Archive for October, 2008

ASBOs for all!

Published
by
J
on 31 October 2008
in Housing law
. 2 Comments

Birmingham City Council v (1) Shafi (2) Ellis [2008] EWCA Civ 1186

This is a complicated case, focusing much more on local government law than on housing law per se, but there are some significant implications for housing lawyers. We’ve already had one request to blog this case and I hope you’ll see why.

Section 222(1)(a) of the Local Government Act 1972 confers on local authorities in England and Wales the right and power to “prosecute or defend or appear in any legal proceedings and, in the case of civil proceedings… [to] institute them in their own name.” One of the effects of this is to allow a local authority to seek injunctive relief in circumstances where, prior to 1972, the Attorney General had exclusive jurisidiction to do so. In practice, the Attorney (and local authorities) tend to use that power in two distinct categories:

(a) to seek an injunction in aid of the criminal law;

(b) to prevent a public nuisance.

See, by way of example, Stoke-on-Trent City Council v B&Q Retail [1984] 1 AC 754 (an injunction in aid of the criminal law to prevent unlawful Sunday trading) and Nottingham City Council v Zain [2001] EWCA Civ 1248; [2002] 1 WLR 607 (an injunction to prevent a public nuisance caused by an alleged drug dealer).

During summer 2007, Birmingham City Council, together with the West Midlands Police and West Midlands Probation service, launched a concerted legal campaign against what they contended were dangerous criminal gangs operating in their area. They sought ASBOs against those alleged gang members who were under 18 and s.222 injunctions against those who were over 18. The orders were broadly similar in all cases in that they sought to prevent the defendants from entering large parts of Birmingham; meeting certain named individuals or carrying out acts of violence. Sometimes (as in this case) additional clauses were sought so as to prohibit the wearing of clothing of a certain colour (said to be the colour of the gang) or being in any group larger than two.

At trial, HHJ Macduff QC (as he was then, now Macduff J) accepted the broad thrust of the council’s case on the facts. He found that there were such gangs operating in Birmigham and that they had engaged in violent, criminal activity. He found that both defendants were members of one such gang, although he did not find that the defendants themselves had acted in a criminal or violent manner.

He rejected the applications for the injunctions. He found that there was a complete code to deal with anti-social behaviour and that code was contained in the Crime and Disorder Act 1998. He found that the availability of the ASBO as a remedy meant that he no longer had jurisdiction to make an injunction under s.222. If he was wrong about that, he went on to hold that, before he would make any injunction, he would require it to be proved, to the criminal standard of proof, that the individual defendants had themselves acted in a criminal or violent manner. He granted the council permission to appeal on all points.

The Court of Appeal dismissed the appeal. The Judge had been wrong to see the question as one of jurisdiction. However, he had been right to focus on the availability of the ASBO as an alternative remedy. Parliamant had, in enacting the Crime and Disorder Act 1998, created a self-contained code for dealing with ASB. It contained checks and balances and had a detailed body of case law. The common-law powers of the local authority, through the vehicle of s.222, should not be used, save in exceptional cases. It would be wrong in principle (save in exceptional cases) for a court to grant an injunction where the subject matter of the complaint or the terms sought could be adequately dealt with by an ASBO.

The Court of Appeal then divided (Rix LJ and Clarke MR for the majority, Moore-Bick LJ in the minority) on the standard of proof to be applied in those exceptional cases where an injunction might be appropriate. The majority thought that the Judge was right to require a criminal standard of proof, by analogy with the ASBO regime. The minority felt that this would introduce uncertainty into the law dealing with all injunctions as it was impossible to categorise local authority injunctions against criminal or nuisance behaviour as a discrete category of injunction.

There is a general point here for housing lawyers. Why does this logic not hold good for ASBIs under ss153A-E? They have the same characteristics as s.222 injunctions. If s.222 is not to be used where an ASBO might be available, why should an ASBI be any different? If an ASBI is to be used then, if an ASBO would have been available, surely, as a minimum, the standard of proof should be the criminal standard.

Birmingham have indicated that they intend to petition the House of Lords.

