AS TO THE ADMISSIBILITY OF
Application No. 15434/89
by Agis ANTONIADES
against the United Kingdom
The European Commission of Human Rights sitting in private
on 15 February 1990, the following members being present:
MM. C.A. NØRGAARD, President
E. BUSUTTIL
A. WEITZEL
J.-C. SOYER
H.G. SCHERMERS
H. DANELIUS
G. BATLINER
H. VANDENBERGHE
Mrs. G.H. THUNE
Sir Basil HALL
MM. F. MARTINEZ
C.L. ROZAKIS
Mrs. J. LIDDY
Mr. L. LOUCAIDES
Mr. H.C. KRÜGER, Secretary to the Commission
Having regard to Article 25 of the Convention for the
Protection of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 1 June 1989 by
Agis ANTONIADES against the United Kingdom and registered on 5
September 1989 under file No. 15434/89;
Having regard to the report provided for in Rule 40 of the
Rules of Procedure of the Commission;
Having deliberated;
Decides as follows:
THE FACTS
The applicant is a British citizen, born in 1927. Until his
retirement he was involved in property business. The facts as
submitted by the applicant may be summarised as follows.
On 9 February 1985 the applicant let to a young man and a
young woman the top flat of a house owned by him. The letting was
expressed to be by way of two licences, that is, agreements giving
neither one occupant nor the other exclusive possession of the flat.
The aim of granting the licences was to avoid the impact of the Rent
Acts, which give a measure of rent control and security of tenure to
tenants. The practice of granting such licences had been accepted by
the Court of Appeal in Somma v. Hazlehurst [1978] I WLR 1014, and the
licences were based on the licences in that case.
Some months after the landlord and the occupants signed their
agreements, the House of Lords, expressly disapproving Somma v.
Hazlehurst, held that the true legal nature of a transaction is not to
be altered by the description the parties choose to give it and that
the Court should be astute to detect and frustrate "sham devices and
artificial transactions whose only object is to disguise the grant of
a tenancy and to evade the Rent Acts" (Street v. Mountford [1985] AC
809).
In the County Court, the judge found, following Street v.
Mountford, that the occupants were in fact tenants, and not licensees,
such that the Rent Acts applied. The Court of Appeal, in its
judgment of 17 March 1988, disagreed with the judge and found for the
applicant, holding that the intention of the parties was, in fact,
not to create a tenancy and that the agreements were not a "sham"
but were valid.
The House of Lords, in its judgment of 10 November 1988 on
consolidated appeals, found that the licence agreements signed by the
occupants stood or fell together. It was the intention that the
occupants should have joint and exclusive possession of the flat, and
they thus became tenants, not licensees. The House found various
technical devices in the agreements (such as the reservation of power
for the applicant to share the flat with the occupants, and a provision
that the occupants should forfeit their right to occupy the flat if
"their double-bedded romance blossomed into wedding bells") not to
have been seriously intended.
At the end of his speech, Lord Templeman concluded:
"My Lords, in each of the cases which were disapproved by
this House in Street v. Mountford, and in the [present
appeal], there was, in my opinion, the grant of a joint
tenancy for the following reasons:
(1) The applicants for the flat applied to rent the flat
jointly and to enjoy exclusive occupation.
(2) The landlord allowed the applicants jointly to enjoy
exclusive occupation and accepted rent. A tenancy was
created.
(3) The power reserved to the landlord to deprive the
applicants of exclusive occupation was inconsistent with the
provisions of the Rent Acts.
(4) Moreover in all the circumstances the power which the
landlord insisted upon to deprive the applicants of
exclusive occupation was a pretence only intended to deprive
the applicants of the protection of the Rent Acts."
The judgment of the judge of first instance was restored.
As a result of the judgment of the House of Lords, the
occupants of the flat, now Rent Act protected tenants, applied to the
Rent Office for a "fair rent".
The rent registered was £90.00 per month plus rates of some
£45 per month for the flat compared with the contractual licence fee of
£87 per month for each of the occupants (rates included).
COMPLAINTS
The applicant alleges a violation of Article 1 of Protocol
No. 1 to the Convention. He contends that the rent which he can now
receive bears no relation either to the market letting value of the
flat or to the capital investment involved. Further, he contends
that the uncertainty of the law, which resulted in his entering into
an agreement of a type which had been considered valid by the Court
of Appeal on many occasions, itself caused him enormous expense in
that now, apart from the loss of income on the flat and his inability
to recover possession of it, he is required to pay the costs of the
domestic proceedings.
THE LAW
1. The applicant alleges a violation of Article 1 of Protocol
No. 1 (P1-1) to the Convention by virtue of the House of Lords' judgment of
10 November 1988, which provided that the agreements by which the
applicant let his flat constituted a Rent Act protected tenancy and
not mere licences.
