Watts v Stewart & Ors

Exclusive occupation does not invariably create a tenancy. A tenancy requires legal possession, including the right to exclude the owner. Whether an occupier has that right depends on the parties’ objectively ascertained intention and all admissible circumstances, rather than the labels used.

An almshouse resident may therefore occupy under a personal licence where the governing charitable scheme and terms of appointment exclude legal possession and require the trustees to retain control for the charity’s objects. Denial of security of tenure to such residents is objectively justified under article 14, read with article 8, because it fairly balances the interests of charities and present and future beneficiaries.

The trustees of the Ashtead United Charity sought possession of an almshouse occupied by Mrs Watts under a letter appointing her as a beneficiary. The County Court determined preliminary issues against her and subsequently ordered possession after finding persistent misconduct and breaches of the appointment terms.

Mrs Watts appealed on three grounds. She contended that she had a periodic tenancy and that [1998] 1 WLR 1093 had been wrongly decided; that denial of security of tenure infringed article 14, read with article 8, of the Convention; and that the possession claim was unauthorised charity proceedings under section 115 of the Charities Act 2011. The trustees additionally disputed that she had exclusive legal possession.

1. The appeal was dismissed. The appointment conferred a personal licence, not a tenancy. Legal exclusive possession must be distinguished from exclusive occupation. Legal possession carries a right to exclude everyone, including the owner; exclusive occupation may instead arise from a personal licence. The parties’ relationship depended on their objectively ascertained intention from all admissible evidence, not isolated references to rent or tenancy.
2. The appointment terms excluded legal possession. They denied the resident any tenancy or legal interest, restricted visitors and absences, allowed the trustees to move her to another almshouse and permitted them to set aside her appointment for good cause. Those provisions also enabled the trustees to perform the charitable scheme by ensuring that accommodation remained available to qualifying beneficiaries. A beneficiary occupying trust property does not automatically become a tenant at will. The terms of the trust and the conditions of occupation determine the capacity in which the beneficiary occupies.
3. Gray v Taylor [1998] 1 WLR 1093 was binding on the County Court, materially indistinguishable and correctly decided. An almshouse resident may have exclusive occupation while lacking legal possession where the charitable trusts and occupancy terms show that only a personal licence was intended.
4. The possession claim was not “charity proceedings” under section 115(8) of the Charities Act 2011. It concerned enforcement of a written contractual licence, rather than the internal administration of the charity. Authorisation from the Charity Commission was therefore unnecessary.
5. The court assumed, without deciding, that the dispute fell within the ambit of article 8 for the purpose of article 14. It also left open whether being an almsperson or charitable beneficiary was an “other status”. Any difference in treatment was objectively justified. The licence structure allowed trustees to ensure that scarce accommodation remained occupied by persons satisfying the charitable qualifications. Denial of security of tenure was a proportionate means of striking a fair balance between the charity and present and future almspersons.

1. Court of Appeal (Civil Division): The appeal was dismissed. The court upheld both the determination that Mrs Watts occupied under a personal licence and the order for possession.
2. Guildford County Court: Her Honour Judge Raeside decided the preliminary tenancy and Convention issues against Mrs Watts. Following trial, she found persistent breaches of the appointment terms, rejected the fiduciary-duty and section 115 defences, and ordered possession and occupation damages.