Varying an ASBO - an (un)appealing option

Published
by
J
on 31 October 2008
in Housing law
. 1 Comment

We here at NL still haven’t decided how much ASB law to cover on the blog. On the one hand, only possession proceedings and s.153A-E Housing Act 1996 injunctions could be said to be ‘true’ housing law. But, on the other, ASB remedies are, to a very significant extent, conferred on public sector landlords, with the clear implication that they’re to be used as one of the range of remedies against/for the benefit of ones own tenants. If readers have any strong views about whether we should include more or less ASB cases, please let us know. We can’t guarantee to blog everything, but it’d be interesting to know what you want to read about.

Ashley Langley v (1) Preston Crown Court (2) West Lancashire DC (3) The Secretary of State for Justice [2008] EWHC 2623 (Admin) concerns the routes of appeal from an order varying an ASBO.

The claimant, Ashley Langley, was made subject to a “stand alone” ASBO under s.1(1) Crime and Disorder Act 1998 in February 2004. It was to run until 19 August 2007. On 17 August 2007, West Lancashire DC applied to vary the order, so as to extend it for another two years. This application was granted by the Chorley Magistrates’. They found that Mr Langley had been convicted of a number of breaches of the original ASBO and that he had been convicted of an offence of violence. The order was necessary to protect the community.

Mr Langley appealed to the Crown Court against that variation. The issue was whether or not the Crown Court had jurisdiction to hear the appeal.

There was no doubt that, in the magistrates’ court,  there was an automatic right of appeal against the making of an ASBO, whether that ASBO was interim or final, (s.4(1) Crime and Disorder Act 1998), but the position as regards a variation of an existing order was less clear.

The Divisional Court held that:

(a) an ASBO which was made by and varied in the county court could be appealed to the High Court or Court of Appeal, as appropriate and with permission; (CPR 52)

(b) an ASBO made on conviction in and then varied by the Crown Court could be appealed to the Court of Appeal (Crminal Division), but only with the leave of that Court; (ss9 and 50 Criminal Appeal Act 1968)

(c) an ASBO made in the magistrates’ court (whether on conviction or a free standing application) and then varied cannot be appealed to the Crown Court. The defendant can only seek judicial review or to have a case stated.

The common feature of all the routes of challenge was that they did not permit a re-hearing on the facts, but were confined to errors of law. This did not even come close to amounting to a violation of Art. 6.

It would be an abuse of process, save in the most exceptional case, to attempt to get around these restrictions by seeking to appeal the original ASBO out of time.

The point that this case does not deal with (and, to my mind, the far more important point) is the different appeal rights from the making of the ASBO. In the magistrate’ court, a stand alone ASBO is subject to an automatic right of appeal to the Crown Court for a complete re-hearing. In the county court, one needs permission to appeal and the appeal will usually be confined to a point of law. Given that the ASBOs have the same effect in each case, this difference is hard to explain or justify.

Deposits - another County Court decison

Published
by
NL
on 30 October 2008
in Housing law
. 3 Comments

Tessa Shepperson at Landlord Law has a report from a landlord’s solicitor on another tenancy deposit case in the County Court, this time Bedford County Court.

In short, the Court found that payment of the deposit and provision of the required information by the landlord prior to the issue of a claim (and, County Court obiter, prior to hearing of the claim) meant that a claim for 3x the deposit failed. This claim was struck out under CPR 24. Note that this was after the landlord had failed to put the deposit into a scheme for over 13 months.

A practically interesting side point is that, because the tenancy had become a statutory periodic before the landlord protected the deposit, the private insurance deposit schemes (TDS and MyDeposits) wouldn’t take the deposit, so only the statutory scheme (DPS) was available. Odd. I have heard the contrary.

On ramps and suitability

Published
by
NL
on 29 October 2008
in Housing law
. 4 Comments

Boreh v London Borough of Ealing [2008] EWCA Civ 1176 was an appeal from a s.204 appeal of a s.202 review that upheld a finding that a property offered in discharge of s.192(3) duty was suitable.

Mrs Boreh was owed the full housing duty by Ealing. Ealing offered a property in discharge of that duty, which Mrs Boreh rejected as unsuitable. Ealing found on review that it was. Mrs Boreh is significantly disabled, uses a wheelchair and cannot stand unaided for more than 2 minutes.

