Kaur v Birmingham City Council. County Court at Birmingham. 12 January 2025. (Copy of judgment is here).

A copy of the judgment in this County Court trial on a preliminary issue before a Circuit Judge has reached me. It is both interesting, and, I gather, under appeal, so worth a look.

The claim was/is a housing conditions claim in respect of the property that was (though no longer) occupied by Ms Kaur and her household. That was Ms K, her partner and three adult children in a two storey, three bedroom terrace. The property was privately owned, and Birmingham had a licence to utilise the property as temporary accommodation for homeless applicants. Ms K was a homeless applicant to whom Birmingham had decided the full housing duty was owed, so this was s.193 accommodation.

The preliminary issue was whether Ms K occupied under a tenancy or a licence. If the former, then sections 9A and 11 Landlord and Tenant Act 1985 and Section 4 Defective Premises Act 1972 applied. If the latter, then there were no implied terms of fitness for human habitation or repairing duties.

The 2019 offer of the accommodation by Birmingham said:

“OFFER OF ACCOMMODATIONUNDER S193(2) OF THE HOUSING ACT 1996”. It informed the Claimant that she was being offered “temporary accommodation” by the Defendant at the Property from 4 March 2019. The letter went on to say that the Property was being offered “under section 193(2) of the Housing Act 1996 as a non-secure tenancy granted under Paragraph 4 of Schedule 1 of the Housing Act 1985” and that it was “subject to the terms and conditions set out in your licence agreement”. The letter referred to “rent” at a rate of £123.58 per week and informed the Claimant that she had the right to request a review of the suitability of the Property within 21 days and that the Defendant had “the authority to move you to alternative accommodation to meet the demands placed on the service”.

The Agreement signed by Ms K upon accepting the offer is worth quoting at some length (sorry, but it is).

“BIRMINGHAM CITY COUNCIL PSL ACCOMMODATION – OCCUPANCY AGREEMENT FOR INTERIM/TEMPORARY ACCOMMODATION PROVIDED FOR HOMELESS PERSONS UNDER THE PROVISIONS OF PART VII OF THE HOUSING ACT 1996”.
The Agreement recorded at the outset that it was a “LEGAL AGREEMENT” and that it allowed the Claimant (and by implication her children) to occupy the Property in accordance with the terms set out therein. It further recorded that “This is temporary accommodation” and that it is “excluded from the Protection of (sic) Eviction Act 1977 as security is excluded from homeless accommodation offered under the Housing Act 1996 Part VII”.

Part 1 of the Agreement provided (amongst other matters) that:

(i) The Agreement did not give the Claimant a right to live in the Property permanently.
(ii)  The Claimant may be required to move to alternative temporary accommodation at any time.
(iii)  The First Defendant could end the Agreement for any reason.
(iv)  The Claimant may be required to share the Property “with other applicants”.
(v)  The Agreement did not allow the Claimant to invite any person to live with her at the Property without the First Defendant’s prior agreement.

Part 2 of the Agreement provided (amongst other matters) that:

Under the heading “Rent”:
(i)  The Claimant was responsible for paying for her occupation and use of the Property until “this licence agreement ends”.
(ii)  If the Claimant’s housing benefit claim were turned down because of any action she took or failed to take, she would be liable for “the full rent” and service charges for the whole period of her occupancy.
(iii)  The “occupancy charge” was £123.58 per week.
(iv) The Defendant could “change your rent at any time”.
(v) The Claimant was required to pay her “rent” every week or at such intervals as agreed by the Defendant.
(vi) If the Claimant was a “joint tenant”, she was jointly and severally responsible for “all the rent” and other charges when they fell due. This meant that “if the other joint tenants in your tenancy do not pay their share… You must pay all the rent and other charges”.
(vii) The Claimant was “responsible for all rent and other costs, such as court costs and rechargeable repairs…” and that if she were a “joint tenant” she would still be responsible even after the other tenants had left the Property.
(viii) If the Claimant did not pay her “rent”, the Defendant “may go to court and ask for a Possession Order…”
(ix) If the Defendant agreed to transfer or exchange the accommodation provided to the Claimant and she had “rent arrears”, those “rent arrears” would be transferred to her new “rent account”.
(x)  If the Claimant had earlier debts due and owing to the Defendant “as well as under your current tenancy”, the Defendant was entitled to credit any sums paid against the oldest debt.
(xi)  If the Claimant owed the Defendant “money for rent” or other charges when she left the Property, she was required to make arrangements to pay the debt.

