appellant requiring him to leave. On his behalf the Tottenham Legal Advice Centre asserted his right to occupy and pay rent under the Matrimonial Homes Act 1983.

On 10th March the respondents issued their summons for possession in the Edmonton County Court. On 11th June the appellant filed his defence and almost a year later on 1st June 1998 the case was listed before Mr Assistant Recorder Warren QC for determination of preliminary points on agreed facts. The first preliminary point was whether on the facts it was possible for Mrs Campbell to surrender the tenancy notwithstanding that her husband was at all material times in occupation. The second preliminary point, if the first were answered in the affirmative, was whether Mrs Campbell in fact surrendered the tenancy. In a reserved judgment dated 8th June 1998 the assistant recorder answered both questions in the affirmative. However the order subsequently drawn on 8th August 1998 gave the appellant leave to appeal and it is that appeal that we now determine.

I say at once that I am satisfied that the assistant recorder was correct to answer the preliminary points in the affirmative. I would only criticise his first conclusion of express surrender. Mr Tanney for the respondents realistically conceded that he could not support that finding. Accordingly the argument in this court concentrated on whether or not on the agreed facts there had been a surrender of the contractual tenancy by operation of law.

Mr Tanney relied upon the very clear judgment of Scott LJ in London Borough of Brent v Sharma and Vyas 25 HLR 257. At 260 Scott LJ said:

“Surrender of a tenancy by operation of law may come about in a variety of different circumstances. In the present case the tenant left the premises of which she was tenant, making it clear, by the events attending her departure, by the contents of the document which she sent to the council and which was received by the council on 29th November 1988, and by her occupation of other premises in Milton Keynes, that she was abandoning her tenancy. By her conduct over the period following her departure from (the property) and including the time in the early months of 1989 when she was living with her two children in Milton Keynes, she represented unequivocally that she was treating her tenancy of (the property) as at an end.

Of course unilateral conduct by one of the parties to a tenancy cannot by itself bring an end to the tenancy. Surrender by operation of law requires unequivocal conduct by both landlord and tenant.” (words omitted) “The council’s conduct in December 1988 may, correctly viewed, have been equivocal. But, in my judgment, by February 1989 at the latest the council’s conduct had become entirely unequivocal. If both tenant and landlord are unequivocally treating a tenancy as at an end, the law has no business to insist on its continuance.”

In the present case there was nothing equivocal in the conduct of either the respondent or Mrs Campbell. A fortiori I conclude that on the agreed facts there was a surrender of the contractual tenancy by operation of law in February 1997 when Mrs Campbell, having re-housed herself, did all that she could in compliance with the respondents stipulation that she should vacate the premises and return the keys. Her husband, a violent man as she asserts, was in possession and denying her access. Unless it was incumbent upon her to seek either an ouster order in divorce proceedings or an order terminating his rights of occupation under the Matrimonial Homes Act 1983 there was nothing more that she could have done.

Miss Smart for the appellant concedes that had her client not married Mrs Campbell in 1995 he would have had no defence to the respondent’s claim for possession. Her appeal depends substantially, if not entirely, upon the right conferred upon her client by the Matrimonial Homes Act 1983 in consequence of the marriage. In the definition of that right she relies upon the decision of this court in Hoggett v Hoggett [1980] P&CR 121. Superficially, and as set out in the headnote, that authority supports her propositions that for there to be a surrender by operation of law there must be a delivery of possession by the tenant and that the tenant can make no valid surrender if the tenant’s spouse remains in occupation of the house. Mr Tanney for the respondents submits that that proposition arrives in the headnote by concession and without argument to the contrary, being derived from two cases decided in 1949 under the common law preceding the Matrimonial Homes Act 1967. (Those cases are Oldgate Estates Limited v Alexander [1950] 1 KB 311 and Middleton v Baldock , which is reported in the same volume at 657.) The concession is recorded in the judgment of Sir David Cairns at page 127 where he said:

“The most significant factor to be considered, however, in my judgment, is whether or not the judge was entitled to hold that the wife remained in occupation despite being physically absent from the house, because it is accepted on behalf of the appellant that, if she did, there can have been no valid surrender: see Oldgate Estates Limited v Alexander and Middleton v Baldock. ”

It is important to emphasise that all three cases considered the position of separated spouses whose matrimonial home prior to separation had been the subject of tenancies controlled by the Rent Acts, under which members of the tenant’s family enjoyed statutory protection, only being subject to eviction in very restricted circumstances. The contractual tenancy in the present appeal was simply a secure tenancy within the meaning of the Housing Act 1985, the effect of which is only to restrict the circumstances in which the landlord may pursue unilateral termination. I conclude that the dicta of Denning LJ in the 1949 cases upon which Miss Smart relies are of no surviving force in relation to a contractual secure tenancy where the rights of the spouses are controlled by the Matrimonial Homes Act 1983. The foundation upon which Denning LJ constructed his opinion was surely the right of the deserted wife to be housed and maintained. In the circumstances of this case a parallel right could hardly be asserted by the appellant. I also conclude that Mr Tanney is right in his submission that the authority of Hoggett v Hoggett , which seemingly supports Miss Smart’s submissions, is distinguishable. Not only was the court there concerned with a Rent Act tenancy but the wide proposition in the headnote is clearly founded on the appellant’s concession which in turn is founded upon the 1949 authorities. Furthermore counsel’s concession was almost inevitably made in the circumstances of that case where there had clearly been neither actual nor ostensible delivery up of possession. The court found the husband’s case to be a sham. Whilst pretending that he had vacated the matrimonial home, in reality he remained in control of it.