Her daughter saw the property on her behalf and rejected it, giving a number of reasons. of these, the one that remained significant on appeal to the Court of Appeal was the absence of a ramp to the stepped front door.

Ealing’s initial decision made no reference at all to wheelchair access via the front door or any access to the property from the outside. On s.202 review, after an inspection of the property, Ealing said that the property was,  or shortly would be, accessible via a side door and rear patio door, using an alley that had a wooden gate that ‘could be widened if necessary’ (having noted that it was too narrow for a wheelchair on a site visit), but noted that for front door access ‘a ramp would have to be installed’ and stated that ‘it was confirmed with the owner of the property that a ramp would be fitted’.

On S.204 appeal, the issue was whether a property which was currently unsuitable could actually be suitable as an offer under s.210 in view of proposed alterations, adaptations or additions to it?

The Recorder found that it could, while it was question of fact and degree the language of s.206 [sic] permitted this. [The Court of Appeal pointed out he must have meant s.210 on suitability]. The Recorder found that amongst some other adaptations, ‘there was to be a ramp to the front door’ and that ‘the gate would be widened if necessary’. There was no error in law in the s.202 review.

The Court of Appeal took a different view, based on a reading of the s.202 review decision.

There is nothing in principle wrong with the Recorder’s view that prospective alterations and adaptations make a property suitable at the time of offer, para 27:

Whilst I record that we had no argument from either side to the contrary effect, I would respectfully agree with the Recorder that the suitability of offered accommodation is not to be judged exclusively by reference to the condition of the accommodation at the time of the offer, but that the assessment of its suitability can and should also take into account any adaptations or alterations that are, at that time, proposed to be made. I would, however, qualify that by saying that I consider that any such proposals would have to be the subject of assurances that the applicant could fairly regard as certain, binding and enforceable. I also agree with the Recorder that, if the accommodation as it currently stands is unsuitable, it will be a matter of fact and degree as to whether any such proposed adaptations and alterations will be such as to make it suitable. At one extreme, the proposed adaptations may be simple, and easily and quickly effected: for example, the installation of a ramp for access purposes. At the other extreme they may involve the carrying out of such major works as to make the accommodation uninhabitable in the meantime: in such a case the property might well be regarded as unsuitable despite the proposal to carry out the works.

However, the Recorder was in error in taking into account adaptations there were being proposed right up to the point of the review decision. The cut of point for considering proposed adaptations must be the initial decision. In this case there was no discussion of access via the front door or the alleyway at the time of the decision, which focused entirely on the suitability of the interior of the property. There was no ongoing discussion between Ealing and Mrs Boreh about adaptations after the decision that would merit later proposals being included in the review decision.

As Mrs Boreh’s appeal actually focussed on the absence of the front ramp, the Court noted that it wasn’t addressed in the initial decision but was acknowledged as required by the review decision, only to be met with the inconclusive statement that a ramp would be fitted. By whom and when, and when any agreement to do so was reached, was not clear at all.

The lead judgment is by LJ Rimer, but LJ Walls’ additional comments bear quoting in full (paras 55-58):

I have to confess to some impatience that this case should not only have required an appeal to the Recorder but also a full hearing as a second appeal in this court. In my judgment, perhaps the most important issue in the case (the need for a ramp to enable the appellant to gain access to the property through the front door) could and should have been capable of resolution on the ground. That viewpoint is reinforced by paragraph 41 of the skeleton argument for the appellant in this court which states in terms that the appellant would most probably have accepted the accommodation had the offer contained any condition or undertaking to render it suitable.

As it is, however, I respectfully agree with Rimer LJ that it is the decision letter of 12 March 2007 which is the critical document, and as he has demonstrated, that letter makes no reference to the property being unsuitable because there is no ramp allowing the appellant to gain access to the property by the front door.

In my judgment, this matter could have been corrected by Ealing in a number of ways. For example Ealing could have acknowledged on the review that the property was indeed unsuitable without a ramp to the front door, and made a fresh offer, this time giving an undertaking or some other enforceable assurance (I respectfully endorse Rimer LJ’s phrase “certain, binding and enforceable”) that a ramp would be provided. By contrast, however, Ealing’s review letter of 13 July 2007 repeats in terms its view that the property “was and continues to be a suitable offer of accommodation”, and only addresses the question of the ramp with the assertion: “It was confirmed with the owner that a ramp would be fitted”. For the reasons Rimer LJ has given this is simply not enough.

