England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BRENTFORD COUNTY COURT
(HIS HONOUR JUDGE OPPENHEIMER)

		Royal Courts of Justice Strand London, WC2
		10 October 2003

1. MR JUSTICE RIMER: This is an appeal against an order made by His Honour Judge Oppenheimer in Brentford County Court on 25 October 2002. The appellant is Mr Johnson McKenzie, who is the first defendant in the action. The respondent is Ealing Family Housing Association Ltd ("Ealing"), the claimant.
2. By his order the judge ordered Mr McKenzie to give possession to Ealing by 30 November 2002 of Flat 2, 53 Kingswood Road, Acton, London W4 ("Flat 2"). Ealing had let Flat 2 to Mr McKenzie's wife, Sharon, on a weekly tenancy under a written tenancy agreement dated 10 April 1997. The tenancy was an assured tenancy within the meaning of the Housing Act 1988. The judge had decided at an earlier hearing that Mr McKenzie was not a joint tenant with his wife although, as a spouse, he was entitled to the rights of occupation and other rights in respect of Flat 2 conferred by Section 30 of the Family Law Act 1996. There is no need for present purposes to go into those rights. It was common ground before the judge that Mr McKenzie would only have a continuing right of occupation if his wife had a continuing tenancy of Flat 2. Ealing's case was that she did not have a continuing tenancy because she had either expressly or impliedly surrendered it to Ealing, and the judge accepted that case and found that she had surrendered her tenancy by operation of law. The issue before this court is whether the judge was right to hold that there had been such a surrender. If he was, the order for possession was correctly made, otherwise it was not. Permission to appeal was granted by Lord Justice Chadwick on 21 July 2003.
3. The judge related in his judgment that Mr McKenzie and his wife had parted on 22 February 2000 when she moved out of Flat 2 and into temporary accommodation elsewhere. It was common ground that initially she wanted Mr McKenzie to leave Flat 2 so that the locks could be changed and she could then occupy it alone. On 7 March 2000, Miss Wilson, an Ealing employee, completed a domestic violence incident form recording Mrs McKenzie's allegations of violence against Mr McKenzie. He denies those allegations and the judge made no finding about them. Mrs McKenzie also told Miss Wilson that Mr McKenzie had told her that he would be moving out of Flat 2 on 17 March. As a result, Ealing made an internal direction that Flat 2's locks were to be changed on 20 March 2000 after which Mrs McKenzie was to be let back in.
4. In fact, Mr McKenzie did not move out of Flat 2 and the plan to change the locks was abandoned. Moreover, at some uncertain point - probably in early March 2000 - Mrs McKenzie told Miss Wilson that she no longer wanted to return to Flat 2 because she was scared that if she did Mr McKenzie would know where to find her. On 7 March, she instead applied to Ealing for a transfer to another property; and Miss Wilson told her that her tenancy of Flat 2 would end and that she would be offered a tenancy of another property.
5. On 7 July 2000, Ealing offered Mrs McKenzie a tenancy of alternative premises at 38 Invicta Grove, Northolt, Middlesex ("No 38"). Miss Wilson's evidence, which the judge appears to have accepted, was that when it made this offer Ealing made it clear to Mrs Mckenzie that, should she accept it, she would have to terminate her tenancy of Flat 2. This was for the obvious reason that it was contrary to Ealing's policy to allow her to have two tenancies of two of its properties at the same time. The offer letter of 7 July indicated that Ealing expected Mrs McKenzie to deliver up possession of Flat 2 in a clean and tenantable condition although Ealing knew that she would not be able to do that since Mr Mckenzie was in occupation. I assume that this part of the letter was in a standard form which Ealing had not tailored to the particular facts.
6. On 11 July 2000, Mrs McKenzie and an Ealing employee signed the tenancy agreement for Mrs McKenzie's new tenancy of No 38. The tenancy was to commence on 17 July 2000. Mrs McKenzie moved into No 38 on 17 July. On that same day she also signed a notice to quit in respect of Flat 2. Miss Wilson had typed the notice and had first explained its effect to Mrs McKenzie. It is in unusual form. It provided as follows:

"I, Mrs Sharon McKenzie, of [No 38] hereby give you notice that I intend to quit and deliver up possession of [Flat 2] now held by me as your tenant on 17 July 2000."

