Newlon Housing Trust v. Alsulaimen and Another

The House of Lords considered whether the termination of a periodic tenancy by notice to quit can amount to a "disposition" of property for the purposes of section 37(2)(b) of the Matrimonial Causes Act 1973. The court held that a tenancy which has terminated by effluxion of time is not a disposition of property capable of being set aside under section 37(2)(b) because, when it expires, the tenant ceases to have any proprietary interest to be disposed of. The Lords accepted that if a periodic tenancy were still subsisting the court could make a property adjustment order under section 24 of the Matrimonial Causes Act 1973, but a tenancy validly ended by notice could not be resurrected under section 37(2)(b).

Background and parties: The respondents (a husband and wife) had held a joint assured weekly tenancy of a flat owned by the appellant, Newlon Housing Trust. The wife left in April 1995 and served a notice to quit on 1 November 1995, which expired on 4 December 1995. The husband remained in occupation.

Procedural history: The Trust commenced possession proceedings against the husband on 28 March 1996. At the County Court hearing the husband sought an adjournment to pursue an application under section 24 of the Matrimonial Causes Act 1973 for a property adjustment order transferring the tenancy into his sole name; the judge refused. The Court of Appeal reversed that refusal, but the Trust appealed to the House of Lords.

Nature of the claim and relief sought: The husband sought to prevent possession by obtaining a property adjustment order under section 24 of the Matrimonial Causes Act 1973; to support that attempt he relied on the power in section 37(2)(b) to set aside a disposition allegedly made by the wife with intent to defeat claims for financial relief.

Issues framed by the court: (i) Whether termination of a periodic tenancy by notice to quit is a "disposition" of property within the meaning of section 37(2)(b); (ii) if not, whether the court could nevertheless revive the tenancy or otherwise make a property adjustment order in the husband’s favour.

Reasoning and decision: The court analysed the nature of proprietary interests in time-limited tenancies and adopted the principle that when a tenancy expires by effluxion of time the tenant simply ceases to have any proprietary interest to dispose of. The notice to quit was held to be a notification of unwillingness to continue the tenancy rather than an act transferring or disposing of an existing proprietary interest. The Lords considered the language and purpose of section 37(2) and concluded that paragraph (b) addresses past dispositions and presupposes a disponor who has disposed of a subsisting proprietary interest; it cannot operate to revive a tenancy that has already expired. The court therefore allowed the Trust’s appeal and granted possession.

Subsidiary findings: The Lords accepted that if a periodic tenancy were still subsisting the court would have power under section 24 to order transfer of the tenancy and that the word "property" in section 24 includes an interest in a periodic tenancy. They did not decide whether the giving of notice could be restrained under section 37(2)(a).

Appeal allowed. The House of Lords held that a tenancy which has terminated by the effluxion of time is not a "disposition" of property within section 37(2)(b) of the Matrimonial Causes Act 1973 and therefore could not be set aside and revived; consequently there was no proprietary interest available for a property adjustment order and the claim for possession succeeded.

County Court (Edmonton) — Judge Tibber refused an adjournment. Court of Appeal reversed that refusal (no neutral citation given in the judgment). Appeal to the House of Lords, [1998] UKHL 35.