Case No: B5/2010/2664
Neutral Citation Number: [2011] EWCA Civ 735
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM SLOUGH COUNTY COURT
(DISTRICT JUDGE PARKER)

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Thursday, 19 May 2011

Before:

LORD JUSTICE LONGMORE
LORD JUSTICE AIKENS
LORD JUSTICE ELIAS
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Between:

	WINDSOR & DISTRICT HOUSING ASSOCIATION	
Appellant	
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HEWITT

Respondent	

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(DAR Transcript of 
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Ms R Cattermole (instructed by Owen White Solicitors) appeared on behalf of the Appellant.

Ms S Brown (instructed by Chambers Solicitors) appeared on behalf of the Respondent.

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Judgment

Lord Justice Longmore:

1.	On 11 January 2005 the claimant, Windsor and District Housing Association (which I shall call the Association), granted an assured tenancy to Ms Hewitt of a one-bedroomed second floor flat at 11 Jutland House, Dedworth Road in Windsor.  

2.	On 30 June 2006 Ms Hewitt applied for a transfer, partly on medical grounds as she suffers from tricompartmental osteoarthritis and partly because she needed a second bedroom for her son who, she said, was her carer.  Ms Hewitt had to wait until 3 October 2008 but on that date she was offered the tenancy of a two bed-roomed ground floor flat at 24 Westmead in Windsor and an assured weekly periodic tenancy was granted to her on 22 December 2008.  

3.	On or about that date Mr Phillip Rowe, who had, about two months earlier, started to work for the Association, met Ms Hewitt and they together filled in a Core Lettings Log for the Association which stated in section three that there was only one occupant of the flat.  On 6 February 2009 Ms Hewitt wrote to the Revenue and Benefits Department of the local council explaining that she had a new flat but had not been able to move in until 30 January and asking the Department to pay rent for both the old and the new tenancy during the period of transfer.  This letter appeared to indicate that she was moving in on her own.  

4.	With some difficulty the Association arranged for Ms Hewitt to visit their offices on 14 August 2009 with a view to discussing the position.  In the course of that meeting Ms Hewitt, who was accompanied by her daughter, denied having stated on her application form that her son was her carer and refused to discuss the matter any further.  

5.	On 7 December 2009 the Association served a notice on Ms Hewitt claiming possession of the flat under grounds 12 and 17 of Schedule 2 of the Housing Act 1988.  It is agreed that ground 12 adds nothing to ground 17 which has been treated as the relevant ground.  It is in these terms, 

“The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by: (a) the tenant, or (b) a person acting at the tenant’s instigation.”

6.	The Association asserts that Ms Hewitt’s statements in the transfer application form of 30 June 2006 amounted to statements (1) that she intended her son to live with her in any new flat; (2) that she intended her son to be her carer; and (3) that she needed a two bed-roomed flat for these reasons.  The Association then further asserts that Ms Hewitt’s representations of her intentions were continuing representations and, although not false when made, by the time she signed the tenancy agreement for the new flat her intention had changed.  Accordingly she knowingly or recklessly continued to make representations which she then knew to be false.

7.	District Judge Parker, sitting in Slough County Court, held that there was a continuing representation to the effect that Ms Hewitt intended her son to move into the new flat with her as her carer and that that representation became false at some stage before 22 December 2008.  He also held that Ms Hewitt’s son did not in fact move in with her and never stayed with her in the new flat.  

8.	He further held on the basis of a passage of Mr John Cartwright’s book Misrepresentation, Mistake and Non-Disclosure 2007, paragraph 5.17, that a person does not make a false statement knowingly or recklessly by failing to correct a continuing representation unless, at the time of that failure, that person knows that or is reckless as to whether that representation has ceased to be true.  

9.	That said, the District Judge required that the person should remember or be reckless as to whether the relevant representation was made in the first place.  He decided that Ms Hewitt did not remember the representation she had originally made and that the ground for possession was not therefore made out.  He also decided that since the Core Lettings Log stated that only one person was to move into the flat the Association could not prove that they had been induced to grant the tenancy by the continuing false representation.  If, he said, the log had come into existence before the grant the 2006 representation would have been corrected and the Association would not therefore have been induced to grant the tenancy by the original statement.  There is now an appeal to this Court.

10.	Ms Cattermole, for the Association, submits (1) there was simply no basis for the judge to conduct an inquiry into the question of whether Ms Hewitt remembered the earlier representation because she never she suggested she had forgotten it when agreeing to accept the new flat in October 2008 or when signing the assured tenancy agreement in December 2008.  Unless there is some basis for saying that she had forgotten that she had said she wanted a two bed-roomed flat for her son and carer, the question whether she remembered her earlier statement did not arise.  (2) This Court has held that, if any statement made before a tenancy is granted is material, it should infer that that statement did induce the landlord to grant the relevant tenancy (See Waltham Forest LBC v Roberts [2005] HLR 2).

11.	Ms Brown, for Ms Hewitt, submits first it was for the Association as claimant to prove every element of fraud which they alleged.  It was a necessary part of the allegation of fraud that they should prove that Ms Hewitt had, when continuing her representation of intention up to the signing of the tenancy agreement, remembered her earlier statement.  The judge had correctly found that she did not.  Secondly, the judge was correct to say that the Association had not proved inducement since, at or about the time when the agreement was signed, Ms Hewitt had made it clear that only one person was moving in.  Thirdly, Ms Brown also submitted, by way of respondent’s notice, that the allegation of fraud was never properly pleaded.  Fourthly, she submitted the statements in the transfer application form were not statements of intention but only predictions as to future conduct and as such did not constitute representations and fell outside the kind of statement envisaged by ground 17 of Schedule 2 of the 1988 Act.

