England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE CCRTF 96/0194/H

(MR ASSISTANT RECORDER PRIVETT )

Royal Courts of Justice

Strand

London WC2

Tuesday, 25 February 1997

B e f o r e:

LORD JUSTICE BELDAM

LORD JUSTICE OTTON

LORD JUSTICE THORPE

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CITY COUNCIL OF BRISTOL

PLAINTIFF/APPELLANT

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MARTIN MOUSAH

DEFENDANT/RESPONDENT

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(Computer Aided Transcript of the Palantype Notes of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 831 3183

Official Shorthand Writers to the Court)

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MR A ARDEN QC with MR I WIGHTWICK (Instructed by Director of Legal Services, City Council of Bristol, Bristol BS1 5TR) appeared on behalf of the Appellant

MR P MORGAN QC with MS A GRIEF (Instructed by Messrs Bobbetts Mackan, Bristol BS8 1HP) appeared on behalf of the Respondent

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J U D G M E N T

(As approved by the Court )

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©Crown Copyright

Tuesday, 25 February 1997

J U D G M E N T

LORD JUSTICE BELDAM: This is an appeal by the City Council of Bristol against the decision of Mr Assistant Recorder Privett who refused to make an order for possession of the City Council's premises at no. 3 Denbigh Street, Bristol, a two-bedroomed council property owned by the appellants and let on a secure tenancy to the respondent, Mr Martin Mousah.

On 29 November 1993 the appellants let no. 3 Denbigh Street to the respondent at the weekly rent of £39.47 per week, but by March 1994 the appellants had received complaints of nuisance and noise from the premises, and on 10 April of that year they served a notice to quit on the respondent. On 6 April the premises had been entered by police officers acting under warrant issued under the Misuse of Drugs Act because the premises were suspected of being used for the supply of Class A drugs. This was indeed the case, and six persons were arrested for using cocaine. A further warrant was issued on 6 June 1994. The premises were again entered. A significant quantity of crack cocaine was found and another six persons were arrested. On 10 June 1994 the appellants served notice seeking possession of the premises under Schedule 2 to section 83 of the Housing Act 1985.

Notwithstanding the service of that notice, on 23 August the premises were again entered. Crack cocaine was found and two persons were arrested. The appellants issued a summons claiming possession on 10 November 1994 on the ground that the respondent was in breach of his obligation to pay rent, for rent was due and outstanding; and secondly, that he, or a person living in the dwelling house, had been guilty of conduct which was a nuisance and annoyance to neighbours.

The appellants relied on condition 24 of the tenancy agreement which provided:

"The tenant must not supply, from or in the neighbourhood of, the premises any controlled drug or other substance contrary to the Misuse of Drugs Act 1971 or related legislation. The tenant will be held responsible if members of household, lodgers, sub-tenants or visitors do not act in accordance with this Condition."

On 6 January 1995 the Bristol County Court gave directions that the defence be filed by 27 January 1995; that there should be discovery of documents with inspection within 7 days thereafter and that witness statements were to be exchanged by 17 March 1995, the hearing to be adjourned generally with liberty to apply.

The order was served on the respondent's then solicitors, Hugh Norman & Co of St Agnes in Bristol. The defence was not delivered. On 22 February 1995 the appellants applied to the Court for an order that the defendant be precluded from defending, unless he filed his defence. The order was made by the Court on 21 April by Deputy District Judge Field, ordering that the defendant file his defence by Friday, 5 May. In fact the defence was filed on 3 May. In this defence, the respondent denied that it was reasonable to grant any order for possession of the property having regard to the extent that the defendant could be held to be accountable for the acts of nuisance or annoyance, or breach of the tenancy agreement by virtue of the matters in the Particulars of Claim. The defendant asserted that a considerable period of time had elapsed since the last alleged incident, and on that basis it would not be reasonable to grant an order for possession.

The defendant further pleads he is a vulnerable person suffering from schizophrenia and would be substantially disadvantaged by being evicted from the property. Each of those two pleas raised significant issues at the hearing before the Assistant Recorder. On 25 October 1995 (that is some five days before the hearing was due to commence) a medical report from Dr Stephen Arnott was obtained by the respondent.

In the first paragraph Dr Arnott stated that the background of his assessment was the possession proceedings being taken by the appellant. He had been asked to give an opinion on the respondent's current mental health and the impact on his health if he were to be rendered homeless.

