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THE SUPREME COURT OF JUDICATURE
OF APPEAL (CIVIL DIVISION)
APPEAL FROM THE PETERBOROUGH COUNTY COURT
Honour Judge Morrell)
Courts of Justice
2nd April 1998
e f o r e :
JUSTICE MUMMERY and
Aided Transcript of the Palantype Notes of
Bernal Reporting Limited
Fleet Street London EC4A 2HD
0171 421 4040 Fax: 0171 831 8838
Shorthand Writers to the Court)
D WATKINSON and MISS M JONES
(instructed by Legal Services, Shelter, London EC1) appeared on behalf of the
C McCALL QC and MISS F QUINT
(instructed by Messrs Greenwoods, Peterborough) appeared on behalf of the
U D G M E N T
Approved by the Court)
2nd April 1998
JUSTICE NOURSE: Sir John Vinelott will deliver the first judgment.
JOHN VINELOTT: This is an appeal from a decision of His Honour Judge
Morrell, sitting in the Peterborough County Court. The respondents, the
plaintiffs in the court below, are the trustees of a charity, the Peterborough
Almshouses and Relief in Need Charity ("the charity"). The appellant, Mrs
, the defendant in the court below, currently occupies a flat in
one of the almshouses administered by the trustees.
20th February 1997 the trustees decided to terminate her appointment as an
almsperson entitled under the trust of the charity to occupy accommodation in
the almshouse on the ground that her behaviour had been vexatious and had
disturbed the quiet enjoyment of the almshouse. On 3rd March they gave her
notice to vacate the flat. She refused to leave, and on 4th April 1997 the
trustees instituted proceedings in the County Court for possession.
her defence the appellant claimed that she was an assured tenant within the
meaning of section 1 of the Housing Act 1988
, with the consequence that her
tenancy could not be brought to an end except by an order of the court, and
that the trustees had not established any of the grounds on which they would
have been entitled to an order for possession. She claimed, in the
alternative, that she was a licensee and that the trustees were only entitled
to repossess the flat if they could show that she had persistently and without
reasonable excuse disregarded the trustees' regulations, or had behaved
offensively, or had become disqualified from retaining her appointment as an
18th July 1997 a District Judge ordered that the first of these contentions
should be tried as a preliminary issue. That issue came before His Honour
Judge Morrell on 9th September. He decided that the appellant did not occupy
the flat as an assured tenant within the meaning of section 1
of the 1988 Act.
charity, which is an amalgam of three older charities, was established as a new
charity by a scheme established by order of the Charity Commissioners which was
sealed on 25th November 1974. It is only necessary for the purposes of this
judgment to refer to a few of the provisions of the scheme. The relevant
clauses are as follows.
22, which is part of a series of clauses headed "Management of Lands", provides
Trustees are to let and otherwise manage all the lands belonging to the Charity
not required to be retained or occupied for the purposes thereof. ..."
shall refer to land within the exceptions (that is, land required to be
retained or occupied for the purposes of the charity) as "functional land".
27 to 33 are headed "Application of Income". By these clauses the trustees are
given power to apply income in meeting the costs of repairs and other
outgoings, to establish a reserve fund for extraordinary repairs or for
rebuilding, and to make certain charitable payments for the benefit of local
churches or for the relief of exceptional need of local residents. Clause 33
to the payments aforesaid the Trustees shall apply the income of the Charity
for the benefit of the almspeople of the Charity or any of them in such manner
as the Trustees think fit from time to time."
34 to 38 are headed "Almshouses and Almspeople". Clause 34 provides:
almshouses belonging to the Charity and the property occupied therewith shall
be appropriated and used for the residence of almspeople in conformity with the
provisions of this Scheme."
36 provides that the almspeople should be:
poor persons of good character who (except in special cases to be approved by
the Commissioners) are not less than 60 years of age and have resided in the
area of the former City of Peterborough for not less than five years next
preceding the time of appointment."
37 gives the trustees power to:
make it a condition of appointing or permitting any person to be or remain an
almsperson that he or she ... contribute ... a weekly sum towards the cost of
maintaining the almshouses and essential services therein but so that the
amount of the weekly sum shall not -
such as to cause hardship to him or her;
more than £2.50 or other the amount approved from time to time by the
follow detailed provisions as to the selection and appointment of almspersons,
and there is a specific provision in clause 44 that no almsperson is to let,
part with possession of or share the occupation of the rooms occupied by him or
her except with the special permission of the trustees.
