Smith v Khan (2018) EWCA Civ 1137

Well! It is not often that an illegal eviction case gets to the Court of Appeal, let alone on the tenant’s appeal. But that is what we have here. There are some useful bits along the way, the correction of some errant views in the lower courts, and in the end a less than hugely helpful assessment, which I have some doubts about.

Mrs S was the wife of Mr S, married in 2011. (Mrs S had leave to remain in the UK but no recourse to public funds, just to explain some odd bits along the way). In June 2014, Mr S took an assured shorthold tenancy of a flat from Mr K, the landlord for a 12 month term. The rent was paid from Mr S’ housing benefit.

In March 2015, Mr S benefits were stopped, without initially telling Mrs S, he left for Scotland, apparently for a plastering job to get money for rent. On 1 April 2015, Mr K handed Mrs S a letter purporting to give Mr S notice to terminate the tenancy. A housing advice centre wrote to Mr K, pointing out, entirely correctly, that the notice was invalid and unenforceable and that, via s.30 Family Law Act 1996, Mrs S had a legal right to occupation of the property (occupation by a spouse continues the residence of the tenant, even if tenant is not residing there at that time).

Mr K was not deterred. While Mrs S was visiting the housing benefit office to see if she could claim, Mr K changed the locks. Mrs S contacted the local authority, who (being rubbish) told her she had no entitlement to assistance because no recourse to public funds and she was not in priority need. (Apparently no attempt to get TROs involved.) Mrs S ended up sleeping on a friend’s floor, for many months.

In April 2015, now represented, Mrs S sought re-entry. Mr K said Mrs S was a trespasser and refused. A claim was issued. An initial order for re-entry for Mrs S founded when it emerged that mr K had re-let the property. At the end of June 2015, Mr K did hand over Mrs S belongings, which,having been stored in bin bags in a basement, were largely ruined by damp.

The claim proceeded for damages. Mr K argued that Mr S had abandoned the property and must be taken to have surrendered the tenancy. He also denied that the property was Mrs S marital home or that the marriage continued. Indeed, the marriage was, he said, a sham and she was making a false claim. Mr S had left only rubbish behind and Mrs S had collected her belongings.

This, unsurprisingly did not go well for Mr K. The first instance court held the marriage subsisted, s.30(4)(b) FLA 1996 meant Mrs S occupation was to be treated as that of her husband, the tenant. There was no surrender. Mr K had not obtained a possession order, so the eviction was unlawful.

Damages were awarded – Aggravated damages of £1500 for injury to feelings, exemplary damages of £1200, damages for harassment of £500 and special damages of £1000. The contentious element was the damages for trespass.

Mrs Smith sought a rate of £220 per night by way of general damages but the judge awarded her £40 per night by reference to the amount of rent payable (£9.86 per day) with an uplift to take account of what she described as Mr Khan’s flagrant disregard of the law and the consequences which it had for Mrs Smith. In the order made on 14 December 2015 Mrs Smith was therefore awarded a total of £14,773.37 (which figure in fact comprised a miscalculation, as subsequently noted by HH Judge Robert Owen QC) together with her costs. The damages for trespass covered the period from the unlawful eviction until the date of judgment on the basis that the tenancy either was continuing or would have continued until then had Mr Khan not acted unlawfully.

Mrs S appealed against the level of award of damages for trespass and exemplary damages. Only the appeal on trespass damages was given permission. On appeal, Mrs S argued a) that the earliest Mr K could have obtained possession was at expiry of the fixed term in June 2015 (the tenancy agreement did not provide for Schedule 2 grounds) which in practice, after notice, meant October 2015. On the ‘daily rate’ of damages, she argued:

Damages for trespass in unlawful eviction cases are now routinely assessed on the basis of a daily rate by reference to all the circumstances of the case including the ability of the claimant to find alternative accommodation and any other aggravating features. The skeleton argument filed on behalf of Mrs Smith refers to decided cases in which the range of awards has been in the region of £150-£200 per day but it has sometimes been more. The District Judge’s award was therefore, it was said, considerably out of line and it was wrong of her to have reduced the award to £40 per day by reference to the rent payable under the existing tenancy. The award is intended to compensate Mrs Smith for being left homeless.

Initially

The judge gave an ex tempore judgment allowing Mrs Smith’s appeal on the basis that the District Judge had erred in assessing the daily rate of damages for trespass. He held that the correct rate was £130 per day and that there was no basis for interfering with the period in respect of which damages had been awarded.

