England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON CIVIL JUSTICE CENTRE
(HIS HONOUR JUDGE KNIGHT QC)

		Royal Courts of Justice Strand, London, WC2A 2LL
		2nd November 2007

Lord Justice Chadwick:

1. This is an appeal from an order made on 24 August 2007, by HHJ Knight QC sitting in the Central London County Court, on an appeal from the District Judge in possession proceedings brought by Westminster City Council in relation to property known as Flat 8A, Warlock Road, London W9.
2. Flat A, 8 Warlock Road, is one of a number of properties let to the City Council by Pathmeads Housing Association under a lease dated 21 October 2004. That lease was entered into, as appears from the recital which it contains, so that the council could use the property demised as temporary housing for homeless persons in accordance with its statutory duties under the Housing Act 1985, the Housing Act 1986 and the Housing Act 2002. Those duties include, of course, the duties imposed on the council as a local housing authority under Part VII of the Housing Act 1996. The 2004 lease must be read with a supplementary lease dated 11 October 2006 which had the effect of extending the term for which Flat A was let until 20 February 2008.
3. On 21 February 2005 or thereabouts, Ms Hatixhe Boraliu (to whom I shall refer as "the tenant") was let into possession of Flat A under a tenancy agreement dated 17 February 2005. The City Council was the landlord in respect of that agreement. The agreement was expressed to be a non-secure tenancy agreement by virtue of Section 79, Schedule 1, paragraph 6 of the Housing Act 1985; being a tenancy of property which had been let to the the Council as use for temporary accommodation for occupation by homeless persons, on terms which included provision for the lessor to obtain possession on the expiry of the lease.
4. Paragraph 6 of Schedule 1 to the Housing Act 1985 is in these terms:

"6. A tenancy is not a secure tenancy if –

(a) the dwelling-house has been leased to the landlord with vacant possession for use as temporary housing accommodation,

(b) the terms on which it has been leased include provision for the lessor to obtain vacant possession from the landlord on the expiry of a specified period or when required by the lessor,

(c) the lessor is not a body which is capable of granting secure tenancies, and

(d) the landlord has no interest in the dwelling-house other than under the lease in question or as a mortgagee."

A secure tenancy, in that context, is a tenancy under which a dwelling-house is let as a separate dwelling at any time when the conditions described in Sections 80 and 81 of the Housing Act 1985 as "the landlord condition" and "the tenant condition" are satisfied (section 79(1) of that Act). But that subsection has effect subject to the exceptions in Schedule 1 to the Act (tenancies which are not secure tenancies) - section 79(2) of the Housing Act 1985.

5. In the context of the present appeal, it is pertinent to have in mind not only the exception in paragraph 6 of Schedule 1, which I have already set out, but also the exception in paragraph 4 of the Schedule, which (as enacted in 1985) was in these terms:

"4. (1). A tenancy granted in pursuance of –

(a) Section 63 (duty to house pending inquiries in case of apparent priority need),

(b) Section 65(3) (duty to house temporarily a person found to have a priority need but to have become homeless intentionally), or

(c) Section 68(1) (duty to house pending determination whether conditions for the referral of application are satisfied),

is not a secure tenancy before the expiry of the period of twelve months beginning with the date specified in sub-paragraph (2), unless before the expiry of that period the tenant is notified by the landlord that the tenancy is to be regarded as a secure tenancy."

6. The date at sub-paragraph (2) provides that the date referred to in sub-paragraph (1) is the date on which the tenant receives notification of a relevant decision. By February 2005, when the tenancy agreement was made, the duties under section 63, section 65(3), and section 68(1) of the Housing Act 1985 had been replaced by duties under sections 188, 190 and 200 of the Housing Act 1996.
7. It is clear that paragraph 4 of Schedule 1 of the Housing Act 1985, as enacted, would not have been applicable to the tenancy granted in 2005. It was accepted by the council that, at the time when that tenancy was granted, the tenant was a person to whom the full housing duty was owed under section 193 of the Housing Act 1996 (formerly section 65(2) of the Housing Act 1985).
8. But paragraph 4 of Schedule 1 to the 1985 Act had been replaced, in rather different terms, by paragraph 3 Schedule 17 to the Housing Act 1996. It was the paragraph in that substituted form that was given force by section 216(3) of the 1996 Act; and it was the paragraph in that substituted form which was relevant in 2005. By 2005, paragraph 4, Schedule 1 of the Housing Act 1985 was in these terms:

"Accommodation for homeless persons

4. A tenancy granted in pursuance of any function under Part VII of the Housing Act 1996 (homelessness) is not a secure tenancy unless the local housing authority concerned have notified the tenant that the tenancy is to be regarded as a secure tenancy."