7. Section 5 (1) of the Protection from Eviction Act 1977 provides that a notice to quit premises let as a dwelling will be invalid unless, inter alia, it is given not less than four weeks before the date on which it is to take effect. Ealing conceded before the judge that the notice given by Mrs McKenzie was short and so was invalid as a notice to quit. Their point at the trial was, however, that it manifested an intention by Mrs McKenzie to give up possession immediately and on the same day that she took possession of No 38 and assumed rent obligations under her new tenancy. The evidence that was before the judge, as shown by a rent account, was that as from 17 July 2000 Ealing transferred Mrs McKenzie's rent account to No 38 and ceased to charge her rent for Flat 2, save only that it also transferred certain arrears of rent due in respect of Flat 2 to her new account. In addition, there was evidence before the judge, in the shape of a statement from Dawn Wightman, that from July 2000 Ealing's staff were instructed that Mr McKenzie was to be treated as an illegal occupier. He would only be such if Mrs Mckenzie's tenancy of Flat 2 had come to an end.
8. I infer from paragraph 19 of the judge's judgment that he found that some time afterwards Ealing asked Mrs McKenzie to sign a further and valid notice to quit, it having realised that the notice dated 17 July was short and invalid in the sense that it did not comply with Section 5(1) of the 1977 Act. On 14 September 2000, Miss Wilson wrote to Mrs McKenzie at No 38 saying that Ealing had not yet received the further notice. Rather later, on 30 January 2001, Mrs McKenzie did serve on Ealing a second notice to quit in respect of Flat 2, one dated 22 January 2001 and expiring on 19 February 2001. Ealing conceded that that notice was also short and invalid.
9. Ealing's pleaded case before the judge, following two amendments to it made at the trial, was as follows. Its primary case was that, having left Flat 2 in early 2000, Mrs McKenzie told Ealing that she was no longer intending to occupy it, and it is said that she either expressly or impliedly surrendered the tenancy in consideration of the grant to her of the new tenancy of No 38 created by the agreement of 11 July 2000. Ealing's alternative case was that she surrendered the tenancy by signing the notice to quit dated 17 July 2000. Its yet further alternative case was that she surrendered it by signing the notice to quit dated 22 January 2001.
10. The judge accepted that those alternative cases were all made out. He held that the events of July 2000 resulted in the surrender by Mrs McKenzie to Ealing of her tenancy of Flat 2. He regarded as irrelevant the fact that the notice to quit of 17 July 2000 was invalid. He found that Ealing had made it clear to Mrs McKenzie that if she was to be given a tenancy of No 38 she had to give up her tenancy of Flat 2 and that -

" ... the notice to quit demonstrates quite conclusively, in my judgment, the intention of Sharon McKenzie to quit and deliver up possession of [Flat 2] ... "

He said:

"A clearer intention, in my judgment, cannot be demonstrated, and it was coupled with her going into possession of [No 38] ...on that day, 17 July 2000."

For these reasons the judge found it unnecessary to consider the relevance, if any, of the second notice to quit. But he said that, if he was wrong so far, that notice was -

"prima facie a document that means what it purports to say, and yields an intention which is patent on its face. In the good old days the doctrine used to be, as expressed in Latin, omnia praesumuntur rite esse acta - that things are presumed to have been done correctly unless the contrary is proved."

11. The judge's primary holding was, therefore, that there was a surrender of Flat 2 on 11 July. If he was wrong on that, he held that there was a surrender either on 17 July or 22 January 2001. He said it would be -

"an outrage if Mrs McKenzie still had tenancies of two of Ealing's properties."

If he was right on any of these alternatives it is not disputed that Ealing was entitled to the possession order he made.