In my judgment, therefore, the message of this case is that however pressed local authority housing officers may be, they must address their minds to the real issues in any given case, and where simple alterations are required to render a property suitable, those issues must be addressed with clarity and certainty in the decision letters they write.

Manchester CC v Moran - Lords appeal

Published
by
NL
on 29 October 2008
in Housing law
. 0 Comments

One of Nearly Legal’s band of information elves (sorry H) brings news that Sharon Moran in Manchester City Council v Moran [2008] EWHC Civ 378 has been given leave to appeal to the Lords. This was the important Court of Appeal case on women’s refuges and homelessness that we previously reported. I am also, via another route, reliably informed that Richards, the respondent in the joined case at the Court of Appeal, has not sought permission.

Trying to avoid Council Tax liability by not being a tenant

Published
by
NL
on 28 October 2008
in Housing law
. 0 Comments

In what might be described as an audacious, or perhaps foolhardy, appeal from the Valuation Tribunal, Mr Jackson sought to challenge his liability to pay Council Tax in Jackson v Cambridge City Council [2008] EWHC 2529 (Admin). Normally, this wouldn’t concern us here, but Mr Jackson’s grounds of appeal bring the case inside the wobbly boundaries of Nearly Legal.

Mr Jackson had taken a 6 month assured shorthold tenancy. He claimed he did not move in but promptly sub-let it to four other people, each with their own room, in breach of the tenancy agreement. He paid the rent to the managing agents for the next four years or so, but stated that he believed that his tenancy (and with it any Council tax liability) ended after 6 months. After about 4 years, one of the occupants took a tenancy of the property from the landlord.

When payment of Council Tax was demanded, Mr Jackson stated that he had never lived at the property and in any case his tenancy had expired after 6 months.

The Valuation Tribunal found that Mr Jackson had set up a HMO, and on the basis of the multiple occupancy, he was liable for the Council Tax. When his assured shorthold had expired, he became a statutory tenant, and remained liable for Council Tax.

Mr Jackson appealed on the grounds that:

1. the tribunal had made an error in law in finding that he remained as a statutory tenant after the AST.

2. In finding that the property was an HMO, the Tribunal had failed to properly consider whether the sub-tenants were joint  tenants, but rather considered that occupying separate bedrooms was enough to establish an HMO. This was not enough to establish multiple sub-let of part as required for an HMO under Council Tax (Liability for Owners) Regulations 1992 Regulation 2(b)(i).

Held:

1. While it was right that Mr Jackson could not be a statutory tenant at the end of the AST because he did not fufill the only or principle residence condition (s.5 Housing Act 1988), he certainly did continue as a tenant in common law - he paid the rent and did not represent to the managing agents or landlord that he was anything other than the tenant. He used the address for his taxi licence and to register cars, meaning that he had signed several statements of truth that he resided at the property. He held over at the end of his lease and paid rent. He was therefore a common law tenant and, as such, remained liable for Council Tax.

2. There was sufficient evidence that the Tribunal had considered the form of occupation of the sub-tenants. The only sub-tenant to give evidence had described himself as a lodger with his own room and shared common spaces. He denied that anyone has access to the others’ rooms. The Tribunal had not failed to appreciate the requirements of the law, or misdirected themselves, but came to a considered conclusion. Appeal dismissed, with costs against Mr Jackson

That takes chutzpah. To try to avoid Council tax on the basis of one’s own misrepresentation, breach of tenancy agreement and potentially criminal misrepresentation in various statement of truth involves some cheek. That this was only over a bill of £2500, even more so. The taxi drivers of Cambridge clearly have a cunning, but not particularly bright member in their ranks, one who now owes a further £5600 in costs (plus his own).

Taking your time

Published
by
J
on 27 October 2008
in Housing law
. 0 Comments

Yorkshire Bank Finance Ltd v Mulhall & anor [2008] EWCA Civ 1156

How long does a creditor who has the benefit of a charging order have to enforce that charge? In particular, if a creditor allows more than 12 years to pass after securing the charging order, can the debtor apply to have it set aside?

