Shome mishtake shurely: The RLA discover a defence to s.21

[Update 26/11/204. Rather gloriously and hilariously rudely, the RLA have replied. Their response and an explanation of why they are shooting themselves in the foot is now at the end of this post]

As the second reading of the Teather bill on retaliatory eviction approaches, some Landlord organisations have been in a bit of a tizzy. Notably getting their knickers in a twist are the RLA. They have a campaign page linking to a briefing paper that they have sent to MPs. Remarkably, this briefing paper asserts that retaliatory evictions are already illegal and tenants have a defence to s.21 possession proceedings accordingly. So, the RLA assert, no more legislation is required.

How exciting! The RLA have apparently found a defence to s.21 possession claims! I was agog.

So, how do they reach this conclusion? One that has escaped housing lawyers everywhere? From the briefing paper:

In June, the Competition and Markets Authority issued guidance on the relationship between landlords and tenants. This guidance makes clear that under the terms of the 2008 Unfair Trading Regulations, coming from the Consumer Protection Act, it is a breach of these where “any commercial practice that, in the context of the particular circumstances, intimidates or exploits consumers such as to restrict (or be likely to restrict) their ability to make free or informed choices in relation to a product, and which cause or are likely to cause the average consumer to take a different transactional decision. These are known as aggressive practices.”

  • In the examples of what could constitute aggressive practices, it includes, “Threatening the tenant with eviction to dissuade them from exercising rights they have under the tenancy agreement or in law, for example where they wish to make a complaint to a local authority about the condition of the property, or seek damages for disrepair.”

  • There is also a body of legislation that protects tenants from harassment by their landlords. As Shelter itself has noted in a paper published in September 2011, “The Protection from Eviction Act 1977, the Criminal Law Act 1977 and the Protection from Harassment Act 1997 make harassment and illegal eviction criminal offences. Harassment includes threatening or intimidating tenants. Illegal eviction involves forcing tenants from their home without having followed due process.”

  • If a section 21 notice is given and Court proceedings are taken to evict a tenant in retaliation for a complaint about the property the landlord would be committing a criminal offence by pursuing the claim. As the landlord is acting illegally, they can defend the claim. The Courts should not help a landlord who would be committing a criminal offence by evicting the tenant. This is known as the common law defence of illegality.

Oh dear.

As far as I can see, the argument runs something like this. Threatening a tenant with eviction for complaining is a breach of The Consumer Protection from Unfair Trading Regulations 2008 according to CMA guidance (see page 27 of the Guidance [pdf]), which gives as an example of aggressive practice:

  • Threatening the tenant with eviction to dissuade them from exercising rights they have under the tenancy agreement or in law, for example where they wish to make a complaint to a local authority about the condition of the property, or seek damages for disrepair.

And there are potential civil and criminal offences for aggressive practice. What the RLA don’t tell you (or MPs) is what can happen about a breach. From Chapter 10 of the Guidance.

10.1  If you do not comply with the legislation you may face enforcement action.

10.2  Local authority trading standards services, the Department of Enterprise, Trade and Investment in Northern Ireland (DETI) and the CMA all have powers to enforce the consumer protection legislation referred to in this guidance.

So, the tenant can’t enforce a breach.

But in any event, what is given as an example is threatening the tenant with eviction. Not actually serving notice. There is a good reason for that. Serving a s.21 in a way permitted by statute cannot be “the use of harassment, coercion or undue influence”, which is at the centre of the definition in the regulation.  So the Unfair Trading Regs don’t do what the RLA suggest they do. Threats, yes. Service of a notice, no.

No matter, let us press on. It seems that what they go on to say is that evicting a tenant for complaining about repairs is harassment. What they don’t mention is that harassment under the Protection from Harassment Act requires a course of conduct – at least two acts – to be a breach. Service of a s.21 per se wouldn’t be harassment.

However, there is actually a kind of precedent for possession claims as harassment.  Carlos Allen v London Borough of Southwark  [2008] EWCA Civ 1478 [our note] established that issuing possession claims may amount to harassment. In that case, Southwark had issued 5 claims over 8 years, each on the same ground and each failing for the same specific reason, which they did not correct. Crucially, the first claim was not capable of being harassment, it was that the subsequent 4 were issued without correcting the error so that they were bound to fail. But, while the Court of Appeal found that conduct may amount to harassment, in the end, Mr Allen lost.

What there isn’t is any precedent that a claim of harassment would amount to a defence to a private sector possession claim via s.21.  In fact, as we will see, quite the reverse.

