England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
HIS HONOUR JUDGE COOKE

		Royal Courts of Justice Strand, London, WC2A 2LL
		20th July 2004

Lord Justice Auld :

Introduction

1. This is the judgment of the Court, to which we have all contributed. The case concerns "secure tenancies" under Part IV of the Housing Act 1985. Until the Housing Act 1980 tenants of local authorities had no statutory protection. That Act introduced security of tenure for such tenants and for those of some other public or quasi public bodies in the form of "secure tenancies" and a right to buy their homes. Those provisions were consolidated in Parts IV and V of the 1985 Act. The case has raised a number of issues of law prompted by the decision of the House of Lords, given on 24^th June 1999 in Bruton v. London & Quadrant Housing Trust [2000] 1 AC 406, that what purported to be a licence of residential property granting exclusive possession in return for periodic payment in money amounted to the grant of a tenancy. The two main issues in the appeal are whether, on the facts, there was a relationship of principal and agent between a head-lessor and its lessee so as to render the latter the head-lessor's agent in the grant of what became Bruton tenancies to the lessee's former licensees and, whether or not that was so, whether on the head-lessor's termination of the head-lease, the sub-tenants of the former intermediate lessee remained or became secure tenants under Part IV.
2. Mr Gavin Kay, Mr William Gorman and others appeal against two rulings by His Honour Judge Cooke in the Central London County Court on 13th December 2002 and 19th December 2003 respectively, in claims against them by the London Borough of Lambeth ("Lambeth") for possession of residential properties owned by Lambeth and occupied by the appellants.
3. The properties in question are, and have all material times been, owned by Lambeth. But it was London & Quadrant Housing Trust ["LQHT"], a charitable housing trust, that let the appellants into possession of them under the authority of a licence granted to it by Lambeth, later replaced by individual leases, to LQHT. Those leases were subject to a break-clause providing for termination by Lambeth, on which, in 2000, it relied to terminate them. The Judge:

a) held, by way of rulings on a number of preliminary issues, that the appellants are not tenants of Lambeth and, therefore, have no security of tenure under Part IV of the 1985 Act; and

b) on an application by Lambeth and LQHT, struck out the appellants' alternative defence that an order for possession against them would infringe their rights under the European Convention of Human Rights ("ECHR").

4. On the preliminary issues the appellants, by this appeal, seek declarations that they are the secure tenants of Lambeth from such date as the Court may determine. On the strike-out they seek in the alternative, that is, on the assumption that they are trespassers against Lambeth, that Lambeth's determination of the LQHT leases was unlawful and, therefore, void because Lambeth did not carry out, when considering whether to seek possession, a balancing exercise required under Article 8 ECHR on the right to respect for private and family life, and/or was in breach of Article 1 of the First Protocol.
5. As we have indicated, the proceedings leading to the appeal have their legal, though not factual, origin in the ruling of the House of Lords in Bruton, that LQHT's agreement with Mr Bruton to allow him to occupy residential property, entered into and with a similar history to that of the appellants, was a tenancy rather than a licence. However, the House left open two important consequential questions: first, whether such tenancies are secure under Part IV of the Housing Act 1985, which provides for secure tenancies and rights of secure tenants; and second, whether the appellants had any rights to security and/or to remain in possession as against LQHT. A further complication is, as just indicated, that following those rulings Lambeth determined the head-leases that it had previously granted LQHT by invoking the break-clauses in them, raising the further issue in this appeal whether the appellants are no longer tenants, but trespassers as against Lambeth.
6. Lambeth's case before the Judge, supported by LQHT, was that, as a result of the decision in Bruton, the appellants' tenancies had become binding on LQHT, but that once Lambeth determined the head-leases of LQHT, the appellants were no longer tenants but trespassers. The appellants' case was that they had become secure tenants of Lambeth: 1) on being let into occupation by LQHT, because LQHT, in granting what were to become "Bruton" tenancies had acted as Lambeth's agent; or 2) in about 1995 when Lambeth determined LQHT's licences and replaced them with head-leases; or 3) in 2000 when Lambeth determined those head-leases..

The facts

7. The premises occupied by the appellants comprise "short-life" property of Lambeth, namely that scheduled for demolition, redevelopment or works and which, in any event, are not in a condition suitable for normal housing use or capable of being rendered so suitable within finances available to Lambeth.
8. By the late 1970s and early 1980s Lambeth owned substantial blocks of property in such poor condition and not in use. It did not have the money to redevelop it for housing, either by way of demolition and rebuilding or with major refurbishment. The properties were also subject to aggressive squatting, which in turn exacerbated their already poor condition, and interfered with Lambeth's long-term policies or hopes for their better use. The Department of the Environment, by Circular DOE 18/74, had urged local housing authorities to make the best use they could of such properties. In 1975 Lambeth began to consider a scheme by which housing associations would take over short life properties, find tenants for them, and manage them until they were required for demolition and/or redevelopment.
9. Over the next year the Department of the Environment issued DOE Circular 76/77 advising local housing authorities to make arrangements with registered housing associations and like bodies for the repair, management and letting of short-life properties. At about the same time the Government announced that money spent by local housing authorities on short-life property would be deducted from their overall housing expenditure budget. In future, such expenditure would have to be met out of housing authorities' own funds and housing association grants ("Mini-HAGs") payable by the Housing Corporation direct to the housing associations concerned. All this coincided with the increase in responsibilities on local housing authorities imposed by the Housing (Homeless Persons) Act 1977 which led them to provide temporary bed and breakfast accommodation for the homeless with assistance from registered housing associations.
10. From about 1977 Lambeth informally licensed such property to LQHT, and a number of similar bodies, for them to make it available as temporary accommodation, in place of bed and breakfast accommodation, to homeless persons and their families for whom Lambeth owed a statutory duty under the 1977 Act to arrange housing - known in these proceedings as "the bed and breakfast scheme". Lambeth nominated such homeless persons for provision by LQHT of bed and breakfast accommodation; Lambeth set the rents and took eviction decisions. Lambeth permitted LQHT to retain, but required it to account to it for, the charges paid by the homeless person, and, in addition, paid LQHT a weekly fee to enable it to pay for works necessary to provide accommodation of an acceptable standard for such purpose. Mini-HAG was not regarded as available nor claimed for bed and breakfast accommodation.
11. In 1979 Lambeth, by a quite separate arrangement, also made provision through LQHT and other bodies to which it "passed" properties, for accommodating persons to whom it owed no statutory duty to arrange accommodation and to whom it would not normally have allocated or arranged housing under its general housing scheme. This became known as "the singles scheme". The financial arrangements for this scheme were that it would cost Lambeth nothing and that it received nothing. LQHT, in its own right, obtained central government assistance in the form of Mini-HAGs from the Housing Corporation, and it set, in agreement with the Corporation (not with Lambeth) a weekly unit rental sum for such occupation. Out of that sum it paid for necessary works to bring the property to sufficient standard, but to a lower standard than the property that it made available to the statutorily homeless under the bed and breakfast scheme. Lambeth did not in practice select occupiers for this scheme; anyone on its general housing list was entitled to apply direct to LQHT which would make the selection, though often simply accepting people who had been let into possession by other occupiers or squatters. Also, it was LQHT, not Lambeth, that took eviction decisions.
12. All the appellants are persons who were allowed into occupation by LQHT, by way of purported licences, under the singles scheme.
13. It seems that these arrangements between Lambeth and LQHT, by which Lambeth granted LQHT a licence of properties for both the bed and breakfast and the singles schemes were, in their early years highly informal, possibly not even recorded in writing. There was little direct evidence at the trial from those involved on behalf of Lambeth and LQHT respectively about the arrangements between them until 1986. Such oral evidence as was given at trial was based on recollections of events occurring some 20 years before.
14. In 1986, in response to a requirement imposed by the Housing Corporation for a formal licence agreement as a pre-condition for its payment to LQHT of a substantial amount of Mini-HAG towards its provision of accommodation under the singles scheme, Lambeth and LQHT executed an agreement ("the 1986 Agreement"). It was described as an "Agreement for temporary utilisation of various properties in providing accommodation for homeless persons". We shall return to that document in more detail in our consideration of issues 1 and 2 in the appeal. It is common ground that it took effect as a licence rather than a tenancy and that it was intended to be declaratory of, or to formalise, the existing arrangements under both schemes. The agreement was terminable on three months written notice by either party, or such shorter period as they might agree, reflecting the flexibility appropriate to short-life property under either scheme.
15. In 1995 Lambeth and LQHT replaced the 1986 Agreement with a series of individual head-leases from Lambeth to LQHT, each for a period of 10 years, but terminable by written notice by either party of just over six months, that mutual right of termination continuing the existing flexibility appropriate to the use of short-life property. These head-leases were also intended to enable LQHT to replace its licences to the appellants and other occupiers with assured shorthold tenancies, with a view, in the light of developing law in this area, to preventing the appellants acquiring security of tenure under the 1985 Act derived from the licences. It was also intended that Lambeth would now charge rent to LQHT and that LQHT would reimburse itself by making charges to the occupiers. The reason for these legal and financial changes was a somewhat delayed response to the introduction some six years earlier by the Local Government and Housing Act 1989, from 1^st April 1990, of "ring fencing" of the Housing Revenue Account, the financial effect of which was to require Lambeth to derive some income from its singles scheme.
16. In fact, few of those occupying under the singles scheme agreed to enter into assured shorthold tenancies. In 1997 Lambeth began to withdraw from the provision of short-life accommodation, and, as a result, many occupiers, including these appellants, began to assert that they were, not only tenants of LQHT, but also secure tenants of Lambeth leading, in 1999, to the Bruton decision in their favour as to the former, but expressly leaving open the latter.
17. Following the Bruton decision, Lambeth terminated the head-leases to LQHT in accordance with their terms for determination on notice, and LQHT communicated that information to the appellants and others of its occupiers holding under the Bruton leases.
18. In August 2000 Lambeth commenced possession proceedings against many of the holders of Bruton tenancies in the Central London County Court, including all the appellants except Mr Gorman. They defended the proceedings, claiming that they were and, at all material times had been or become, secure tenants of Lambeth. In 2000 Mr Gorman brought an action against Lambeth for a declaration making the same claim. The appellants maintained that, before Lambeth's grant of the head-leases to LQHT in 1995, LQHT was acting as agent for Lambeth with the result that the appellants had become Bruton tenants of Lambeth. They maintained, in the alternative, that the effect of the replacement of the 1986 Agreement with 1995 head-leases, or of the termination of those leases, rendered the appellants secure tenants under the provisions of Part IV of the 1985 Act, and that Lambeth could not recover possession against them other than as permitted by those provisions. As a final alternative, they claimed that, even if they were trespassers as against Lambeth, its determination of the 1995 head-leases violated their human rights because it had failed to undertake the balancing act required by Article 8 of the European Convention of Human Rights ["ECHR"] and/or it was in breach of Article 1 of the First Protocol.
19. Lambeth, in response to those contentions, maintained that it is not and never has been bound by the Bruton secure tenancies granted by LQHT to the appellants and that the appellants are, as against Lambeth, trespassers. It denied that, before the grant of the head-leases in 1995, LQHT had acted as its agent in allowing the appellants into or remaining in occupation. It maintained that, in any event, such an arrangement would have been ultra vires its powers with the result that the Bruton tenancies putatively granted would have been void. It also applied to strike out the appellants' human rights defence as showing no reasonable ground for defending the claim.
20. On 13^th December 2002, by way of preliminary rulings, the Judge found against the appellants on all the issues going to whether the appellants held secure tenancies under Part IV of the 1985 Act. And, on 19^th December 2003, following the decision of the House of Lords in Qazi v. Harrow LBC [2003] 3 WLR 792, he also struck out their human rights defence as groundless.

