‘Exclusive possession’ and property operated by charities

In Watts v Stewart ([2016] EWCA Civ 1247) Ashtead United Charity (‘Ashstead’) owned almshouses. Its governing instrument provided that the persons selected to occupy an almshouse had to be chosen from among ‘poor single women of not less than 50 years of age who are inhabitants of the ancient parish of Ashstead’. Mrs. Watts was given the right to occupy one of the almshouses.

Ashstead’s governing instrument empowered Ashtead to ‘set aside the appointment of any resident who in their opinion –

(a) persistently or without reasonable excuse either disregards the regulations for the residents or disturbs the quiet occupation of the almshouses or otherwise behaves vexatiously or offensively’.

Ashtead’s agreement with Mrs Watts provided that she could be removed for ‘serious misconduct’.

Ashstead sought to evict Mrs Watts because of her admitted misconduct. The English Court of Appeal heard Mrs Watts’ appeal against the order for eviction made at first instance. Sir Terence Etherton MR delivered the Court of Appeal’s judgment.

Exclusive possession

Mrs. Watts argued that she was not a licensee but was at first a tenant at will and, once she began to make rent payments, a periodic tenant. The question was whether she had exclusive possession.

The Court of Appeal distinguished between the ‘legal exclusive possession’ of the tenant and the ‘personal right of exclusive occupation’ of licensees such as lodgers ([31]).

The court pointed to a number of provisions in Ashtead’s governing instrument which pointed away from an intention to grant legal exclusive possession. This provided that residents would not be tenants, could be required to leave, could only have visitors stay with them with Ashstead’s consent, could not leave the almshouse empty for more than 28 days in any year without consent and could be required to leave on the grounds of serious misconduct ([39]).

There was no hint that these terms could be regarded as ‘sham’ ([40]). Rather:

‘the Trustees could only properly discharge the trusts of the Charity, which limited its objects to those in need, hardship or distress, if a personal revocable licence was granted (which could be revoked if, for example, the occupier no longer became qualified under the Scheme because they became wealthy). ([40]).

A little later the court said:

‘The status of a beneficiary occupying trust property will depend upon the terms and conditions on which the occupation was permitted.’ ([45])

The terms of the governing instrument are an important part of the context for the purposes of the interpretation of the agreement.

Mrs. Watts had a personal licence to occupy the property. She did not have ‘legal exclusive possession’ and was not a tenant ([46]).

Michael Lower

 

 

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