Mr & Mrs Mulhall had provided a guarantee to the bank in respect of some company borrowings. The company defaulted and the bank sought to enforce the guarantee. Judgment in default was obtained, followed by interim and final charging orders. The final order was made on 25 June 1991.

In January 2007, Mrs Mulhall applied to set aside the charging order. One of her arguments was based on the failure of the bank to take any steps to enforce the order for c.16 years. The Deputy District Judge and Circuit Judge both dismissed her application, but permission for a second appeal to the Court of Appeal was given Mummery LJ.

Her argument was based on s.20(1) Limitation Act 1980. This provides that “no action shall be brought to recover… any principle sum of money secured by a mortgage or other charge on property… after the expiration of 12 years from the date on which the right to receive the money accrued.” The right to the money had accrued, at the latest, when the final charging order was made.

The Court of Appeal disagreed. Section 20(1) did not apply to charging orders and, by analogy with Ezekiel v Orakpo [1997] 1 WLR 340, there was no limitation period for the enforcement of charging orders.

I know at least one other member of the NL team has come across creditors seeking to rely on ‘old’ charging orders, so this decision from the Court of Appeal does at least give us a clear answer. Shame about the result though.

New PRS Report

Published
by
Dave
on 25 October 2008
in Housing law
. 0 Comments

Ok, I’m angry again.  It’s really out of character as I’m usually very mild mannered.  Here’s a question: what do you do if you’ve paid a group of people over around 10 years to come up with a series of proposals to regulate renting relationships (ie the Law commission) but you can’t live with their final reports?  Well, you could do nothing, which was the government’s preferred strategy, but a lot of people out there think that the Law Commission’s suggestions were pretty sensible (although I’m in the “some good, some daft” category) and those people are beating the drum.  Alternative strategy: pay somebody else to come up with a report on which you can base your forthcoming Green Paper which rubbishes the other body’s work.  Yes, there is yet another review of private renting, funded by the government and written by a couple of housing policy academics at York University, published yesterday (click here).  Now, its pretty clear that the authors are not lawyers and that shouldn’t be held against them; indeed, its a positive head start.  But you can’t achieve a review of the future regulation of the sector without (say) John Hills’ charming implied put-downs of government ministers and/or Cave’s clear analytical (but dry) reasoning; actually, you can’t really do this kind of a review without understanding the state of the art in basic regulation, something which the Law Commission actually did achieve.  The entire body of the Law Commission’s work on security of tenure is dealt with by misrepresenting it in this new review in a couple of pages of really mind-numbing poverty of thought (see pp 81-2); understandings of regulation, risk and impact are non-existent, and well, I could go on.  Ordinarily, I wouldn’t give this kind of thing the time of day but it is going to be influential in developing the government’s proposals in, brace yourself, the forthcoming Green Paper.

Yet amidst all that negativity, there are some good recommendations which are likely to appeal to readers; it’s just that they’re really rather vague. The authors recommend that there should be a licensing scheme for all landlords, run by an independent body, which would be given on the payment of a cash sum but the landlord could be removed from the scheme if the local authority says so (eg where the landlord is guilty of retailiatory eviction) but these circumstances aren’t really spelled out - the suggestion is that local authorities should start with the worst landlords but this rather begs the question; agents should be encouraged but subject also to mandatory licensing and regulation, seemingly of a more intrusive kind; and, much more importantly, the authors sneak the following into a bullet point

Landlord licence fees could contribute to the development of a housing justice network, which should be effectively linked to the licensing framework. A single property tribunal might be easier for tenants to access, and could be connected to a specialised housing court. The procedures and outcomes from similar models operating in other countries should be scrutinised in detail, so that any good practice lessons could be absorbed. (at p. 113)

(note: the Law Commission did this comparative work).

All of this would have been great if the authors had a feel for regulation, law, and, in a way, real life outside the York closet.  But they don’t.  There is, on the plus side, an interesting discussion of buy-to-let and the types of households living in private renting; but there’s a lot of other stuff on the minus side (eg a poor discussion of the use of private renting to meet homelessness obligations) and a lot of the usual academic self-referencing.

Oh, roll on the Green Paper.