It appears that in 1989 the respondent had attended at a psychiatric out-patients department. He had been found to be anxious, abusing illicit substances, but with no evidence of formal psychiatric illness. However, in November 1991 he had been admitted under section 2 of the Mental Health Act 1983 to the Whitchurch Hospital in Cardiff with a diagnosis of acute schizophrenic episodes, but he had made a good recovery from this episode, having been treated with anti-psychotic tablets and had last been seen by Dr Watkins in December 1991. After this attack he had moved to Bristol. When he was in Bristol he attended an out-patient clinic from August 1992 until May 1993, but then failed to attend follow-up appointments and was discharged from the clinic.

The opinion of Dr Arnott was that the respondent appeared to suffer from symptoms of chronic schizophrenia, but that he also had quite a volatile temperament. He recorded that the respondent had been referred back to the Inner City Mental Health Team and was now in regular contact with a psychiatric community nurse, and that he was willing to continue with this medication. In the final paragraph of his report Dr Arnott answered the specific questions which he had been asked about the impact on the respondent's mental health if he were to be rendered homeless. The doctor expressed the fear that, if that was the case, it could have a "negative influence on his mental welfare". He said that he was clearly settled at his current address and felt happy there. If he had to leave his home, this would not only disrupt his contact with the mental health service, but also his links with the local community, and would make it far more difficult for him to coordinate care for him; such an event would create a great deal of stress in his life which would probably have an adverse affect on his mental health with the worsening of his symptoms of schizophrenia. Nonetheless, he said that if the respondent were to be made homeless he would continue to endeavour to provide him with support and psychiatric treatment.

In his judgment the Judge considered the events of April to August 1994. He found, as I set out earlier, that police had searched the premises and described the behaviour of those who were in the premises, the finding of crack cocaine and, in addition, the finding of the accessories of dealing in drugs such as foil, pipes and cling film. The Judge was satisfied that the premises were being used for the consumption and supply of drugs over this period. He correctly directed himself on the standard of proof that he had to require before reaching that conclusion. He expressed himself as quite satisfied on the evidence that the premises had been used in that way.

The respondent was not at the premises on any of the occasions when they were searched, and he had asserted in evidence that he did not know what was going on. It was apparently the case that for quite a large part of the time he did not reside at the premises. He had three dependent families whom he would visit on occasions. Sometimes he only spent two days a week at the premises. But the Judge rejected his evidence and found that he did know what was going on. He also found that there must have been a steady stream of callers who had been calling at the house. Evidence had been given by a police officer to the effect that on one occasion there had been eight to ten people arriving in the course of an hour. He found that, at the very least, there was a clear breach of Condition 24 of the Council's conditions. He said:

"In any event, the use of the premises as a place for selling drugs is the plainest breach of condition and I am quite satisfied that there was a most serious breach under ground 1 of schedule 2 of the Housing Act of 1985."

His reference to ground 1 of schedule 2 of the Housing Act 1985 arose because the appellants were seeking an order for possession under section 84 of the Housing Act 1985. Section 84(1) provides:

"The court shall not make an order for the possession of a dwelling-house let under a secure tenancy except on one or more of the grounds set out in Schedule 2."

It further provides by subsection (2):

"The court shall not make an order for possession -

(a) on the grounds set out in Part I of that Schedule (grounds 1 to 8), unless it considers it reasonable to make the order..."

Ground 1 of Schedule 2, which the Judge found had been proved was:

"Rent lawfully due from the tenant has not been paid or an obligation of the tenancy has been broken or not performed."

It was common ground between the parties before the Assistant Recorder that prima facie , subject to the question whether it was reasonable in all the circumstances to make an order for possession, the appellants had established grounds on which such an order could be made.

The Judge set out the competing contentions of the parties. The appellants relied on the seriousness of the breach, and the Judge repeated that he regarded it as a very serious matter indeed. Although the respondent had not participated in the actual sale of drugs, the Judge found that he must have known that it was going on, and that there was a high degree of culpability, though perhaps not the highest that could be imagined.

On the respondent's behalf it was urged that, since the last events in August 1994, there had been no evidence of any further offences being committed at the premises. It was urged that, as a result of the schizophrenia, he had to weigh in the balance the need of the respondent for housing and the effect which the making of an order might have, both on the respondent's illness and on his need for housing.

In the result the Judge came to the conclusion that it would not be reasonable in the circumstances of this case to make an order for possession. He appears to have based his decision on three factors which are criticised by Mr Arden, who has presented the case for the appellants. Firstly the Judge said that, weighing all the matters he had to take into account, he did not think that this was the right case in which to make an example. Mr Arden drew attention to this phraseology, suggesting that it was the wrong approach. It was not a case of making an example, rather the appellants approached the matter from the point of view of whether they should make an exception because the breach of Condition 24 (involving the sale at these premises over a period of some three months of a Class A drug) was such a serious matter that, so far as the appellants were concerned, it would, save in the most exceptional circumstances, be a case which ought to result in an order for possession being made.

