England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH WYCOMBE COUNTY COURT
(HIS HONOUR JUDGE COOK)

		Royal Courts of Justice Strand London, WC2
		7th July 2006

1. LORD JUSTICE LLOYD: This is an application for permission to appeal from an order made in the High Wycombe County Court pursuant to a judgment of HHJ Cook. The claim was by Wycombe District Council for possession against one of its tenants and the issue was whether the tenancy, which had been a secure tenancy under Section 79 of the Housing Act 1985, was still a secure tenancy at the date when it was terminated by notice with effect from 31 March 2004. The reason why it might not have been still a secure tenancy, at any rate why the claimant contended that it was not, is that it was no longer the only or principal residence of the first defendant, who was the tenant.

2. The background was that the first defendant had been employed by the claimant as a Landscape Officer and she was provided with the tenancy, not as a condition of her duties, and she lived there for some time. She married the second defendant in 2000. At some point he received a redundancy payment and they decided that they would exercise their right to buy under Part I of the Housing Act 1985. They also thought that they would branch out into a new way of life and career and acquire a public house, and as the judge said it was their intention that if the public house was successful it might be one of a number, and that once they had purchased the freehold of the property, which is in Marlow, they would let it to generate some income to supplement the profits from the pub.

3. They applied to exercise their right to buy in February 2003. Their right was admitted. There was a form of sale offer in June. The defendants obtained an extension of time by agreement and accepted the offer in October and the claimant said that in six to eight weeks the legal paperwork would be ready and would be sent to their solicitors.

4. In the meantime in September 2003, the first defendant gave notice terminating her employment with effect from 14 October and soon after that date they took up their new business running The Plough Inn in Claverley, in Shropshire. From then on throughout the relevant period there was no doubt they were working away very hard trying to make a success of that business. They wrote to the Council Tax Office in mid-October, claiming council tax exemption on the grounds that the premises would be empty and unfurnished from 27 October, preparatory to it being let out to tenants.

5. That, the defendants said at trial, was not the truth. They realised that the letter was premature. They thought that it had not been acted on. They did not withdraw it. The judge found that was not honest and satisfactory evidence. He thought that they were trying to avoid having to pay council tax on the property, but he said that it did not preclude them from asserting the truth and that it was at no time empty and unfurnished. He held that although there were no signs of occupation between October and February, they were observed to be staying at the property for a couple of nights in the middle of February and although some furniture was taken away in November, there was nevertheless a fair bit of furniture left and the property remained habitable.

6. On 20 February 2004, the council wrote to the first defendant at The Plough Inn asserting that she had been living at The Plough Inn for the last three months and was not occupying the property in Marlow and that accordingly the tenancy had ceased to be a secure tenancy and the Notice to Quit was served. The letter also said this:

"Because your tenancy has ceased to be a Secure Tenancy as defined by Part IV of the Housing Act 1985, the Council is unable to complete your Right to Buy Application relating to the property."

7. I think it is fair to say that although up till October 2003 the right to buy matter had been proceeding with reasonable and indeed due diligence, at the time that the defendants moved and took up the tenancy at The Plough, the council had it in mind that if the first defendant did abandon the property in Marlow she would not be entitled to go through with the right to buy and the council would not be obliged to sell it to her, and if that was right then it seems to me that it was their duty to council tax payers not to proceed with the sale. Unfortunately the judge, while finding that the defendants had been not honest in applying for council tax exemption, also took a dim and, in my view, quite unfair view of the council's letter. At paragraph 8 he says:

"The claimant's letter had a sting in the tail: because [the first defendant] was no longer a secured tenant the defendants had lost the right to buy."

8. I have read the paragraph in the letter which refers to the right to buy and it does not say that the defendants had lost the right to buy. At paragraph 14 he said:

"Apart from the claim for council tax exemption, the defendants were at all times open and honest with the claimant about their intentions, but I cannot say the same about the claimant. Completion of the sale was delayed month after month for no apparent reason, while surveillance of the property was undertaken with the intention of depriving the defendants of their tenancy and right to buy. The claimant's letter of 20 February 2004 not only failed to inform the defendants how they could save the situation by moving back into the property before the expiry of the notice to quit, it categorically and wrongly stated that the secure tenancy and the right to buy had already been lost."

