Second time around

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

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Posted in Assured Shorthold tenancy, FLW case note, Housing law - All, Possession and tagged , , , .

About J

J is a barrister in London. He loves service charges and all things leasehold law related. He also likes beating rogue landlords and mortgage companies.

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