Secondly, he went on to consider the appellants state of health. Here again Mr Arden says he approached the matter upon the wrong basis. The Judge found that, if he made an order for possession of the premises, the respondent would be likely to become homeless; that that could have an effect on the symptoms from which he was suffering; that taking into account the public interest in council property which it was proper for him to do, there was to counter-balance the public interest that the property should not be used for the sale of drugs, the public interest in keeping people off the streets who might become dangerous from illness from which they suffer. Mr Arden says that that is a misreading of the medical reports, since there was no evidence in them that the respondent was suffering from a condition which was dangerous to the public. He had not been shown to be dangerous to the public before, and nor had Dr Arnott when he gave evidence expressed the opinion that he was likely to be dangerous. In any event, Mr Arden points to fact that the Judge relied upon the respondent becoming homeless.

It appears that the Judge did become concerned whether, if he made an order for possession, the respondent would become homeless. On the respondent's behalf it was submitted (in accordance with the defence which had been put forward) that he would have a clear housing need and that, by committing the serious breach of the condition of his secure tenancy, if the Court ordered that he should give up possession, he would be forced, or would be likely to be forced, to rely on Part III of the Housing Act to obtain housing for the homeless. Section 58 provides that a person is homeless if he has no accommodation in England, Wales or Scotland. It also provides for the circumstances in which such a person is to be regarded as being homeless, or indeed, threatened with homelessness. But because the Judge became involved in a discussion about the effect of his order and whether it would make the respondent homeless, the appellants considered it important to explain to the Judge that, even if he did become homeless under section 59 of the Housing Act, he would probably be regarded as having a priority need for accommodation as a person who, under section 59(1)(c), was a vulnerable person by reason of mental illness. It was argued that the appellant authority might well not treat him as entitled to accommodation because, under section 60, they might regard him as having become homeless intentionally because he had deliberately done, or failed to do, something in consequence of which he ceased to occupy his present accommodation. Thus the argument was that, by committing these serious breaches of his tenancy condition, he might have exposed himself to an order for possession against him by an act which the Council might regard him as having done intentionally, and thus rendered himself intentionally homeless and therefore they might decline to give him accommodation. So it was argued the respondent ought to be allowed to continue to occupy his present accommodation.

This argument seems to have struck a chord with the Assistant Recorder, for he said in the course of his judgment:

"In the doctor's view, I am quoting from the report of Dr Arnott and from his evidence, the settled homebase of this defendant was an important factor in his health and if an order for possession were made and he became homeless, he would be likely to suffer and the suffering would be a relapse into symptoms previously seen by the doctor in relation to this patient."

The Assistant Recorder went on:

"I am urged to consider the public interest, and I do, in relation to this council property, but I have to bear with that, not just the interests of the defendant, but the public interest in keeping people off the streets, who may become dangerous through the illness from which they suffer."

Finally he said:

"I think it would be wrong, in the particular circumstances of this case, to follow a course which would very likely, in my judgment, lead to the deterioration in this defendant's mental health."

Mr Arden submits that the proper approach in a case of this kind where there is proved to have been a serious criminal offence being committed at these premises by the tenant in permitting them to be used for the sale of dangerous drugs, is that only in exceptional cases could it be said that it was not reasonable to make an order. He said that that would be the ordinary approach which one would expect to be made in a case of this kind. The Assistant Recorder took into account matters which he ought not to have taken into account, for the question of homelessness could not arise until he had decided whether or not to make an order and, in any event, the appellants could not state, nor could anyone else state, what the result of an application by the respondent under Part III of the Housing Act would be likely to be. It was thus wrong for the Assistant Recorder to speculate that he might become homeless when there was no evidence that he would. Further, Mr Arden says that, even if the appellants did not provide him with accommodation, in these days there is other accommodation in the private sector which might be available for the respondent.

Mr Morgan for the respondent submits that this is a discretionary decision of the Judge and that it is only in rare cases that this Court will interfere with the exercise by a Judge of his discretion. He submits that where the Judge in his judgment has mentioned all the relevant factors, it is only if the Court came to the conclusion that the decision was one which no reasonable Judge could have reached that this Court will intervene. He emphasises that it is not appropriate for this Court, merely because it takes the view that it might have come to a different conclusion, to substitute its own view for that of the Judge.