The issues in the appeal

The appeal raises six issues:

1) Did LQHT grant the appellants Bruton tenancies in its own right or, as the appellants contend, as agent for Lambeth?

2) What effect, if any, did the 1986 Agreement have on those arrangements?

3) If LQHT granted the tenancies as agent for Lambeth, were such tenancies ultra vires Part IV of the 1985 Act, because Lambeth had unlawfully delegated its housing functions to LQHT, and if so, whether, as a result, the appellants had lost their security of tenure?

4) Whether, when the tenancy of an intermediate landlord from whom an occupier held a secure tenancy under Part IV of the 1985 is terminated, there remains or is created a secure tenancy that can prevent the superior landlord from recovering possession independently of the restricted grounds for possession provided in that Part?

5) Whether, if the head-leases were valid, their creation or subsequent termination destroyed the tenancies granted by LQHT or, as the appellants contend, rendered them binding on Lambeth?

6) Whether the Judge was entitled to strike out the appellants' human rights defence as groundless?

21. The appellants appealed to this Court, with the Judge's permission on all those issues except issues 4 and 6, in respect of which the Court has granted permission.
22. If the appellants succeed on issues 1 and 2, namely in establishing that they were tenants of Lambeth, to defeat Lambeth's claim for possession overall, they must also succeed on issue 3, namely, by showing that Lambeth's delegation of its housing responsibilities in this way to LQHT was intra vires.
23. If the appellants fail on issues 1 and 2 with the result that they were secure tenants of LQHT, to defeat Lambeth's claim overall they must succeed on issues 4 or 5, namely that Lambeth was confined to the restricted grounds provided by Part IV for recovering possession or that the creation or termination by Lambeth of the head-leases bound Lambeth with those secure tenancies.
24. If they fail to succeed through either of those routes, the appellants could yet succeed if they show that they have an arguable case to resist Lambeth's claim for possession because it is a violation of their human rights.

Issues 1 and 2 –whether LQHT initially granted the tenancies in its own right or as agent for Lambeth and the effect of the 1986 Agreement on whatever pre-existing relationship there had been between Lambeth and LQHT

25. The appellants' case is that LQHT, when letting them into occupation, did so as Lambeth's agent, and that, as their occupancies have been held by the House of Lords in Bruton to be tenancies, they are and always have been Lambeth's tenants and, as such its, not LQHT's secure tenants. The Judge held that the appellants were not tenants of Lambeth because LQHT had not acted as agent of Lambeth when it first let them into occupation or subsequently when it had allowed them to remain in occupation following the 1986 Agreement.
26. As we have said, there was little direct evidence from the persons most closely involved in the transactions between Lambeth and LQHT over the relevant period from about 1979 to the making of the 1986 Agreement and thereafter until 1996 when Lambeth replaced its licence to LQHT with individual head-leases in respect of each property. Such evidence as there was, was based on recollection of events that had occurred some 20 years before trial.
27. However, as Mr Andrew Arden QC and Mr Terry Gallivan, for Lambeth and LQHT, tellingly indicated by way of summary of the Judge's findings of fact, the arrangements between Lambeth and LQHT for the singles scheme do not suggest a landlord and tenant relationship between Lambeth and the appellants through the medium of LQHT as Lambeth's agent. Lambeth did not effectively select any of the appellants for occupation. None of them ever paid rent to Lambeth. LQHT either selected persons for occupation or they were self-selecting in that they just moved in or were let in by other occupiers and LQHT allowed them to remain. LQHT set the rent levels. LQHT alone decided on eviction where it considered it necessary. The occupiers requested LQHT to attend to repairs, and LQHT dealt with them. And the occupiers clearly regarded LQHT as their landlord, and so described it on their applications for housing benefit.
28. Turning to the 1986 Agreement, it was, as we have said, intended to be declaratory of the existing arrangements between Lambeth and LQHT under both the bed and breakfast scheme and the singles scheme, despite their different functions and distinguishing features. Construction of the Agreement is, therefore, critical to the determination of issues 1 and 2 as to the relationship of Lambeth and LQHT respectively with the appellants before and after Lambeth and LQHT entered into it. The Judge, at page 34 of his judgment, described it as casting in "formal form the arrangements as they had been in the preceding years". Scheduled to the agreement and, therefore, governed by it, are just under 100 short-life properties with which, directly or indirectly, the case is concerned.
29. The Agreement is an unusual document. As we have mentioned, it is described on its back-sheet as an "Agreement for temporary utilisation of various properties in providing temporary accommodation for homeless persons". Three preliminary points about it should be noted. First, it clearly applies, albeit in different ways, both to the bed and breakfast scheme and the singles scheme. Second, it expressly refers to LQHT as "the licensee". And third, it does not, in terms, refer to the relationship between Lambeth and LQHT as one of principal and agent.
30. The Agreement began with a number of recitals, which acknowledge the factual context giving rise to it, namely: (3) provision by Lambeth of accommodation for the statutorily homeless, namely those in priority need under the 1977 Act; (4) its ownership of properties scheduled to the Agreement in need of substantial works by way of rehabilitation and/or development; (5) its wish to make good use of those properties in the short-term by licensing them to LQHT for it to use for providing "temporary accommodation", including accommodation for statutorily homeless persons; and (6) and (7) that the provision by LQHT of temporary accommodation pursuant to the licence for "homeless persons or short term arrangements" should not confer any security of tenure.
31. Moving on to the body of the agreement, clause 1 is, as the Judge said, the "central dispositive provision" of the document. It provided:

"In consideration of the agreements … [Lambeth] gives leave and licence to the licensee [LQHT] in common with [Lambeth] to use and manage the properties on behalf of … [Lambeth] for the periods agreed upon the terms and conditions [of the document]"

32. Clause 2(a) was clearly capable of application to short stay accommodation under either scheme. It provided, so far as material:

"In consideration of the agreements on the part of the Licensee hereinafter contained … [Lambeth] hereby GIVES LEAVE AND LICENCE to the Licensee in common with … [Lambeth] to use and manage the properties only as temporary housing accommodation there may be [sic] for homeless persons referred to the licensee by … [Lambeth's] Director of Housing ….(save whereby [sic] prior written consent the Director of Housing permits an alternative use) …."

33. As the Judge observed, at pages 36 to 37 of his judgment, this provision, though primarily concerned with the provision of bed and breakfast accommodation for the statutorily homeless, was also capable of referring to accommodation made available under the singles scheme. But, importantly, and in contrast to the bed and breakfast scheme, neither in this sub-clause nor elsewhere in the Agreement, are there any details as to how the latter was to operate, for example, of a restrictive nature in the nomination of occupiers, or setting and accounting for rents, eviction etc.
34. Clause 2(b) imposed a number of such obligations on LQHT clearly referable only to its provision of temporary bed and breakfast scheme to the statutorily homeless, in the main requirements for nomination of qualifying occupiers and for LQHT periodically "to account for or to collect on behalf of" Lambeth all accommodation charges and other costs that it might levy on occupiers.
35. Clause 2(c), which obliged LQHT to maintain the properties to a basic level to the satisfaction of Lambeth "for the occupants", and all or most of the ensuing provisions of the Agreement, which we need not detail, are, as the Judge observed, consistent with either use. At page 38 of his judgment, he summarised, as follows, the effect of the document:

"… The licence as drafted primarily refers to … [bed and breakfast accommodation]. It admits of other uses (sub-clause 2(a)) without defining or restricting them except that they must be with the permission of the Director. Some of the clauses are relevant only to … [bed and breakfast accommodation], nothing in the document is relevant only to … [short stay accommodation]], some clauses are capable of operating with either scheme."

