Brighton & Hove City Council v Collinson & Anor

For an agreement excluding security of tenure under sections 24 to 28 of the Landlord and Tenant Act 1954 to be valid, the court must have authorised the exclusion in relation to the tenancy actually granted. The court should read the application and order sensibly, without turning technical requirements into unnecessary over-technicality. A change in the identity of the tenant may be immaterial where the prospective tenant was party to the application, understood that protection would be excluded, and the granted lease remains substantially similar to the tenancy considered by the court. The order itself governs the authority granted. An application may include persons who may become landlord and tenant, even if the precise final tenancy structure is not yet settled.

Brighton & Hove City Council, landlord of part of the King Alfred Leisure Centre, appealed against HHJ Kennedy QC’s decision of 15 January 2004. The respondents, David and Martin Collinson, were directors of Galaxi 3 Limited and had entered into a lease with the Council in 1995.

Before the lease was granted, the Council, Galaxi 3 and the respondents jointly applied to the Brighton County Court under section 38 of the Landlord and Tenant Act 1954 for authority to exclude sections 24 to 28. The application and draft lease described Galaxi 3 as lessee and the respondents as sureties, but the court order authorised a lease to “the respondents”. The final lease was taken in the respondents’ personal names and contained a recital referring to the order.

The central issue was whether the order validly authorised exclusion of statutory security of tenure for the lease actually granted.

1. Appeal allowed. The judge below had treated the change from a company tenancy with personal guarantees to a tenancy in the respondents’ names as defeating the court’s authority. That approach was unnecessarily technical.
2. Section 38(4) of the Landlord and Tenant Act 1954 permits the court, on the joint application of the persons who will be landlord and tenant, to authorise an agreement excluding sections 24 to 28, provided the agreement is contained in or endorsed on the lease or other specified instrument. The application could properly include the Council, Galaxi 3 and the respondents as possible participants in the tenancy.
3. The order was the governing document. It authorised the grant of “a Lease” to “the Respondents”. Although the application and draft lease contemplated Galaxi 3 as lessee and the respondents as sureties, the order was broad enough to authorise a lease to all, or some, of those respondents. Arguments based on the narrower documents might have supported correction under the slip rule, but no such case had been advanced.
4. The guidance in Receiver for the Metropolitan Police District v Palacegate Properties Ltd [2001] Ch 131 was applied. The court’s concern is whether the prospective tenant understood that protection was being surrendered, and whether the tenancy granted bears substantial similarity to that placed before the court. Wholesale changes, or changes material to the need for protection, may nullify the authority. The alteration here was only a technical change for tax purposes. The respondents knew of the exclusion, and the lease remained substantially similar.
5. The appeal was therefore allowed. The counterclaim was dismissed, a possession order was granted, and the respondents were ordered to pay the Council’s costs of the appeal and hearing below, subject to detailed assessment if not agreed. Permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): Appeal from HHJ Kennedy QC’s decision of 15 January 2004, allowed. The counterclaim was dismissed and a possession order granted.
• County Court: HHJ Kennedy QC held that the court had no jurisdiction to authorise exclusion of statutory protection for the lease granted to the respondents.