In my view, it is now well settled that this Court will only interfere with a discretionary decision on rare occasions, where, for example, a Judge has misdirected himself; where he has taken into account matters which he ought not to have taken into account, or where he has failed to take account of matters which he should have taken into account. In this case I am satisfied that the Assistant Recorder based his decision on matters which he ought not to have taken account. It seems to me that, whilst he was perfectly entitled to consider the effect which an order for possession would have, it was wrong for him to become so involved with the possible outcome of an application by the respondent under Part III of the Housing Act.

Evidence had been given by the appropriate housing officer that, if the respondent applied, his application would be dealt with on its merits. That, in my view, was all that the Judge could properly take into account. Equally it seems to me the Judge paid regard to the fact that, since August 1994, the respondent had not been found to have been in breach of covenant and, in particular, Condition 24, or to have committed any offence at these premises. He regarded that as a substantial time. But the truth of the matter was that a large portion of the time was attributed to the fact that the respondent was in breach of the Court's orders for delivery of his defence, and, in any event, this was not simply an isolated occasion on which someone had been found with a small quantity of a Class B drug in the premises, as was the case in Abrahams v. Wilson [1971] 2 QB 88, to which we were referred.

This was a case in which there had been a most serious offence committed over a period of three or four months at these premises, and, as I have said, the lapse of time since the last occasion was largely due to the failure of the respondent (or those who were representing him) to comply with the requirements of the Court.

For those reasons, I am satisfied that this Court is in a position to review the decision of the Assistant Recorder, to substitute its own decision and exercise its own discretion in place of the Recorder's discretion. I consider that Mr Arden's approach to this question is correct. Where there is such a serious breach of a condition of the tenancy, it is only in exceptional cases that it could be said that it was not reasonable to make the order.

I consider that the medical report does not disclose a situation in which it is likely that the respondent will become a danger to the public. We have been referred to a passage in the evidence in which the respondent said that he desired to move to a different part of Bristol, and there would be no difficulty in his keeping in touch with the hospital authorities with whom he has now made contact.

The public interest, in my view, is best served by making it abundantly clear to those who have the advantage of public housing benefits that, if they commit serious offences at the premises in breach of condition, save in exceptional cases, an order for possession will be made. The order will assist the housing authority, who, under section 21 of the Act, have the duty to manage the housing stock and have the obligation to manage, regulate and control allocation of their houses, for the benefit of the public. In my view the public interest would best be served by the appellant being able in a case such as this to relet the premises to someone who will not use them for peddling crack cocaine.

For those reasons I consider that this is a case in which, taking into account the circumstances of the offence, public interest and the matters which were urged on behalf of this respondent, it is clear that the Court ought to exercise its discretion to make an order for possession. Accordingly, I would allow the appeal.

LORD JUSTICE OTTON: I agree, and I consider both grounds advanced by Mr Andrew Arden QC on behalf of the appellant to be well-founded. In my view, the learned Judge misdirected himself in law in concluding that it was not reasonable to make an order for possession.

He reached this conclusion on two premises which I regard as wholly unsatisfactory. The first was that the effect of the order would make the respondent "homeless". It is true that, by virtue of section 59(1) of the Housing Act 1985, he would be homeless within that section. However, that did not mean, as the learned Recorder undoubtedly concluded, that he would be on the streets with no roof over his head. He reached that conclusion by questioning closely the housing authority officials as to whether he would be accepted as a vulnerable person who had a priority need within section 59(1)(c) and whether the Council would regard him as having made himself intentionally homeless within section 60(1). When the officials were unable to answer these questions in the absence of an application to be treated as homeless and to the Judge's satisfaction, he concluded that the respondent would be without a home to go to. In doing so, in my judgment, he felt into error. The officials' evidence was by way of explanation of the procedures within the homeless unit, and did not purport to be a determination one way or the other of the respondent's status.

The Judge did not, in my view, discriminate between the fact-finding exercise he embarked upon and the exercise of the Housing Authority's powers and duties under Part III of the Housing Act which encompasses their obligations to house the homeless. In effect, he elided the judicial function with the administrative function. The answers and explanations given did not justify or support the conclusion that the respondent could only be kept off the streets by the exercise of a judicial discretion in his favour.