Under the heading “Looking after the accommodation”:
(xii) The Claimant was not permitted to redecorate any part of the Property or put up posters or pictures in a way that was likely to damage the walls or spoil the decoration.
(xiii)  The Claimant was not permitted to make any permanent change to any fixtures or fittings.

Under the heading “Preventing damage and dealing with repairs”:
(xiv) The Claimant was required to report all “repairs as soon as they happen” and that if she failed to do so and further damage occurred, the Defendant might charge her for any extra expense.
(xv) Under no circumstances was she to attempt to repair any appliance herself.
(xvi) The Claimant was responsible for light bulbs, fuses and plugs for the sinks and baths.
(xvii) If the Claimant did something or failed to do something that caused a repair to become necessary, then she would be charged accordingly.
(xviii) The Agreement “does not imply that the [Defendant] is responsible for carrying out repairs to the property”.
(xix) Where the relevant property is owned or managed by a third party “those persons will be responsible for carrying out/paying for any repairs…”.

Under section ‘E’:
(xx)The Claimant was required to use the Property as her main home.
(xxi) If the Claimant was absent for more than two nights in a row or more than two nights in any week without the Defendant’s knowledge, the Defendant might “end the occupancy agreement in your absence” and remove her belongings from the Property.
(xxii) The Claimant was prohibited from allowing anyone to live at the Property without the knowledge and consent of the Defendant and she was to notify the Defendant of any changes in occupation.
(xxiii) The Defendant would regard any person who stayed at the Property for two consecutive nights or for more than two nights in any week as living with the Claimant at the Property.

Under the heading “Access to the property”:
(xxiv) The Defendant could enter the Property without notice in an emergency.
(xxv) The Claimant was required to allow “reasonable access at other times to ensure the good maintenance of the property and its contents”.

As the Court notes

the Agreement and the document headed ‘Welcome to Your New Home’ are all poorly drafted and use terminology and labels which are, at times, consistent with the grant of a lease and, at times, with the grant of a licence.

All poorly drafted, but this also meant that the terminology was not of great assistance in determining the licence/tenancy issue.

The Court runs through the case law from Street v Mountford (1985) AC 80 to Stewart v Watts (2018) Ch 423 (our note) and Global 100 Limited v Laleva (2022) 1 WLR 1046 (our note) to arrive at the following principles.

The key is whether the rights and obligations created by an agreement confer on the occupier the right to exclusive possession (assuming that a term and a rent are largely a given).

The grant may be express in a written agreement, or implied where there isn’t one.

Construing the agreement is concerned with the intention of the parties, objectively ascertained by the language and the relevant background/surrounding circumstances known to both parties, as well as the intended and actual mode of occupation of the accommodation.

That the accommodation was temporary accommodation provided by the Council in discharge of its homelessness duties under Part VII Housing Act 1996 was a part of the surrounding circumstances to be considered, but not in itself determinative, as such accommodation could be provided by way of a non-secure tenancy as permitted by the Act.

That a landlord itself only had a licence of the property does not prevent it from granting a tenancy. Bruton v London & Quadrant Housing Trust (2000) 1 AC 406.

The post-agreement actions of the parties should not be taken into account in construing the agreement, but may be evidence that some or all of the terms of the agreement are a sham. AG Securities v Vaughan (1990) 1 AC 417.

But that rights conferred by an agreement have not been exercised is not, per se, evidence that the agreement is a sham.

Finally, when construing the agreement, the court should not award marks for drafting, or attempt to determine whether general clauses in a written agreement are more like clauses which are normally found in a tenancy or a licence.

Following Stewart v Watts and Global 100 v Laleva, it was clear that Street v Mountford was to be understood as concerned with the legal right of exclusive possession, not the fact of exclusive occupation (which may or may not amount to legal possession).  The court used ‘exclusive possession to refer to the legal right of exclusive possession, and ‘exclusive occupation’ to mean a personal right, or sole occupation.

Ms K asserted a tenancy. Birmingham, a licence.

Ms K argued that sole or exclusive occupation created a presumption in favour of a tenancy, which could be rebutted, but would require ‘exceptional’ or ‘special’ circumstances. The Court did not accept this. The older cases had used ‘exclusive occupation’ in contexts where what was meant was ‘exclusive possession’, but the context undid any suggestion of a presumption based on exclusive occupation alone.

Ms K argued on the construction of the agreement that Ms K had enjoyed exclusive occupation. The offer letter had referred to what was being offered as a non-secure tenancy and this should be taken as the intention of the parties. A requirement to move at any time was not incompatible with a tenancy as it would have required termination of the agreement and the grant of a new one in any event. The agreement did not provide a general right to Birmingham to enter the property. Occupation by others at the same time was not reasonably contemplated by the parties at the time of agreement, given the size of the property and Ms K’s household.