In my judgment that is simply not an accurate reading of the letter. It is true that the letter does not say, "For the moment you cannot proceed with the right to buy but of course if you move back you may be able to", but it seems to me far from clear that the council should have been expected to do that.

9. Of course the council's acts and intentions are really irrelevant to the question of whether on 31 March 2004 the property was the first defendant's only or principal home. Clearly it was not her only home because she was actually living for most of the time at The Plough Inn. It could be her home even though she had another home. The question is whether it was her principal home. That is a question of fact on the evidence, as to which both the subjective evidence as to intention of the tenant herself and the objective evidence as to the circumstances prevailing are relevant.

10. The judge had regard to the fact that the property remained furnished and habitable and he had regard at paragraph 15 to a number of other factors. One was that the rent under the council tenancy was paid regularly. Since the first defendant was legally liable to pay it, whether or not it was her principal home, it seems to me that that is neutral, as is the fact that the gas and electricity bills had been paid; again, she was under a legal liability so long as those utilities continued to be supplied. The post was collected; that seems to be neutral. The defendants remained on the electoral roll. That again is entirely neutral, because the electoral rolls are made up by reference to occupation on 10 October every year and of course on 10 October 2003 it was still probably their only home; at any rate, they had not moved away from it in any sense.

11. It is said they remained registered with their doctor and dentist. That might possibly have some bearing on the matter. They maintained their bank accounts locally. It seems to me that the location of the branch of the bank at which one maintains one's bank account is really entirely neutral in these days of automatic teller machines and so on. They left a car at the property, that I agree could be relevant, and either both of them or the first defendant visited the property when their work commitments allowed. Again, that is a relevant factor.

12. They said in the witness box that they envisaged that they would live in the property again either if the Plough Inn failed or if it succeeded and they put in a manager, and in the meantime they envisaged using the property to generate income through short term letting after completion of the transfer to them. So far as the manager is concerned, Miss Henderson tells me that their business plan did not make any indication that they would be using a manager, at any rate in the first twelve months, and that is no doubt entirely realistic.

13. At paragraph 60 the judge says he was satisfied that the property remained their principal home even though pending its transfer, that is to say pursuant to the right to buy, which should have taken only a matter of weeks, they were residing at The Plough Inn for business reasons. He says that the circumstances on which the claimant relies to terminate the secure tenancy came about only because of the claimant's own failure to proceed expeditiously with the transfer of ownership of the property to the defendants. It seems to me that again that reveals an unfair attitude on the part of the judge to the conduct of the claimant.

14. As Miss Henderson recognises, ultimately it is a question of fact for the judge to find by reference to both subjective and objective evidence and intention. There are cases which show that it can be quite difficult to displace an intention to regard one's home or a home as being or continuing to be one's home or, as the case may be, one's principal home, at any rate unless something is done of a fairly radical nature, such as sub-letting or emptying the property of furniture and cutting off the utilities. There is nothing of that kind in this case.

15. What is said is really two things. One is that in the circumstances the onus was on the defendant to show that it was still her principal home and that the judge did not consider that nor did he address the question of fact in the light of that. That is a fair comment so far as it goes, although it seems to me relatively unlikely that this is a case that would depend on the location of the burden of proof. But I think that point carries more weight in the light of Miss Henderson's next point, which is that the judge has taken what I agree with her appears to be an entirely unfair view of the claimant's conduct both in writing the letter of 20 February 2004 and in not proceeding with the right to buy application for the months from about October onwards, and that that view clearly coloured his attitude to the resolution of the issue of fact. It may be that it coloured his view of the defendants own evidence, although of course he was critical of them in relation to the claim for council tax exemption.

16. Miss Henderson emphasises that faced with a finding of fact by the judge, she will have something of an uphill task to persuade the Court of Appeal that the appeal should be allowed. Clearly if it were allowed, it would have to lead to a new trial. It seems to me however that this is a case in which, taking together the judge's failure to address the question of burden of proof, how relevant that may be remains to be seen, and the judge's, in my view, mistaken view of the council's own conduct, both of those give a more than fanciful prospect of success on appeal and there is in my judgment a compelling reason why permission should be granted for the appeal to continue, having regard to the apparently – as I would regard it at any rate – on a prima facie basis, wrongly critical view taken by the judge of the claimant's conduct.

17. Accordingly, I would grant permission to appeal in this case. I will also grant the extension of time.

Order: Application granted.