So in determining Miss Smart’s submissions it is necessary to go to the statute from which she submits that her client’s rights derive. Indeed in my judgment any right that her client may have to continuing occupation of the maisonette must derive from that provision or from some other provision of family law. Section 1 of the Matrimonial Homes Act 1983 is the relevant provision. It re-enacts the Matrimonial Homes Act 1967 and has in turn itself been re-enacted in the Family Law Act 1996. Section 1(1) provides:

“Where one spouse is entitled to occupy a dwelling house by virtue of a beneficial estate or interest or contract or by virtue of any enactment giving him or her the right to remain in occupation, and the other spouse is not so entitled, then, subject to the provisions of this Act, the spouse not so entitled shall have the following rights (in this Act referred to as ‘rights of occupation’) -

(a) If in occupation, a right not to be evicted or excluded from the dwelling house or any part thereof by the other spouse except with the leave of the court given by an order under this section;”

Miss Smart’s submission is that this enactment is wide enough to protect her client not only from eviction or exclusion by Mrs Campbell but also from the respondent’s otherwise lawful entitlement to possession. She submits that the rights conferred on her client by this section so confined Mrs Campbell’s right to terminate her contractual relationship with the respondents that any purported surrender or termination in order to be effective had to be preceded by application to the court for an order terminating the appellant’s rights under section 1(2)(a) of the statute. She submits that Mrs Campbell’s conduct in purporting to terminate the contractual tenancy at a time when she well knew that her husband continued in occupation constituted a constructive eviction contrary to section 1(1)(a).

Mr Tanney for the respondents makes the simple submission that any rights of occupation that the appellant derives from the statute must be dependent upon the existence of, in this instance, a contractual right of occupation in the other spouse. Therefore the logical development of Miss Smart’s submission would be that Mrs Campbell remains to this day the tenant entitled to occupation and liable for rent despite the surrender effected in 1997. That would be manifestly absurd.

It is perhaps surprising that there appears to be no authority directly on the point raised by the present appeal. However I am of the clear opinion that there is nothing within section 1 of the Matrimonial Homes Act 1983 to restrict Mrs Campbell’s right to terminate her contractual relationship with the respondents and nothing within that section to vest in the appellant indefinite rights of occupation of the former matrimonial home only terminable by an order under section 1(2)(a) or otherwise within the court’s jurisdiction derived from the suit.

The section is plainly intended to operate to regulate the rights of spouses inter se. Although advised by the Tottenham Legal Advice centre in or after November 1996 the appellant neither registered a class F charge nor initiated any proceedings against Mrs Campbell under the Matrimonial Homes Act. He sought no relief against his wife until filing a petition for dissolution on the 24th September 1997, at which date pleadings in the possession action were already closed. We were told by Miss Smart that Mrs Campbell subsequently filed an answer but that the defended proceedings were later compromised. However within those proceedings the appellant has apparently issued an application under section 37 of the Matrimonial Causes Act 1973 to set aside Mrs Campbell’s surrender of the tenancy. I cannot refrain from expressing concern at the extent to which public funds have been committed to sustaining the appellant’s fight to remain in occupation both within these proceedings brought by the respondent and within the proceedings for dissolution.

There remains a subsidiary point in relation to the appellant’s right to register a class F land charge during the subsistence of Mrs Campbell’s tenancy under section 2(1) and section 2(7) of the Land Charges Act 1972. It is common ground, that despite the appellant’s failure to register, the tenancy is kept alive for the purposes of preserving the charge for so long as it would have continued had the tenancy not been surrendered, unless the respondents gave valuable consideration for the surrender. Miss Smart, of course, submits that the respondents did not give valuable consideration. She says that in reality the surrender of a secure tenancy confers a windfall on the landlord. The only release given by the respondents was from the future liability to pay rent which is no more than the effect of the surrender itself. For the purposes of this appeal Mr Tanney does not assert that Mrs Campbell was released from any liabilities accrued or due at the date of surrender. His submission is that surrender is an essentially consensual process under which the parties invariably negotiate the basis upon which their contractual relationship is to end. Since there will in all cases be at a minimum the tenant’s release from the liability to pay future rent, he concedes that on his analysis there is no such thing as a surrender of a contractual tenancy without consideration.

Again I prefer Mr Tanney’s submission. The respondents made it plain that they would not release Mrs Campbell from her continuing liability for the rent of the maisonette unless and until she returned the maisonette to their possession in the manner stipulated. She met her side of the bargain insofar as she was able and to the respondents satisfaction. The release that they thereupon granted was effectively the price that they paid to liberate the maisonette from her tenancy. Mr Tanney responsibly drew our attention to the fact that this conclusion is likely to prove fatal to the appellant’s outstanding application under section 37 of the Matrimonial Causes Act since sub-section (4) of the section removes from the court’s review any disposition made for valuable consideration to a person who, at the time of the disposition, acted in relation to it in good faith and without notice of any intention on the part of the other party to defeat the applicant’s claim for financial relief.

By way of footnote I record that Miss Smart has subsequently sought to raise a new point by lodging with the court after judgment had been reserved a further written submission. She contends that section 2(6) of the Matrimonial Homes Act 1983 ensures that “ the charge created by the appellant’s rights of occupation still exists after surrender and that surrender is subject to the charge”. Were there validity in the submission then it would not have been too late to recognise it. But I am satisfied that there is none. Section 2(6) does not create rights but provides the mechanics by which rights arising from the registration of a charge operate against the landlord.

For all these reasons I would dismiss this appeal.

Lord Justice Potter: I agree.

Order: Appeal dismissed; order nisi against Legal Aid Fund with nil contribution; legal aid taxation; possession 42 days; appellant to pay £4,971.03 for damages and £6.46 per day until date of possession; application for leave to appeal to House of Lords refused; liberty to apply to circuit judge for stay of execution pending determination of petition to House of Lords if not answered prior to date for possession; appellant's counsel undertakes to use due expedition to petition.