12. The issue before this court is whether the judge was correct to find that Mrs McKenzie effected a valid surrender of her tenancy of Flat 2 on any of the alternative dates to which he referred. It is accepted by Miss Stagi for Ealing that there was no express such surrender because an express surrender requires the execution of a deed whereas there was none in this case (see section 52(1) of the Law of Property Act 1925). The question, therefore, is whether there was ever a surrender of the Flat 2 tenancy by operation of law or (which means the same) by way of an implied surrender, section 52(2)(c) of the 1925 Act making clear that section 52(1) has no application to surrenders by operation of law.
13. In Allen and Another v Rochdale Borough Council [2000] Ch 221, at 229, this court referred to the judgment of Parke B in Lyon v Reed (1844) 13 M & W 285, 306 to 307, as setting out the principles by reference to which a tenancy will be regarded as surrendered by operation of law. I will cite the same passage as Morritt LJ cited:

"all the old cases will be found to depend on the principle to which we have adverted, namely, an act done by or to the owner of a particular estate, the validity of which he is estopped from disputing, and which could not have been done if the particular estate continued to exist. The law there says that the act itself amounts to a surrender. In such case it will be observed there can be no question of intention. The surrender is not the result of intention. It takes place independently and even in spite of intention. Thus, in the cases which we have adverted to of a lessee taking a second lease from the lessor, or a tenant for life accepting a feoffment from the party in remainder, or a lessee accepting a rent-charge from his lessor, it would not at all alter the case to show that there was no intention to surrender the particular estate, or even that there was an express intention to keep it unsurrendered. In all these cases the surrender would be the act of the law, and would prevail in spite of the intention of the parties."

14. The essence of surrender by operation of law is thus dependent not on the parties' intention but on whether their acts give rise to an estoppel sufficient to prevent the assertion by either of them that the term of the tenancy had continued. In particular, a surrender cannot be effected by a mere oral agreement. As Lord Justice Brett said in Oastler v Henderson (1877) 2 QBD 575, 579:

"There can be no estoppel by mere verbal agreement; there must be in addition to such agreement some act done which is inconsistent with the continuance of the lease. If after the agreement the landlord actually takes possession or does what virtually amounts to it, if he not only attempts to let, but actually does let, then there is a palpable act done with regard to the premises raising an estoppel~..."

15. The acts giving rise to such an estoppel will most commonly be the giving up by the tenant and the taking by the landlord of possession of the premises, although the estoppel may be created by other acts inconsistent with the continuance of the tenancy. A familiar example is the grant by the landlord and acceptance by the tenant of a new lease of the demised premises for a term commencing during the currency of the existing term. There would be an implied surrender of the current term in such a case because the landlord would have no estate enabling him to grant the new term unless the current term is regarded as having been impliedly surrendered immediately before the grant of the new one. I will also refer later to cases on which Miss Stagi, particularly relies which show that there can be an implied surrender even in cases in which the tenant has attempted, but has been unable, to yield up vacant possession to the landlord. I turn now to the judge's conclusions for finding that an implied surrender took place on 11 July, alternatively 17 July 2000, alternatively 22 January 2001.