Agreements and constructive trust

Published
by
NL
on 24 October 2008
in Housing law
. 0 Comments

Parris v Williams [2008] EWCA Civ 1147 was an appeal against an order that Mr Williams had 100% beneficial interest in one of two flats to which legal title was held by Mr Parris. It is of interest because it contains a challenge to the ways in which a constructive trust can be found to arise.

The facts were, briefly, that Mr Parris and Mr Williams were friends. Mr Williams was subject to an IVA. Mr Parris bought two flats (originally knocked into one, but a dividing wall was put up shortly after purchase). Mr Williams contributed nothing to the purchase monies and the mortgages were paid by rent from tenants. Mr Williams could not hold legal title because of the IVA. Mr Williams claimed that there had been an agreement that one of the flats was his.

At trial, Mr Williams argued that there had been the agreement, following which he acted acted to his detriment in decorating both properties, paying service charge on on property, which were accepted by the Recorder, and other payments that weren’t believed. Mr Parris denied there was an agreement and that Mr Williams had paid any sums or done anything more than half a day’s decorating. The Recorder found that there was evidence that pointed towards an agreement and that Mr Williams had acted to his detriment on the basis of that agreement, sufficient to establish a common intention constructive trust and beneficial interest of 100% in one flat.

Mr Parris appealed, initially on the ground that the Recorder was wrong to divide up the flats in this way. At hearing at the Court of Appeal, the further ground of appeal that the Recorder was wrong to find that a constructive trust had arisen was given permission.

Mr Parris argued that in order for a constructive trust based upon an agreement to arise, there must be subsequent acts in accordance with the agreement. He cited Gissing v. Gissing [1971] AC 886 (para 905B)

What the court gives effect to is the trust resulting or implied from the common intention expressed in the oral agreement between the spouses that if each acts in the manner provided for in the agreement the beneficial interests in the matrimonial home shall be held as they have agreed.

In this case the point was that:

the evidence before the Recorder was that it was no part of the agreement or understanding between Mr Williams and Mr Parris that Mr Williams was expected or required to do anything. It followed that the acts that the Recorder found he had performed were not acts he was required to perform under the agreement and so their performance was ineffective to enable him to establish the claimed constructive trust. (para 26)

Midland Bank Plc v. Dobson [1986] 1 FLR 171 was also cited in support of this view. The upshot being that, absent an express agreement as to what it was Mr Williams would have to do to get his beneficial interest, any acts of his that might otherwise be considered as detrimental reliance were by the by.

The Court of Appeal didn’t agree. In a tour of subsequent authorities, Lloyds Bank Plc v. Rosset and Another [1991] 1 AC 107 and Grant v. Edwards [1986] Ch 638, the lack of strict requirement as argued by Mr Parris is identified, with Lord Bridge’s statement at para 132D taken as a clear guidance:

The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel.
In sharp contrast with this situation is the very different one where there is no evidence to support a finding or an agreement or arrangement to share, however reasonable it might have been for the parties to reach such an arrangement if they had applied their minds to the question, and where the court must rely entirely on the conduct of the parties both as to the basis from which to infer a common intention to share the property beneficially and as the conduct relied on to give rise to a constructive trust. In this situation direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust. But, as I read the authorities, it is at least extremely doubtful whether anything less will do.

This case would fall under the second of these categories, as an agreement had been found to have been made. Mr Parris, via Counsel Mr Glen, was effectively repeating arguments made to the House of Lords in Rosset and which were not accepted then. The Court of Appeal had adopted that approach to agreement cases, in Crossley v. Crossley [2006] 2 FLR 813.

The final line of appeal - that Mr Williams detriment was too insignificant to amount to establishing 100% beneficial interest in the flat, also failed. This was a decision for the Recorder at first instance on the facts, but given that the mortgage was paid by rent on both flats, there was no major discrepancy in value.

Appeal dismissed.

Second time around

Published
by
J
on 23 October 2008
in Housing law
. 0 Comments

Truro Diocesan Board of Finance Ltd v Foley [2008] EWCA Civ 1162

In March 1987 Mr Foley became the tenant of a property owned by the predecessor in title of the Board. In 2000, the Board sought possession of the property. They contended that Mr Foley was a protected shorthold tenant (within the meaning of s.52 Housing Act 1980). Mr Foley resisted the proceedings and contended that he was in fact a Rent Act tenant.

