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Old common legislations rule

Introduction

The old common legislation guideline of "The demise of nemo dat quod non habet" that a person cannot convey a greater subject than that person already has and a person positioning a licence cannot communicate the superior name of a lease. This old comman legislation rule have been followed for quite some time, before House of Lords decision in Bruton. THE HOME of Lords in Bruton placed that someone without curiosity about land can give a lease provided that the exclusive ownership is given in the arrangement. I will describe and critically measure the House of Lords decision in the followings.

House of Lords Decision

The House of Lords took the contrary view with the Courtroom of Charm and held that the agreement between the Trust and Mr. Bruton was a rent. I will demonstrate the decision below.

Applying Streets v Mountford

The House of Lord decision in Avenue had been purely applied. [1] Relating to Streets, the agreement between the Trust and Mr. Bruton is actually a rent/ tenancy if the three elements of 1) exclusive possession; 2) term and 3) rent are satisfied. The agreement permitted Mr. Bruton to occupy a flat in the stop over a short-term basis for a every week sum of ?18. The components of term and hire are thus satisfied.

Whether Bruton got exclusive possession

Whether the requirement in Neighborhood can be satisfied depends upon whether Mr. Bruton possessed exclusive possession. Although the agreement expressively referenced it as a licence, it is irrelevant. Lord Hoffmann said that the terminology used, such as licence, is irrelevant. It's the true structure that identifies it as a lease. [2]

Exclusive possession is a question of legislation that is determined by the feature of the terms arranged. Lord Hoffmann said that the Trust plainly offered Mr. Bruton a right to exclusive possession and there is no advice on shared possession. "[3]

Effect of the reservation clause

Although the Trust reserved limited right of entrance for the purpose of inspection and repair, still exclusive possession was given to Mr. Bruton. Lord Hoffmann used the truth of Westminster City Council [1992] as research. In Westminster City, the only rights which it reserved were for itself and the council to type in at times for limited purposes. He further relied on the judgment of Lord Templeman in Neighborhood, and deduced that this express reservation "only further reinforced the entitlement of Mr. Bruton to exclusive possession. "[4]

Special Circumstances - Charitable objective

Could the charitable objective and the lack of fascination with land of the Trust be considered to be special circumstances? Lord Hoffmann explained that the type of the landlord is irrelevant. He said that "Although Rent Functions and other Landlord and Tenant Works do make distinctions between different types of landlords, it is not by declaring that what would be a tenancy if awarded by one landlord will be something else if granted by another. "[5] Therefore, the charitable aim of the Trust did not constitute to a particular circumstance.

Could a landlord with no curiosity about land grant a rent/ tenancy

The general guideline is the fact if the landlord has no involvement in land, he's in lack of capacity to give a lease.

The House of Lords relied on Family Enclosure Association to justify that there is no special circumstances existed to make an exception to the principle in Street. The House of Lord considered that Family Cover Association v. Jones was wrongly recognized in the Court of Appeal. Lord Hoffmann deemed the fact in cases like this was nearly the same as that in Bruton. The key element is the fact in Family Real estate Relationship, the grantor haven't any legal title, nonetheless, Slade L. J. concluded that the grantor haven't any legal title had not been constitute an exception to the rule in Road. Therefore, the Cover Trust could give Bruton a tenancy despite that the Trust possessed no fascination with land.

Tenancy by Estoppel

MillettL. J. in the Judge of Appeal said an agreement could not be a lease unless it created a legal estate in the land which "binds depends upon". He said that the only exception in cases like this that the grantor could offer a lease was by "tenancy by estoppel".

Lord Hoffmann thought that "MilletL. J. was misled by the word of tenancy by estoppel that an agreement which could not otherwise be considered a rent or tenancy but which was treated as being one by virtue of an estoppel. "[6] Lord Hoffmann and Lord Hobhouse thought that "tenancy by estoppel" was not a correct evaluation. In this case, estoppel comes from the contract, not the other way around.

Critical Evaluation

Contrary to the goal of legislation/ Parliament

According to section 32(3) of the Property Take action 1985, the Council got no capacity to grant the Casing Trust a tenancy. Therefore the goal of the legislation was that the trust could have only the capability to grant licence to homeless people over a temporary basis. The House of Lords decision totally disregarded the purpose of the legislation. The work of an Judge is never to make rules, but to interpret the intention of the Parliament. In this case, I think that the purpose of the Parliament in section 32(3) is to provide momentary accommodation for homeless people through the Cover Trust by granting licence. The objective of Parliament should be supreme and should be strictly followed by the Judges.