11 July 2000

16. The material events that had happened by the end of 11 July were (1) Mrs McKenzie moving out of Flat 2 and her statement to Ealing that she had no intention of resuming occupation of it, (2) Ealing's offer to Mrs McKenzie on 7 July of a tenancy at No 38, one accompanied, according to the judge's findings, by a statement that if she accepted it she would have to terminate her tenancy at Flat 2, and (3) the signing on 11 July by Ealing and Mrs McKenzie of the new tenancy agreement of No 38.
17. I do not accept that these events can have effected an implied surrender of Mrs McKenzie's tenancy of Flat 2. Mrs Mckenzie did not give up possession of Flat 2 to Ealing on 11 July 2000 and nor could she. It was still occupied by Mr McKenzie. There is no evidence that she even did so much as to give Ealing any keys she may still have had to Flat 2. Nor did she do anything else on 11 July pointing to the giving up by her of the tenancy on that day. The most that can be said about the events of 11 July is that there was an implied, or perhaps even an express, oral agreement between Mrs McKenzie and Ealing that, in consideration of a grant of the new tenancy of No 38, she would terminate her current tenancy of Flat 2. But any such agreement - being one for the disposition of the interest in land that Mrs McKenzie had in Flat 2 - would have been void as failing to satisfy the writing requirements of Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989.
18. Moreover it is, in my view, anyway impossible for either Ealing or Mrs McKenzie to suggest there was any surrender on 11 July because after that day Miss Wilson prepared a notice to quit for Flat 2 for Mrs McKenzie to sign, which Mrs McKenzie signed on 17 July. The notice expressly recited that as at 17 July Mrs McKenzie was still the tenant of Flat 2 and so neither she nor Ealing can have been working on the basis that she had impliedly surrendered the tenancy six days earlier. Even though the notice to quit was invalid, the only possible inference is that it was given and accepted by both sides on the basis that immediately before it was given Mrs McKenzie's tenancy of Flat 2 was still continuing, and the whole point of the notice was to bring the tenancy to an immediate end. In my judgment the judge was therefore in error in finding that there was an implied surrender on 11 July. He identified no evidence of any unequivocal act by anyone on or before that date as a result of which either side became estopped from asserting a continuance of the Flat 2 tenancy.

17 July 2000

19. This was the judge's first alternative. This was the day on which Mrs McKenzie entered into possession of No 38 under the tenancy agreement she had signed on 11 July and on which she also signed the notice to quit Flat 2 on the same day. At the trial, Ealing conceded that the notice was short and so invalid as failing to comply with Section 5(1) of the 1977 Act. The decision of this court in Hackney London Borough Council v Snowden (2001) 3 L & TR 60 shows that it was open to Ealing to accept short notice to quit and so waive the short notice. But there is no suggestion that Ealing advanced a positive case to this effect at the trial and the judge made no finding to such effect. He recorded the concession that the notice was invalid but said that the invalidity was irrelevant. This was because Ealing had made clear to Mrs McKenzie that if she was to get No 38 she had to give up Flat 2 and because - so he held - the notice demonstrated conclusively Mrs McKenzie's intention to quit and deliver up possession of Flat 2. In those circumstances the judge found that there was an implied surrender on 17 July.
20. With respect to the judge, I cannot agree that the reasoning he advanced in support of there being an implied surrender was by itself sufficient to make good the conclusion to which he came. But there were other matters in evidence before him, to which he made no express reference in his judgment, which appear to me to be directly supportive of that conclusion. In particular, there was the evidence that as from 17 July 2000 Ealing terminated Mrs McKenzie's rent account for Flat 2 and opened a new one for her in respect of No 38. In addition, Ealing gave instructions to its staff to treat Mr McKenzie as an illegal occupier. Both facts appear to me to point unequivocally to the inference that as from 17 July 2000 Ealing was accepting that Mrs McKenzie's tenancy of Flat 2 had been terminated. Her notice to quit was an act by her performed at Ealing's request manifesting an intention to terminate the tenancy immediately and on the same day as she was assuming new obligations to Ealing in respect of No 38; and Ealing's acts in response were acts manifesting unequivocally its acceptance that the tenancy was at an end.
21. Mr Hutchings, for Mr McKenzie, made some legitimate complaint that reliance on these latter matters had not been pleaded, and he is right. But they were all in evidence and at least the point about the transfer of the rent account was expressly flagged up in Miss Stagi's skeleton argument before the trial. So I cannot see that the judge could not and should not have taken account of these matters in coming to his decision even though he did not do so expressly in his judgment. Nor can I see that this court cannot or should not take account of these matters either.
22. In my judgment, the inference is that, as from 17 July 2000, both sides were conducting themselves on the basis that the tenancy had terminated; and the evidence of those events entitled the judge to find, as he did, that there was an implied surrender on 17 July 2000.

