Moreland Properties (UK) Ltd. v Dhokia & Ors

Under section 2(1)(a) of the Rent Act 1977, a statutory tenancy continues only while the former protected tenant occupies the dwelling-house as his residence. Abandonment of the dwelling as his home ends that tenancy. The former tenant then lacks the status or interest necessary to create a lawful subtenancy. A purported subletting in those circumstances is not a dwelling-house lawfully sublet for section 137(2), so the subtenant does not become the landlord’s tenant when the superior tenancy is determined.

The landlord appealed from a decision of Barnet County Court dated 24 February 2003. The first defendant had been a statutory tenant but had left the flat and established his home elsewhere four or five years before purporting to sublet it to his brother-in-law, whose family occupied the property. The county court held that the subletting was lawful under section 137(2) of the Rent Act 1977 and dismissed the possession claim against the second to fifth defendants. The central issue was whether a statutory tenant who had abandoned the dwelling as his residence could lawfully sublet it.

Appeal allowed. Sir Martin Nourse gave the leading judgment and Lord Justice Brooke agreed.

1. The evidence established that the first defendant had abandoned the flat as his home four or five years before the purported subletting. His nephew’s occasional occupation of a box room did not undermine that conclusion.
2. Section 2(1)(a) of the Rent Act 1977 makes statutory tenancy conditional on the former protected tenant occupying the dwelling-house as his residence. Once the flat had been abandoned as the tenant’s home, he ceased to have the statutory status or interest which would enable him either to resume possession or to grant a subtenancy.
3. Trustees of Henry Smith's Charity v Wilson [1983] QB 316, properly understood, supported that conclusion. The judgment implicitly treated a clear finding of abandonment before the transaction as sufficient to resolve the issue. The passage relied on by the county court concerned the separate question whether a statutory tenant could grant an effective subtenancy of the whole premises.
4. The flat had therefore not been lawfully sublet within section 137(2). The second to fifth defendants could not become tenants of the landlord on determination of the superior tenancy. The further questions considered below were unnecessary and had not been argued on the appeal.
5. An order for possession was made against the second to fifth defendants within 28 days. They were ordered to pay £4,000 on account of the costs below and £4,000 on account of the costs of the appeal, with any balance subject to detailed assessment if not agreed.

1. Court of Appeal (Civil Division): Allowed the appeal and ordered possession against the second to fifth respondents. [2003] EWCA Civ 1639
2. Barnet County Court: Her Honour Judge Mayer dismissed the landlord’s possession application against the second to fifth defendants on 24 February 2003. Permission to appeal was refused, but Wright J granted permission on 25 March 2003 and directed that the appeal be referred to the Court of Appeal.