For whatever reason, the changes made by the 1996 Act had not found their way into the form of tenancy agreement which the City Council used in granting the tenancy to this tenant on 17 February 2005. That agreement - as well as referring to provisions of the 1985 Act which had long been repealed - makes no reference to the exception in paragraph 4 of Schedule 1 to that Act as it was at that time, following the change made in 1996. It refers only to paragraph 6 of that Schedule.

9. On 28 December 2006, the City Council served on the tenant a Notice to Quit. Under that notice, the tenant was to give up possession on 5 February 2007. She did not give up possession on that day. On 23 February 2007, the council made her an offer of alternative temporary accommodation at another property. An appointment to view that alternative accommodation was arranged for 26 February 2007; but, it seems, the appellant did not keep that appointment. The council took the view that that was a refusal of the alternative accommodation: a view which, for reasons which the tenant was to set out later in the letter of 13 March 2007, was a correct appreciation of her intention at that time.
10. In the light of the tenant's refusal of alternative accommodation, the council decided that their housing duty under Section 193 of the Housing Act 1996 was discharged. They notified the tenant of that decision by a letter dated 26 February 2007. By the letter of 13 March 2007, to which I have referred, the tenant sought review of that decision under Section 202 of the 1996 Act, as she was entitled to do. Following that review, the council confirmed their decision that the alternative accommodation was suitable and that the housing duty was discharged. They did that by letter dated 1 May 2007. So far as we are aware, the tenant did not appeal to the County Court under Section 204 of the Housing Act 1996 from the decision in the review letter.
11. In the meantime, proceedings for possession of Flat A, 8 Warlock Road had been commenced by the issue of a claim form on 24 April 2007 in the Central London County Court. The Particulars of Claim included this paragraph (paragraph 8):

"The Claimant is a local authority. The Claimant granted the Defendant the tenancy of the property in pursuance of its functions under Part VII of the Housing Act 1996 (homelessness) and the tenancy is not a secure tenancy by virtue of paragraph 4 of schedule 1 of the Housing Act 1985. The Claimant avers that it has not at any stage notified the Defendant that the tenancy is to be regarded as a secure tenancy."

12. Those proceedings came before Deputy District Judge Harmer on 6 June 2007. The District Judge made an order that possession be given up on or before 20 June 2007. The tenant did not give up possession on that day. She appealed with the permission of HHJ Collins CBE granted on 19 July 2007.
13. It was that appeal which came before HHJ Knight QC on 24 August 2007. HHJ Knight allowed the appeal. He held, first, that the tenancy created by the agreement of 17 February 2005 did not fall within paragraph 4 of Schedule 1 of the Housing Act 1985. He reached that conclusion for reasons which he set out at paragraphs [16] to [18] of his judgment. Put shortly, he held that a tenancy of property which was itself held by a local authority as lessees from a private landlord fell within paragraph 6 of Schedule 1 of the 1985 Act, if at all, and so could not fall within paragraph 4 of that Schedule. In effect, paragraphs 4 and 6 were mutually exclusive. As he put it, at paragraph [18] of his judgment:

"[18]…I cannot see the purpose of paragraph 6 being introduced into the First Schedule because the position would be quite clear from the effect of paragraph 4, namely that the tenancy would not be secure unless the local authority notified the tenant to the contrary. It seems to me, therefore, that the basis of the order for possession in this case was not properly made out under paragraph 4 of the First Schedule. The fundamental reason for me saying that is that this is a case which quite clearly falls within paragraph 6 of the First Schedule."

But he went on to hold that, although the tenancy agreement was one which fell within paragraph 6, the council could not rely on that paragraph in the circumstances of this case because the condition at subparagraph(b) of paragraph 6 in Schedule 1 of the 1985 Act was not satisfied.