46 is the clause which provides for the setting aside of an appointment. It
The Trustees may set aside the appointment as an almsperson of any almsperson
who in their opinion -
or without reasonable excuse either disregards the regulations for the
almspeople or disturbs the quiet occupation of the almshouses or otherwise
behaves vexatiously or offensively; or
longer has the required qualifications; or
been appointed without having the required qualifications; or
suffering from mental or other disease or infirmity rendering him or her
unsuited to remain an almsperson.
Upon setting aside the appointment of an almsperson the Trustees shall require
and take possession of the room or rooms occupied by him or her. ..."
clause 47 the trustees are given power to make:
reasonable regulations as they consider expedient for the government of the
clause 51 provides that:
question as to the construction of this Scheme or as to the regularity or the
validity of any acts done or about to be done under this Scheme shall be
determined by the Commissioners upon such application made to them for the
purpose as they think sufficient."
is all I need say about the scheme.
who are selected and allocated rooms in the almshouse are supplied with a
document entitled "Conditions of Occupancy". New editions have been brought
out from time to time to replace the old. Paragraph 1.3 of the current
are licensees and pay a contribution towards the cost of providing
accommodation at the Court: residents are not tenants and do not pay rent."
is unnecessary to read any of the subsequent paragraphs, which relate to the
administration of the almshouse and rules and restrictions to be observed by
the almspersons. The appellant signed the most recent edition of these rules
on 1st October 1996.
20th February 1997, at a meeting of the trustees, a resolution was passed that
"the appointment of Dorothy Taylor
be set aside on the grounds that her
behaviour at Stephenson Court was vexatious and disturbed the quiet enjoyment
of the almshouse".
case for the appellant can be simply stated. It is that the appellant became
entitled, when she was appointed an almsperson and allowed to occupy rooms in
the almshouse, to exclusive possession of the rooms for a term, at a rent, and
that the necessary legal consequence that was that she became in law a tenant.
Watkinson, who appeared for her, relied upon a well known passage in the speech
of Lord Templeman in
 1 AC 809 at p.817, where he said:
the case of residential accommodation there is no difficulty in deciding
whether the grant confers exclusive possession. An occupier of residential
accommodation at a rent for a term is either a lodger or a tenant. The
occupier is a lodger if the landlord provides attendance or services which
require the landlord or his servants to exercise unrestricted access to and use
of the premises. A lodger is entitled to live in the premises but cannot call
the place his own."
cited a passage in the judgment of Blackburn J in
v. Liverpool Overseers
(1874) LR 9 QB 180 at 191, where the position of a lodger is more fully
described, Lord Templeman continued:
on the other hand residential accommodation is granted for a term at a rent
with exclusive possession, the landlord providing neither attendance nor
services, the grant is a tenancy; any express reservation to the landlord of
limited rights to enter and view the state of the premises and to repair and
maintain the premises only serves to emphasise the fact that the grantee is
entitled to exclusive possession and is a tenant."
is of course well settled that if on its true construction an agreement
constitutes a tenancy, the fact that it may be described as a licence is simply
neither here nor there.
it is important to bear in mind a subsequent observation which comes almost
immediately after the passage I have cited, where Lord Templeman said:
can be no tenancy unless the occupier enjoys exclusive possession; but an
occupier who enjoys exclusive possession is not necessarily a tenant. He may
be owner in fee simple, a trespasser, a mortgagee in possession, an object of
charity or a service occupier."
observation is elaborated towards the end of his judgment at the foot of p.826,
where he said:
it may appear from the surrounding circumstances that the right to exclusive
possession is referable to a legal relationship other than a tenancy. Legal
relationships to which the grant of exclusive possession might be referable and
which would or might negative the grant of an estate or interest in the land
include occupancy under a contract for the sale of the land, occupancy pursuant
to a contract of employment or occupancy referable to the holding of an
passage reflects an observation of Denning LJ in
v. Errington and Woods
 1 KB 290
, which is cited with approval by Lord Templeman at pp.820-821,
where Denning LJ said:
cannot turn a tenancy into a licence merely by calling it one. But if the
circumstances and the conduct of the parties show that all that was intended
was that the occupier should be granted a personal privilege, with no interest
in the land, he will be held to be a licensee only."
my judgment, on the facts of this case, the position of the appellant falls
precisely into the position described by Denning LJ and in the passage at the
end of the judgment of Lord Templeman which I have cited.
person who is selected as an almsperson becomes a beneficiary under the trusts
of the charity and enjoys the privilege of occupation of rooms in the
almshouses as a beneficiary. It is, in my judgment, wholly immaterial that, in
this case, the appellant pays a weekly sum towards the cost of maintaining the
almshouses and the essential services therein. An example may make this clear.