Street v Mountford should be distinguished

Although the arrangement expressly stated that it is by means of a licence. The House of Lords still found that the agreement was a tenancy because the arrangement grants exclusive ownership to Mr. Bruton.

Charitable objective of the Trust should be constituted as a particular circumstance that constructs the arrangement as a licence despite the rule in Block. Lord Hoffmann regarded as that the charitable purpose of the Trust is irrelevant and there is no difference among other landlords. Again, Lord Hoffmann did not follow the intention of the Legislation/ Parliament. The Rent Works and other Landlord and Tenant Acts do make distinctions between different types of landlords. For me, the characteristic of charity will prohibit the Trust from granting a tenancy, since providing a short-term accommodation for people in need required a high degree of overall flexibility. Therefore a charitable trust should only offer licence rather than tenancy. Your choice in Block should be recognized credited to these special circumstances.

No exclusive possession

I feel that exclusivity of ownership should be judged in an objective basis. All the terms in the contract and the intention of the functions should be studied into account. Which means booking clause should be interpreted objectively. Since it was an express clause, there is strong evidence showing that the Trust intended never to give exclusive possession to Mr. Bruton. Additionally, with the right of entrance is reserved by the Trust, it could hardly be figured exclusive possession was presented with to Mr. Bruton.

Floodgate

After Bruton, a new type of tenancy called 'personal tenancy' is created. In Bruton, the grantor without fascination with land can still grant a lease. This decision totally departed from the old rule that a person holding a licence cannot express a rent. After Bruton, Kay v Lambeth [2004] and London Borough of Islington v Green and O'Shea [2005] both confirmed that 'a personal tenancy could be awarded by someone without desire for land. '[7]

The aspect of personal tenancy appears to be similar to that of a contractual licence. Regrettably, the home of Lords did not distinguish personal tenancy from contractual licence. The effect would be possibly dangerous since a licence granted by the landlord maybe eventually interpreted as a personal tenancy by court docket relating to Bruton. A floodgate situation would be resulted, since every licensee would dispute a personal tenancy should be granted instead of a licence.

Registration

The personal tenancy creates no interest in land and the type of a personal tenancy is similar to that of a contractual licence. A contracts or leases (but not oral rent) are registrable under LRO s. 2 but a contractual licence is not registrable under L. R. O, s. 2. . Therefore it is doubtful whether an individual tenancy created in Bruton is registrable.

Conclusion

After the aforementioned analysis, I do not think that the decision of the home of Lord in Bruton is an excellent decision. It created uncertainty in whether someone with no curiosity about land can offer a rent or not. Although in Bruton, and the last mentioned circumstance of Kay [2004] and Green [2005] affirmed that a grantor with no desire for land can grant a personal tenancy. However the old common law guideline of "The demise of nemo dat quod non habet" still needed to be considered. And Lord Hoffmann did not provide a concrete reason on not making use of the old common rules rule.

It also blurred the necessity of satisfying a special ownership. In Bruton, the tenant of the personal tenancy 'has enforceable protection under the law resistant to the landlord and against strangers, '[8] except the original grantor (the council), which has a superior subject. [9] As the tenant cannot enforce his right against someone who has the superior subject, the component of exclusive possession in the personal tenancy is in doubt. The House of Lords created an doubt in identifying whether exclusive ownership had been given in the assignment.

Finally, certainty in rules and the goal of the Parliament should be purely observed. And the decision of the House of Lord in Bruton disrupted the legal certainty and contravened the purpose of Parliament. Therefore, it cannot be the correct decision.

  1. Per Lord Templeman in Streets v Mountford, supra at p. 818
  2. Per Lord Hoffmann in Bruton v London & Quadrant Casing Trust, supra at p. 413
  3. Per Lord Hoffmann in Bruton v London & Quadrant Real estate Trust, supra at p. 414
  4. Per Lord Hoffmann in Bruton v London & Quadrant Casing Trust, supra at p. 414
  5. Per Lord Hoffmann in Bruton v London & Quadrant Property Trust, supra at p. 414
  6. Per Lord Hoffmann in Bruton v London & Quadrant Real estate Trust, supra at p. 414
  7. Mark Pawlowski, Wayne Brown, Case Comment Bruton: A new kinds of tenancy?, Landlord & Tenant Review 2000
  8. M. Harwood, "Lease: Are They Still not necessarily Real?" (2000) 20 Legal Studies 503 at p. 513
  9. John-Paul Hinojosa, On Property, Lease, Licences, Horses and Carts: Revising Bruton v London & Quadrant Casing Trust, Conveyancer and Property Lawyer 2005
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