"Every natural or legal person is entitled to the peaceful
enjoyment of his possessions. No one shall be deprived of his
possessions except in the public interest and subject to the
conditions provided for by law and by the general principles of
international law.
The preceding provisions shall not, however, in any way
impair the right of a State to enforce such laws as it deems
necessary to control the use of property in accordance with the
general interest or to secure the payment of taxes or other
contributions or penalties."
The Commission recalls that Article 1 (Art. 1) comprises three
distinct rules. The first rule, which is of a general nature,
announces the principle of peaceful enjoyment of property; it is set
out in the first sentence of the first paragraph. The second rule
covers deprivation of possessions and subjects it to certain
conditions; it appears in the second sentence of the same paragraph.
The third rule recognises that the High Contracting Parties are
entitled, amongst other things, to control the use of property in
accordance with the general interest, by enforcing such laws as they
deem necessary for the purpose; it is contained in the second
paragraph (cf. Eur. Court H.R., Sporrong and Lönnroth judgment of 23
September 1982, Series A no. 52, p. 24, para. 61; James and Others
judgment of 21 February 1986, Series A no. 98, p. 29, para. 37).
The three rules are not, however, "distinct" in the sense of
being unconnected. The second and third rules are concerned with
particular instances of interference with the right to peaceful
enjoyment of property and should therefore be construed in the light
of the general principle enunciated in the first rule (James and
Others judgment, ibidem, p. 30, para. 37).
The Commission finds that the clarification of legal status of
the occupation of the applicant's flat did not constitute a deprivation
of possessions. It cannot be said that the rights of the applicant
as stipulated in the agreements (principally to repossess the flat,
but also to the licence fee) constituted individual rights enjoying,
in their own right, the protection awarded to possessions.
The effect of the House of Lords' finding in the applicant's
case was that devices such as those employed by him were, and should
always have been seen as, invalid attempts to avoid the Rent Acts.
Such a finding could be seen as a factual finding that the legislation
at issue applied to the present circumstances. In such a case, there
would be no question of an interference with the applicant's property
rights, as the courts merely declared the true meaning of the
agreements entered into. However, the Commission is not required to
decide this question as, even if it is accepted that the applicant's
use of his property was "controlled" by the fact that the case-law
changed during the currency of the "licences", the application is in any
event manifestly ill-founded for the following reasons.
The rent legislation at issue pursues a legitimate aim of
social policy in that it seeks to protect the interests of tenants in
a situation of a shortage of expensive housing (Kilbourn v. the United
Kingdom (No. 10991/84, Dec. 16.5.85, unpublished)).
As to the proportionality of the interference, the Commission
notes that the reduction in rent was not particularly striking (from
£174 per month for the flat, including rates of some £45 per
month, to £90 per month plus the rates, i.e. £135). As to the
capital depreciation of the flat, the applicant's principal complaint,
the Commission accepts that as a result of the decision of the House
of Lords, the applicant was unable to sell his flat with vacant
possession on the open market as he was effectively prevented from
repossessing it. However, the agreement entered into by the applicant
must be regarded in the light of a long history of attempts on the part
of landlords to avoid the operation of the Rent Acts. If the
applicant had taken appropriate advice, he may well have been told,
even before the House of Lords decision in Street v. Mountford, that
there was no certainty that Somma v. Hazlehurst would remain good law
indefinitely. The applicant must therefore be regarded as having
accepted a certain risk when entering into his agreements. In the
circumstances of the present case, the Commission finds that, even if
there was a control of use, bearing in mind the wide margin of
appreciation afforded to States in determining the existence of social
problems and ways for remedying them, the control of use was
proportionate to the legitimate aim, and may therefore be deemed
necessary.
It follows that this part of the application is manifestly
ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of
the Convention.
2. The applicant claims that his having to pay all the costs of
the domestic proceedings following uncertainty in the law is itself a
violation of Article 1 of Protocol No. 1 (P1-1).
The principle that costs follow the event is, as such,
reasonable. In particular, it may act as a disincentive to
unnecessary litigation and provides that at least some of a successful
litigant's costs may be recovered. The Commission has previously
found that costs imposed were "contributions" within the meaning of
the second paragraph of Article 1 of Protocol No. 1 (P1-1)
(No. 7909/74, Dec. 12.10.78, D.R. 15 p. 160) and it notes that the
imposition of costs in the present case will have been based on the
Rules of the Supreme Court (RSC Ord 62 relates to the court's
discretionary power to award costs). The imposition of costs may
here reasonably be regarded as "necessary", notwithstanding the
unfortunate fact that the applicant in the end had to pay costs for
three levels of jurisdiction.
It follows that this part of the application is also manifestly
ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of
the Convention.
For these reasons, the Commission
DECLARES THE APPLICATION INADMISSIBLE
Secretary to the Commission President of the Commission
(H. C. KRÜGER) (C. A. NØRGAARD)
Full & Egal Universal Law Academy