Protection was sought under the 1954 Act for premises where the relevant occupation was partly residential and partly for the purposes of a business.
Held: The Act will apply so long as the business activity is a significant purpose of occupation. It must be more than incidental. The business occupation must exist both at the time when the contractual tenancy comes to an end and the date of service of the notice of determination of the tenancy: ‘If the tenant continues the ‘business occupation’ (if it may be called that) thereafter, no further difficulty arises. What is the situation, however, if between the end of the contractual tenancy and the service of notice of determination by the landlord the business occupation ceases? Section 25(1) provides that the landlord ‘may terminate a tenancy to which this Part of this Act applies by a notice given to the tenant in the prescribed form specifying the date at which the tenancy is to come to an end…’ If at the time the notice is served the business occupation has ceased, there is no ‘tenancy to which this Part of this Act applies,’ and nothing on which a section 25 notice by the landlord can bite. It seems therefore that the business occupation must exist both at the time, the contractual tenancy comes to an end and at the date of service of the notice of determination. It is necessary to point out, however, that in neither of the two cases with which we are concerned was there any change of purpose between the term date and the service of notice of determination. In each case the question is, was there or was there not a section 23(1) business occupation at the time the contractual tenancy ended?’
Lord Denning MR: ‘There was much discussion before us as to the meaning of the Business Tenancy Act (I use those words because I think ‘Landlord and Tenant Act 1954, Part II’ is a little confusing), especially the word ‘purposes’ in section 23(1); and the time or times at which those ‘purposes’ had to exist; and the effect of a change by the tenant in the use to which he put the property. Could he take himself in or out of the Act at his option? I found all these matters so confusing that I do not propose to attempt a solution today. I am only going to take four simple illustrations to show how the statute works; for they will suffice for our present cases.
First, take the case where a professional man is the tenant of two premises: one his office where he works; the other his flat, conveniently near, where he has his home. He has then a ‘business tenancy’ of his office; and a ‘regulated tenancy’ of his home. This remains the situation even though he takes papers home and works on them at evenings or weekends and occasionally sees a client at home. He cannot in such a case be said to be occupying his flat ‘for the purposes of’ his profession. He is occupying it for the purpose of his home, even though he incidentally does some work there: see Sweet v Parsley [1970] AC 132 at 155 per Lord Morris of Borth-y-Gest.
Second, take the case where a professional man takes a tenancy of one house for the very purpose of carrying on his profession in one room and of residing in the rest of the house with his family, like the doctor who has a consulting room in his house. He has not then a ‘regulated tenancy’ at all. His tenancy is a ‘business tenancy’ and nothing else. He is clearly occupying part of the house ‘for the purposes of’ his profession, as one purpose; and the other part for the purpose of his dwelling as another purpose. Each purpose is significant. Neither is merely incidental to the other.
Third, suppose now that the first man decides to give up his office and to do all his work from his home, there being nothing in the tenancy of his home to prevent him doing it. In that case he becomes in the same position as the second man. He ceases to have a ‘regulated tenancy’ of his home. He has only a ‘business tenancy’ of it.
Fourth, suppose now that the second man decides to give up his office at home and to take a tenancy of an office elsewhere so as to carry on his profession elsewhere. He then has a ‘business tenancy’ of his new premises. But he does not get a ‘regulated tenancy’ of his original home, even though he occupies it now only as his home, because it was never let to him as a separate dwelling, unless the landlord agrees to the change.’
Geoffrey Lane LJ discussed the ddifference between premises occupied for carrying on a business and premises occupied for the purpose of a business: ‘It is obviously a very fine distinction, but the words in section 23 seem to have been used in an attempt to make it absolutely clear that activities on the premises which are merely incidental to residential occupation do not bring the premises within the section although they may properly be described as using them for carrying on a trade or business. The businessman, for example, who takes work home in the evening which he does in a study set aside for the purpose may very well be using the premises partly for carrying on thereat a business, but he could scarcely be said to be occupying the premises for the purposes of a business, any more than the person who watches the television regularly every evening can be said to be occupying his house for the purpose of watching television. It is only if the activity is part of the reason for, part of his aim and object in occupying the house that the section will apply. Lord Morris of Borth-y-Gest expressed the concept clearly when dealing with the meaning of the words of section 5 of the Dangerous Drugs Act 1965 in Sweet v Parsley [1970] AC 132: ‘It seems to me, therefore, that the words ‘premises . . used for the purpose of smoking cannabis’ are not happily chosen if they were intended to denote premises in which at any time cannabis is smoked. In my opinion, the words ‘premises used for any such purpose . . ‘ denote a purpose which is other than quite incidental or casual or fortuitous; they denote a purpose which is or has become either a significant one or a recognised one though certainly not necessarily an only one.’
As is so often the case in matters of this kind it will in the end come down to a question of degree, and borderline cases will produce their usual difficulties.’
Judges:
Geoffrey Lane LJ, Lord Denning MR, Eveleigh LJ
Citations:
[1978] 1 WLR 1329
Statutes:
Landlord and Tenant Act 1954
Jurisdiction:
England and Wales
Cited by:
Cited – Esselte Ab and British Sugar Plc v Pearl Assurance Plc CA 8-Nov-1996
The tenant was no longer in occupation of the demised premises when he served a s27 notice.
Held: A business tenancy ceases at end of the lease, if the premises are not actually occupied by the tenant despite any notices given. The occupation . .
Cited – Pulleng v Curran CA 1980
The question was whether under the 1977 Act the tenant occupied the premises for residential purposes. The landlord said that a business was also conducted from them.
Held: The tenant had failed to establish that the business use had ceased. . .
Cited – Wagle v Trustees of Henry Smith’s Charity Kensington Estate CA 1990
The tenant had used the premises for both residential and business use. He claimed that, the business use having ceased, he had the protection of the 1977 Act.
Held: The Pulleng case required te court to reject the tenant’s argument. The . .
Cited – Pirabakaran v Patel and Another CA 26-May-2006
The landlord had wanted possession. The tenant said that the landlord had been harassing him. The landlord said that the tenancy was a mixed residential and business tenancy and that the 1977 Act did not apply.
Held: The 1977 Act applied. A . .
Cited – Webb and Barrett v London Borough of Barnet CA 1988
The authority resisted an application by the tenant to buy the property let as a council dwelling saying that the tenant was using it for mixed residential and business purposes. The tenant said that the business use had finished, and that the . .
Cited – Broadway Investments Hackney Ltd v Grant CA 20-Dec-2006
The respondent had taken a tenancy of premises from the local authority. The ground floor was for use as a shop, and the first was residential. He had previously taken a licence and had refurbished the premises. The authority sold the freehold to . .
Cited – Tan and Another v Sitkowski CA 1-Feb-2007
The tenant claimed Rent Act protection for his tenancy. He had been rehoused and began his tenancy in 1970 with the ground floor used as a shop, and the first floor as living accomodation. He later abandoned the business use. He appealed a finding . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant, Housing
Updated: 13 May 2022; Ref: scu.216552
