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 THE CENTAL LONDON COUNTY COURT
(HER HONOUR JUDGE FABER)

		Royal Courts of Justice Strand London, WC2
		4th March 2015

1. LORD JUSTICE LONGMORE: The question in this appeal from Her Honour Judge Faber in the Central London County Court is whether the reviewing officer of London Borough of Enfield, which I shall call "Enfield", misdirected herself when she decided that Mr and Mrs Najim were intentionally homeless. They had an assured short-hold tenancy of No 30 Haselbury Road North 18 in London from 3rd April 2009 to 2nd April 2010. Their landlady was Ms Watanabe.
2. She did not renew the tenancy when it expired because, as she put in a letter to her agents Masons of 12th April 2010, copied to Mrs Najim, Mr and Mrs Najim had withheld rent for works that had not been agreed and have removed furniture and because she desired to return to the property.
3. Mr Watanabe re-let the property a few days after resuming possession, a fact which Enfield's reviewing officer took into consideration when concluding that the cause of the non renewal of the tendency was withholding of rent by the Najims.
4. The first question is whether the reviewing officer was entitled to take account of that fact. The second question is: did she ask herself whether the Najims' ceasing of occupation was reasonably to be regarded as a likely consequence of the Najims' deliberate conduct for the purposes of Housing Act 1996, section 191 of which provides:

"(1) A person becomes homeless intentionally if he deliberately does or fails to do anything in consequence of which he ceases to occupy accommodation which is available for his occupation and which it would have been reasonable for him to continue to occupy.

(2) For the purposes of subsection (1) an act or omission in good faith on the part of a person who was unaware of any relevant fact shall not be treated as deliberate."

5. Paragraph 11 of the Code of Guidance issued to housing authorities dealing with homelessness applications required reviewing officers to consider whether the loss of an applicant's previous home is "the reasonable result" of the relevant act or omission giving rise to homelessness. The reviewing officer did not refer to this guidance but did consider the Najims' solicitor's submission that an application for possession of an existing tenancy, when a small amount of rent had been deducted for repairs or other improvement, would not have been successful. By implication, the submission continued that the eviction in the present case could not therefore be considered reasonable or proportionate.

The terms of the tenancy

6. Clause 6A contained the obligation to pay the rent at the rate of £1050 per month. Clause 6(c) prohibited repairs or redecoration without the landlord's written consent. Clause 6(d) prohibited alteration or addition without consent. Clause 6(e) required the tenant prior to replacement of any lost or damaged item to obtain the landlord's approval. Clause 6(f) prohibited the tenant from bringing additional furniture onto the premises without written consent.

Relevant History

7. Rent was withheld on three occasions: on 3rd August 2009 the Najims deducted £68 from the rent because Ms Watanabe had agreed to replace the bathroom flooring. Both she and Mr Najim had gone to B & Q to acquire tiles for which Ms Watanabe paid. But more tiles and grout were required to complete the flooring so Mr Najim purchased £68 worth of further tiles and deducted that amount from the rent.
8. On 2nd October 2009 Mr Najim deducted £388 from the rent because Ms Watanabe had agreed to put up partition fencing in the back garden. She had bought the fencing from B & Q and said she would instruct someone to put it up. The Najims thought she was taking too long and arranged for the job to be done for £388 which they then deducted from the rent.
9. In respect of both these deductions the Najims said that Ms Watanabe consented to the deductions but the reviewing officer decided that no such consent had ever been given. In fact Ms Watanabe served what is called a section 21 notice to terminate the tenancy on 2nd October, the day of the second deduction, complaining of breaches 6(a), 6(c) and 6(d) of the tenancy agreement. The notice was however invalid because it was in the wrong form for alleging breaches of the tenancy agreement. Ms Watanabe never obtained possession for those breaches and it seems the rent problem was thereafter resolved in the sense that Ms Watanabe did not pursue the matter any further.
10. On 3rd February 2010 the Najims deducted from rent, now for the third time, the sum of £260 because the washing machine had broken down. The Najims have asserted that several requests had been made for the washing machine to be replaced. Again, they said it was agreed that the Najims could purchase the machine and deduct the amount paid from the rent. But the reviewing officer decided that no such agreement had been made and the deduction was therefore a breach of the tenancy agreement.
11. On 1st March 2010 Masons wrote to Mr and Mrs Najim to say that the landlord would not be renewing the tenancy when it expired on 2nd April 2010. On 12th April 2010, after that expiry, Ms Watanabe wrote to Masons in the following terms and I now quote verbatim:

"I have advised you that I do not wish to renew the tenancy due to the tenants withholding rent for works that have not agreed or approved and the removable and deliberate loss of all the furniture within the property without my permission. I also need to return to the property due to a change in my circumstances."