36. As the Judge rightly observed, by reference to the well-known dicta of Lord Hoffmann in ICS v. West Bromwich BS [1998] 1 WLR 896, HL, at 912-913, in the case of such a document it is of particular value to consider it in its factual and legal matrix. In doing so, he had regard to the statutory and financial background, to the way in which Lambeth had developed and operated the two schemes and to the different ways in which it and LQHT operated them. He also had regard to the recitals to the agreement, which, as one would expect, reflected that factual matrix.
37. Among the matters in the factual matrix, in addition to the general history of Lambeth's development of the two schemes, the Judge had recourse to: 1) the documentary evidence of the loose use of words like "manage" and "use" and on "behalf of" before and after the making of the 1986 Agreement by those with direct knowledge of the development and working of the two schemes; 2) the different ways in which the properties were dealt with, especially before the 1986 Agreement, under the respective schemes; 3) a manual issued in May 1988 by Mrs Sue D'Souza, of Lambeth's Directorate of Housing and Property Services, for referral of properties to LQHT indicating the different nature of the two schemes operated by LQHT; 4) the fact that housing benefit was claimed and paid to occupiers under the singles scheme on the basis that LQHT were their landlords; (5) the matrix deriving from statutory provisions, including the non-delegability by a local housing authority of its functions of setting rents and selecting tenants, the wide statutory powers for collaboration between local housing authorities and housing associations enabling the former to make available residential property to the latter for the latter's own purposes; and (6) the statutory basis for the grant of Mini-HAGs.
38. We should deal in more detail with the last of those matters in the factual matrix, as it is plain that it had a significant part to play in the history of the development and operation by Lambeth of the singles scheme. As we have indicated, Mini-HAGs, under which funding for the singles scheme was provided, were paid direct by the Housing Corporation to LQHT, in contra-distinction to the funding for the bed and breakfast scheme, which it was Lambeth's responsibility to finance out of payments it received from central government and from occupiers for which LQHT had to account to it. The relevant provision is section 29(1) of the Housing Act 1974, which provided that the Secretary of State could make housing association grants to registered housing associations "in respect of their expenditure in connection with housing projects approved by him" for the purposes of improving and/or repairing and/or providing housing or residential accommodation. Section 29(4) and (6) provided that the amount of such a grant was to be equal to the net cost of the project to the housing association, namely the difference between the estimated expenditure of the association attributable to the project and the estimated income that might reasonably be expected to be received in respect of it. The Judge rejected a submission on behalf of the appellants that it was immaterial to the provision of Mini-HAGs whether LQHT were acting as agents or as principals in the provision of accommodation under the singles scheme. This is how he expressed that conclusion at pages 45 and 46 of his judgment:

"… (i) I accept that it is in no way central to the legislation or the existence of a project that the … [housing authority] has any particular legal interest in the property concerned provided, I would expect, that it has some sort of reasonably firm arrangement enabling it in practical terms to carry the project out. But this is not the point rather (ii) the point is as I think the simple question 'whose project is it'. (iii) the reason that is the essential question is that if the … [housing association] managing the project is a mere agent the payment is not to him at all but to his principal, in other words it is [sic] [would be] a method of getting … [Mini-HAG] for the benefit of organisations not entitled to it. (iv) 'providing' in my view naturally means providing oneself not providing on behalf of a principal (in those circumstances the principal would be the provider).

This is not of course to say that the Housing Corporation necessarily got it right but it is a powerful pointer to the … [singles scheme] being contemporaneously treated as eligible for … [Mini-HAG] on the criteria I have set out (and indeed the importance of creating the 1986 licence)."

39. He had recourse to the recitals, as well as the substantive terms of the Agreement. He drew attention to expressions in the recitals of the properties being "taken by the Licensee" and "used by" it "to provide temporary accommodation", suggesting independent use by LQHT of the properties for such a purpose. And, he contrasted such terminology with the expression in clause 1, "in common with … [Lambeth] to use and manage the properties on behalf of … Lambeth]", indicating, if it stood on its own, probably non-exclusive use in the nature of an agency. As the Judge had earlier observed, at page 36 in relation to clause 2(a) and the singles scheme properties:

"The expression 'in common with … [Lambeth]' does not obviously relate to anything that was being done or intended to be done. The practical reality was that … LQHT were doing the actual dealings with the properties – whether as agent or principal is another matter – but on no view of the facts were they doing it in common nor did anyone ever intend they should (at least other than in the most legalistic sense). The provision has all the appearance of draftsman desperate to avoid security of tenure. …

On the other hand the expression 'to use and manage … on behalf of … [Lambeth]' if taken either as a single expression or with the accent on 'manage' if unexplained and uncontrolled by some context (including the factual matrix) has a strong appearance of agency and predictably is one of the high watermarks of the occupiers' case. I have to say that 'use on behalf of' the owner who is granting the right to use is an expression that does not fit very easily either with common sense or ordinary language."

40. In the end, the Judge, as we have said, held, as a matter of construction that the 1986 Agreement did not constitute LQHT Lambeth's agent for the purpose of granting the Bruton tenancies under the singles scheme. He summarised his reasoning at pages 51 and 52 of his judgment in the following terms:

"(a) In order to interpret the scheme that affected the … [singles scheme] properties one has to construe the 1986 licence as a document representing the essence of the existing schemes.

(b) Much of that document has no relation to … [the singles scheme] but to … [bed and breakfast]. However the singles scheme properties are plainly within it and clause 2(a) is clearly of importance in defining the activity as both … [bed and breakfast] and an alternative use, though that alternative use is not fully defined or limited by the document itself.

(c) It is no good simply construing the document by reference to the words such as 'management' alone. One must read it in the context of the factual matrix.

(d) For the principal reasons I have already given the factual matrix shows strongly that when properties were administered/managed by [LQHT] under the … [singles scheme] method they were managed in a way which indicated both financial independence and freedom from operational control. The most obvious conclusion is that when properties were released to …[the singles scheme] they were operated and intended to be operated by … [LQHT] in a way which depended on … [LQHT's] own decisions and was not susceptible to command/control by … [Lambeth] except by means to terminating the arrangement by recalling the property.

(e) This is an arrangement which is (without much distinction) included in the general expression 'management' used by those on the job at the relevant time.

(f) It is a proper conclusion from this that when the Licence talks about management in the context at least of Clause 2(a) it does not limit or intend the … [the singles scheme] to be an agency scheme.

(g) The overall history and many if not all of the matters of factual matrix which I have set out but not mentioned individually in my conclusions go to support this conclusion."

The case for the appellants

41. Mr Jan Luba QC, Mr David Watkinson and Mr Kelvin Rutledge, on behalf of the appellants, made an overall criticism of the Judge's approach, namely that he wrongly distinguished between the bed and breakfast scheme for statutorily homeless persons and the singles scheme. They suggested that, on the material before him, it looks as if he would have found that the arrangements between Lambeth and LQHT for the former amounted to an agency. They suggested that his reason for coming to a different conclusion in respect of the appellants, who went into occupation under the singles scheme, appears to have stemmed from his mistaken view that it was a separate scheme from that to which the 1986 Agreement was intended to give formal expression. Whereas, they maintained, the Agreement made provision for it under, as they put it, umbrella arrangements laid out in that document, not separately from the bed and breakfast scheme.
42. More particularly, Mr Luba submitted that the Judge, in holding that there was no agency between Lambeth and LQHT in respect of the appellants' occupations of the properties, failed to construe the 1986 Agreement as an agency agreement pursuant to which Lambeth granted LQHT rights to occupy on its, Lambeth's, behalf, and, as such confirmatory of Lambeth as the original source of their right to occupy. In support of that proposition, he made the following main criticisms of the Judge's construction of the Agreement:

i) The Judge failed to have adequate regard, when considering whether there was an agency agreement, to the words "manage the properties on behalf of" in clause 1 of the Agreement. Whilst he acknowledged that those words, "without more indicate[d] the likelihood of agency" and that, without clause 2(a), "the licence on its own would be strongly indicative of agency", he nevertheless wrongly found against it. It was inexplicable, suggested Mr Luba, that the Judge did not refer to clause 1 in his ultimate summary of conclusions, notwithstanding his earlier description of it as the "central dispositive provision". He suggested that, in the absence of explanation from the Judge as to why, if, as he had held, it was capable of connoting agency for the bed and breakfast scheme, it was equally inexplicable why he had found that it did not bear that connotation in the context of the singles scheme.

ii) The Judge wrongly found that only clause 2 of the 1986 Agreement was "capable of referring" to the grants to the appellants and, in consequence wrongly disregarded the effect of other clauses in the Agreement equally capable of application to them. He argued that the Agreement is replete with language explicable only on the basis that it is confirming or establishing a relationship of agency, namely: clause 1 – "on behalf of the Council"; clause 2(a) – to use and manage the properties only as temporary housing accommodation for homeless persons referred to it by Lambeth unless by "prior written consent … [Lambeth] permits an alternative use"; 3) clause 2(b) – "to account for or to collect on behalf of" Lambeth all accommodation charges directed by Lambeth to be levied on the occupiers; 4) clause 2(g)(ii) to ensure that occupiers entered into a specific form of licence providing only for temporary occupation and excluding any right of security; 5) clause 2(j) on notification from Lambeth to take steps "on behalf of" Lambeth to obtain vacant possession of property or properties the subject of the notification; and 6) clause 2(l) to maintain a proper and efficient standard of management of the properties "to the absolute satisfaction of" Lambeth in accordance with Lambeth's statutory duties. Mr Luba also referred to recitals (4) and (5) to the Agreement (summarised above at paragraph 30), which refer to the Council's acquisition under statutory powers of the properties for the purpose of rehabilitation and/or development, and its agreement with LQHT pending that rehabilitation and/or development for LQHT to use them to provide temporary accommodation for persons nominated by Lambeth in the discharge of its statutory duties.

iii) The Judge wrongly held, as a matter of statutory construction of section 29 of the Housing Act 1974, that the Mini-HAGs grants granted to LQHT could not have been granted to it as an agent for Lambeth in respect of such properties, an aspect of the financial structure of the scheme that the Judge regarded as a valuable part of the factual matrix. Mr Luba submitted that the Judge wrongly limited the meaning of providing accommodation for the purpose of section 29 to an independent owner, whereas on a true construction of the section such grants were available to bodies such as LQHT whether providing housing accommodation independently or as agent for another. Beyond establishing some formality in the relationship between the housing body receiving the funds and the property in question, neither section 29 and the statutory regime of which it was part nor the Housing Corporation, as the paying party, was concerned with the nature of the legal relationship between the housing body and the property owner.

iv) The Judge wrongly found that the operational independence or degree of delegation granted by Lambeth to LQHT excluded agency, particularly when, as he had accepted, LQHT was an experienced agent and if, as the appellants contend, such delegation was legally permissible. Mr Luba submitted that LQHT's financial and operational independence, the former due not least to its eligibility for Mini-HAGs, did not militate against it being Lambeth's agent for the purpose of day-to-day management of the properties. He maintained that the degree of operational control permitted to LQHT was, on the facts as found by the Judge, consistent with the degree of control any property owner might permit a very experienced property-managing agent on day-to-day property management matters. He added that such independence was also highly beneficial to Lambeth because, for among other reasons, it relieved the pressure on Lambeth's waiting list; as the properties were initially, at any rate, short-life and scheduled for demolition, they would otherwise have stood empty; and they would be put and/or retained in habitable condition without expense to Lambeth as a result of the funding that LQHT received direct in the form of mini-HAGs. Mr Luba contrasted that independence on day-to-day management issues with Lambeth's control, as evidenced by the 1986 Agreement, in its: ownership of the properties; imposition of the 1986 Agreement and its replacement with the 1995 Lease; control over what properties to license/lease to LQHT and over their availability for use by other than nominated homeless families (clause 2); and its ability to intervene to control the contractual rights accorded to individual occupiers and to prevent termination by LQHT of occupiers' agreements. All this pointed, said Mr Luba, to Lambeth retaining control of the "big decisions" and leaving LQHT to deal with the day-to-day matters. He added that the facts, as the Judge found, that LQHT allocated the properties to occupiers, set the charges to them and decided whether to evict them, were not inconsistent with agency; on the contrary, they were entirely consistent with the day-to-day management that a large property owner would leave to an experienced property managing agent.