I’m not entirely sure why RLA have thrown in mention of the Protection from Eviction Act 1977. S.3 PEA doesn’t apply to assured shorthold tenancies and s.1 applies to unlawfully depriving the tenant of occupation. A possession claim following s.21 notice is, of course, lawful. So PEA is completely irrelevant to what they are on about. The ‘acts calculated to interfere with peace or comfort of occupier’ in s.1(3) can’t extend to the exercise of a contractual and statutory right in service of a notice.

But, for the sake of argument, let us assume that bringing a retaliatory eviction possession claim could be part of a course of action amounting to harassment for the purposes of the Protection from Harassment Act 1997. Let us assume that this would be a criminal offence. What then?

What RLA appear to be saying is the Court would not assist the landlord  to carry out an unlawful act. Well yes, that is a fairly trite point. The trouble is that serving a s.21 notice and bringing the possession claim is not solely a criminal act, even if we accept that it might be part of a course of conduct amounting to harassment. It is also a contractual and statutory right. So the landlord would not have to rely on the unlawful act for the possession claim.

Thus Chapman v Honig [1963] 2 Q.B. 502 in which the tenant had given evidence in another tenant’s claim for trespass against the landlord. The landlord served notice to quit on the tenant the next day. The tenant brought a claim alleging that the landlord’s action in serving notice was in contempt of court for victimising a witness. The tenant was successful at first instance, but the Court of Appeal held

the notice to quit was a valid exercise of the landlord’s contractual rights vis-à-vis the tenant and effective to terminate the tenancy, and his vindictive motive for serving it was irrelevant

and

The same act cannot at the same time as between the same parties be both a lawful exercise of a contractual right and a tortious act giving rise to a claim for damages.

For good measure, and assuming the RLA are thinking of ex turpi causa, we could throw in Tinsley v Milligan [1993] 3 All ER 65, [1994] 1 AC, a property rights case, which broadly held that a claimant will fail on grounds of illegality only if his claim requires him to rely upon or plead an illegal act. Service of a notice which the landlord is contractually and statutorily able to serve is not an illegal act.

There is, then, a good reason why the courts aren’t full of tenants relying on their landlord’s harassment in evicting them as a defence to s.21 possession proceedings. It can’t be done and isn’t a defence.

Of course, some MPs might actually believe their briefing paper. So it might be an idea for people to make sure MPs are aware that the RLA assertions are legally nonsense.

And who on earth came up with that stuff?

Update: I’ve been putting this to the RLA on twitter. I don’t think they want to respond really. So far it looks like this…

But answer came there none. And the page and the briefing are still up.

Making a mistake is one thing. Not correcting it is another…

 

[Update. After a week, on 25 November 2014, the RLA responded. And though I don’t like to use the blog to do the feuding and the fighting, their response is simply too gloriously entertaining not to include here. With commentary by me.

We see it clearly, Nearly!

Shurely it is Nearly Legal not the RLA who are mistaken:

Nearly Legal challenges the RLA Briefing which argues that, as retaliatory eviction is already unlawful as an aggressive practice under the Consumer Protection Regulations (CPRs), so a Section 21 notice should not be upheld by the Courts where served by a landlord because a tenant has raised a complaint. We can see where Nearly Legal’s sympathies lie. First of all Nearly Legal thinks we are in a “tizzy”. This is wrong – we are rightly extremely concerned that under Sarah Teather’s Bill there would be a presumption that any landlord serving a Section 21 notice after a complaint about disrepair is guilty of retaliatory eviction. This means that the landlord has to allow the tenant to remain for a further six months at least. Where is the justice if there is to be no opportunity for a landlord to demonstrate legitimate reasons for serving the Section 21 notice? The Bill’s approach is fundamentally wrong, so our concerns are hardly something that should be condescendingly dismissed.

This is an extremely interesting approach. If the RLA are seriously arguing that the validity of a s.21 notice should be based on the landlord’s intentions – whether they have a ‘legitimate reason’ for seeking a s.21 based possession, perhaps we should encourage them. Because there are a whole host of defences to a s.21 possession claim that could arise once the validity of the landlord’s purpose is an issue for whether possession should be granted. Alternatively, they really haven’t thought this through. i suspect the latter.

Nearly Legal makes much of our suggestion that retaliatory eviction could amount to harassment under the Protection from Harassment Legislation. We are fully aware of the need for a minimum of three incidents but a landlord engaged in the unacceptable practice of retaliatory eviction may well make repeated threats so it is quite possible that that landlord could also be guilty of harassment, giving rise to a further potential defence.

That is two incidents, not three, suggesting not fully aware. Still completely missing the point that serving a s.21 that the landlord is contractually and statutorily entitled to serve cannot be at the same time an act of harassment as far as the lawfulness of the service is concerned. Chapman v Honig (a case that this response completely ignores. Unsurprisingly, as it is completely fatal to their argument).

