England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
CIVIL DIVISION
ON APPEAL FROM THE HIGH COURT
CROYDON COUNTY COURT
(District Judge Fink)

		The Royal Courts of Justice The Strand London Tuesday 5 February 2002

Tuesday 5 February 2002

1. LORD JUSTICE KAY: On 19 April 2001 the claimant, Pollards Hill Housing Association, obtained from District Judge Fink in the Croydon County Court an order against the defendant, granting it possession of premises at 6 Shropshire Close, Pollards Hill, Mitcham, which were occupied by the defendant and her children pursuant to an assured tenancy. The order was suspended on condition that the appellant did not allow a man called Stephen Millington to reside there, she did not invite him to visit the house and that she did all that she reasonably could, without resorting to violence, to prevent him from visiting the house. That order was to remain in force for four years. She now appeals, with permission from Keene LJ, against the making of that order.
2. In 1993 the defendant became the tenant of the house at 6 Shropshire Close. At that stage her landlord was the local authority and she was then a secure tenant. She had living with her her three children. The second child, a boy, was to be injured in a road traffic accident and thereafter had special educational needs. In about 1995 she started a relationship with Stephen Millington, subsequently giving birth to his child in June 2000. At the date of the hearing in the county court she was expecting another child, of whom Mr Millington would be the father. From about 1997 Mr Millington lived with the defendant, although he did not stay at the house every night of the week. In 1998 the claimant became her landlord and the tenancy became an assured tenancy. That tenancy commenced on 9 November 1998. The defendant was throughout the sole tenant. It will be necessary to return shortly to set out some of the terms of the tenancy, but it is convenient first to recount the subsequent history.
3. In January 2000 both the defendant and Mr Millington were arrested after the police discovered controlled drugs in the house, both cocaine and cannabis and over £6000 in cash. The drugs were found in both the bedroom and in the garage. In November 2000 the couple appeared before the Crown Court. Mr Millington pleaded guilty to possessing each of the drugs with intent to supply. He was sentenced to a total of five years' imprisonment. The prosecution then dropped similar charges against the defendant. In exercising her discretion whether to grant immediate possession, the district judge heard evidence and she found as a fact that the claimant was aware of the presence of the drugs in the premises.
4. On 15 December 2000 the claimant landlord served on the defendant a notice seeking possession of the premises. On 18 January 2001 proceedings were issued in the Croydon County Court for possession of the premises from the defendant. In the particulars of claim the claimant relied on grounds 12 and 14 of schedule 2 of the Housing Act 1988 as amended ("the Act"). These are the proceedings that give rise to this appeal against the order of District Judge Fink.
5. It is necessary at this stage to set out some of the relevant parts of the tenancy agreement. Clause 3.3 dealt with use of the premises by the defendant. By clause 3.3.2 the defendant agreed not to use the premises for immoral or illegal purposes, including selling, buying or distributing drugs. Clause 4 set out the defendant's rights under the tenancy. Clause 4.1 provided that the claimant had a right to occupy the premises for "so long as [she complied] with the terms of this Agreement" and had "proper respect for the rights of other tenants and neighbours." Clause 4.2 set out that the defendant would be an assured tenant and explained the steps which the claimant would have to take before possession could be obtained.
6. There then followed before clause 4.3 the following heading, which was in capital letters:

"The following are the only grounds and circumstances in which the association will serve notice and seek to recover possession."

7. Beneath that in bold type appeared "Grounds for possession" and then there were set out, as clauses 4.3-4.12, various grounds upon which the claimant could seek to recover possession. Cross-references to the grounds contained in schedule 2 of the Act were given. Clause 4.3 referred to non-payment of rent, relating it to ground 10; clause 4.4 referred to persistent delay in payment of rent, with reference to ground 11. Clause 4.5 provided for circumstances where the tenant or anyone living with her had broken or failed to conform with any one or more of the conditions of the tenancy, and related that to ground 12. Clause 4.6 related to causing deterioration of the premises. It specifically referred to "You or anyone living in the Premises" causing such deterioration and cross-referred to ground 13.
8. Clause 4.7, which is at the heart of this appeal, read:

"You or anyone living in or visiting the Premises have been guilty of conduct causing or likely to cause a nuisance or annoyance to others living, visiting or carrying out a lawful activity in the locality, or you have been convicted of using the Premises for immoral or illegal purposes or of an arrestable offence carried out at or in the locality of the Premises. (Ground 14)"

