ON APPEAL FROM LAMBETH COUNTY COURT
HIS HONOUR JUDGE GIBSON
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LLOYD
LORD JUSTICE TOULSON
|- and -
|MAYOR & BURGESSES OF THE LONDON BOROUGH OF SOUTHWARK
Nicholas Grundy (instructed by Southwark Council) for the Respondent
Hearing date : Wednesday 23rd November, 2011
Crown Copyright ©
LORD JUSTICE CARNWATH :
"118 The Right to Buy
(1) A secure tenant has the right to buy, that is to say, in the circumstances and subject to the conditions and exceptions stated in the following provisions of this Part -
(b) if the landlord does not own the freehold, or if the dwelling-house is a flat (whether or not the landlord owns the freehold), to be granted a lease of the dwelling-house.
"(1) Where a secure tenant has claimed to exercise the right to buy and that right has been established, then, as soon as all matters relating to the grant . . . have been agreed or determined, the landlord shall make to the tenant—
(b) if the landlord does not own the freehold or if the dwelling-house is a flat (whether or not the landlord owns the freehold), a grant of a lease of the dwelling-house,
in accordance with the following provisions of this Part.
(3) The duty imposed on the landlord by subsection (1) is enforceable by injunction."
" 124 Landlord's notice admitting or denying right to buy
(1) Where a notice under s. 122 (…) has been served by the tenant, the landlord shall, unless the notice is withdrawn, serve on the tenant … a written notice either –
(a) admitting his right, or
(b) denying it and stating the reasons why, in the opinion of the landlord, the tenant does not have the right to buy.
125 Landlord's notice of purchase price and other matters
(1) Where a secure tenant has claimed the right to buy and that right has been established (whether by the landlord's admission or otherwise), the landlord shall
(b) within 12 weeks where the right is that mentioned in section 118(1)(b) (right to acquire leasehold interest),
serve on the tenant a notice complying with this section.
By s 125(2), the notice must describe the house and state the price at which "in the opinion of the landlord" the tenant is entitled to acquire the interest. By s 125(4A) the notice "shall contain a description of any structural defect known to the landlord…". Section 129 provides for the calculation of a discount on the purchase price. By HA 85, s. 181 a County Court has jurisdiction to entertain proceedings in respect of questions arising under HA 85:
181 Jurisdiction of county court
(1) A county court has jurisdiction-
(a) to entertain any proceedings brought under this Part, and
(b) to determine any question arising under this Part or under a conveyance or grant executed in pursuant of the right to acquire on rent to mortgage terms
but subject to sections 128, 128B, 155C and 158 (which provide for matters of valuation to be determined by the district valuer)
(2) The jurisdiction conferred by this section includes jurisdiction to entertain proceedings on any such question as is mentioned in subsection (1)(b)"
The proceedings below
i) He rejected the contention that the authority acted unlawfully under section 124 merely because its decision was shown later to have been wrong. The test was one of reasonableness:
"…the statute makes it clear that the authority needs to form an opinion as to the applicant's right and to make a decision on the basis of that opinion. If by the decision it accepts the application then the right is established by the admission. If it does not, then the tenant has recourse to the County Court, which is given jurisdiction by [HA 85] s. 181." (para 12)
ii) At the time of its decision, the council had acted reasonably in treating Mr. Francis as not qualifying for RTB on the basis that he was no longer a secure tenant, even though the contrary was later established by the decision of Judge Behar (para 14)
iii) He rejected the submission that the Act created a remedy in damages for breach of section 118 or 124.
"My conclusion is that with one exception it [i.e. HA 85 Part V] enables a tenant who is ready, able and willing to accept the grant of a long lease, as well as being entitled to it, to achieve his aim, with the consequence of any delay on the landlord's part falling on the landlord and not on him. The exception is where the property is to be demolished, and in that case the tenant is compensated in respect of money which in any event has been wasted, but not in respect of any benefit which he could have gained if the property had not been demolished. I conclude that on balance Part V of the Act provides an applicant with all the remedies which he needs, and I infer that Parliament did not intend that there should be additionally a private law right to recover damages." (para 16)
i) erred in law by applying the incorrect test for breach of statutory duty;
ii) erred in finding there was no breach of statutory duty even if he did apply the correct test, which is denied;
iii) erred in saying there was no right to bring a private law damages action for such a breach of statutory duty;
iv) erred in concluding that if they had a good claim it would be worth very little.
" "Notwithstanding use of the words "in the (landlord's) opinion" entitlement to buy is a factual question, not dependent…on opinion-making by landlords, and it accordingly seems clear that a wrongful refusal can be challenged…"
"17.… The wording of s. 124(1) could not, in my mind be plainer: they shall give a decision which is either in favour of accepting or denying the right to buy. … If the application is such that the information leads them to conclude that there is a doubt as to the authenticity of the application, there is therefore sufficient material in their minds, for them to deny the right to buy."
In other words, they are entitled at that stage to "err on the side of caution" (para 57). The remedy for the tenant is provided by section 181, that is a claim in the county court for a declaration as to his rights.
LORD JUSTICE LLOYD :
LORD JUSTICE TOULSON :