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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)

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ANTONIADES v. THE UNITED KINGDOM

ANTONIADES v. THE UNITED KINGDOM

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