22 January 2001

23. This was the date of the second notice to quit which was belatedly served on 30 January 2001 by Mrs McKenzie in response to Ealing's request to her during the previous summer to serve a further notice. The judge relied on this as his second alternative, but for reasons given I take the view that the proper inference is that there had been a surrender on 17 July and that the subsequent events are therefore immaterial. In particular, as Miss Stagi submitted, they could not have operated to revive a surrendered tenancy. Mr Hutchings, however, places reliance on the request by Ealing for a second notice to quit as supporting a conclusion that Ealing's attitude to the status of the Flat 2 tenancy was equivocal and points against a conclusion that there had been a surrender on 17 July.
24. For my part, I do not accept that the facts such as we know them to be relating to the request for and the giving of the second notice are sufficiently equivocal to undermine the conclusion that there had been a previous surrender. There is no evidence as to when Miss Wilson began to have her second thoughts about the first notice to quit. But in my view the arising of those thoughts, whenever it was, cannot cause any real doubt to be cast on the inference from the events on and immediately after 17 July, which I consider point unequivocally to an inference that both sides regarded the tenancy as at an end. Despite its second thoughts, Ealing at no time suggested that Mrs McKenzie should be paying rent for Flat 2. In my judgment, the proper weight to be attached to the request for and the giving of further notice to quit was that it was essentially no more than in the nature of a belt and braces exercise.
25. In support of the judge's decision, Miss Stagi relied on two authorities which she said were indistinguishable. The first was London Borough of Brent v Sharma and Vyas (1992) 25 HLR 257. Like the present case, it concerned the grant of a tenancy of a flat to a woman, Miss Vyas, which she occupied with a man, Mr Sharma, who in 1989 became her husband. Miss Vyas left the flat in 1987, leaving him in occupation. She moved to Milton Keynes where she was given the tenancy of a council house. In November 1988, she wrote to the London Borough of Brent, the landlord of the flat, to say that she was no longer sharing with Mr Sharma, that she had moved out and had no objection to the transfer of the flat into his name. Following receipt of that notice and with effect from 12 December 1988, Brent no longer debited any rent to Miss Vyas in respect of the flat. On 16 December 1988, Brent posted a notice to quit through the letter box of the flat requiring Miss Vyas to give up possession on 16 January 1989. The judge held that the notice was invalid as never having been properly served on Miss Vyas. She continued to live in Milton Keynes until September 1989. Mr Sharma continued to occupy the flat. Brent never transferred the tenancy to him and never treated him as a tenant.
26. Brent took proceedings for possession against both Miss Vyas and Mr Sharma on 14 September 1989. The judge made an order for possession, taking the view that Miss Vyas' notice of November 1988 was an unequivocal act by her and evincing an intention to surrender the tenancy, which he held had been accepted by Brent. The judge relied on the fact that Brent's internal records showed that they no longer debited any rent to Miss Vyas. He therefore made the possession order.
27. The defendants appealed, arguing that there was no evidence of any unequivocal act by Brent showing that it had accepted that there was no longer a continuing tenancy and that Brent's service of the notice to quit in December 1988 showed that it regarded the tenancy as then still continuing. This court dismissed the appeal. The basis on which it did so is, in my view, succinctly shown by Lord Justice Scott's judgment. He said that Miss Vyas' conduct in leaving the flat, moving to Milton Keynes and living there with her two children and sending her November 1988 notice to Brent amounted to unequivocal representations that she was treating her tenancy of the flat as at an end. Lord Justice Scott said this at page 260:

"Of course, unilateral conduct by one of the parties to a tenancy cannot by itself bring to an end the tenancy. Surrender by operation of law requires unequivocal conduct by both landlord and tenant. The landlord council, it seems, was not entirely clear as to the legal effect of the conduct of Miss Vyas. So the council did three things. On December 19, 1988, it ceased to charge rent as from December 12, 1988; thereafter no rent was charged to Miss Vyas in respect of the tenancy at 33, Donovan Court. Second, the council served a document, purporting to be a notice to quit, terminating the tenancy as at the end of January 1989; and, third, by any number of internal memoranda, the council showed that it regarded Miss Vyas's tenancy of 33, Donovan Court as having come to an end. I refer, in particular, to the comments describing the occupation of Mr Sharma, who had been living with Miss Vyas at 33, Donovan Court, as in 'unlawful occupation'.