14. The council appeal to this court with the permission of Mummery LJ granted on 22 October 2007. The appeal has been expedited, pursuant to his direction, for the reason that the question whether a tenancy agreement of property leased by a local housing authority from a private landlord for the purpose of discharging obligations under Part VII of the 1996 Act (and made in discharge of those obligations) is taken outside the protection afforded to secure tenancies by the Housing Act 1985, by the exception in paragraph 4 Schedule 1 to that Act, is of obvious general importance. The court was told that there are a number of cases pending in the county court which will turn on the decision of this Court that HHJ Knight was or was not correct in the conclusion which he reached.
15. Counsel for the tenant - who succeeded in front of HHJ Knight and who appears on this appeal - does not seek to uphold the judge's conclusion on the effect of paragraph of the schedule 1 to the 1985 Act. But this is not a case, as it seems to me, in which it would be satisfactory simply to allow the appeal from HHJ Knight's order by consent without giving reasons. It is a case in which it must be much more important to the council to obtain a reasoned judgment as to whether HHJ Knight was right or wrong; rather than simply to obtain by consent an order for possession of this individual property.
16. In my view, the judge was wrong to reach the conclusion which he did. Unless the unqualified words of paragraph 4 of Schedule 1 to the 1985 Act, as substituted in 1996, are to be cut down by necessary implication from the words of paragraph 6 of that Schedule, the tenancy in the present case plainly falls within paragraph 4. It is a tenancy granted in pursuance of a function under part VII of the Housing Act 1996, and the local housing authority has not notified the tenant that the tenancy is to be regarded as a secure tenancy. The relevant function in the present case was the provision of accommodation under section 193 of the Housing Act 1996.
17. Paragraph 6 of Schedule 1 to the 1985 Act imposes four conditions. The question in the present case is whether condition (a) - "for use as temporary housing accommodation" - is coextensive with the condition in paragraph 4 of Schedule 1 - "in pursuant of any function under Part VII of the Housing Act 1996". If the condition in paragraph 6 extends beyond the performance of functions under Part VII of the 1996 Act, then paragraph 6 cannot be said to be otiose: it covers circumstances which would not fall within paragraph 4. The fact that paragraph 6 also applies to circumstances which do fall within paragraph 4 is not a sufficient reason for qualifying the plain words of paragraph 4 itself.
18. There are, as it seems to me, three reasons why, on a proper analysis, paragraph 6 does extend to circumstances which would not fall within paragraph 4. The first is that paragraph 6 plainly extends to circumstances in which the landlord in respect of the relevant tenancy is not a local housing authority on which duties under Part VII of the 1996 Act are imposed. It is pertinent to have in mind that at the time when the Housing Act 1980 - which introduced the concept of the secure tenancy (under section 28) - was enacted, there was no protection for local authority tenants under the Rent Act 1977. That protection had been removed sometime earlier. A tenancy was a secure tenancy in cases where the landlord condition and the tenant condition were satisfied. The landlord condition included the condition that the landlord belonged to one of the bodies mentioned in subsection 28 (4) of the 1980 Act: (section 28(2)). Those bodies included a local authority; but included, also, a number of other corporations - for example, the Commission for New Towns and the Development Corporation - so that paragraph 6 applied in a case where the landlord was a landlord other than a local authority who fell within the landlord condition. Paragraph 7 of Schedule 3 to the Housing Act 1980 - which was the predecessor of what is now paragraph 6 in the First Schedule to the 1985 Act - included cases where the landlord was not a local authority. Accordingly, it extended to cases which would not fall within what was then paragraph 5 of the Third Schedule to the 1980 Act - which was the predecessor of the present paragraph 4 of the schedule 1 to the 1985 Act. Paragraph 5 in Schedule 3 of the 1980 Act applied to tenancies granted in pursuance of sections 3(4), 4(3) and 5(6) of the Housing and Homeless Persons Act 1977. Tenancies granted pursuant to those sections - which were the predecessors of sections 60(3), 65(3) and 68(1) in the 1985 Act - were tenancies which could only be granted by local authority landlords. It was only a local authority who was subject to those duties in relation to homeless persons.
19. For those reasons, there was an obvious need, when the Housing Act of 1980 was enacted, to address both the position where the landlord was not a local housing authority, and the position where the landlord was a local housing authority granting tenancies under the relevant homelessness legislation. Paragraphs 5 and 7 in the Third Schedule to the 1980 Act had distinct purposes. That was reflected in the successor paragraphs (respectively, paragraphs 4 and 6 of schedule 1 to the 1985 Act) when that Act replaced the 1980 Act. And that remains the position following the change made in 1996. A landlord who grants a tenancy pursuant to duties imposed by part VII of the 1996 Act will be a local housing authority. A landlord within paragraph 6 of what remains the First Schedule to the 1985 Act may be a local authority landlord, or may be a body which is not a local housing authority. That is the first reason, as it seems to me, why the paragraphs 4 and 6 are not to be regarded as mutually exclusive.