12. On 25th June 2010 Ms Watanabe served a valid section 21 notice and she issued a claim form for possession on 8th September. On 6th January 2011 DJ Morley made an order for possession. On 25th February 2011 Ms Watanabe served notice of eviction timed for 5th April 2011 when eviction in fact took place. No one can say that the Najims had been hustled out of the property.
13. On 26th April Ms Watanabe re-let the premises to tenants who had already moved in on 16th April. The Najims applied to Enfield for accommodation but Enfield decided on 14th May 2012 that they were intentionally homeless. The reviewing officer confirmed that position by her letter of 30th May 2013.
14. On 20th May 2014 Her Honour Judge Faber found that there were two errors of law in the reviewing officer's decision (i) she wrongly took account of the fact that after eviction on 5th April 2011 Ms Watanabe almost immediately re-let the property as negativing her statement in the letter of 12th April 2010 that she needed to return to the property due to a change in her circumstances. If the subsequent re-letting is left out of account the right conclusion might be that the operative reasons for the Najims ceasing to occupy the property was not their withholding of rent but Ms Watanabe's wish to resume possession for her own occupation.

(ii) she omitted to consider whether the eviction of Mr and Mrs Najim was a reasonable consequence of the withholding of rent.

15. Mrs Najim, who is the sole claimant in these proceedings, says that the reviewing officer made a further error of law in failing to consider the argument that the withholding of rent was not deliberate because it was done in good faith when she was unaware of a relevant fact, namely the withholding of rent would result in her being evicted. This is the subject matter of a respondent's notice.

Operative reason for non renewal

16. If Ms Watanabe had never given any reason for the non renewal of the tenancy it would perhaps be difficult to say that the Najims were intentionally homeless. But since she did give reasons, as recorded to her letter agents of 12th April 2010, it was for the reviewing officer to determine the operative reason for the non renewal. If the operative reason was a deliberate act or omission by the Najims, they would be intentionally homeless, subject to the saving section 19(2) of the 1969 Act.
17. A comparatively unusual feature of this case is that although Ms Watanabe had, as she was entitled to do, decided not to renew the tenancy in April 2010, the non renewal was not carried into effect until she served a notice of eviction on 25th February 2011 and eviction did not take place until 5th April 2011, a year after the tenancy had expired. Thus whatever Ms Watanabe gave as a reason in April 2010 might not have been still operative in 2011. By the time she served notice of eviction it is highly probable that to the extent she might have wanted to resume possession in April 2010, she no longer wished to do so in 2011 since she allowed new tenants into the premises within 11 days of the Najims' leaving the premises and gave those new tenants a tenancy on 26th April.
18. The reviewing officer recited the first half of the first sentence of the part of the letter to 12th April 2010 which I have already quoted and considered the withholding of the rent there referred to was the operative cause of the non renewal of the tenancy. The second part of the first sentence referring to removal and loss of furniture has not been relied upon by either party. She, the reviewing officer, then continued:

"I note Ms Watanabe's letter goes on to state that she 'also needs to return to the property due to a change in my circumstances'. Whilst you have raised this as a reason you cannot be found intentionally homeless I have confirmed that the new tenants moved into the property 11 days after you were evicted. Therefore whilst I have been unable to discuss this particular issue with Ms Watanabe herself, it is clear that although this may have been a consideration in April 2010 she ultimately did not proceed with your eviction so she could take residence at 30 Haselbury Road."

19. The judge (para 37) said of this that in rejecting Ms Watanabe's stated intention in April 2010 of wanting to occupy the property herself, the reviewing officer considered the wrong time period, "as she should have considered the statement in the letter itself rather than what happened after the eviction."
20. I cannot agree with this. Ms Watanabe's reason or reasons for not renewing the lease have to be considered over the whole period from the decision not to renew until the eviction. She could have called the bailiffs off at any time before 5th April 2011 and the fact that she did not do so but allowed other tenants to take possession on 16th April shows that, if she did indeed originally intend to resume possession she no longer had that intention at the time of eviction and the operative reason must have been the Najims' withholding of rent during the tenancy. I do not think the judge was right to say that the reviewing officer fell into any error of law in this respect.

Was non renewal the reasonable consequence of non payment of rent?

21. Paragraph 11.11 of the Code of Guidance on Homelessness provides:

"For homelessness, or threatened homelessness, to be intentional it must be a consequence of a deliberate act or omission. Having established that there was a

deliberate act or omission, the housing authority will need to decide whether the loss of the applicant's home, or the likelihood of its loss, is the reasonable result of that act or omission. This is a matter of cause and effect."