Birmingham argued that the purpose of the agreement was to provide temporary accommodation, and intended to create a licence. Other terms of the agreement, such as s being required to move to other accommodation at any time, potentially sharing the accommodation with others, not having other people to live there (or stay more than 2 nights) or not to be absent from the property for more than 2 nights without Birmingham’s consent were inconsistent with the grant of exclusive possession.

We should note that the Court heard live evidence from Ms K and officers of Birmingham, in the course of which Ms K

accepted that she was bound by the Agreement and understood when she signed the Agreement that she could not have anyone come and live or stay with her at the Property, could not go on holiday or be away from the Property for more than 2 nights without the Defendant’s permission and that she could be required to share the accommodation provided to her. It was for this reason that she had not been able to have her niece and granddaughter come and stay overnight at the Property. She understood when she signed the Agreement that the Defendant could move her anywhere and at any time. Prior to becoming homeless, she lived in a property owned by a private third party landlord but which had been leased to the Defendant. When she lived at that property, her niece was able to come stay over, she was able to go on holiday without first seeking the Defendant’s permission and the First Defendant could not simply move her without first serving a notice.

The Court held:

i) The agreement did permit Birmingham to put in other people to the accommodation, even if they did not in practice. It was not a sham.

ii) The agreement did allow for Birmingham to move Ms K to other accommodation, which was inconsistent with granting exclusive possession. And, as the agreement allowed for Birmingham to ‘change the agreement’, another address could simply have been substituted. There was no requirement in law to terminate the agreement and grant a new one. (Stewart v Watt.)

iii) The agreement more generally reserved to Birmingham control over who could live or stay overnight at the property; control over how long Ms K could be away from the property; and the power to terminate the agreement how and when it wished.

All of these were inconsistent with and pointed away from the grant of a right to exclusive possession. (Dresden Estates v Collinson (1988) 55 P. & C.R. 47, Westminster City Council v Clarke (1992) 2 AC 288, Stewart v Watts and Global 100 v Laleva).

Birmingham’s limited right to enter the property under the agreement was, however, consistent with and pointed towards the grant of exclusive possession. Ms K’s exclusive occupation as a fact was not inconsistent with exclusive possession.

But balanced overall

and having considered the Agreement as a whole and taken account of the purpose of the Agreement and the surrounding circumstance, I am satisfied that although the Claimant may have enjoyed exclusive occupation of the Property (as a matter of fact), upon its proper construction, the Agreement did not confer on the Claimant a right to exclusive possession. Overall, the rights reserved to the Defendant demonstrate that the intention of the parties (objectively ascertained by reference to the language used and the surrounding circumstances) was that the Defendant should and would retain legal possession and control over the Property.

I add that even if I had concluded that the Agreement did not reserve to the Defendant the right to move the Claimant to alternative accommodation and that she was not under a corresponding obligations to move if required, I would nevertheless have come to the same conclusion. The absence of a right to move the Claimant to alternative accommodation would, at best, have been neutral – it would not have pointed one way or other. The remaining rights reserved to the Defendant and the corresponding obligations on the Claimant taken cumulatively were still sufficient to lead to the conclusion that the Agreement did not confer on the Claimant a right to exclusive possession.

The agreement was a licence, with all that followed for the preliminary issue.

The Circuit Judge did add as a postscript

Finally, it is troubling that the Defendant, with its resources and access to lawyers and legal advice, would use such poorly drafted documents. The Defendant would be well advised to review its standard form offer letter and agreement.

Comment

As mentioned at the start, this judgment is apparently under appeal. I don’t know the grounds, so anything I say may well be contradicted by a higher court.

But that said, it seems to me that the basic distinction between legal exclusive possession and de facto exclusive occupation is right, and certainly so since Global 100 v Laleva (and indeed before). De facto exclusive occupation is a necessary element for, but not conclusive of legal exclusive possession.

Where seeking to establish that a self-described ‘licence’ is actually a tenancy, there are only two alternatives – i) does the agreement effectively provide for legal exclusive possession in its terms (as fall to be construed by the court), or ii) is the agreement so far from the facts of the occupation (and actual intentions of the parties) that it is a sham.

But it is all fact specific. It is to be remembered that the mere fact that a property is offered as temporary accommodation under Part VII Housing Act 1996 duties does not make it a licence per se.