20. The second reason is that the tenancies within what is now paragraph 6 of schedule 1 of the 1985 Act include tenancies which are not granted in pursuance of the duties headed under the homelessness legislation. A local authority may well require property for use as temporary housing accommodation in circumstances where the person to be housed is not a person to whom they owe a duty under Part VII of the 1997 legislation. Two obvious examples were put before us. The first example is a case in which the local authority is providing accommodation for a person under section 21(1)(a) of the National Assistance Act 1948. That paragraph has remained in force, notwithstanding the repeal of paragraph (b) by the Housing and Homeless Persons Act 1977. For a valuable exposition of the history of the legislation in this field, reference may be made to the judgment of Carnwath LJ in R (on the application of O) v Haringey LBC & The Secretary of State for the Home Department [2004] EWCA Civ 535, reported at [2004] 2 FNR 476, paragraphs [18] to [24] at pages 484 to 486. A second example is the provision of accommodation for children under the age of 18, pursuant to section 17(1) and (6) of the Children Act 1989. Provision of accommodation under both of those sections would fall squarely within the purposes mentioned in paragraph 6 of schedule 1 to the 1985 Act, but would not fall within paragraph 4 of that schedule. So, again, there is no reason to treat paragraph 6 as otiose if paragraph 4 is given the meaning which its plain words require.
21. A third reason – and a further indication that the two provisions have always had, and always been intended to have an independent purpose - is found in the legislative history. As I have said, when the need for exemptions from the secure tenancy regime was recognised in the Housing Act 1980, paragraph 5 in Schedule 3 to that Act confined the exemption to the provision of accommodation to homeless persons under three specific sections of the Housing and Homeless Persons Act 1977. The common link between those sections is that they were all sections concerned with the provision of temporary accommodation; accommodation for what could be seen to be a limited period. That, no doubt, is why when paragraph 5 was originally enacted in schedule 3 of the 1980 Act, it provided that the tenancy would not be a secure tenancy for the first twelve months or thereabouts.
22. The full housing duty was not limited in time. That that remained the position when the 1980 Act was replaced by the 1985 Act. In the 1985 Act, the full housing duty was imposed, by Section 65(2), in a case where the local authority was satisfied that the applicant had a priority need and were not satisfied that he had become homeless intentionally. The duty was not limited in time. That was the background against which, as originally enacted, paragraph 5 in schedule 3 to the 1980 Act and paragraph 4 in schedule 1 to the 1985 Act did not apply to tenancies granted pursuant to the full housing duty. But the changes that were made by the Housing Act 1996, (as enacted) included a limitation, in section 190(3), of the full housing duty to a period of two years. In that context, it could be seen that even the grant of a tenancy pursuant to the full housing duty would be temporary; at least, temporary in the sense that the duty only extended for two years. That, no doubt, was the reason which led to the replacement of the old paragraph 4 in Schedule 1 to the 1985 Act with the paragraph 4 in its present form. It must have been thought appropriate that the paragraph should extend to cases within the full housing duty, as well as to the cases to which it had formerly extended, in which had been the provision of accommodation was temporary. That change survived the subsequent amendment of section 193(3) of the 1996 Act by the Homelessness Act 2002 - which removed the two year limit under Section 193(3) which had been introduced in 1996. Parliament did not take the opportunity in 2002 to revert to the old scheme under the 1980 Act and the 1985 Act. It plainly intended to leave paragraph 4 in the form to which it had been altered following the change in section 193 (3) which was made in the 1996 Act.
23. For all those reasons, there is a real purpose served by each of paragraph 4 and paragraph 6. There is no reason to qualify the plain words of paragraph 4 by a restriction introduced on grounds that, without qualification to paragraph 4, paragraph 6 would be otiose.
24. I am satisfied that the judge was wrong in this case, and that the appeal should be allowed on that ground. It is unnecessary to go on to consider the second ground which attracted the judge: namely, that, in the particular circumstances of this case, the conditions in paragraph 6 were not met. I say nothing about that point.

Lord Justice Gage:

25. I agree.

Lord Justice Lawrence Collins:

26. I entirely agree with the lucid and comprehensive reasoning of my Lord Chadwick LJ.

Order: Appeal allowed