Summary

The right of a tenant to hold over under Part I Landlord and Tenant Act 1954 at the end of a long lease at a low rent was property vesting in the tenant's trustee in bankruptcy and was lost if disclaimed by the trustee.

Facts

Appeal by plaintiff landlords from HH Judge Medawar QC sitting at the Central London County Court. In January 1982 the defendant and his wife became joint tenants of a residential flat in London held for a long lease at a low rent, the term expiring in December 1996 ('the determination date'). In 1984 they were divorced, and thereafter the defendant occupied the flat alone, claiming to be entitled to the protection of Part I Landlord and Tenant Act 1954 after the determination date. In January 1997, he was adjudged bankrupt and in May 1997 his trustee in bankruptcy purported to disclaim the lease. The plaintiff landlords sued for possession in the Central London County Court. The judge refused it on the grounds that the defendant was entitled to the protection of the 1954 Act and the lease was incapable of vesting, and did not vest, in the trustee in bankruptcy, so that the disclaimer was ineffective. The landlords appealed.

Held

(1) The defendant did have the right to remain in the flat under the 1954 Act as a residential occupier holding over. Lloyd v Sadler (1978) 1 QB 774 followed. Jacob v Chaudhuri (1968) 2 QB 471 distinguished. (2) By virtue of Part I of the 1954 Act the tenant became entitled to protection under the Rent Acts, to which the normal rules governing Rent Act tenancies applied in full. Two principles could be applied with regard to the protection conferred by Rent Act tenancies. Firstly, regard had to given to the purpose of the legislation , which was to protect the interests of residential occupiers. Secondly, protection under the Rent Acts created rights which were not founded on the grant but arose collaterally to it by the operation of statute. (3) That right vested in him alone as the sole occupier, and not in him and his former wife as joint tenants, notwithstanding that the joint tenancy had continued throughout the term of the lease. (4) The lease and the rights arising under it by virtue of the protection of the 1954 Act, were "property" within the terms of s.283 Insolvency Act 1986, and vested in the trustee in bankruptcy under the terms of that section. (5) The disclaimer was therefore effective to determine the lease, and the landlords were therefore entitled to possession.

Appeal allowed.