9. Clause 4.8 dealt with violence between partners occupying the premises, with reference to ground 14A. Clause 4.9 dealt with ill-treatment of any furniture provided under the tenancy, with a wrong reference to ground 17 (it should have been to ground 15). It made specific reference again to "You or anyone living in the Premises" ill-treating such furniture. Clause 4.10 dealt with obtaining the grant of the tenancy by false representation with reference to ground 17. Clause 4.11 then dealt with the situation where the tenancy had devolved under the tenant's will or on the tenant's intestacy. It is necessary to refer again to the precise way in which that is set out when dealing with the arguments advanced on behalf of the claimant housing authority. Clause 4.12 again referred to one of the grounds, ground 9, and dealt with the circumstances where the association sought to recover possession of the premises on the ground that suitable alternative accommodation was available.
10. There then appeared in capital letters "For the avoidance of doubt the association hereby declares that it will not seek to use ground 1,2,3,4,5,6, and 8 of schedule 2 Housing Act 1988 to obtain possession of the premises."
11. When the matter came before the district judge the claimant abandoned the claim pursuant to ground 12. That was because the requirement contained within the tenancy agreement referred to an obligation upon the tenant and there was at that point no reference to anyone else. Thus only ground 14 was pursued. The argument advanced in relation to ground 14 was that the conviction of Mr Millington, who was somebody residing in, or certainly visiting the house, gave rise to the circumstances envisaged by ground 14 and accordingly the right to possession was made out.
12. On behalf of the defendant, it was argued that clause 4.7 restricted that right and a comparison was made between the wording of clause 4.7, to which we have referred, and the wording of ground 14. Ground 14 reads:

"The tenant or a person residing in or visiting the dwelling house --

(a) has been guilty of conduct causing or likely to cause a nuisance or annoyance to a person residing, visiting or otherwise engaging in a lawful activity in the locality, or

(b) has been convicted of --

(i) using the dwelling-house or allowing it to be used for immoral or illegal purposes, or

(ii) an arrestable offence committed in, or in the locality of, the dwelling-house."

13. It was submitted on behalf of the defendant that the obvious distinction between 4.7 and ground 14 was that, when one came to consider the second limb, that part equivalent to (b) in ground 14, the wording restricted consideration to the tenant, described as "you" without any reference to anyone else living in or visiting the premises. It was submitted on behalf of the defendant that what had happened was that the claimant had, by drawing its tenancy agreement in this way, limited the circumstances in which ground 14 could be employed by its own tenancy agreement.
14. That argument was considered by the district judge. She came to the conclusion that when "you" was used in the second part of clause 4.7, it had to be read so as to give it the meaning "you or anyone living in or visiting the premises". The ground of appeal is, put simply, that the judge was wrong to reach that conclusion.
15. To complete the history before turning to the arguments advanced on each side in relation to that matter, the district judge, having decided that the matter did come within ground 14 because on her interpretation of clause 4.7 there was no restriction on the right of the claimant to obtain possession, then, since the ground gave a discretion whether to grant an order for possession, went on to consider whether to grant possession or not. She concluded that it was right to make an order for possession but, in the exercise of her discretion, decided to suspend it on the terms to which earlier reference has been made. That, she explained, was substantially because of consideration of the welfare of the defendant's son, with his special educational needs. She accordingly made the order to which reference has been made.
16. There were initially appeals and cross-appeals relating to the exercise of discretion. Those have been resolved and the parties are agreed that if the decision is right in relation to the effect of clause 4.7, the order should stand.
17. I turn, therefore, to the arguments advanced on each side. On behalf of the defendant, Mr McDonnell QC submits quite simply that the wording of clause 4.7 is plain and has the significant difference, to which I have earlier referred, when compared with ground 14. He points to the heading which precedes grounds 4.3 onwards and to the fact that there specifically the claimant made clear that the only grounds and circumstances in which the association would serve notice and seek to recover possession were those that were set out thereafter. Accordingly, he submits that the interpretation put upon clause 4.7 by the district judge had strained the language in a way which was simply not permissible and that this clause had to be given its clear and simple meaning. He submitted that, in so far as arguments might be advanced suggesting that these were simply descriptive of the statutory rights of the tenant, an examination of the whole of the agreement, and in particular clause 4, made clear that that was not the situation.
18. On behalf of the claimant, Mr Mann QC has submitted, first, that the judge was right in her interpretation of this clause. He submits that it is quite clear that the intention was simply to reproduce ground 14 and that the use of the word "you" in the second part has to be read in context and can only mean "you or anyone living in or visiting the premises." His second basis of support for the decision of the district judge, and the one he advanced most fully before us, was a submission that when one looks at the terms of clause 4, it is quite apparent that the wording of the clause is in large measure descriptive of the rights of the tenant as they are under the Act and that in setting out the specific grounds in clauses 4.3 onwards, the claimant was doing no more than giving guidance and explanation as to what precisely the various grounds which were specifically referred to meant from the point of view of the tenant. He has invited the court to look at clause 4 in its entirety. Clause 4.1 sets out the right of occupation. That, he says, is simply a setting out of what has already been referred to earlier in the agreement, namely the right to enjoyment of the premises which comes with the tenancy. Clause 4.2, he submits, does no more than set out exactly what the rights are of a tenant under an assured tenancy in relation to the premises, so far as the first two paragraphs of that clause are concerned. He submits that the first paragraph of 4.2, which reads:

"You have security of tenure as an Assured Tenant so long as you occupy the Premises as your only or principal home. The Association can only end the Tenancy by obtaining a court order for possession of the Premises on one of the grounds listed in Schedule 2 of the Housing Act 1988 (as amended by the Housing Act 1996)"

clearly does no more than to describe the rights that the defendant would receive under the assured tenancy. It gives her no additional rights of any kind over and above the statutory rights, and it makes clear that the association can obtain a court order for possession on one of the grounds listed in schedule 2 of the Act.

19. The next paragraph deals with the requirements to be satisfied before the court can make an order. It reads:

"The Court will not make an order unless the Association shall have served on you a notice in writing complying with the requirements of the Housing Act 1988 (as amended) or the Court considers it just and equitable to dispense with service of such a notice."

20. Again it is submitted that that in no way creates any contractual right, it is merely descriptive of the statutory rights which necessarily follow for an assured tenancy.
21. The third and final paragraph of 4.2 is accepted to give rights over and above the statutory rights of the defendant. In that passage the association agrees that it will give not less than four weeks' notice in writing of its intention to seek a possession order, save exceptionally where the proceedings involve nuisance, again referring to ground 14. It is accepted that under the statutory scheme the period of notice would not always be four weeks and consequently this part of 4.2 must have been intended to give wider rights to the tenant than would otherwise have been the case.
22. The words that follow -- the words in capital letters relating to the only grounds and circumstances in which the association would serve notice and seek to recover possession -- it is submitted do no more than explain to the defendant that which has already been set out before, namely, that the only way in which possession of the premises can be obtained is pursuant to one of the grounds listed in schedule 2 of the Act.
23. Mr Mann submits that when one looks at each of clauses 4.3 through to 4.10, each provides a specific ground and then summarises, in language which is easy to follow, the effect of that ground. He submits that it can never have been intended that those would in any way have been giving any contractual right to the defendant. The rights of the defendant were the right not to have a possession order made against her except on the specified ground, and these were simply to explain to her in general terms, which were easy to understand, the circumstances with which the ground dealt. He submits that when one looks at each of those provisions there is no hint or suggestion, apart from clause 4.7, that in any way was the claimant giving up any part of its rights under the Act to apply for possession. He submits that one has to look at the particular wording of clause 4.7 in that context and that one can only read it as being an attempt, albeit not the best attempt, to explain the significance of ground 14 to the defendant without in any way being intended to restrict the rights of the claimant.
24. He then goes on to submit by looking at clauses 4.11 and 4.12, which relate to grounds 7 and 9, that one can see the scheme of the tenancy agreement is that in each case, having referred to the ground, there are then specific references to ways in which the association would restrict its right to apply for possession under the relevant ground, even though the Act permitted such an application. He submits that if it had been the parties' intention therefore to restrict the right under ground 14, similar language would have been employed to show that there was a deliberate limiting of that right.
25. Mr Mann then points to the passage to which I have earlier referred, which appears at the end of clause 4.12, where the association specifically declares that it would not seek to use various grounds. He points out that some of those grounds were not available in any event because they did not apply to the particular circumstances of this letting, but acknowledges that some of them do give extended rights to the defendant. In particular, ground 8 would have been applicable to a tenancy of this kind. It would have meant that if her rent was more than eight weeks in arrears the association would have been able as of right to obtain possession. By forsaking that right the defendant was limited to the right under ground 10 for the court to exercise its discretion whether to grant possession in such circumstances or not.
26. Mr Mann's submission is that, taken altogether, it is quite clear that there has been an express use of language where the claimant was giving up its rights or limiting its rights, and that the court should not read clause 4.7, which contains no such express provision, as being an indication that rights were being given up.
27. He submits, further, that there would be no commercial sense in the claimant giving up that right. The right to apply for possession in circumstances such as those in this case, he submits, is a valuable right. Therefore he concludes that if the court comes to the conclusion that there is a degree of ambiguity in clause 4.7, so that more than one meaning can be attached to it, the court ought to give effect to that which makes commercial sense, and should not interpret it as a restriction on the right of the association to apply for possession, not only in its own interest but also in the interest of neighbours and others in the district.
28. Those then are the competing submissions.