12.	As to these last two matters, I agree with the judge.  The judge decided that the case should go ahead on the basis of the existing pleadings.  No attempt had been made to seek further information of the allegation that Ms Hewitt had knowingly made a false statement, let alone to strike the pleading out.  

13.	The judge did require Ms Cattermole to say plainly before the witnesses were called what her allegations of fraud were and he recorded them in paragraph 14 of his judgment.  By the end of the evidence Ms Cattermole no longer submitted that Ms Hewitt’s statements were fraudulent when made but said that it was fraudulent not to correct those statements before the tenancy agreement was signed.  The judge therefore rejected the pleading point in his judgment and that was, in my view, well within his discretion.  

14.	I also agree with the judge when he said in paragraph 124 that Ms Hewitt’s statements in the transfer application form were representations of intention and, moreover, continuing representations of intention not merely predictions of future conduct.  An application for a two bed-roomed flat on the basis that a carer is needed for the tenant is self-evidently a serious statement of intention which is intended to have legal effect.  Housing associations and local authorities could hardly be expected to deal with their housing stock on any other basis.  It is perhaps also noteworthy that ground 17 does not use the word “representation” but only the word “statement”.  While mere predictions might no doubt not count as statements for the purpose of ground 17, there may not necessarily be any need to import into housing law all the law about representations contained in books about contract.  On any view in the present case there was, in any event, a representation of intention.

15.	I turn therefore to the two primary issues and find myself in agreement with Ms Cattermole’s submissions.  Before an inquiry into a representor’s recollection of past events can become relevant, there has to be some foundation for saying that an important statement - such as that Ms Hewitt intended her son to come to live with her as her carer – had been forgotten by her and it seems to me that there was no such foundation here.  Ms Hewitt’s whole case leading up to and during the trial was that she always intended her son to live with her as her carer and that he did in fact do so.  She gave evidence to that effect and the majority of District Judge Parker’s careful and detailed judgment of 154 paragraphs deals with her case and her evidence to that effect.  Eventually he concludes in paragraph 114 that her son did not move to the new flat and had never lived there, and at paragraph 117 that, before the agreement for the tenancy was made, Ms Hewitt had ceased to intend that he would move there.  

16.	In the absence of some evidence from Ms Hewitt that she had forgotten her earlier expression of intention, there could, as it seems to me, be no basis for the judge embarking on any inferential inquiry as to whether she had or had not remembered her earlier statement.  Her earlier statement (that her son with living with her as her carer) was the whole basis of her fighting the case and, as the judge remarked when he came to give his ruling on costs, she ran a deliberately false case on this issue in a way that was dishonest.  The idea that she could have made an honest mistake at the time of signing the tenancy agreement without even saying at trial that she had forgotten what she had earlier said but then run a dishonest case at trial does not withstand even the analysis which Ms Brown sought in her submissions to provide.

17.	The judge pointed out at paragraph 135 that Ms Hewitt was not cross-examined on the question of whether she remembered what she had said in the transfer application.  That was of course precisely because it never became an issue in the case.  If the judge were right in saying that it was for the Association to raise the point in the teeth of Ms Hewitt’s assertion that her state of continuing intention was in fact accurate and then prove that she did not remember her earlier statement, the failure to cross-examine on the question should have been fatal to the claimant’s case.  The judge was not, however, prepared to go that far and he answered the question whether Ms Hewitt had remembered her earlier statement by drawing inferences from certain documents.  However, that was, in my view, an unnecessary and indeed somewhat dangerous exercise in the absence of any suggestion by Ms Hewitt that she had altogether forgotten her earlier statement.

18.	Subject to the question of inducement, therefore, I would hold that the Association made out its case under ground 17 before the judge and that he should, therefore, have accepted its case and found accordingly.  In so concluding, I do not say that I in any way disagree with the way Mr Cartwright puts the law in paragraph 5.17 of his important work.  Quite the contrary.  His statement of law seems to me to follow from the passage from Lord Blackburn’s speech in Brownlie v Campbell [1880] 5 App Cas 925, 950 which he cites.  I say merely that before a judge embarks on the inquiry into whether the representor remembers his earlier statement there must be some basis for supposing that the representor may have forgotten it.  Here there was no such basis.

19.	I turn therefore to inducement and here again I fear I cannot agree with the judge.  There is first the presumption which I have already mentioned.  The only fact relied on by the judge as rebutting that presumption is the fact that when Mr Rowe and Ms Hewitt filled in together the Core Lettings Log, box 3 of that form headed “Household Details” stated:

“Household characteristics. Enter age, sex, economic status and relationship to person 1 of all household members.  Enter occupation code only for household members working full or part-time.”

Then, under person 1, there is an entry in pen or pencil saying that person one is aged 57 and is female and has economic status 8 (viz, unable to work because of long term sickness or disability).

20.	The judge could not make any findings as to when the document was filled in, save that it would have been about the time when the tenancy was granted.  He said in paragraph 34 that its purpose was to gather data about new lettings to be ultimately provided to the Housing Corporation.  It is self-evidently not a document on which the Association relies before it offers all grants for tenancy agreement but is more of a fact collecting exercise.  It could not be relied on to correct an earlier false statement unless it had in some way been seen by an executive officer of the Association before the tenancy was granted and there was no evidence to that effect.  In those circumstances it is neutral at best and the ordinary presumption of inducement must, in my view, prevail.  I would therefore allow this appeal, set aside the judgment of District Judge Parker and invite counsel’s submissions on the form of any other order.

Lord Justice Aikens:

21.	I agree.

Lord Justice Elias:
22.	I also agree.

Order:  Appeal allowed