Chapman v Freeman
[1978] 3 All ER 878(Decision by: Lord Denning Mr)
Between: Chapman
And: Freeman
Judges:
Lord Denning MrGeoffrey Lane LJ
Eveleigh LJ
Subject References:
Landlord and tenant
Business premises
Occupied for business purposes
Business purposes
Cottage let to hotel proprietor to house hotel staff
Occupation by staff convenient for hotel proprietor's business
No evidence that occupation by staff necessary for proprietor's business
Whether hotel proprietor occupying cottage 'for the purposes of a business carried on by him'
Legislative References:
Landlord and Tenant Act 1954 - s 23(1)
Case References:
Ramsbottom v Snelson - [1948] 1 All ER 201; [1948] 1 KB 473; [1948] LJR 946; 112 JP 160; 46 LGR 139, DC; 31(2) Digest (Reissue) 912, 7554
Bagettes Ltd v G P Estates Co Ltd - [1956] 1 All ER 729; [1956] Ch 290, CA
Hobson v Tulloch - [1898] 1 Ch 424; 67 LJ Ch 205
Lee-Verhulst (Investments) Ltd v Harwood Trust - [1972] 3 All ER 619; [1973] QB 204, CA
Judgment date: 5 May 1978
Decision by:
Lord Denning Mr
This case raises a short point under Part II of the Landlord and Tenant Act 1954, but it is one which is of general application. It concerns an hotel called the Cornish Arms at Pendoggett, St Kew, in Cornwall. It is a small residential hotel with a busy dining room and bars.
Near to the hotel there was a cottage owned by a lady called Mrs Hawken. The proprietor of the hotel took a tenancy of it. They paid Mrs Hawken a rent of £104 a year. They used it to house some of their staff. That was some years ago. In January 1976 Mrs Hawken, the owner of the cottage, died. Her administrator now seeks possession of it. In January 1977 he gave a notice to quit on 10 July 1977. He brought an action against the owner of the hotel requiring possession of the cottage. The owner of the hotel said that that notice to quit was not good. He claimed that he was protected under Part II of the Landlord and Tenant Act 1954 as the cottage was occupied for business purposes. Accordingly he claim that he has a right to have the tenancy continued indefinitely unless it is terminated in accordance with that Act, which it never was.
Section 23(1) of the Landlord and Tenant Act 1954 says:
'Subject to the provisions of this Act, this Part of this Act applies to any tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by him or for those and other purposes.'
The judge held that this cottage came within that definition, so that the administrator of Mrs Hawken could not recover possession. The administrator appeals to this court.
Counsel on behalf of the landlord (that is, now the administrator) has urged that the tenancy does not fall within Part II of the Landlord and Tenant Act 1954. It is conceded that the tenant (that is, the owner of the hotel) does occupy this cottage. He is in control of it. He has his staff there and he does not charge the staff any rent. Several different employees have occupied it, barmen, couples, gardeners, and so forth. At the moment the barman lives there with his wife and their two children. He is the head barman and she assists in the bar delivering the orders. So it is occupied by the tenant. The question is whether it is so occupied 'for the purposes of a business carried on by him or for those and other purposes,'
This raises a very nice question. Illustrations were canvassed in the course of the argument. One of the most interesting was of a barrister who has his business chambers in the Temple but has his residential flat a block or two away. Is he occupying the flat for the purposes of his profession which he carries on in his chambers? The answer is, No. He occupies his flat for his convenience in connection with his profession, but he does not occupy it for the purposes of his profession. Another illustration was where a company sets up a new factory in a town and finds houses for its staff in the neighbourhood. They are not occupied for the purposes of the business which this company is running. They are used for housing purposes.
Those illustrations remind one of the cases we used to have in the old days about service occupations: such as the toll-keeper who had to live in a cottage next to the toll-bridge; or the stockman who had to live in the centre of the stockyard so as to carry out his duties. Those servants occupy for the purposes of the business: see Ramsbottom v Snelson.
Speaking generally, the test is whether it is necessary for the individual to live in the house in order to perform his own particular duties properly; or whether it is just for convenience that he should live there in connection with his duties.
Coming back to our present case, it seems to me that there is no evidence, and was no evidence before the judge, to show that it was necessary for any of the staff to live in this cottage for the better performance of their duties. It is no doubt highly convenient that they should live there, but that is not enough. It would be extending the Act far too widely if it were held that every dwelling-house which the owner of premises took in order to house his staff was held to be a business tenancy. The truth is that it is a dwelling-house simply for the convenience of the person carrying on the business. It is not a business tenancy.
Some point was made because the section does not add after 'business carried on by him [on the premises]' the word 'therein' or 'thereat'. But there is nothing in it.
I would therefore allow the appeal and make the order for possession. The owner of the hotel is not protected as he does not come under the Rent Acts. I would allow the appeal accordingly.