Lambeth's and LQHT's case

43. Mr Arden submitted that the appellants' claim that the arrangements between Lambeth and LQHT conferred on them all the rights of a local authority secure tenant flew in the face of the very purpose and nature of the singles scheme as revealed by the undisputed factual background. All the properties in question were ones that Lambeth had at one time or another acquired for certain purposes, but which it could not finance in the short-term For that reason Lambeth had passed the properties to LQHT to ensure that they did not deteriorate further as empty properties or become subject to squatting and, at the same time, for LQHT to make available, under the singles scheme, to persons to whom Lambeth would not have granted tenancies. Mr Arden suggested that, carried to its logical conclusion, the appellants' argument in support of their claim, if successful, would lead to the absurd outcome that property temporarily released from its housing stock because of its poor condition and Lambeth's financial inability to do anything about it, would become secure tenancies and, as such, subject Lambeth under section 11 of the Landlord and Tenant Act 1985 to repairing obligations to those whom they would not normally house.
44. Mr Arden drew attention to the arrangements under which, on the evidence, Lambeth and LQHT had operated the two different schemes, and the circumstances, including the funding of them, giving rise to the differences, and to the way those arrangements had been carried through, however inelegantly into the 1986 Agreement as declaratory of what had gone before. He emphasised in particular the way in which it made specific reference in clause 2(a) to more than one scheme, and he contrasted the provisions in the body of the document dealing with Lambeth's oversight of, and involvement and financial concern in, the bed and breakfast scheme with the absence of such provisions in relation to the singles scheme. He also distinguished between contractual obligations of a general kind as between Lambeth and LQHT to be found in the Agreement and those particularly referable to a relationship of agency, a distinction, he maintained, that Mr. Luba had overlooked in his submissions. In short, he submitted that it was plain from the different ways in which Lambeth and LQHT had conducted themselves in relation to each of the schemes over the years, and from the reasons why, that the Judge was right to find that there was no agency in relation to the singles scheme and that the 1986 Agreement, however unsatisfactorily drafted, was not only of a piece with that conclusion, but supported it.

Conclusions

45. The history of the matter giving rise to and of which the 1986 Agreement, in its somewhat disorderly way, was declaratory shows that Lambeth had two quite different schemes under which it licensed short-life properties to LQHT for the provision of temporary accommodation to those without homes. The first, the bed and breakfast scheme, was one by which Lambeth, with the assistance of LQHT, fulfilled its statutory duties to arrange accommodation for the statutorily homeless, with Lambeth retaining all the control and financial responsibilities of that scheme that we have described. The second, and quite different scheme, the singles scheme, was one in which it made available similar, though generally lesser quality properties, to LQHT to allocate and provide accommodation to homeless persons largely at its own discretion, on its own account and with its own quite separate financing to homeless persons to whom Lambeth owed no statutory duty to arrange accommodation. The fact that under both schemes Lambeth licensed the properties to LQHT and that in some instances the same properties were, according to need, used for one or other scheme over different periods does not, in our view, affect the inherently different nature of the schemes.
46. The 1986 Agreement, however badly drafted, clearly provided for both schemes, as recitals (5) and (6) and clause 2(a) suggested, and as clauses 1 and 2(c) and many other clauses in the Agreement allowed in the sense that their provisions were consistent with either use. We include clause 1 in that grouping of consistency with either use, notwithstanding its curious expression "in common with the Council to use and manage the properties on behalf of the Council". We do so because it is plain that this clause, "the central dispositive provision" as the Judge described it, is not the product of a skilled legal draftsman attempting legal definitions for the future. It is an attempt, albeit inadequate and in keeping with the loose use of language by Lambeth identified by the Judge as part of the factual matrix, to reflect the established arrangements between it, LQHT and the occupiers under the two different schemes for which the Agreement was henceforth to be an "umbrella".
47. Clause 2(b), in its detailed provisions exclusively referable to the bed and breakfast scheme, and with no counterpart for the singles scheme, is, in our view, eloquent as to the difference between the two schemes and between the relationships that each created for Lambeth, LQHT and the occupiers. Its focus on Lambeth's role of nominating bed and breakfast occupiers to LQHT and on the accountability of LQHT to Lambeth for accommodation and other charges leviable by and payable to Lambeth contrasts sharply with the silence of the Agreement on such matters in relation to the singles scheme. It also contrasts sharply with the way in which it was run by LQHT, effectively on its own account, at its own direction and financed largely by Mini-HAGs payable directly to it.
48. As to the Mini-HAGs, we add that it is immaterial, as the Judge reasoned, whether as a matter of law section 29 of the 1974 Act permitted the payment of such grants to housing associations acting as agents; the relevance of such payments direct to LQHT were, as he said, a practical reflection of payment by the Housing Corporation to housing associations because they were the bodies whose projects they were. Payment to them rather than local housing authorities who passed them short-life properties to enable them to run such projects was, after all, the raison d'etre of agreements like the 1986 Agreement, namely to formalise relationships as a condition of direct payment of such grants to the housing associations, when central government funds for such purposes were no longer available to local housing authorities.
49. In our view, the Judge was correct to construe the Agreement, insofar as his exercise was one of construction, as declaratory of the existing arrangement between the parties, namely one in which there was, in the case of the singles scheme, no relationship of principal and agent between Lambeth and LQHT. The collection of features that he identified in the factual matrix with which the Agreement, so far as it went, was consistent, amply supported his conclusion that LQHT was not, as it might have been regarded in different circumstances, simply an experienced agent, with a wide measure of discretion, instructed to manage someone else's property. It was a body that, for all reasons identified by the Judge was more than such an agent, a body acting on its own account – acting as a principal.
50. It follows that we reject the appellants' case on issues 1 and 2 that LQHT acted as agent for Lambeth in the grant of the Bruton leases to the appellants or that the 1986 Agreement in any way affected their relationship in this respect.

Issue 3- whether, if contrary to the Judge's ruling on issues 1 and 2, Lambeth had appointed LQHT as its agent for the purpose, such delegation of Lambeth's management powers under Part II of the 1985 Act was permissible, and, if not, whether the tenancies "thereby created" were of no effect.

51. This does not now arise.

Issue 4 - Whether, when the tenancy of an intermediate landlord from whom an occupier held a secure tenancy under Part IV of the 1985 is terminated, there remains or is created a secure tenancy that can prevent the superior landlord from recovering possession independently of the restricted grounds for possession provided in that Part ?

52. The issue, as formulated by the appellants, was whether Part IV of the 1985 Act provides the only way in which a landlord can bring a secure tenancy to an end. But to put it in that way begs the question whether in the circumstances of this case there were still tenancies to which Part IV could apply. Or, as Mr Arden has put it, the question is whether a secure tenancy can cease to be a tenancy other than by termination within Part IV of the 1985 Act.
53. Before turning to the submissions on this issue, we should summarise, and set out, some of the relevant provisions of Part IV of the 1985 Act. As we have said, before the Housing Act 1980, tenants of local authorities had no statutory security of tenure. That Act introduced security of tenure for them and for those of some other public or quasi public bodies in the form of a "secure" tenancy and gave them a right to buy their homes. Those provisions were consolidated in Parts IV and V of the 1985 Act. The statutory rights, which are embodied in section 79 of that Act, arise in respect of the letting of a dwelling house whenever the "landlord condition" and the "tenant condition" as described in sections 80 and 81 respectively are satisfied. The landlord condition in section 80 is that the interest of the landlord belongs to one of a number of authorities or bodies that it lists, including a local authority or, in respect of tenancies granted before 15^th January 1989, a charitable housing trust, such as LQHT, or housing association¹ or co-operative. The tenant condition in section 81 is that the tenant "is an individual and occupies the dwelling-house as his only or principal home". It has been held that these provisions have an "ambulatory" effect in that occupiers may pass in or out of "secure" status, depending on either a change of landlord or a change in the tenant's own circumstances; see Basingstoke & Deane BC v Paice (1995) 27 HLR 433,CA; Crawley BC v Sawyer (1987) 20 HLR 98, CA; and Elvidge v Coventry City Council (1993) 26 HLR 281, CA.
54. By section 82, a secure tenancy under these provisions "cannot be brought to an end by the landlord except by obtaining" an order for possession on statutory grounds under section 84(1) of and Schedule 2 to the Act, or, in the case of fixed-term secure tenancy, by an order for forfeiture under section 82(3).
55. Nothing in the statutory scheme prevents a tenant determining his secure tenancy or, whilst remaining a tenant, from losing his secure status, for example by sub-letting or otherwise ceasing to occupy the premises. Nor does it prevent a tenancy passing out of the security of tenure regime as a result of disposal by the landlord of its title to a body or person not listed as a public body in section 80. There are other constraints imposed by the Act on local authorities that might seek, by disposal of property held for housing purposes, to avoid the security provisions in Part IV and the right to buy in Part V. Sections 32 and 45 require the consent of the Secretary of State for such disposals.
56. The appellants maintain that there can be a secure tenancy under section 79 where, in relation to a property, there is no tenancy between a body satisfying the landlord condition and a person satisfying the tenant condition, where the tenancy was originally held through an intermediate tenancy which has since been terminated. Lambeth contends that unless there is a direct landlord and tenant relationship between the two parties, the fact that each, until its termination, may have satisfied respectively the landlord and tenant conditions through an intermediate landlord does not render the tenant's holding a secure tenancy under section 79.
57. The Judge agreed with Lambeth that, unless there is a direct landlord and tenant relationship between a landlord satisfying the landlord condition under section 80 and a tenant satisfying the tenant condition under section 81, the fact that each satisfies the applicable condition does not render it a secure tenancy within the provisions of section 79. His reasoning, at pages 78 to 82 of his judgement, was as follows:

… neither in the Housing Acts nor in other Landlord and Tenant legislation is there any authority for the proposition that because the statutes (by a variety of different means) impose security of tenure on a number of different types of letting (private/domestic/public housing/business/agriculture) those regimes are exclusive to everything to do with those types of letting. It is I would have thought fairly obvious if one looks at the pieces of legislation that a constant is the acceptance of the existence of a contractual tenancy upon which the statutory safeguards/inhibitions are grafted. The nearest that one comes to a complete statutory creation is the famous 'statutory tenancy' which was central to the protection regime under the Rent Acts but even that only arose once the contractual tenancy had been determined.

