Lazarus Estates Ltd v Beasley

Lazarus Estates Ltd v Beasley [1956] 1 Q.B. 702; [1956] 2 W.L.R. 502

No advantage can be obtained by fraud.

Facts:

The appellant, Mrs Beasley, was a tenant in the respondent’s block of flats. Under s.25(1) Housing Repairs and Rents Act 1954, a landlord seeking to increase the rent had to serve a declaration on the tenant stating what works have been carried out to justify the increase. Under Schedule 2 paragraph 4 the tenant had 28 days to challenge the validity of the declaration. The respondent landlord delivered a declaration stating that the conditions for a rent increase were met (namely that the premises were in good repair and reasonably fit for occupation) and that they had carried out works valued at £566. The tenant alleged that the declaration was fraudulent, as only £300 worth of work had been carried out. However, the tenant did not challenge the declaration within the 28 day period. The landlord brought an action to recover the rent arrears. At first instance the judge found that evidence of the Landlord’s fraud had to be brought within the 28 day period. The tenant appealed.

Issues:

The tenant argued that Parliament could not have intended that a landlord could rely on fraud when it laid down the limitation period which the tenant had to challenge the declaration’s validity.

Held:

The Court of Appeal ordered a retrial. Denning LJ stated (at para 712):

No court in this land will allow a person to keep an advantage which he has obtained by fraud… fraud unravels everything.

The court had a jurisdiction to relieve against fraud in all cases.