Farrell v Alexander

Section 85 of the Rent Act 1968 applies to any person, including an outgoing tenant. The phrase “in addition to the rent” describes the character of the payment, rather than the recipient. An outgoing tenant therefore acts unlawfully by making surrender conditional upon a premium so that the landlord may grant the payer a new protected tenancy. An excessive price for furniture is treated as a premium under section 88, and the unlawful excess is recoverable under section 90.

A consolidation Act should ordinarily be construed as a self-contained enactment. Earlier legislation may be consulted only where the current text presents a real and substantial ambiguity. A penal provision receives a restrictive construction only if genuine doubt remains after full inquiry.

The appellants paid the respondent £4,000, nominally for fixtures and fittings, when replacing her as the protected tenant of a flat. The price substantially exceeded the items’ value. Although the parties initially contemplated an assignment, the landlord required the respondent to surrender her tenancy and simultaneously granted the appellants a new tenancy.

The county court and a majority of the Court of Appeal rejected the appellants’ claim because they considered themselves bound by Zimmerman v Grossman [1972] 1 Q.B. 167. The central issue before the House was whether an outgoing tenant who required and received the excess payment in connection with that surrender and new grant fell within section 85 of the Rent Act 1968, thereby making the excess recoverable under section 90.

1. Disposition. The House allowed the appeal by a majority of four to one. Lord Wilberforce, Viscount Dilhorne, Lord Simon of Glaisdale and Lord Edmund-Davies concluded that the respondent had unlawfully required or received a premium. Lord Russell of Killowen dissented.
2. Construction of section 85. Lord Wilberforce delivered the leading speech. The majority held that “any person” in section 85 of the Rent Act 1968 bears its ordinary, comprehensive meaning. It includes an outgoing tenant who makes surrender of an existing tenancy conditional upon payment so that the landlord may grant the payer a new protected tenancy. The words “in addition to the rent” describe a payment over and above rent; they do not confine the section to a person who receives rent.
3. Premium and recovery. Viscount Dilhorne and Lord Edmund-Davies emphasised that section 88 treated the excess over the reasonable price of the fixtures and fittings as a premium. It was required as a condition of the new grant and received in connection with that grant. Sections 85(1) and 85(2) therefore applied, and section 90(1) entitled the appellants to recover the unlawful excess.
4. Consolidation Acts. Lord Wilberforce, Lord Simon and Lord Edmund-Davies held that a consolidation Act should initially be construed from its own language, context and statutory purpose. Resort to repealed antecedents is appropriate only where a real ambiguity or substantial difficulty remains. The structure of Part VII and the purpose of suppressing capital payments on changes of occupation confirmed the ordinary meaning of section 85.
5. Earlier authorities and penal construction. The majority rejected the landlord-only construction adopted in Zimmerman v Grossman [1972] 1 Q.B. 167. Lord Wilberforce, Viscount Dilhorne and Lord Simon also treated Remmington v Larchin [1921] 3 K.B. 404 adversely, although Lord Edmund-Davies considered that case correct on the materially different 1920 wording. The principle favouring a narrow construction of penal provisions applies only when real doubt remains after full consideration.
6. Order. The case was remitted to the Wandsworth County Court to determine the amount by which £4,000 exceeded the true value of the fixtures and fittings. The appellants were entitled to repayment of that excess and to their costs.

1. House of Lords: By a majority of four to one, allowed the appeal, set aside the result below and remitted the case to the Wandsworth County Court to quantify the recoverable excess.
2. Court of Appeal: By a majority comprising Lawton and Scarman L.JJ., dismissed the appeal because Zimmerman v Grossman [1972] 1 Q.B. 167 was indistinguishable and binding. Lord Denning M.R. dissented.
3. County Court at Wandsworth: His Honour Judge Ifor Lloyd rejected the appellants’ claim because he considered himself bound by Remmington v Larchin [1921] 3 K.B. 404 and Zimmerman v Grossman [1972] 1 Q.B. 167.