29. For my part I find the language of clause 4.7 to be simple and straightforward. As my Lord, Sir Anthony Evans observed during the course of argument, the use of the word "you" in the second part of clause 4.7 is wholly unnecessary if it was to be given exactly the same meaning as that used in the first part of the clause and in ground 14. The inclusion of the word "you" can only have been intended to distinguish between acts of the tenant or the other persons specified in the first part of the clause and the criminal conviction of the tenant alone in the second part. I do not find it possible in any way to interpret "you" in the way that the district judge did. Through the whole of the tenancy agreement "you" is specifically used to refer to the tenant. On every other occasion when the conduct of a person living in or visiting the premises has a relevance, specific reference is made to such a person and I can see no way that one can simply say that "you" means "you or anyone living in or visiting the premises" in this context. I, therefore, would reject the basis upon which the district judge came to her conclusion.
30. The argument advanced by Mr Mann which I consider to be of more substance is that if one looks at the totality of clause 4 there is there a basis for thinking that where rights were being given up or were being limited by the claimant that position was expressly set out. However, one has to bear in mind that this is a document drawn by the claimant for use by tenants, and the tenants would be entitled to look at the document and understand from it what their rights were. I consider that the reference to the only grounds and circumstances in which the association would serve notice and seek to recover possession made clear that for the purposes of the tenancy agreement these were the only circumstances which would give rise to an application for permission. I reject the notion that in some way these provisions were merely descriptive of the statutory rights; they were setting out the contractual rights that were more restricted than those under the statute.
31. Clause 4.7 would in my judgment clearly lead to the conclusion that there was an intention to restrict the rights to apply for possession under ground 14. Nor do I accept that it is a restriction which makes no sort of sense at all. To cause somebody to have to leave their premises because of the actions of somebody else living in or visiting the premises is a harsh course to take. There may be a justification for it, and Parliament clearly saw that in giving ground 14 its wider ambit. But equally, one could see that a party to a contract of this kind might take the view that it was wider than was necessary and be prepared to limit the use that it could make of that ground. In particular, it has to be borne in mind that if the commission of an arrestable offence in the premises or in the locality of the premises by someone other than the tenant caused nuisance or annoyance to anybody residing locally, visiting or otherwise engaging in lawful activity locally, that would engage ground 14(a), which is clearly within clause 4.7. Accordingly, I find it impossible to say that the meaning suggested on behalf of the defendant is not one that this clause could sensibly or commercially have and on the clear wording of the clause I am satisfied that anybody reading the clause as it is set out would come to the conclusion that the claimant had imposed a restriction upon its right to make use of the second limb of ground 14.
32. For those reasons I would reject the arguments advanced very skilfully and with ability by Mr Mann and come to the conclusion that this was in fact a decision to which the district judge could not come. This application for permission was not within the terms of the tenancy agreement and no order for possession could be made in the circumstances of this case. For those reasons I would allow this appeal.
33. SIR ANTHONY EVANS: I agree and I respectfully add three footnotes. First, it seems to me clear that the insertion of the word "you" in the second part of clause 4.7 was not obviously a mistake. There was a sensible reason why the landlord might restrict his statutory rights under the clause -- for reasons which I need not expand here -- and therefore this clause can be contrasted with clause 4.9 where there is a clearly mistaken reference to ground 17. This is not a case where it is apparent from the face of the document that there has been some error.
34. Secondly, I agree with my Lord that it is impossible to avoid the conclusion that clauses 4.3-4.12 inclusive are contractual rather than "descriptive", to use the word which Mr Mann QC in his skilful submissions to us applied to them. But even if those clauses -- or clause 4.7 in particular -- were merely descriptive I would find it difficult to hold that the landlord could resile from what would be, in the circumstances, a serious misdescription of the effect of ground 14.
35. Thirdly, Mr Mann urged upon us the commercial reasons why it might be disadvantageous for the claimant association to have 4.7 interpreted in the way for which the tenant here contends. I do not find that a factor of any weight. The only additional restriction would apply in a case where ground 14 would entitle the landlord to obtain possession but clause 4.7 does not. That would mean that the restriction only applied when there had been no nuisance or annoyance to others in the neighbourhood, where the tenant herself had not been convicted of any offence, and the only ground upon which the association might rely would be the that another person living in or visiting the premises had committed an arrestable offence at or in the locality of the premises. I put on one side, as theoretical only, the possibility that someone other than the tenant might be convicted of using the premises for immoral or illegal purposes without the tenant herself also being convicted of that or some related offence. It seems to me, therefore, that the restriction is in practice more apparent than real, hence my view that the submission in that respect was of little weight.
36. THE PRESIDENT: I also agree.
ORDER: The appeal is allowed. The order for possession is set aside as is the order for costs below. The claimant is to pay the costs of the appeal and the costs of the hearing below before the district judge on a standard basis and there will be detailed assessment of the appellant's costs. Application for permission to appeal to the House of Lords is refused. (Order not part of approved judgment)