…

… while I do not doubt that there is a comprehensive and … mandatory regime as regards termination by the Landlord it does not follow that the statutory regime is to be read as of itself inhibiting the obtaining of possession by someone who is not the Landlord under the tenancy. The statute on what seems to be a plain reading only inhibits the landlord, it is silent as to anyone else, notably anyone who has (as would be the case here) title paramount.

My view thus far is supported … by the fact that secure tenancies can be ambulatory i.e. at various stages they can be within or without the statutory regime (see e.g. Basingstoke v. Paice 27 HLR 433). This supports my view that a secure tenancy is basically an ordinary tenancy that becomes secure (and in consequence attracts statutory protections) when the appropriate conditions are satisfied and for so long as they are satisfied.

… there is no reason why if what Parliament wanted was to preserve the rights of a secure sub tenant against a head landlord either (a) generally or (b) if the head landlord was an appropriate body, it should not have said so in clear and appropriate terms.

… the regime of security prevents tenants from being evicted by their Landlord other than under the statutory regime. It has nothing to say about the situation (rare one would think in the realm of secure tenancies and more rare perhaps as the law would have been perceived in 1985) where the tenant stands to be evicted not by his Landlord but by a third party against whom he has no binding tenancy."

The appellants' case

58. Mr Luba, on behalf of the appellants, submitted: first, that Part IV of the 1985 Act is the only way a landlord can terminate a tenancy to which it applies; second, that security of tenure under section 79 of the Act extends to sub-tenancies where, as here, a superior landlord satisfies the condition in section 80 and the sub-tenant, via a former intermediate tenancy, satisfies the condition in section 81; and/or third, that the only lawful basis on which a superior landlord can terminate such a secure tenancy is in accordance with the provisions of section 84 of and Schedule 2 to the Act. He maintained, therefore, that, whether or not the appellants succeed in their case on issues 1 and 2 that LQHT granted the Bruton tenancies as agent for Lambeth, the Judge ought to have held that those provisions are the only way in which Lambeth, as landlord, could determine the appellants' sub-tenancies, provisions which, in this case, do not apply.
59. Mr Luba's submissions in a little more detail were that, as between LQHT and the appellants, the appellants were secure tenants because LQHT had granted them all Bruton tenancies before 15^th January 1989. As between Lambeth and the appellants, he submitted that they are also secure tenants because the properties are let as separate dwelling houses as required by section 79 and the landlord and tenant conditions in sections 80 and 81 respectively are present, namely Lambeth is a local authority and the appellants occupy the properties as their only or principal homes.
60. Mr Luba would have no difficulty with this submission if the appellants could, contrary to our ruling, succeed under issues 1 and 2 in establishing that, when LQHT let them into or allowed them to remain in occupation, it was acting as Lambeth's agent. But, as we have indicated, he maintained that the establishment of such agency was not necessary to the success of their case under this issue. He sought to sustain that submission by one or other or both of "two routes" derived, he said, from a true reading of the statutory scheme. The first was that a head landlord, such as Lambeth, could be a landlord of the secure occupier, despite another intermediate interest, such as that of LQHT. The second was that no transaction between the landlord and the holder of the intermediate interest, where each met the landlord condition in section 80, could operate so as to determine the occupiers' secure tenancies.
61. In support of those propositions, Mr Luba pointed out that there is nothing in section 79 to indicate what was to happen if, as here, the occupying tenant's immediate landlord holds under a head-lease granted by its landlord, and each landlord is a public authority or body satisfying the landlord condition. He contrasted that absence of indication with paragraph 6 of Schedule 1 to the 1985 Act, which expressly excluded from the definition of secure tenancy in section 79 short-term arrangements for leases, by a lessor not specified in section 80, to a landlord that is so specified, with vacant possession for use by him to provide temporary housing accommodation for others. He suggested that, in that provision, Parliament had envisaged circumstances in which both the intermediate and head landlords could fulfil the section 80 landlord condition, with the result that, on a purposive construction, the occupying tenant would have two landlords to the extent, but only to the extent, that both or either of them could not recover possession of such a tenancy if it met the tenant condition in section 81, save on one of the grounds specified by section 84 and Schedule 2.
62. Mr Luba suggested also that there is "statutory underpinning" for this proposition in section 621 of the 1985 Act, a definition section of general application to the whole of the 1985 Act, which provides:

"(1) In this Act 'lease' and 'tenancy' have the same meaning.

(2) Both expressions include-

(a) a sub-lease or sub-tenancy, and

(b) an agreement for a lease (or sub-lease or sub-tenancy).

(3) The expression 'lessor' and 'lessee' and 'landlord' and 'tenant', and references to letting, to the grant of a lease or covenants or terms shall be construed accordingly."

63. The effect of that provision in the present case, Mr Luba submitted is to make clear that Part IV applies to a tenancy even if it is a sub-tenancy, and, further, that, so far as necessary for the secure tenancy regime for which it provides, 'landlord' includes a landlord under the ultimate superior interest. He submitted that it is necessary "to deploy … [this] extended definition of 'landlord'" where, as here, a superior landlord seeks to recover possession. He suggested that it thus serves an important function in the 1985 Act in making clear that a secure occupier cannot be displaced by a public sector landlord whilst the tenancy is still otherwise secure and whether or not the landlord is, or was, the immediate landlord. He acknowledged that this definition provision is of limited value to the appellants because, as the Judge observed, it did not appear in the 1980 Act and clearly serves as a general definition section for all of the Parts and provisions consolidated in the 1985 Act. However, he invited the Court to construe the Act as it is now, albeit continuing to acknowledge the tenuous nature of his argument, describing his construction of the provision as "fragile". The highest at which he could put his argument based on this "extended" construction of the provision was that it rightly limited the right of public providers of housing to recovery of possession to the statutory grounds provided, echoing an observation of Waite LJ, with whom Millett and Stuart-Smith LJJ agreed, in Basingstoke & Deane BC v. Paice at 438, in holding that section 79 has an "ambulatory" effect.
64. Mr Luba argued in the alternative that, even if section 84 of and Schedule 2 to the 1985 Act do not in terms or by means of that "extended" construction of section 621 confine a superior landlord to their machinery to bring to an end a secure tenancy granted by an intermediate landlord, it is a lacuna that the Court should fill by a purposive interpretation of the scheme as a whole. He cited as an example of such a course, the approach of this Court in Lloyd v. Sadler [1978] QB 774 in relation to a lacuna in the Rent Act 1968, so as to enable one of two joint tenants to claim, as "the tenant" the protection of the Act. Without such an approach, he submitted that superior and intermediate landlords, both of whom satisfy the landlord condition in section 80, could, by arranging between themselves for the intermediate landlord's interest to "fall away" readily circumvent the protection that Part IV of the Act was designed to provide.

Lambeth's case

65. Mr Arden's response to these submissions was short. He said that the provisions of Part IV of the 1985 Act apply only so far as they go to the immediate landlord of the tenant in question. Lambeth had been the landlord of LQHT, not of the appellants. The provisions are, therefore, he said, of no more relevance than if the appellants had throughout been trespassers and Lambeth was – as it is – seeking as landowner to recover possession. As he put it, the security of tenure regime in sections 79 to 82 of the Act does not apply where a superior landlord fulfils the landlord condition in section 80, when the landlord is looked at on its own, and the sub-tenant fulfils the condition in section 81, looked at on his own, that is, where there is no legal relationship between the two parties. The fact that both a superior and intermediate landlord, before the latter lost his interest, may each have fulfilled the landlord condition is not, he submitted, to the point because that still would not have created a landlord and tenant relationship between superior landlord and the sub-tenant before the intermediate landlord lost his interest, still less after it, as contrasted with the joint landlords of a tenant; see e.g. Tilling v. Waterman [1980] AC 1, and the reasoning of Neill LJ in R v. City of Plymouth and Cornwall County Council, ex p. Freeman (1987) 19 HLR 328, CA, at 342-344.
66. As to the silence in section 80 of the 1985 Act about what is to happen if there is more than one superior interest, Mr Arden said that there was no need for statutory explanation because section 80 in its definition of "the landlord condition" by reference to "the interest of landlord" is in each case concerned only with an immediate landlord, that is, the landlord of the putative section 79 tenancy to which that landlord condition applies. As he pointed out, even if "landlord" for this purpose were to be construed as "superior landlord", it would still not fulfil the landlord condition in section 80 because that is referable solely to a letting under section 79 to a tenant satisfying the tenant condition in section 81, not some intermediate landlord.

