This post is my Christmas gift to land law students everywhere in the UK. It is a discussion of the very important Court of Appeal decision in Watts v Stewart [2016] EWCA Civ 1247, which concerned whether charitable providers of accommodation (in this case, almshouses, but, in principle, the issue in the case is broader) are exceptions to the Street v Mountford mantra that exclusive possession for a fixed term at a rent = tenancy. This point was argued for Ms Watts by Mark Wonnacott QC (who argued successfully for the tenant in Mexfield Housing Co-Op v Berrisford), whose The History of Landlord and Tenant should have been on everybody’s Santa list. There is also the question of whether there was Article 14 discrimination against Ms Watt’s right to respect for her home because of the lack of security of tenure given to almshouse occupiers.
The charitable trust’s scheme provided that residents of the almshouses “… shall be poor single women of not less than 50 years of age who are inhabitants of the area of the ancient parish of Ashtead with a preference for such women who have been employed in domestic service”. By a letter of appointment from the trustees, Ms Watts took one of the properties as a beneficiary. The letter was, however, less than clear in that it variously described her as a beneficiary and tenant, and the weekly fee as rent. There was a mobility clause, entitling the trustees to move Ms Watts to other almshouse accommodation. The trustees retained the power to set aside Ms Watts’ appointment for good cause. The trustees served notice to quit following anti-social conduct by Ms Watts. The question for the court was whether that notice was valid or not.
The provision of almshouse accommodation has been held to create the relationship of trustee-beneficiary, not landlord and tenant. It is an exception to the Street v Mountford rule that an occupier with exclusive possession has a tenancy because, as Sir John Vinelott put it in Gray v Taylor [1998] 1 WLR 1093: “The trustees have power to permit – indeed, are under a duty to permit – a selected almsperson to occupy rooms in the almshouse. There is no need to resort to a tenancy to explain the almsperson’s right to exclusive possession of the rooms; and, inasmuch as the grant of a tenancy might obstruct or fetter the performance by the trustees of their duty to provide accommodation for deserving persons, it would be wrong for them to grant a tenancy”. Probably, rather than being an exception to the rule in Street, the relationship reflects simply a different intention.
Mark Wonnacott argued that this line of authority was per incuriam and Lord Templeman was “plainly wrong” in Street to uphold it. His argument was that there is a line of authority, of which Earl of Pomfret v Lord Windsor (1752) 2 Ves Sen 472 (28 ER 302) provides an example, in which a beneficiary goes into occupation as a tenant at will; a beneficiary who goes into occupation as a tenant at will and pays rent on a periodic basis becomes a periodic tenant.
Sir Terence Etherton MR gave the judgment of the court. He played a straight bat in answer to these arguments. Ms Watts was not granted exclusive possession but exclusive occupation. The labels and terms used by the trustees in the appointment letter did not determine the relationship (cue Lord Templeman’s fork analogy): “It turns on the intention of the parties having regard to all the admissible evidence”. And, in this case, a tenancy was not the intention of the trustees:
The Trustees could only properly discharge the trusts of the Charity, which limited its objects to those in need, hardship or distress, if a personal revocable licence was granted (which could be revoked if, for example, the occupier no longer became qualified under the Scheme because they became wealthy).
On the tenancy at will argument, the court did not accept that proposition, arguing that the status of an occupier beneficiary depended on the terms on which the occupation was granted. It is clear that a beneficiary might be granted a tenancy of the property but that is not the case of almshouse occupiers. I’ve also read the Earl of Pomfret case and would suggest that it does not actually go beyond that proposition either. It is not particularly well reported and factually rather complicated but it does not suggest to me that a beneficiary who enters into occupation of property always does so as tenant at will, although clearly they can. So, although I see Gray v Taylor and this case as perpetuating a kind of Elizabethan and Victorian paternalism, I am not sure whether that attack was going to succeed. It was the only way it was possibly going to succeed before the Court of Appeal, to be sure, and it will be interesting to see how the argument might develop before the UKSC (presumably Ms Watts is seeking PTA).
On the Article 14/Article 8 argument, Ms Watts was slightly hamstrung by a concession made in the County Court that the trustees were not a public authority. Although Ms Watts sought to withdraw that concession in the Court of Appeal, the court held that this was a mixed question of fact and law, and so it was not appropriate to reopen the issue. Nevertheless, the court held that it was “unclear on the authorities” whether Article 8 was engaged in this horizontal dispute and proceeded on the assumption that it was. The next question was whether Ms Watts had “other status” as an almshouse beneficiary so as to bring herself within Article 14. The court again assumed that being an almsperson was an “other status”, although it strongly doubted whether that assumption was correct (see in particular [83]). These lengthy discussions are likely to be important points of reference in the future, but the killer point for the Court of Appeal was that it was proportionate for almspersons to be treated differently, given the wide margin of appreciation afforded to states in this area. Substantively, the court said:
In the context of almshouses the exclusion of security of tenure for almspersons has been in place for many years. Parliament has not required the grant of assured shorthold tenancies to almspersons. … We consider on the basis of the material before us that not only is this the correct characterisation as a matter of domestic law but it also fairly balances the competing interests of the Charity and the resident in a manner which would not be achievable if residents had the status of tenants. In the present case the Scheme, approved by the Charity Commission, under which the Charity is required to operate provides, inter alia, that the residents in the almshouses belonging to the Charity shall be poor single women of not less than 50 years of age. If the almspersons were entitled to security of tenure this would be inconsistent with the performance by the Trustees of their duties under the Scheme because it would be impossible to ensure that only qualifying persons occupied the almshouses. In terms of HRA 1998, which came into force in 2000 after the decision in Gray v. Taylor, the denial of security of tenure to almspersons is clearly justifiable as a proportionate measure which secures a fair balance between the interests of charities and current and future almspersons.
There was another argument about the scope of the charity to bring the action but that was easily disposed of by the court.
All-in-all, this will be an interesting matter to follow as it wends its way presumably to the UKSC.