The value of a family business or business interest is treated as an asset and therefore part of the matrimonial pot to be distributed when it comes to negotiating a financial settlement on divorce or...
(Court of Appeal; Waller, Scott Baker and Sullivan LJJ; 1 April 2009)
The pregnant girl approached the local authority as homeless when she was 16. The authority granted her a tenancy of premises in their standard form of tenancy agreement. Following complaints from other tenants, and in the light of the authority's concerns about a variety of matters, including payment of the rent, the authority gave the girl notice to quit. The girl sought to defend the possession proceedings, but the district judge held that the notice to quit was effective. On appeal the girl argued that because minors were not capable of holding legal estate in land, the authority had not granted the girl a lease, but had held the property on trust for her, and could not therefore serve notice to quit. Under Trusts of Land and Appointment of Trustees Act 1996, Sched 1 any purported grant of a legal estate to a minor operated as a declaration that the premises were held on trust for the minor.
Allowing the appeal the court held that a landlord who had full capacity to grant a legal tenancy, and who granted such a tenancy without any express qualification that something less than a legal tenancy was being granted could not subsequently say that what had been granted was not a legal tenancy, but an equitable tenancy. Having entered into a standard form tenancy agreement with a minor, the local authority therefore held the premises on trust for the minor. For so long as the local authority held the premises on trust for the girl, it could not lawfully destroy the subject matter of the trust by serving a notice to quit on her. Authorities seeking to avoid such problems when housing minors could either agree to grant a licence, or to grant a lease until the minor turned 18. Describing an agreement as an agreement to grant a licence would not suffice to avoid the creation of a tenancy if the landlord allowed the minor to have exclusive possession of residential premises for a term, and did not provide any attention or services. Given that the applicants in question were minors, they might well require support and assistance going beyond mere provision of accommodation and it should not be too difficult for the landlord authority, in discharging both its housing and social services functions, to co-ordinate matters so that, whether by making provision in the agreement for some attention or services, or by permitting inspection of the premises by those charged with the child's welfare, and thereby preventing the grant of exclusive possession, any agreement with a minor was not merely expressed to be but was the grant of a licence rather than a tenancy. Whatever course was adopted, it was important that the inability of a minor to hold a legal estate was expressly recognised, and that any agreement with a minor expressly stated that because the applicant was a minor the authority was not granting a legal estate, but was instead securing that accommodation was available by granting something other than such an estate.