As the RLA’s separate technical briefing demonstrates, based on Competition and Markets Authority Guidance, threatening retaliatory eviction is an aggressive practice and serving a Section 21 notice, even without threats in these circumstances, is an unfair practice because the landlord serving the notice on a consumer would be in breach of the requirement for professional diligence. Both are criminal offences under CPRs.

Let us take this step by step.

  1. The guidance is merely guidance. It actually says so, right at the start. it is not a guide to the law and has no weight at all in what a court might decide.  Waving it around as if it was statute is just nonsense.

  2. So what if – a very, very big if – we agree with the RLA’s interpretation that serving a s.21 notice ‘in response to a tenant or tenants raising legitimate complaints about the state of the property’ is an ‘aggressive act’ under the meaning of Regulation 7 (which it probably isn’t, because it isn’t “the use of harassment, coercion or undue influence” required, regardless of what the guidance-which-isn’t-law says). If they were right (which they aren’t) it might be a criminal breach of the Regs. But the tenant can’t prosecute it. And it is not, unlike, say, the Equality Act, a statutory basis for a defence to possession – see below.

So, the tenant can’t prosecute and it is not a civil defence. The tenant therefore can’t prove that the service of a s.21 was an unlawful act (to the criminal burden of proof, of course, not the civil one) and thus there is no defence.

  1. That is even before we get back to the absolutely fatal point for the RLA’s argument. Chapman v Honig. How to do they avoid it?

Nearly Legal says that despite this the Court would still uphold a Section 21 notice and evict the tenant. Wrong again. The Blog relies on a House of Lords decision in Tinsley v Milligan. This case is about a completely different situation dealing with ownership of a property under equitable principles. The decision addresses the impact of illegal conduct when it comes to rebutting the presumptions of advancement or the existence of a resulting trust. It has nothing directly to do with a landlord who commits a criminal offence when pursuing a Section 21 possession claim.

Why yes, they avoid it by ignoring it completely. pretending it doesn’t exist as good law by the Court of Appeal. The point of Chapman v Honig is quite simple. If an act is both potentially an unlawful (even criminal) act, and at the same time an act which is contractually and/or statutorily legitimate, then it cannot be both at the same time, and the statutory and/or contractual right will prevail. That case involved someone whose defence to possession was that the notice to quit was harassment of a witness and contempt of court – a serious criminal offence.  (Not a made up maybe offence via guidance to Regulations).  Tinsley involved a similar point – if the claimant doesn’t have to rely on an unlawful act, because it is also a lawful one in a different way, then the unlawful part is disregarded.

Nearly Legal conveniently omits to mention the analogous situation of disability related discrimination as it affects Section 21 notices. Surprising, when Nearly Legal have a detailed blog on this very subject. In Malcolm v London Borough of Lewisham the majority of the Judges in the House of Lords stated that a disabled tenant served with a Section 21 notice could successfully defend a Section 21 notice where it was served due to a disability related reason. Thus, as a landlord guilty of the statutory tort of disability related discrimination would fail, so surely it is even more likely where the landlord is guilty of a criminal offence under CPRs? The Court would be carrying out the landlord’s criminal conduct for him.

Oh where to start! First, when correcting me on something I have written about, it helps to actually get it right. So, Malcolm v Lewisham in the House of Lords:

  1. It was not a s.21 case, but a loss of security of secure tenure and NTQ case

  2. Malcolm lost and was evicted.

  3. The House of Lords judgment did such damage to disability discrimination and discrimination as a whole that it brought about the Equality Act 2010 to fix it.

Now, it is, as I said above, trite law that the courts will not assist an unlawful act. The question is whether the act is wholly unlawful – per Chapman v Honig and Tinsley v Milligan.

The Equality Act does indeed provide a defence of disability discrimination to possession proceedings, including s.21. This is because there is primary legislation that says so. It says so at s.35(1)(b).  This is an unlawful act which cannot be covered by other lawfulness, because the statute says so.

But – and this is key again – for a discrimination defence to a s.21 possession case,  the tenant would have to prove either that the landlord had served a s.21 because of their disability (or other protected characteristic) or for a reason arising in consequence to their disability, and that it could not be a proportionate means of achieving a legitimate aim.

To the best of my knowledge, there have been no defences to s.21 possession proceedings on the basis of disability discrimination under the Equality Act that have succeeded at Court. Of course many may have settled, but there has been no judgment that I know of. And one reason is that it requires the tenant to prove the landlord’s reasons for serving the notice. And of course the landlords lie.

All the risk, the expense and the effort is placed upon the tenant in defending proceedings, and they are required to establish something close to impossible to evidence, the landlord’s state of mind, unless the landlord is so bloody stupid as to admit it.

