Not Bare Licencees

Spielplatz Ltd v Pearson & Anor [2015] EWCA Civ 804

It would be easy to make smutty jokes during this post…and be in no doubt that I will do so! However, that should not detract from what is a pretty key decision in the crucial question of whether a property is sufficiently attached to the land so as to create a tenancy.

This case involved a naturist resort in the St Albans area which was established in the 1930s. I have always assumed nudists in the UK to be seriously hardy folks and particularly so in St Albans! However, that is neither here nor there. Spialplatz were the owners of the resort which was divided into 64 plots which were only available for occupation by members. Originally those plots were occupied by caravans and tents but over time more permanent erections (see what I did there) were desired by residents and so chalet’s were built.

And so it was with Plot 44A. The original tenants of the plot built a wooden chalet in 1975. Originally the planning permission was for occasional occupation only. However, in 1988 a permission for full residential use was purchased from the occupier of Plot 19B and transferred to Plot 44A. The original tenant of Plot 44A died in 1992 and Spielplatz then granted a new tenancy to the Pearsons.

The tenancy demised was expressly for the plot, and not any building on it, for one year with an annual rent payable quarterly in advance. There was a normal forfeiture clause, a prohibition on assignment and parting with possession, an obligation to keep the chalet in good repair and condition and (it being a naturist resort) clauses about sunbathing and when clothes could and could not be worn. I have no idea about those last clauses and how they should be drafted before anyone asks.

Over time the Pearson’s came to use the chalet as a permanent residence. The rent was increased from time to time but it continued as a yearly tenancy on a periodic basis.

From 2008, the Pearson’s commenced work on the chalet and during the next few years they rebuilt and rendered the walls, replaced the roof, and “virtually rebuilt” the whole structure. Spielplatz became increasingly concerned by this and in September 2012 served a 6 month notice to quit.

The judge at first instance found that the Pearson’s had a fully assured tenancy of the chalet, it having commenced in 1992.

At appeal, Spielplatz was primarily arguing that the tenancy was one of the land only and not the dwelling. To hold otherwise was to frustrate the common will of the parties.

There were three main areas of appeal advanced before the Court of Appeal.
The first area was that the first instance judge was wrong to find that the chalet was part of the land. It was not a substantial part of the land at the time the plot was rented to the Pearson’s. The wording of the tenancy as being for a “plot or clearing in the grounds” was the correct interpretation. The chalet was not intended as a permanent home and original grant of planning permission for limited residence made that clear. The object of Spielplatz was to promote naturism and not to provide homes and the chalet was for the better enjoyment of a naturist way of life and not for dwelling in. The Court of Appeal dismissed all of this. It put substantial weight, as it supposed the first instance judge had done, on an experts report which made clear that the original chalet construction was of a permanent character and that the chalet could at no time have been removed from the land in one or two pieces and would have needed to have been broken down to its constituent parts or demolished to remove it.

Spielplatz secondly argued that the chalet was for a holiday let only and was excluded from the Housing Act 1988 accordingly. This was disposed of in a very peremptory manner on the same basis as the first instance judge had. The letting did not restrict occupation and allowed the Pearson’s to occupy all year round. Therefore it was not for holiday purposes. I was going to wax lyrical here on how one does naturism in December but I will save you all from my thoughts on this.

The final point was a new point of appeal which had not been raised in written submissions but which appeared to be the main thrust of the oral argument before the Court. This was that the tenancy should properly be construed as a tenancy for the soil of the plot with a licence to occupy the chalet. Therefore the Pearson’s were bare licensees of the dwelling (I blame the Chief for this one). This would mean that the tenancy was not of a dwelling and so the Housing Act 1988 would not apply, it would also mean that Spielplatz would not be liable for repairs under s11, Landlord & Tenant Act 1985. This is potentially an issue going forward as the works done by the Pearson’s were in part the result of a roof leak which, as their landlord, Spielplatz would probably be liable for. This argument also got short shrift on the basis that there was no evidence of any intention from the parties to carry out what was described as a “bizarre scheme”. The Court, a little harshly, described this argument as “simply a cri de coeur to the court to fashion a legal relationship between Spielplatz and the Pearsons which will be as painless to the former as possible.” This it declined to do.

Appeal Dismissed.

Comment
There are some points to take away here. The most important is the endorsement of the decision in Elitestone that the parties’ subjective intention is not necessarily that important when considering annexation to the land. The fact that the parties did not intend to create an Assured tenancy will not stop the Court filing such a thing if it in fact exists. This is a real point of warning for landlords everywhere.
The second useful point to note is the value to this case of expert evidence on construction. The expert evidence provided here was the point that won the case for the Pearson’s.

About D

D is a solicitor specialising in landlord and tenant matters with a London firm.
Posted in assured-tenancy.

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