Carphone Warehouse UK Ltd v Malekout

A compromise embodied in a Tomlin order may settle the essential factual basis of a party’s legal status, rather than merely state a legal conclusion. A party that agreed a protected tenant was temporarily absent but intended to return when repairs made premises habitable cannot later rely on earlier events to deny that agreed position.

Under Rent Act 1977, absence from premises does not necessarily end a statutory tenancy. The tenant must prove continued occupation as a residence, ordinarily by establishing the reason for absence and a continuing intention to return. Conduct during a genuine dispute about outstanding repairs may support that intention.

The landlord appealed against a Wandsworth County Court order refusing possession of a maisonette let to Dr Malekout. His contractual tenancy had ended, but he asserted statutory protection under Rent Act 1977 while the premises were vacant and undergoing repair.

Earlier proceedings had been settled by a Tomlin order in May 2003. The landlord agreed to carry out specified works and pay storage costs. In the later possession proceedings, the landlord relied on evidence that Dr Malekout had ceased living at the flat many years before. The county court held that the settlement prevented reliance on that earlier position and found that he retained an intention to return.

The central issue was whether the settlement fixed the relevant factual basis of statutory status and, if so, whether the tenant had ceased to occupy the premises as his residence before the later proceedings began.

1. Appeal dismissed unanimously. Lady Justice Smith held, with Cresswell J and Ward LJ agreeing, that the county court was entitled to find that Dr Malekout remained a statutory tenant.

2. The May 2003 Tomlin order settled more than the bare legal conclusion that he then held a statutory tenancy. Read in its commercial and factual setting, it necessarily proceeded on the basis that he was temporarily out of actual occupation, intended to return when the premises became habitable, and remained entitled to require the agreed works. The landlord had therefore waived its right to contend that his statutory status had already been lost through non-occupation in the 1990s.

3. The relevant inquiry under section 2 of the Rent Act 1977 was whether, between the agreed starting point of 7 May 2003 and the commencement of the later proceedings on 22 July 2004, he retained an intention to return when the premises were habitable. Evidence of his mother’s sole occupation in the 1990s was not relevant to that inquiry.

4. There was ample evidence supporting the county court’s finding. Dr Malekout’s persistent demands about the repairs were consistent with an intention to resume occupation. Although the court found that the premises should have become habitable by mid-April 2004, his delay in returning during the continuing repair dispute did not compel an inference that he had abandoned that intention. The landlord’s issue of possession proceedings in July 2004 also curtailed the period from which such an inference could be drawn.

5. Mills v Cooper, [1967] 1QB 459, did not assist the landlord. It concerned changing factual status on two dates without an agreement between the parties. It did not permit a party to go behind a freely made and legally advised settlement as to the tenant’s status and underlying intention.

• Court of Appeal (Civil Division): Appeal dismissed: [2006] EWCA Civ 767.

• Wandsworth County Court: On 25 August 2005, His Honour Judge Walker refused the landlord’s claim for possession, holding that the tenant retained statutory protection.