So this is a)  not a good model and b) invites changing s.21 to require the landlord to show grounds. Oddly, the RLA seem to agree (though I don’t think they realise it).

Nearly Legal sneeringly conclude by asking where we get this stuff from. Answer – no less eminent figures than the former Senior Law Lord, Lord Bingham and the current President of the Supreme Court Lord Neuberger. Lord Bingham says in Malcolm “The Courts cannot be required to give legal effect to acts proscribed as unlawful”. Lord Neuberger says in the context of disability discrimination “if the service of the Notice to Quit… was unlawful… then the Court could not give effect to it. If, by seeking an order for possession, a landlord has acted in a way the legislature has held to be unlawful then again the Court cannot make such an order. In either case the Court would be permitting, indeed facilitating, an unlawful act”. Both are supported by Lady Hale.

Trite law. And not the point, as even a simple minded reading of the post above should have made clear. What I asked was where and whom the cloud cuckoo land ‘existing defence to s.21’ came from.

Nearly Legal argue that we rely on this to suggest that the Bill is not necessary at all. Wrong yet again. Nearly Legal really should read our briefing properly.

Oh don’t make me quote your briefing at you. What I said was virtually word for word.

We argue that to put matters beyond doubt the Teather Bill could be used to put the illegality defence on a statutory footing. This would establish a targeted defence to deal with actual cases of retaliatory eviction on a case by case basis; rather than treating all landlords, good and bad alike, as automatically guilty of retaliatory eviction. The Teather Bill seeks to replace one injustice with another. This must be seen for what it is; an attempt to undermine Section 21 and give unscrupulous tenants an opportunity to delay an eviction, even if they are guilty of serious anti social behaviour or major breaches of their tenancy obligations.

And back to my first point. Do the RLA really want a defence to s.21 based upon the landlord’s intention in serving it placed on the statute book? Do they really want to open up the arena of the validity of a s.21 notice depending on the landlord’s intention in serving it?

Because if they were worried about tenants ‘misusing’ the provisions of the Teather Bill, the scope for defending a s.21 claim (even if not necessarily successfully) on the basis of the landlord’s bad illegitimate intentions in serving the s.21 is much, much wider.

The experience of the Equality Act is that any such statutory defence to s.21 should require the landlord to demonstrate their reason for seeking eviction. After all, if as the RLA argue, landlords who have failed to carry out required repairs still may have ‘legitimate reasons’ for serving a s.21, can there be any harm in insisting that the landlord prove those reasons in order to get possession?

It remains the case that the RLA’s argument on an ‘existing defence’ to s.21 proceedings does not stand up. But what is thoroughly entertaining is that they really haven’t thought through what their proposal means. Because it means considering the landlord’s intention, and whether it is valid, in serving a s.21 notice.

About Giles Peaker

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts, and still is Nearly Legal on Google +.
Posted in Assured Shorthold tenancy, Housing law - All and tagged , .

4 Comments

  1. Pingback: Landlord Law Blog Roundup from 10 November

  2. I agree with Giles’s conclusions.
    Before the Consumer Protection (Amendment) Regulations 2014 № 870 , breach of the Consumer Protection from Unfair Trading Regulations 2008 would not make an agreement void or unenforcable. By implication it might be there was no civil redress?
    Validity of agreements
    29. An agreement shall not be void or unenforceable by reason only of a breach of these Regulations.
    HOWEVER
    From 13/6/14 The Consumer Protection (Amendment) Regulations 2014 SI № 870 inserted Part 4A to the Consumer Protection Regulations 2008. This brings in a right to redress in certain limited circumstances in certain cases of misleading or aggressive conduct within the meaning of the regulations 5 and 7. The right to redress includes compensation and in limited circumstances a right to a discount or even unwinding the agreement.
    however the major stumbling block is
    27A (6) The third condition is that the prohibited practice is a significant factor in the consumer’s decision TO ENTER into the contract or MAKE THE PAYMENT [ for the product].

    In the field of rental housing [as opposed to eg repairs to property] this only applies to assured tenancies and holiday lets but does not apply to RSLs, PRPSHs or a lease granted to a person as a result of the exercise by a local housing authority within the meaning of the Housing Act 1996 of its functions under Part 7 (homelessness) of that Act .
    the right to unwind only applies for the 1st 90 days from the commencement of the lease and the right to unwind and discount can’t normally both be exercised.

  3. It would be good if Teather’s bill could reverse the travesty that is Spencer-v-Taylor whilst she is at it . The sort of judicial interpretation contrary to Parliament’s intentions that one might have hoped had died with Somma-v-Hazlenurst

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