Conclusions

67. We are firmly of the view that the Judge and Mr Arden are correct in their construction of sections 79 to 82 looked at together and in the context of the security regime provided by Part IV as a whole. A secure tenancy for the purpose of section 79 is one in which there is a direct landlord and tenant relationship between a landlord, satisfying the landlord condition in section 80, and a tenant, satisfying the tenant condition in section 81. The scheme of those provisions, on a plain reading of them, is to define "a secure tenancy" under section 79 as one in which, "at any time" "the landlord" as referred to in section 80 is as specified in that section, and in which "the tenant" as referred to in section 81, meets the condition specified in that section. It is talking about one tenancy, which may take the form of a sub-tenancy, between two parties that at the material time satisfy the respective conditions in sections 80 and 81. That is why, in answer to Mr Luba's argument to the contrary, there is nothing in section 79 to indicate what was to happen if, as here, an occupying tenant's immediate landlord holds under a head-lease granted by its landlord, and each landlord is a public authority or body satisfying the landlord condition. Whilst the intermediate lease continues, so does the occupier's secure tenancy if the intermediate lessor and he continue respectively to meet the landlord and tenant conditions. As soon as either of them ceases to do so or the sub-lease in respect of which section 79 provides security ceases to exist, so also does that secure [sub-]tenancy. That is what one would expect since, as the Judge aptly emphasised in one of the passages from his judgment that we have set out at paragraph 57 above, statutory security of tenure in legislation of this sort is normally, and certainly is in the terms and clear intention of these provisions, grafted onto a tenancy created by a contract between two persons.
68. As to Mr Luba's associated suggestion that Parliament envisaged circumstances in which both an intermediate and a head-lessor could fulfil the section 80 condition, Mr Arden correctly observed that it wrongly equates a case of joint landlords, that is with a single, indivisible title, with that in this case where there has been more than one body with an interest superior to the tenant, each with its own separate title. Clearly there is a difference in principle and effect between one or more intermediate landlords from those considered at first instance in R v Plymouth CC and Cornwall CC, ex p Freeman (1987) 19 HLR 328, namely joint head landlords which granted an intermediate lease to one of them, which in turn let to the occupier. Hodgson J, at first instance, said, at page 256 of his judgment, that if it had been necessary to decide the point, he would have held that the intermediate landlord was the section 80 landlord. The matter was pursued by a respondent's notice on appeal, but did not fall for decision by the Court of Appeal, which decided the case on a different point.
69. Paragraph 6 of Schedule 1 to the 1985 Act, is one of the provisions on which Mr Luba relied in support of his argument that the Act recognises circumstances in which there may more than one relevant interest superior to that of an occupying tenant. As we indicated in rehearsing his submission at paragraph 57 above, those provisions relate, so far as material, to short-term arrangements by a landlord letting to an intermediate landlord vacant property for use by it to provide temporary housing accommodation for others. They were clearly designed to deprive the intermediate landlord of security, not, whether considered in pre or post Bruton days, those whom the intermediate landlord allowed into temporary occupation when both intermediate and occupying tenant met the landlord and tenant conditions in sections 80 and 81 respectively.
70. As to Mr Luba's argument suggesting that section 621 provided some "statutory under-pinning" for his "extended" construction of section 79 – an argument that had been advanced below, the Judge said at page 81 of his judgment:

"S. 621 if simply read as a matter of ordinary language in the context of the provisions of Part IV of HA 1985 does not mean 'on the termination of a mesne tenancy the secure tenancy shall continue to be a secure tenancy against the head landlord (whether or not the tenancy would otherwise be binding on him), provided the landlord conditions [sic] is satisfied' which – or something like it – is what Parliament would perhaps have done had it wished to include a provisions [sic] or 'where there is a sub-tenancy and both the head landlord and the mesne landlord satisfy the qualifying condition the sub-tenant is to be regarded as the secure tenant of either landlord' … It means, construed according its own language 'a tenancy shall still be a secure tenancy even though the qualifying landlord is the tenant of somebody else'. I cannot see that it goes any further than that."

71. In our view, the Judge in those words, correctly rejected Mr Luba's submission based on section 621. That provision is, as the Judge said, simply a definition provision of general application in a much larger (consolidating) statute. As he had pointed out earlier in his judgment, there was no equivalent provision in the 1980 Act before it became part of the 1985 Act consolidation. And there was no recommendation or suggestion in the Report on the Consolidation of the Housing Acts 1985 (Cmnd. 9515), to indicate that this definition section was intended to have the focus contended for by Mr Luba, one that would bring about so significant a change in housing law and policy. In addition to restricting the recovery of possession in the manner suggested, it would have wider, distorting effects on the operation of Part IV of the 1985 Act, for example, in relation to assignment and exchange, sub-letting, taking in lodgers and, importantly, the right to buy conferred in Part V of the 1985 Act. In those respects it would import into the 1985 Act provisions analogous to those for which the parliamentary draftsman found it necessary to make express provision in section 137 of the Rent Act 1977 (preserving a sub-tenancy against the head reversion) and section 18 of the Housing Act 1988 (concerning assured tenancies), not found in the 1985 Act. Section 621 is a standard interpretation clause applicable to the whole of the 1985 Act. As the Judge observed, its purpose is to ensure that a landlord does not cease to be such because he is himself the tenant of another.
72. Finally, we do not consider, either on the terms of the Act or in the mischief that it was designed to meet, the provision of security of tenure to those occupying public housing, that there is a statutory hole that the Court should or could properly fill by a "purposive" construction of that sort that Mr Luba urged. If indeed there is a hole, which we doubt, it is for Parliament, not the courts, to fill. If and in the unlikely event, public bodies were to seek to frustrate the protection provided by the Act in the case of intermediate leases by arranging for them to "fall away" as posited by Mr Luba, there are, as we have mentioned in paragraph 55 above, the constraints in sections 32 and 45 of the 1985 Act on such bodies' disposal of property held for housing purposes.
73. Accordingly, we also rule against the appellants on this issue.

Issue 5 – Whether, if the head-leases were valid, their creation or subsequent termination destroyed the tenancies granted by LQHT or, as the appellants contend, rendered them binding on Lambeth?

74. In summary the argument on this issue is as follows. In 1986, Lambeth granted LQHT a licence, which was terminated and replaced by headleases in 1995. However, the appellants had become tenants of LQHT before the headleases were granted. By analogy with the rule on surrender of head tenancies, the appellants became direct tenants of Lambeth when the 1986 licence was terminated and this occurred in the moment of time between the termination of the 1986 licence and the grant of the 1995 leases. Accordingly, the interests of the appellants precede the grant of the 1995 leases and are not affected by its termination ("the surrender of the licence issue"). Alternatively, the appellants became tenants of Lambeth when the 1995 leases were terminated ("the termination of the leases issue"). This is because they never consented to the creation of the 1995 leases (containing, for the first time, a break clause) and only agreed to the termination of their interests in accordance with the 1986 licence. The 1995 leases were res inter alios acta. Termination of the 1995 lease operated in the same way as the surrender of a head tenancy. The appellants, therefore, became secure tenants of Lambeth by virtue of section 79 of the Housing Act 1985.
75. The judge rejected the appellants' argument on the surrender of the licence issue as they held no interest in land. The judge also rejected the appellants' argument on the termination of the leases issue. It followed from the surrender of the licence issue that the appellants had no estate in land which bound Lambeth. They were tenants of LQHT. The grant of the 1995 leases had no effect on them. However, Lambeth could claim possession against LQHT and the appellants had no right as against Lambeth to prevent it from claiming possession against them also.

The surrender of the licence issue

76. It is common ground that the surrender of a head tenancy results in a sub-tenancy surviving against the head landlord. We will call this "the surrender exception" as it is an exception to the general rule that termination of a head tenancy results in termination of a sub-tenancy. The differences between a surrender of a head tenancy and its termination by service of a notice to quit were considered by Lord Millett (with whom the other members of the House agreed) in Barrett v Morgan [2000] AC 264. In that case the head landlord and original tenants under an agricultural tenancy agreed in advance that if the landlord served a notice to quit the tenants would not serve a counter-notice. In consequence the subtenant would lose his right to possession and would not be entitled to the statutory protection arising on termination of an agricultural tenancy by service of a notice to quit. The Court of Appeal held that the arrangements amounted to a surrender. The House of Lords rejected this argument. Lord Millett explained that on a surrender a tenancy is absorbed into the landlord's reversion (page 270G). He further explained that a subtenant cannot be prejudiced by a surrender which results from an arrangement to which he is not a party:-

"Although a person such as a subtenant having a derivative interest may benefit by the surrender and consequent extinguishment of the estate out of which his interest is derived, he cannot be prejudiced by it. It is a general and salutary principle of law that a person cannot be adversely affected by an agreement or arrangement to which he is not a party. So far as he is concerned, it is res inter alios acta. It would conflict with this principle if the destruction of a tenancy by surrender carried with it the destruction of the interest of a subtenant under a subtenancy previously granted. It has been clear from the earliest times that it does not do so. In Coke's Commentary upon Littleton, vol.II, s.636, p.338b the effect of a surrender on third parties such as subtenants is stated as follows:

'having regard to the parties to the surrender, the estate is absolutely drowned … But having regard to strangers, who were not parties or privies thereunto, lest by a voluntary surrender they may receive prejudice touching any right or interest they had before the surrender the estate surrendred hath in consideration of law a continuance …' " (page 271 D-F)

77. In Barrett v Morgan, what the landlord had done was exercise his contractual right to terminate the head tenancy. The subtenant had taken his subtenancy subject to this right, and was therefore bound by the notice to quit (page 272).
78. Mr Luba submits that the rationale for the surrender exception is that the surrender is res inter alios acta. It is, therefore, irrelevant that the appellants had no estate in land. The law has assimilated a licence to an interest in land for the purpose of enabling a licensor to bring proceedings against a person interfering with the exercise by him of his rights under the licence: see Dutton v Manchester Airport [1999] 2 All ER 675.
79. Mr Arden responds that the surrender exception is not a proposition of contract law but of land law. The true rationale is that of merger of estates. This can be seen from Lord Millett's speech at page 270G (see above). Section 139(1) of the Law of Property Act 1925, applying to surrenders or mergers effected after 1 October 1845, is drafted on this basis:-

"Where a reversion expectant on a lease of land is surrendered or merged, the estate or interest which as against the lessee for the time being confers the next vested right to the land, shall be deemed the reversion for the purpose of preserving the same incidents and obligations as would have affected the original reversion had there been no surrender or merger thereof."