But then the CJ ‘recalled’ his judgment on the basis that the period for damages should actually only be 76 days (to 30 June 2015) not 232 days, as 30 June was the longest the tenancy could have continued had it been lawfully terminated by Mr K. Damages for trespass of £9880 and written judgment to follow. Mrs S requested a further hearing, and after that the CJ maintained that damages would only be awarded to the date by which Mr K could lawfully have obtained possession, but, despite there being no cross appeal by Mr K, the CJ then went on to find that

the tenancy had been surrendered with effect from 15 April 2015 after Mr Smith had disappeared off to Scotland and Mr Khan had served his notice to quit. Although Mrs Smith had been unlawfully evicted, her only protection was under s.3 of the Protection from Eviction Act 1977 and in those circumstances the correct period for the purpose of calculating damages was 28 days from 15 April.

This was apparently on the basis that Mr S leaving amounted to implied abandonment or surrender, which was accepted by Mr K’s ‘amateurish’ notice to quit. Mrs S had not sought an injunction under s.33(3) to protect her right of occupation.

Damages of £3640 awarded and no order for costs as this was a reduction in the damages award.

(Before we get to the court of appeal, may I just say oh dear, oh dear, oh dear).

Mrs S, unsurprisingly, brought a second appeal.

Mrs S grounds were:

(1) that on the facts as found by the District Judge there had been no implied surrender of the tenancy; (2) that the judge was wrong to limit damages to the 28 days’ notice required under the Protection from Eviction Act 1977. Damages were payable up to when the landlord could lawfully have obtained possession under a court order which in this case would have taken a number of months not least because the landlord had not registered the tenant’s deposit and would have had to return it before commencing proceedings; and (3) that the hearing before Judge Owen was procedurally unfair because it was determined on the basis of an argument that neither party had relied on and which was not the subject of any cross appeal by Mr Khan.

Mr K cross appealed against the award of £130 per day rather than £40 per day.

The Court of Appeal deals with the basis of the claim simply. Mr S had an assured shorthold tenancy, That could not be ended during the fixed term other than by s.8 HA 1988 and Schedule 2 ground. Or, by service of a s.21 notice expiring after the end of the fixed term. Mr K pursued neither.  Mrs S occupation of the property during her marriage was treated as occupation by Mr S by way of Housing Act 1988.

On surrender, there was no express surrender by Mr S and there was no ‘unequivocal’ demonstration by Mr S that he wished to give up the tenancy before Mr K’s purported notice. In any event, the issue of surrender had not been raised on the first appeal. The CJ was wrong to assess damages on the basis that there had been a surrender.

On damages..

In the particulars of claim Mrs S has sought damages for trespass; statutory damages for eviction under s.27 HA 1988; damages for trespass to goods and damages for harassment. She also sought and obtained awards of aggravated and exemplary damages. But the appeal was concerned with general damages for trespass, rate and period.

Period
Damages had been sought in the alternative in trespass and under Housing Act 1988 s.27 and s.28. There could be no double recovery under both. s.27 damages, moreover, are in the alternative to reinstatement – s.27(6). S.27/s.28 damages are restitutionary.

Damages for trespass are not restitutionary.

They are payable to compensate the displaced tenant or anyone who has a right to possession of the property in question for the unlawful occupation of that property by the trespasser. They continue to be payable throughout the period during which the claimant’s right to possession subsists and they are not therefore inconsistent with the pursuit in the same proceedings of a claim for an injunction to re-instate the tenant or rightful owner to possession of their property. If such an order is made then damages will be payable up to the date when possession is restored.

But where the claim for being re-instated is abandoned, the period would be so long as the right to possession actually subsists. The date therefore is the earliest point in time at which the landlord could have lawfully terminated the right of occupation.

(There is some oddness, not really explained, about Mr K possibly having a right to terminate the tenancy by 28 day notice under the tenancy agreement.. This seems to me to be wrong, but nothing turns on it here.)

The tenancy would have subsisted to the end of the fixed term – 30 June 2015. Mr S played no part as claimant in the unlawful eviction claim. Mrs S had obtained an order for reinstatement on 18 May but did not to seek to enforce it

It appears that Mr Khan took steps to re-let the Property on 14 May 2015 after he was served with the application for a re-instatement order. But the fact is that Mrs Smith accepted this state of affairs and continued with her claim only in respect of damages.

