Vine Housing Co-Operative Ltd v Mark Smith [2015]

Tenant expelled from Co-Operative

Respondent Smith was granted a weekly tenancy of a ground floor flat in London on several conditions:

• The Respondent was not to be the owner or tenant of any other habitable property; and
• The Respondent was to be a member of the Appellant Co-Operative throughout the duration of the tenancy and agreed to comply with the Co-Operative’s policies and regulations.

Tenants cease to be members of the Co-Operative if they die, resign, are expelled, their leases are terminated or if they no longer require the property.

Both parties agreed that the Respondent had been expelled from membership of the Co-Operative; the Co-Operative then applied to the First-Tier Tribunal, seeking determination that the Respondent had breached the terms of the contract with a view to forfeiting the lease.

The Law

The FTT held that expulsion from the Co-Operative did not constitute a breach of the lease. Although the lease states that the tenant ‘shall be a member of the Co-Operative throughout the tenancy’, the Respondent did not resign or choose to leave the Co-Operative himself in any way. The Appellant chose to expel him and therefore this by itself did not constitute a breach of the covenant to be a member of the organisation.

In the Appellant’s view, the question was simply a matter of fact: was the Respondent a member of the organisation or not? The reasons behind his membership (or lack thereof) were immaterial; if he was not a member, he has breached that term of the lease.

In the Upper Tribunal hearing, two breaches had to be considered:

• Breach by illegal use and anti-social behaviour (the Respondent has used the property for illegal betting); and
• Breach by expulsion from the Co-Operative.

The Decision

The Upper Tribunal allowed the appeal, upholding the view that the Tribunal need only consider the question of whether the Respondent was a member of the Co-Operative or not. It was held that the Respondent was in breach of the terms of the lease.

It is in the landlord’s discretion as to how to enforce such a judgment, for example by service of a S.146 Notice or by bringing possession proceedings against him.

JB Leitch’s Stuart Miles comments on the decision:

“This case provides authority to the Courts and Tribunals that they should still find a breach of lease, even where the landlord has effectively “triggered” the breach by expelling the tenant from membership of the landlord company. On the face of it, this may seem like a harsh decision but it provides a useful reminder that leaseholders must obey all their covenants in their leases.

His Honour Judge Gerald also comments on the fact that it is entirely open for the landlord to bring multiple applications for breaches of lease, regardless of whether or not the landlord already had a breach of lease determined. There is no obligation for the landlord to enforce the determination, once obtained, by way of service of the Section 146 Notice to forfeit the lease before the landlord is free to bring another application for another breach of lease, should the landlord opt to do so.”