Gray v Taylor

Exclusive possession of residential accommodation does not invariably create a tenancy. The surrounding circumstances may show that possession is referable to another legal relationship.

An almsperson occupies charitable accommodation as a beneficiary under the relationship between trustee and beneficiary. A contribution towards maintenance and essential services is not rent where it meets costs borne by the trustees. The occupation therefore falls outside an assured tenancy under section 1 of the Housing Act 1988.

The trustees’ powers and duties under the governing charitable scheme inform the character of the arrangement. A tenancy should not be inferred where it could obstruct the trustees’ duty to reserve accommodation for qualified beneficiaries.

The trustees of an almshouse charity appointed the appellant as an almsperson and permitted her to occupy a flat. After deciding that her behaviour was vexatious and disturbed the quiet occupation of the almshouse, they set aside her appointment and sought possession.

The appellant contended that she was an assured tenant under section 1 of the Housing Act 1988. Alternatively, she claimed the protection afforded to a licensee by the charity’s scheme. His Honour Judge Morrell, sitting in the Peterborough County Court, determined as a preliminary issue that she was not an assured tenant.

The central issue on appeal was whether exclusive possession coupled with a weekly contribution towards maintenance and services made the appellant a tenant, or whether her occupation was attributable to her status as a beneficiary of the charity.

1. Appeal dismissed unanimously. Sir John Vinelott, delivering the leading judgment, held that the appellant occupied the flat as a beneficiary under the charity’s trusts rather than as a tenant. Lord Justice Mummery agreed with his reasons. Lord Justice Nourse agreed and gave additional reasons.

2. The general reasoning in Street v Mountford [1985] 1 AC 809 did not make every occupier with exclusive possession a tenant. Exclusive possession may be attributable to another legal relationship. The circumstances may establish only a personal privilege carrying no interest in land, as explained in Errington v Errington and Woods [1952] 1 KB 290.

3. An appointed almsperson became a beneficiary under the charity’s trusts and enjoyed occupation in that capacity. The pre-existing relationship of trustee and beneficiary both authorised and explained the grant of exclusive possession. There was therefore no need to infer a tenancy.

4. The weekly payment was a contribution towards the trustees’ expenditure on maintenance and essential services. It liberated charitable income for other permitted purposes but was not rent. Its introduction following the availability of housing benefit did not alter the legal character of the occupation.

5. The governing scheme also supported that conclusion. The trustees’ power to let land did not extend to land retained for the charity’s purposes. A tenancy could obstruct their duty to ensure that the almshouses remained occupied by qualified beneficiaries. Lord Justice Nourse emphasised that the trustees lacked power to grant a right which might permit occupation after the resident ceased to qualify as a beneficiary.

6. The appellant was consequently not an assured tenant within section 1 of the Housing Act 1988. Sir John Vinelott added that the trustees were responsible for deciding whether a circumstance specified in clause 46 justified setting aside an appointment. Under clause 51, a question about the regularity or validity of such a decision fell to the Charity Commissioners rather than the court.

7. The appeal was dismissed with costs, assessed at nil against the appellant. An order nisi was made against the Legal Aid Board under section 18 of the Legal Aid Act 1988. Leave to appeal to the House of Lords was refused.

1. Court of Appeal: Dismissed the appellant’s appeal unanimously and affirmed the determination that she was not an assured tenant.

2. Peterborough County Court: His Honour Judge Morrell determined the preliminary issue in favour of the trustees, holding that the appellant did not occupy the flat as an assured tenant within section 1 of the Housing Act 1988.

3. Peterborough County Court: A District Judge had directed that the assured-tenancy contention be tried as a preliminary issue.