The proceedings were settled on 20 September 2001. It was agreed that Mr Foley was a protected shorthold tenant. It was further agreed that Mr Foley would give up possession of the property within 6 days, spend a minimum of 24 hours out of possession and, on 27 September 2001, that he would be granted an assured shorthold tenancy of the same property. That assured shorthold tenancy would be for a fixed term of 5 years. This agreement was contained in a deed. Mr Foley duly gave up possession.

In April 2006, the Board served a notice under s.21 Housing Act 1988, seeking possession on the last day of the five year term. Mr Foley again defended the proceedings and, again, claimed that he was a Rent Act tenant. His defence failed in the county court and he appealed to the Court of Appeal.

Mr Foley argued that in general terms, it has not been possible to create new Rent Act tenancies since 15 Jan 1989, when the assured tenancy provisions of the Housing Act 1988 came into effect. However, this general rule is subject to exceptions. One of those exceptions is found in s.34(1)(b) Housing Act 1988. That provides that:

(1) A tenancy which is entered into on or after the commencement of this Act cannot be a protected tenancy unless…

…

(b) it is granted to a person… who, immediately before the tenancy was granted, was a protected tenant or a statutory tenant and is so granted by the person who at the time was the landlord… under the protected or statutory tenancy

Mr Foley relied on s.45 Housing Act 1988. This provides that, except where the context otherwise requires, a tenancy includes an agreement for a tenancy. Hence, the settlement order of 20 September 2001 was, actually a grant of a new tenancy and, by virtue of s.34(1)(b), it was a protected tenancy.

The Court of Appeal, with some reluctance, did not accept this argument. They took the view that the “context otherwise require[d]” that, in s.34, a tenancy could not include an agreement for a tenancy. The language of s.34 as a whole suggested that it was dealing with tenancies which had actually been granted and not merely agreed.

Mr Foley had a second string to his bow though. He argued that the settlement of 20 September 2001 was itself a tenancy, following Walsh v Lonsdale (1882) 21 Ch D 9. At this time, he satisfied the requirements of s.34(1)(b).

The Court of Appeal was similarly reluctant to reject this argument, but reject it they did. One had to consider the actual intentions of the parties at the time that they entered into the settlement on 20 September 2001. They intended that the new tenancy arise on 27 September 2001, not 20 September 2001. Hence this point failed as well.

Mr Foley then sought to argue that the 24 hours between the surrender of his old tenancy and the grant of his new tenancy were irrelevant when considering whether or not “immediately before the [new] tenancy was granted” he was a protected tenant. The Board relied on Dibbs v Campbell (1988) 20 HLR 374 and Bolnore Properties Lrd v Cobb (1996) 29 HLR 2002, as authority for the proposition that the 24 hr break between the tenancies was sufficient to mean that the new one did not follow immediately after the old one. Again, the Court of Appeal rejected Mr Foley’s argument (albeit by 2 to 1 - Sir John Chadwick dissented on this point).

The Human RIghts Act 1998 did not help him either. Kay v Lambeth LBC [2006] 2 AC 465 made clear that it was only an exceptional case where domestic law would not provide sufficient protection for Art. 8 purposes. Although Kay was about social housing, the logic applied equally to the private sector. McCann v UK (App. No. 19009/04) took matters no further and, in light of the criticism of that case by Lords Scott and Hope in Doherty v Birmingham CC [2008] UKHL 57, it added nothing to the general law as set out in Kay.

So - a clean sweep for the Board. There probably isn’t much of lasting value in this case - the facts are so unusual and there are so few protected tenants left. However, the discussion of Kay, Doherty and McCann might have some wider impact. This was the first time that the Court of Appeal grappled with Doherty and they’ve clearly decided that it adds nothing to Kay. Landlord lawyers will no-doubt seize on paras 33 and 34 to do down human rights arguments but I don’t think anyone would seriously contend that this is the end of the road for McCann based arguments.

Andrew Arden QC and Iain Colville, instructed by Michelmores LLP for the Board

David Watkinson, instructed by Cartidges for Mr Foley