The tenancy could not have come to an end after 30 June 2015 merely by reason of Mr S no longer being in physical occupation, as his absence was made good by Mrs S’s occupation by s.30(4)(b) Family Law Act 1996 and Housing Act 1988.

However, by 30 June 2015, neither Mr or Mrs S were in physical occupation of the property. Mr K could not rely on his unlawful exclusion of Mrs S as cesser of occupation by Mrs S, the position was different once Mrs S had elected to no longer pursue her claim for reinstatement. She had collected her belongings by 30 June and made no further attempt to retain possession of the property.

On that basis the tenancy could not be regarded as having continued after 30 June 2015 and the tenancy came to an end on 30 June 2015 at the end of the contractual term.

The CJ was wrong to award only for 28 days. The claim was not for a breach of section 3 of the Protection from Eviction Act because that did not create a statutory cause of action. It merely confirms that the eviction was unlawful. The unlawfulness of the removal founded the claim in trespass, so damages up to the end of the tenancy – 30 June 2015.

However, the DJ had also been wrong to award damages up to December 2015, as there was no right to occupy the property after 30 June. Appeal against the order of the CJ allowed.

Daily Rate

The appeal by Mrs Smith to Judge Owen succeeded on the basis that the District Judge had been in error in basing the amount awarded on the contractual rent under the tenancy. She had rejected Ms Cafferkey’s suggested figure of £220 per night as excessive compared with a daily rate of £9.86 under the tenancy and had used the current rent as a cross-check in accordance with the guidance given by this court in Wallace v Manchester City Council [1998] 30 HLR 1111 which concerned the award of damages for breach of a covenant of repair. In that case the court said that damages for breach of the duty to repair were intended to place a monetary value on the discomfort and inconvenience suffered by the tenant. It was helpful when making a global assessment to cross-check the award with the rent that the tenant was paying for his occupation of the premises during the period of the breach.

But damages for trespass in unlawful eviction are to compensate the tenant not merely for the letting value of the property, but also for the anxiety, inconvenience and mental stress involved in being deprived of their home. Recent county court decisions show awards between £100 and £300 per night. The CJ had been right to find that the DJ’s award of £40 per night was out of line with the current ‘tariff’ for this kind of award.

Each case turns on its own facts, but there was no particular reason to interfere with the CJ’s award of £130 per night.

Cross appeal by Mr K dismissed. Damages for trespass awarded at £9,880, plus the £4,200 previously awarded for aggravated, exemplary and special damages and damages for harassment.

Comment

While the Court of Appeal finding on the ‘daily rate’ is welcome (and before anyone for illegally evicting landlords starts citing £130 per day as ‘the tariff’ note that no criticism is expressed of the range of £100-£300 in other county court decisions), I have some considerable concerns here.

While it is true that claiming s.27/28 Housing Act 1988 damages and being re-instated is incompatible, I don’t think that claiming s.27 damages is prevented simply by seeking and obtaining an order for reinstatement.

S.27(6) states

No liability shall arise by virtue of subsection (3) above if—

(a) before the date on which proceedings to enforce the liability are finally disposed of, the former residential occupier is reinstated in the premises in question in such circumstances that he becomes again the residential occupier of them; or

(b) at the request of the former residential occupier, a court makes an order (whether in the nature of an injunction or otherwise) as a result of which he is reinstated as mentioned in paragraph (a) above;

What prevents liability is reinstatement, not just an order for it.

Where, as here, reinstatement is effectively prevented by a re-let of the property by the landlord (after all, the landlord could not lawfully evict the new tenant in order to re-instate the unlawfully evicted one), s.27(6)(b) has not actually been fulfilled.

Secondly, and related, I think the calculation of the ‘end date’ of the tenancy is flawed. The landlord has frustrated the reinstatement and therefore benefits by the tenancy being limited to the expiry of the contractual term. The Court of Appeal’s suggestion that Mrs S had ‘elected not to enforce’ the order for reinstatement seems to me to take no account whatsoever of the actual position where the landlord has (deliberately) re-let the property and what ‘enforcing’ the order for reinstatement would actually mean (or not mean) in those circumstances.

Still, in the meantime, this present some stark decisions to those advising people who have been unlawfully evicted – decisions on whether or not to seek reinstatement, and the consequences of that.