Suppose that trustees hold a fund on trust to pay the income to A, but with
power to apply the fund in the purchase of a residence for him or her. A asks
the trustees to buy a flat at a price which would absorb the whole of the fund.
The trustees agree to do so, but on terms that A pays them a quarterly sum
sufficient to discharge the ground rent and any service charge. These sums are
not rent and the agreement to pay them does not convert A's occupation of the
flat from occupation as a beneficiary to occupation as a tenant.
the weekly contribution paid by the almsperson goes towards the discharge of
costs falling on the trustees, thereby liberating income of the charity for
other purposes, including the maintenance of a reserve fund and the improvement
and extension of the almshouses. The weekly charge is not rent payable under a
tenancy. Indeed, it is historically the case that, until comparatively
recently, almspersons were not required to pay any weekly sum. The
introduction of a weekly sum came with the introduction of housing benefit, to
which almspersons would normally be entitled; payment of a weekly sum not
exceeding the housing benefit would not result in any net loss to the
almsperson and in effect the housing benefit would be available to the charity.
was the conclusion reached by the learned County Court Judge. He pointed out
that the trustees' powers to let land does not extend to functional land. The
creation of a tenancy of functional land would be inconsistent with the
performance by the trustees of their duties as trustees of a charity, for the
tenancy would impose a burden which might make it impossible for the trustees
to ensure that occupation of an almshouse was restricted to almspersons who
satisfied the qualifications set out in clause 36. For instance, an almsperson
who inherited a substantial legacy or won a prize in a national lottery would
no longer be a poor person and a proper object of charity.
Justice Mummery, in the course of the argument, put forward a more extreme
example, where all the residents of an almshouse joined together to buy a
ticket in a lottery, transforming their fortunes when the ticket came up. They
might all decide to stay where they were, amongst familiar surroundings and
with familiar neighbours. Lottery winners often announce that they do not
intend that their good fortune should be allowed to change their pattern of
life. The almshouse would then become something like a rich persons' club. It
cannot be seriously suggested that the change from being a poor to being a rich
person would be a ground falling within Part I of Schedule 2 of the Housing Act
1985 on which the court could make an order for possession.
Watkinson submitted that the learned County Court Judge committed the cardinal
error of taking the statutory consequences of creating an assured tenancy into
account in reaching his conclusion that the arrangement between the trustees
and the appellant did not constitute a tenancy. I do not think that criticism
is justified. What the learned judge had in mind is that it is permissible to
look at the powers which the trustees had in order to ascertain the nature and
consequences of the arrangement they had entered into. The trustees have power
to permit - indeed, are under a duty to permit - a selected almsperson to
occupy rooms in the almshouse. There is no need to resort to a tenancy to
explain the almsperson's right to exclusive possession of the rooms; and,
inasmuch as the grant of a tenancy might obstruct or fetter the performance by
the trustees of their duty to provide accommodation for deserving persons, it
would be wrong for them to grant a tenancy.
my judgment, therefore, the learned County Court Judge reached the right
should add that it is for the trustees to decide whether any of the
circumstances set out in clause 46, justifying the setting aside of the
appointment of an almsperson, has arisen. If any question arises as to the
regularity or the validity of any decision made by the trustees, then, under
clause 51, that question falls to be decided by the Charity Commissioners and
not by the court.
JUSTICE MUMMERY: I agree that this appeal should be dismissed for the
reasons given by my Lord.
JUSTICE NOURSE: I also agree with the judgment of Sir John Vinelott.
the time when the trustees grant an almsperson a right of occupation there
exists between them the relationship of trustee and beneficiary. It is only by
reason of that relationship that the trustees have the power to grant the
right. But the power does not allow them to grant a right which would or might
infringe the objects of the charity by permitting the grantee to remain in
occupation after he or she has ceased to qualify as a beneficiary. On this
analysis, it is clear that the almsperson's occupation and his or her right to
exclusive possession are referable to a legal relationship other than a
tenancy. Therefore the case falls outside the general category identified in
 AC 809
my view the decision of Judge Morrell was entirely correct and I too would
dismiss this appeal.
dismissed with costs; the appellant's liability under that order being
assessed at nil, order nisi made against the Legal Aid Board pursuant to
of the Legal Aid Act 1988
and adjourned to the Registrar; legal aid
taxation of the appellant's costs; leave to appeal to the House of Lords
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