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."

28. I would, with respect, not go all the way with Miss Stagi in regarding that case as indistinguishable from the present one since there are certain obvious differences as to the facts. One relevant difference between the facts of that case and this one is that Miss Vyas was not being re-housed in her new accommodation by Brent. In this case it is an important factor that Mrs McKenzie was being given a transfer from Flat 2 to No 38 against a background of Ealing's policy that it would not allow her to have two tenancies at the same time.
29. In my view, however, the approach of this court to the problem with which it was faced in that case provides a helpful guidance as to how this case should be disposed of. The court made clear that it is necessary to have regard to the totality of the evidence, and I refer in this respect to what Lord Justice Stuart said at page 260:

"In my judgment the combination of no longer charging rent to the tenant, the service of the notice to quit - which, as my Lord in the course of argument said, was really a belt and braces effort by the council, but which clearly showed that from the expiration of the notice they were treating the tenancy as at an end - coupled with the fact that for months the tenant, to their knowledge, was not in possession or occupation of the premises and the fact that they did not demand any rent during that period, is really overwhelming evidence that they were showing by their conduct that the tenancy no longer existed."

30. Of particular importance for present purposes is that that case shows it is not essential to the effecting of a valid surrender by operation of law that the tenant must actually give up possession to the landlord. It may be sufficient if the tenant does all that he can do to indicate his abandonment of the tenancy provided that the landlord then so conducts himself as to show that he is accepting that the tenancy has been abandoned.
31. The other case to which Miss Stagi referred us which also supports this last point, is Sanctuary Housing Association v Campbell [1999] 1 WLR 1279. In that case the claimant had granted a secure weekly tenancy of a maisonette to Mrs Campbell, which she occupied with her husband and children. Mrs Campbell then left the maisonette, leaving the husband in occupation. The husband made a proposal to the claimant whose substance was that he should be given the tenancy of the maisonette, but the claimant refused, saying that once Mrs Campbell was re-housed it would require vacant possession. Mrs Campbell was re-housed, although not by the claimant, and she then wrote to the claimant saying that she was giving up the maisonette and asking what she should do with the keys. The claimant's response was that she must empty the maisonette of her possessions before returning the keys and that until such times as the keys were returned she would be liable for the rent. Her response was that she could not do this because her husband remained in possession and had changed the locks. She enclosed her own keys with her letter. She asked to be given the opportunity to remove her own possessions from the maisonette once her husband had vacated it, following which the claimant wrote to the husband asking him to leave. He did not, and so two months later the claimant sued him for possession. The judge held that on those facts there had been an implied surrender of the wife's tenancy to the claimant, a decision which this court upheld on appeal. Lord Justice Thorpe referred to Lord Justice Scott's judgment in Sharma and said there was nothing equivocal about the claimant's and the wife's acts and that they showed there had been an implied surrender. I respectfully agree. Mrs Campbell had evinced a clear intention to surrender her tenancy by giving up her keys to the claimant. She did not give it vacant possession because she could not. But she had done all that she could to manifest her intention to surrender the tenancy. The claimant had the option of declining to accept any surrender but it instead unequivocally indicated its acceptance by promptly asking the husband to go, an action consistent only with a recognition by the claimant that the tenancy was at an end. The events of and surrounding 17 July 2000 in the present case, which I regard as supporting the judge's conclusion that there was an implied surrender, are not in my view very different in substance from what happened in Sanctuary Housing Association.
32. In these circumstances while, with respect, I am not convinced that in his judgment the judge identified a sound basis for his conclusion that there had been an implied surrender, I am satisfied that on the whole of the evidence before him he could and should have come to the conclusion that he did, that there was an implied surrender on 17 July 2000. As Lord Justice Scott said in Sharma:

"If both tenant and landlord are unequivocally treating a tenancy as at an end the law has no business to insist on its continuance."

33. I would dismiss the appeal.
34. LORD JUSTICE CLARKE: I agree.
35. LORD JUSTICE MANTELL: I also agree.

Order: Appeal dismissed with costs.