80. Section 139(1) only applies to leases. If Mr Luba is right, Lambeth would have no rights against the appellants (for example, to sue for rent) when their rights against LQHT became rights against Lambeth on termination of the 1986 licence. Mr Luba responds that this would be a matter for Parliament.
81. Mr Arden submits that a licence cannot be assimilated to an estate in land. To do so would resuscitate the notion of proprietary licences which received its quietus in the judgments of this court in Ashburn Anstalt v Arnold [1989] 1 Ch.1 at 15 to 22. Moreover, if the appellants are right, the appellants have obtained that which LQHT could not have given, namely an estate in land. That would be an unusual result.

The termination of the lease issue

82. Mr Luba's argument is a very simple one. The appellants' rights preceded the 1995 leases and therefore cannot be derived from them. Therefore, their rights cannot be prejudiced by termination of the 1995 leases.
83. Mr Arden submits that the principle on which the appellants rely only applies where a subtenant has a proprietary interest. In the present case, the House of Lords left open the question whether the tenancy enjoyed by the appellants also bound Lambeth: unless the appellants can show that they have such an interest, they cannot resist Lambeth's claim to possession.

Conclusions on the surrender of the licence issue and the termination of the lease issue

84. It is important not to lose sight of the question, which is whether the appellants can resist Lambeth's claim for possession. To do this, they need to show that they have an estate in land. The House of Lords did not decide this issue since they concluded that, in certain circumstances, a lease could exist without conferring an estate in land. The appellants' primary argument for asserting an estate in land is based on the surrender exception. However, there is, in our judgment, no basis for applying the surrender exception by analogy to the termination of a licence. If it was so applied, the rationale would not simply be, as in the case where the surrender exception applies, res inter alios acta; it would inevitably be that the licensee should have, as against the reversioner, a greater right, that is an estate in land, than he had against the licensor. There is nothing in the authorities to which we have been taken to support such an extension of the surrender exception. Indeed, such an extension would be inconsistent with principle, since it would at the same time involve depriving the reversioner without justification of the right to recover possession, free from the interests of any third party.
85. For like reasons, Mr Luba's argument on the termination of the lease issue cannot succeed. This argument only arises for decision if the surrender of the licence issue fails. Even though the appellants acquired their rights before Lambeth acquired its rights under the 1995 leases, the appellants' rights can only be as good when the 1995 leases were terminated as they were when they were granted. LQHT could not grant them an estate in land and thus they acquired none at the point of grant. If they acquired rights after the 1995 leases were granted, those rights would have been subject to Lambeth's rights against LQHT (see Barrett v Morgan, above). Accordingly, the appellants fail to show that they have the essential prerequisite in this case, namely an estate in land.
86. In conclusion, we dismiss the appeal on this issue. It is unnecessary to deal with the second ground in the amended respondents' notice. This seeks to uphold the judge's conclusion on this issue by submitting that the only effect of the 1995 leases on the appellants was to extend the period of notice to which they would have been subject under the 1986 licence.

Issue 6 – Whether the judge was entitled to strike out the appellants' Human Rights defence as groundless?

87. This issue strictly arises only in relation to the appeal by the appellant, Mr Gavin Kay. By his defence, the appellant, as an alternative or further defence to the claim for possession, averred that he was entitled to raise alleged breaches of section 6 of the Human Rights Act 1998. He claimed that he was entitled to the dismissal or adjournment of the possession proceedings on the grounds that the decision to seek an order for possession was an interference with his rights under Articles 8 and 14 ECHR, and Article 1 of the First Protocol. Lambeth applied to strike out this defence on the grounds that it had no reasonable prospects of success. The judge held that, whilst it was arguable that Mr Kay was entitled to raise the issue as a defence to the claim, and that it was not necessary for him to raise these issues by way of an application for judicial review, nonetheless the decision of the House of Lords in Harrow London Borough Council –v- Qazi [2003] 3 WLR 792 precluded him from relying upon any breach of Article 8, that there was no discrimination under Article 14 and that the nature of the right asserted by Mr Kay was such that it was subject to determination in the events that in fact happened, so there was no deprivation of his possession, that is the right to occupy the premises for the purposes of Article 1 of the First Protocol.
88. Mr Luba QC, on Mr Kay's behalf, did not seek to pursue the discrimination claim under Article 14, but submitted that the Judge was wrong in his conclusions as to Article 8 and Article 1 of the first Protocol. As far as Article 8 is concerned, his argument was perhaps more refined than that which he had put before the Judge. He did not submit that the decision to institute proceedings was, in itself, a breach of Article 8; but, he submitted, it was an administrative decision that necessarily engaged Article 8; and accordingly Lambeth was required to take into account Mr Kay's Article 8 rights so that Lambeth was required to justify the decision on the basis that it was a proportionate response and accordingly within under Article 8(2). He submitted that we are therefore required to consider whether Lambeth has been able to justify the decision not merely on classic Wednesbury grounds, but applying the more stringent test applicable to issues which engage Convention rights, and to determine whether Lambeth's decision meets the test of proportionality set out by the House of Lords in R –v- Secretary of State for the Home Department ex parte Daly [2001] 2 AC 532.
89. Lambeth does not seek to challenge the Judge's view that Mr Kay was arguably entitled to raise these issues as a defence. Mr Arden QC, on its behalf, submitted that the Judge was right to conclude that Qazi essentially decided that in so far as Article 8 was engaged, the requirements of Article 8(2) were met by the operation of the provisions of the ordinary law of landlord and tenant modified to whatever extent it may have been in the particular case by statute. He submitted therefore that the decision to exercise the private law right could not require Lambeth to carry out any exercise under Article 8(2). He further submitted that the Judge was right to conclude that there was no interference with Mr Kay's peaceful enjoyment of his possessions leading to a breach of Article 1 of the First Protocol because the nature of the right that constituted the possession was, as the Judge found, limited in any event. He submitted that the only basis upon which the decision could be challenged is accordingly on traditional Wednesbury grounds and that no grounds had been pleaded that could justify the conclusion that the decision was even arguably unlawful in that sense.
90. It is important to note the relatively restricted nature of the arguments before us. We are concerned with an application to strike out the relevant parts of the defence. Mr Arden has not sought to say that the Judge was wrong in holding that Mr Kay was arguably entitled to raise the public law issues as a defence to the claim in the County Court. He restricted his submission to the proposition that whilst there may be circumstances in which it would be more appropriate for the courts to require public law issues to be resolved by way of an application for judicial review, this appeal does not raise the difficult issue of the circumstances in which a defendant can do so. Mr Arden's submissions were restricted to the facts of this case. He submitted that the only pleaded issues were the fact that a possession order would inevitably interfere with Mr Kay's private life, so as to engage Article 8, and his right to remain in the premises, so as to engage Article 1 of the first Protocol, and that, by implication although not explicitly, Lambeth was seeking to take advantage of the device of the arrangement with LQHT as the justification for obtaining a possession order.
91. We turn therefore, first, to the issue raised under Article 8. As we have said, Mr Luba's submission can be simply stated. The decision to bring proceedings for possession affected the appellant's private and family life and his home. Accordingly, considerations under Article 8 were applicable. Whatever conclusion one reaches about the approach of Lord Scott in Qazi, the other four members of the Committee all held that the possession proceedings in question in that appeal did engage Article 8. It follows, Mr Luba submitted, that Article 8 was at the least a relevant consideration. In those circumstances, it was for Lambeth to show how it has taken into account all matters relevant to a decision affecting Mr Kay's Article 8(1) rights so as to enable the court to determine whether the interference can be justified under Article 8(2); and Lambeth is not able to do so in these strike-out proceedings.
92. His submissions were essentially based upon the reasoning of Waller LJ in R (McLellan) –v- Bracknell Forest Borough Council [2002] QB 1129. The issue there was whether the procedures adopted under s. 127 of the Housing Act 1996, which relate to introductory tenancies are compatible with the provisions of Articles 6 and 8 of the Convention. Section 127 provides for all circumstances in which an introductory tenancy can be terminated. And the issue relevant to the present appeal was the extent to which Article 8(2) remained a relevant consideration even after one or other of the matters justifying termination of the tenancy under Section 127 had been established. Waller LJ said at paragraph 58:

"It seems to me that the tenant under an introductory tenancy must have the right to raise the question whether it is reasonable in his or her particular case to insist on eviction, i.e. the question whether Article 8(2) justifies the eviction."

93. The question before us is the extent to which that approach can survive the decision of the House of Lords in Qazi. In that case the proceedings were brought against a husband who had been the joint tenant of a property owned by the Local Authority under a secure tenancy. The wife had given notice to quit in accordance with the tenancy agreement. On the expiry of the tenancy agreement the husband became in law a trespasser and the local authority requested him to vacate the premises. When he did not do so, it brought proceedings for possession. The issue was whether Article 8 was engaged; and if so what consequence flowed from that. The decision of the majority of the Lordships was given succinctly by Lord Hope at paragraph 84 where he said:

"I agree with my noble and learned friends, Lords Millett and Lord Scott that the Strasbourg jurisprudence has shown that contractual and proprietary rights to possession cannot be defeated by a defence based on Article 8. It follows that the question whether any interference is permitted by Article 8(2) does not require, in this case, to be considered by the County Court."

94. Lord Hope took the view that Article 8 was engaged, but that where there was an unqualified right to possession, the law giving that right was a sufficient answer to the question posed by Article 8(2). He said at paragraph 78:

"My understanding of the European jurisprudence leads me to the conclusion that Article 8(2) is met where the law affords an unqualified right to possession on proof that the tenancy has been terminated."

95. Lord Millett said at paragraph 103:

"The premises were Mr Qazi's home and evicting him would obviously amount to an interference with his enjoyment of the premises as his home. But his right to occupy them as such was circumscribed by the terms of his tenancy and had come to an end. Eviction was plainly necessary to protect the rights of the local authority as land owner. Its obligation to "respect" Mr Qazi's home was not infringed by its requirement that he vacate the premises on the expiry of the period on which he agreed that he might occupy them. There was simply no balance to be struck."

96. It is clear that Lord Scott was less convinced that Article 8 was applicable; at paragraph 145 he said:

"Each home had been established on the basis that proprietary interest in the premises obtained in the contractual tenancy granted by the landlord. How could the termination of that tenancy in a manner consisted with its contractual and proprietary incidents be held to constitute a lack of respect for the home that had been thus established? The home was always subject to those contractual and proprietary incidents. The contrary seems to me to treat a "home" as something ethereal, floating in the air, unconnected to bricks and mortar and land."