The second premise was that, if evicted, the plaintiff would be a danger. The Judge expressed himself as follows:

"I am urged to consider the public interest, and I do, in relation to this council property, but I have to bear with that, not just the interests of the defendant, but the public interest in keeping people off the streets, who may become dangerous through the illness from which they suffer ." (My emphasis)

This finding was based on the report and evidence of Dr Stephen Arnott. There is, on my reading of the report and his evidence, nothing either in the diagnosis or in the prognosis to justify that conclusion. Dr Arnott does not suggest that he has been a danger to himself or others in the past. Even in its florid state, his schizophrenia was confined to delusions which were described as symptoms of:

"... muddling of his thoughts, with pronounced religious ideas and was clearly deluded".

His fantasies were thus not of a violent or sexual nature, nor had he threatened to commit suicide or self-mutilation. Moreover, the Judge's opinion was based on the same false assumption that he would be homeless, that is, on the streets. In addition, Dr Stephen Arnott was unaware when he wrote his report that the respondent had absented himself from the area for substantial periods without reactivating his latent schizophrenia into a florid state.

Dr Arnott expressed his opinion thus:

"In answer to your specific question about the impact on Mr Mousah's mental health if he were to be rendered homeless, I fear that if Mr Mousah was to be made homeless this could have a very negative influence upon his mental welfare. He has only recently re-established contact with the inner City Mental Health Team and we are in the process of re-assessing his mental state over a period of time. We are hoping to create, with his co-operation, a plan of care... He is clearly quite settled at his current address and feels happy there. If he had to leave his home this would not only disrupt his contact with our service, but also his links with the local community, and would make it far more difficult for us to co-ordinate care for him. Such an event would create a great deal of stress in his life that would probably have an adverse effect on his mental health, with a worsening of his symptoms of schizophrenia. Nonetheless, if Mr Mousah were to be made homeless then we would continue to endeavour to provide him with support and psychiatric treatment."

By expressing himself in those terms, Dr Arnott was bringing together two factors: that of homelessness and the weakening of the links with the local service which would have an adverse effect on his mental health. Unfortunately, and for reasons one well understands, Dr Arnott gave evidence first and did not remain in Court while the respondent gave evidence. He did not hear, for example, the respondent say that he spent a lot of time away from home:

"I have a number of children by three different women, and I regularly visit each of them. My ex-wife lives in Yoevil and I regularly visit her and her children. I have a six year old son who lives with is mother in Caerphilly and a 14 year old girl living with her mother in Bristol. I also regularly visit my mother who lives at Totterdown. I spend quite a lot of time visiting these children."

By not being aware of that part of the background, it is difficult to place as much reliance upon the conclusion of Dr Arnott as the learned Recorder appeared to do. By reaching his conclusion that the respondent was a danger, in my view, he fell into an error of law because he took into account a wholly irrelevant matter, and misunderstood the nature of the evidence, thus undermining the exercise of his discretion under the Act.

Turning to ground two, I am satisfied that the decision was unreasonable in the Wednesbury sense and to such an extent that it is legitimate to set it aside and substitute our own finding on the principles already adumbrated by Lord Justice Beldam. It is appropriate to take into account the reasons already given under this ground also.

Of more significance is the fact that the Judge found as a fact that the respondent had persistently permitted the premises in question to be used for the purpose of the supplying of a class A drug, namely crack cocaine. In reaching that strong finding, he undoubtedly, correctly applied a high standard of proof. This was a serious criminal offence and a serious matter. In my judgment it can only be in exceptional cases or circumstances that it would be reasonable for an order for possession not to be made when a serious criminal offence has been persistently committed, as was undoubtedly the fact in this case.

Accordingly, I too would allow this appeal.

LORD JUSTICE THORPE: I agree with all that my Lords have said, and only add a word on the value of the expert evidence.

The defendant had no psychiatric illness until he was almost 35 years of age. Once schizophrenia was diagnosed and treated, the drug therapy prescribed by his general practitioner maintained him symptom free. Although the defence pleaded a current schizophrenic state, his witness statement of 30 September 1995 supported the pleading with this single sentence:

"I have in the past suffered from schizophrenia and received medical treatment for this."

The use of the past tense carries an obvious inference. Dr Arnott saw him on 29 September 1995 for purely forensic purposes. His report of 25 October 1995 was guarded in opinion as to the consequence of eviction. It was only his oral evidence on 30 October that went further. My conclusion is that the Judge plainly exaggerated the significance of schizophrenia in this case.

ORDER: Appeal allowed; respondent to pay the costs below, not to be enforced without leave of the Court; order nisi against the Legal Aid Board in relation to the costs of the appeal; legal aid taxation of the respondent's costs; leave to appeal to the House of Lords refused.