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Wellcome Trust Ltd v Hammad (1997)

Summary

Sub-tenants in mixed residential and business premises may still enjoy Rent Act protection after expiry of head-lease.

Facts

Three appeals, against County Court possession orders, by sub-tenants (Baines, Hopkins and Hammad) who enjoyed sub-tenancies in premises used both as dwelling houses and for business purposes. In each case the headlease had expired. The respondents were the head-landlords. Each appellant had lost at the County Court because of Pittalis v Grant (1989) 2 EG 90, which was taken as authority for the proposition that s.24(3) Rent Act 1977 caused premises covered by Part II of the Landlord and Tenant Act 1954 to be excluded from the operation of s.137(3) of the 1977 Act. The relevant authorities for the definition of a dwelling house in mixed tenancies provided an untidy picture, as follows: Epsom Grand Stand Association Ltd v EJ Clarke (1919) 35 TLR 525 (the purpose test); Colls v Parnham (1922) 1 KB 325 (the substantially residential test); Hicks v Snook (1928) 27 LGR 175 (confirmed the purpose test) and Whiteley v Wilson (1953) 1 QB 77 (the broad test of whether the premises are a dwelling house used as business premises or business premises used as a dwelling).

Held

Pittalis v Grant (supra) should not be followed. Tenancies under Part II of the 1954 Act (business premises) may concurrently fall under s.137(3) of the 1977 Act (dwelling houses). The Court of Appeal, in that case did not consider either the above mentioned earlier authorities setting out the relevant principles, nor the words of qualification in s.24(3): "... but this provision is without prejudice to the application of any other provision of this Act to a sub-tenancy of any part of the premises comprised in such a tenancy.". Therefore, sub-tenants of premises mixed between business and dwelling may enjoy Rent Act protection upon the expiry of the head lease.

The three appeals were allowed and the orders for possession made against the tenants were set aside.

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Judgment
30 Jul 1997

Court of Appeal
Leggatt LJ, Morritt LJ, Brooke LJ

References
[1998] QB 638 : [1998] 2 WLR 156 : [1998] 1 All ER 657 : (1998) 30 HLR 629 : [1998] L & TR 130 : [1998] 1 EGLR 73 : [1998] 02 EG 121 : Times, October 13, 1997

Members
Timothy Dutton QC

Practice areas
Real Estate