97. However in the following paragraph, he acknowledged that the Court in Strasbourg had held Article 8 to be prima facie applicable but that in every case where there was an unqualified right to possession, the claim or order for possession was justified under Article 8(2). He considered that this was in accordance with principle in that otherwise Article 8 would, in effect, give to a tenant a form of security beyond that provided for by domestic legislation.
98. The majority opinions are based, it seems to us, on the logic that the incidents of the domestic law of landlord and tenant provide the answer to the question whether or not, in any case, the interference with the person's home is justified under Article 8(2). In other words, as Lord Hope said, where there is an unqualified right to possession, the law has already answered the question. It follows that the dictum of Waller LJ in McLellan cannot stand in an unqualified way. Article 8(2) will underpin the tenant's right in that situation to a proper evaluation of the extent to which the conditions entitling the local authority to serve a notice to quit have been met. But if they have been met, then that evaluation will satisfy the requirement for justification in Article 8 (2). In the present case, that particular step in the reasoning is unnecessary, as the appellant is a trespasser, as was Mr Qazi.
99. Mr Luba sought to avoid what we consider to be the logic of the decision in Qazi by submitting that a distinction has to be drawn between cases in which it could properly be said that Parliament has considered the need for security of tenure and either made provision for it, or limited provision for it, or has declined to provide security of tenure. He submitted that Qazi can be readily understood if applied to those cases where it could be said that a deliberate decision must have been made to provide no security, such as the joint tenancy position in Qazi itself. But, he submitted, the present case, where Mr Kay did indeed have statutory security as against LQHT, but that security was avoided by the termination of LQHT's tenancy, is different. This is a situation which cannot have been envisaged by Parliament; we should therefore not assume that Parliament had intended that a tenant could lose security in circumstances such as the present.
100. It seems to us that this is a very difficult argument for Mr Luba to sustain. Whilst it may be right that Parliament did not have the precise situation that developed in the present case in mind, it would be an impermissible speculation to assume that if it had, Parliament would have provided security. It does not seem to us that it could be right that the answer to a question such as the present should depend upon what a court thinks Parliament might or might not have done in any particular situation. The fact is that Lambeth has an unqualified right to possession. And on the basis of the majority opinions in Qazi by which we are bound, that is a sufficient answer to the claim under Article 8. This court has confirmed the unequivocal nature of the decision in Qazi in Birmingham City Council –v- Bradney [2003] EWCA Civ 1783. And on the 11^th March 2004, the European Court of Human Rights decided that Mr Qazi's application to it did not disclose any appearance of a violation of the Convention or its protocols and declared it inadmissible.
101. However, Mr Luba is right to this extent. The decision to bring possession proceedings was an administrative decision to which the ordinary principles of administrative law apply. Accordingly it can be challenged by judicial review and perhaps by way of defence in proceedings such as the present. That was acknowledged by both Lord Hope and Lord Millett in Qazi. Lord Hope said at paragraph 79:

"I wish to reserve my opinion as to whether it would be open to the tenant, in a wholly exceptional case, to raise these issues in the county court where proceedings for possession were being taken following the service of a notice to quit by the housing authority, bearing in mind as Lord Millett points out that its decision to serve the notice to quit would be judicially reviewable in the High Court so long at the application was made in the relevant time limit."

102. And Lord Millett said at paragraph 109:

"In the exceptional case where the applicant believes the local authority is acting unfairly or from improper or ulterior motives, he can apply to the High Court for judicial review. The availability of this remedy, coupled with the fact that an occupier cannot be evicted without a court order, so that the court can consider whether the claimant is entitled as of right to possession, is sufficient to supply the necessary and appropriate degree of respect for the applicant's home."

103. But that does not mean that, by the backdoor, Article 8 comes back into play as a "relevant consideration". Initially, as in all decisions related to housing, the particular needs of a tenant and his family will form a necessary background to the decision a housing authority has to take. And they will therefore form part of the considerations which the housing authority has to evaluate. But those considerations fall to be evaluated on ordinary administrative law principles. In the present case, no material has been put before the court to suggest that the decision was unlawful or unreasonable in the Wednesbury sense. The nearest Mr Luba was able to come to establishing that such an argument was available was the history of the tenancy and the suggestion that in some way it was unconscionable for Lambeth to take advantage of Mr Kay's loss of security of tenure. It was in that context that the Judge concluded that the contractual arrangements had not been a sham and that this accordingly did not provide a basis for an argument that the decision to seek possession was unreasonable. We agree.
104. It follows that, quite apart from the concession made by Mr Arden, it is unnecessary to consider the difficult question of whether, had there had been an arguable challenge to the Lambeth's decision in public law, that could have afforded Mr Kay a defence to these proceedings as opposed to requiring him to challenge it by judicial review. We should say, for completeness, however, that we have been provided with the judgment of the European Court of Human Rights in the case of Connors –v- UK Application No 66746/01 which was given on the 27^th May 2004. This was an application brought by gypsies against whom possession proceedings were brought after they had been served with a notice to quit plots on a caravan site. On the expiry of the notices to quit the local authority as the site owner decided to evict the applicant and his family. The County Court granted a Possession Order, which the Council proceeded to enforce. In the County Court proceedings, there was no consideration of the applicant's position in the context of Article 8, and accordingly the applicant asserted a breach of that Article. The arguments before the court centred on the particular problems presented by gypsies and their nomadic lifestyle. The court said:

"83. The procedural safeguards available to the individual will be especially material in determining whether the respondent State, has, when fixing the regulatory framework, remained within its margin of appreciation. In particular the Court must examine whether the decision making process leading to measures of interference was fair and such as to afford due respect to the interests safeguarded to the individual by Article 8 (see Buckley cited above, pp. 1292 to 93, paragraph 76, Chapman –v- The United Kingdom [GC] No 27138/95, ECHR 2001-1, paragraph 92).

84. The vulnerable position of gypsies as a minority means that some special consideration should be given to their needs in a different lifestyle both in the relevant regulatory framework and in reaching decisions in particular cases (Buckley judgment cited above pp 192 to 95, paragraphs 76, 80 and 84). To this extent, there is thus a positive obligation imposed on the Contracting States by virtue of Article 8 to facilitate the gypsy way of life (see Chapman cited above, para 96 in the authorities cited mutatis mutandis therein)"

105. The Court concluded that the availability of judicial review was not a sufficient procedural safeguard. It expressed its conclusion in the following terms:

"94. The power to evict without the burden of giving reasons liable to be examined as to their merits by an independent Tribunal has not been convincingly shown to respond to any specific goal or to provide any specific benefit to members of the gypsy community …..

95. In conclusion, the court finds that the eviction of the applicant and his family from the local authority site was not attended by the requisite procedural safeguards, namely the requirement to establish proper justification for the serious interference of his rights, and consequently cannot be regarded as justified by "pressing social need" or proportionate to the legitimate aim being pursued. There has accordingly been a violation of Article 8 of the convention."

106. Whilst there is, in those general statements of principle, some support for the argument of Mr Luba, they cannot, it seems to us, affect this court's assessment of the decision in Qazi. The general statement of principle in paragraph 83 of the Court's judgment is based upon the Court's decisions in Buckley, and Chapman, to which it refers, both of which were cited to and considered by the House of Lords in Qazi. Connors is therefore only of assistance to the courts of this country in relation to cases involving gypsies.
107. Turning then to the alleged breach of Article 1 of the 1^st Protocol, Mr Luba submitted that Mr Kay's tenancy with LQHT, which was a secure tenancy, was a possession for the purposes of this Article. He submitted that Mr Kay was deprived of this possession by the act of Lambeth in serving notice as the head landlord to determine LQHT's lease, which had the effect of terminating Mr Kay's tenancy. This was an act of Lambeth as a public authority and accordingly a breach of the Article unless it could be justified as being in the public interest. That is therefore an issue which Mr Kay is entitled to raise by way of defence.
108. This argument, ingenious though it is, is in our view fundamentally flawed. Lambeth accepts that Mr Kay's tenancy was a "possession" for the purposes of Article 1. But that Article is concerned to protect a citizen's possessions from arbitrary interference or deprivation by public authorities. As Lord Hope said in Wilson –v- First County Trust Ltd (No 2) [2003] 3 WLR 568 at paragraph 106, the Article "does not confer a right of property as such nor does it guarantee the content of any rights in property." The nature of Mr Kay's "possession" is therefore defined by domestic law. His tenancy was at all times vulnerable to the rule of domestic law that it would terminate on the lawful determination of LQHT's lease. The fact that the lease was terminated by notice given by Lambeth does not in any way change the nature of Mr Kay's "possession". Once LQHT's lease had been terminated, Mr Kay had no more right to be in the premises than Mr Qazi after his right to remain in occupation had been determined by the service by his wife of a notice to quit as joint tenant. The termination of Mr Kay's tenancy was the result of the exercise by Lambeth of its proprietary rights under domestic law. To accede to Mr Luba's submission would, accordingly, be to give Mr Kay, in effect, additional substantive rights, which was not the purpose, and can never be the effect, of Article 1.
109. Accordingly, we rule against Mr Kay's ground of appeal on this issue.
110. In the result, we dismiss all the appeals.

Order:

111. The appeals against the Order of His Honour Judge Cooke dated 13 December 2002 be dismissed.
112. The appeals against the Order of His Honour Judge Cooke dated 19 December 2003 be dismissed.
113. The Appellants do pay the Respondents' costs of the appeal, such costs to be determined by a costs judge. The Appellant who were in receipt of services funded by the community legal service do pay the Respondents such amount, if any as may be determined by the costs judge pursuant to section 11 of the Access to Justice Act 1999.
114. The Appellants' costs to be assessed in accordance with the Community Legal Services (Costs) Regulations 2000.
115. Permission to the Appellants to apply in writing within 7 days for leave to appeal to the House of Lords.
(Order does not form part of the approved judgment)

Note 1   Both now removed from the list by the Housing Act 1980, s. .. and Sch 18, as part of the Government’s move to take housing associations and trusts from the public into the private sector, but not so as to affect existing secure tenancies.    [Back]