Rowe v Mathews

Under the transitional provisions of the Housing Act 1988, a tenancy that was a restricted contract under the Rent Act 1977 became a new contract for all relevant purposes when its rent was varied after the 1988 Act commenced. The post-commencement contract could not become a protected tenancy under section 34, even though the landlord’s later departure might otherwise have altered the tenancy’s statutory position. A contingent possibility of protected-tenancy status was insufficient to engage the statutory exception.

The tenant occupied a flat under a tenancy granted while the original landlord lived in another flat in the same building. The tenancy was therefore a restricted contract, rather than a protected tenancy, under the Rent Act 1977. Rent was varied in 1990 and 1993. After the landlord ceased to reside in the building and transferred his interest, the respondent demanded a substantial rent increase in 1999.

The County Court held that the tenant was an assured tenant in 1997, entered judgment for rent arrears and ordered possession. The High Court dismissed her appeal. The issue before the Court of Appeal was whether the rent variation created a new contract capable of becoming a protected tenancy under the transitional provisions of the Housing Act 1988.

Disposition. Lord Justice Dyson gave the first judgment and concluded that the proposed appeal had no reasonable prospects of success. Lord Justice Thorpe agreed. The application for permission to appeal was dismissed, with a public funding costs assessment.

1. At the commencement of the Housing Act 1988, the tenancy was not, and had never been, a protected tenancy. Because the original landlord occupied another dwelling in the same building when the tenancy was granted, it fell within the resident-landlord exception in section 12(1)(b) of the Rent Act 1977. Section 20 treated it as a restricted contract.
2. It was common ground that the tenancy continued as a restricted contract after the landlord ceased to be resident, until the rent was varied. By section 36(2)(a) of the Housing Act 1988, the variation treated the contract as a new contract entered into at the time of variation. Read with section 34(1), that new post-commencement contract could not be a protected tenancy.
3. The court rejected the argument that section 36(2)(a) operated only for rent purposes or preserved a potential right to protected-tenancy status. The reference to section 36(1), and the provisions concerning rent variations, did not justify restricting the effect of section 36(2)(a). A contingent possibility of protection was insufficient to engage section 34(1)(a).

1. Court of Appeal (Civil Division): On 10 July 2001, Dyson LJ, with Thorpe LJ agreeing, dismissed the application for permission to appeal and ordered a public funding costs assessment.
2. High Court (Queen’s Bench Division): McCombe J dismissed the tenant’s appeal in a reserved judgment given on 22 March 2001.
3. Wandsworth County Court: On 6 December 2000, HHJ Rose held that the tenant was an assured tenant in 1997, entered judgment for rent arrears and ordered possession.