The Code then gives by way of example someone who voluntarily gives up settled accommodation for unsettled accommodation which he is then required to leave. In such a case the housing authority would have to ask itself why the applicant left the settled accommodation in the first place.

22. The judge pointed out in paragraph 38 of her judgment that the reviewing officer failed to mention paragraph 11.11 of the Code of Guidance which had been brought to Enfield's attention by Mrs Najim's solicitor's letter of 28th January 2013.
23. It is true that the reviewing officer did not specifically mention the Code of Guidance but she did deal with the solicitor's argument which was raised in that letter and based on paragraph 11.11 of the Code. Under the head of "loss of the accommodation" Messrs Hopkin Murray Beskine, said this:

"You assert that our client's failure to meet her rental obligations in full led to eviction. However, it is unreasonable to conclude that she should be found intentionally homeless on this basis as it was not possible for her to have reasonably foreseen that her actions/omissions would lead to the eviction.

Had the landlord sought a possession order on the basis of the facts of this case she would not have been granted the order as the Court could not have found that it was reasonable for an order to be made. The fact that the landlord had the benefit of obtaining an order pursuant to section 21 of the Housing Act means that the Court had no cause to look at the reasons why possession was being sought. It is therefore for the local authority to properly consider the reasonableness of eviction based on the circumstances of the case.

Our client was in arrears of £715.94, which is not even one month's rent. The landlord would not have been able to obtain a possession order on the basis of these arrears as they are minimal. Furthermore, the amount outstanding does not constitute arrears of rent as it is perfectly reasonable for our client to deduct these costs."

24. The reviewing officer's response to this submission at paragraph 27 was this:

"When considering the issue of intentionality I am required to look at the acts or omissions that cause the lack of accommodation. The evidence shows that the trigger for eviction in your case was your decision to withhold rent and use it to purchase a washing machine. Ms Watanabe's potentially disproportion action would not escape the fact that you were in breach of your tenancy."

25. The reviewing officer thus recognises that the landlady's action was "potentially disproportionate" but decides that, in light of the fact that no agreement had been secured to make a deduction from rent, there was a breach of the tenancy agreement. The fact that during the currency of the tenancy a judge would in all probability not have made a possession order for the comparatively small amount of outstanding rent as stated by Mrs Najim's solicitors is nothing to the point because in this case the tenancy had come to an end. In deciding whether to grant a new tenancy any landlord must be entitled to consider the conduct of the tenant during the original tenancy. He is not bound to renew and it must be open to a reviewing officer to decide that the non-renewal is the "reasonable result" of the failure to make payment of rent when due.
26. In these circumstances it seems to me that the reviewing officer addressed the substance of the argument based on paragraph 11.11 of the Code of Guidance and the fact she did not mention the code in terms is of no consequence. This court has to be guided by the observations of Lord Neuberger at paragraph 50 of Holmes-Moorhouse v Richmond Upon Thames BC [2009] UKHL 7, [2009] 1 WLR 413:

"Accordingly, a benevolent approach should be adopted to the interpretation of review decisions. The court should not take too technical view of the language used, or search for inconsistencies, or adopt a nit-picking approach, when confronted with an appeal against a review decision. That is not to say that the court should approve incomprehensible or misguided reasoning, but it should be realistic and practical in its approach to the interpretation of review decisions."

27. A realistic and practical approach leads me to conclude that the reviewing officer in the present case had well in mind that the refusal to renew the tenancy had to be a reasonable consequence of the withholding of rent and that the non-renewal of the tenancy and the subsequent eviction of the Najims was indeed a reasonable consequence of that withholding of rent.
28. Mr Lintott for the housing authority submitted that paragraph 11.11 of the Code of Guidance was based on existing case law in the form of R Hounslow London Borough ex parte R, [1997] 29 HLR 939, as approved in Watchman v Ipswich BC [2007] HLR 33 in which Laws LJ said this:

"What is called for, then, in a case where there are potentially multiple causes of an applicant's homelessness, is a careful judgment on the particular facts looking to see whether homelessness is shown to have been a likely consequence of the applicant's deliberate act, bearing in mind that it is the applicant's own responsibility for his homelessness that the statute is looking for."

29. In the light of this dictum and the words in the Code, that a decision whether the loss of the applicant's home is the reasonable result of the applicant's deliberate act is "a matter of cause and effect", Mr Lintott said that the word "reasonable" in the Code only relates to the causative aspect of homelessness and that there was no need for the local authority to show reasonableness in any other sense.
30. In the light of the decision I have already reached that the reviewing officer's decision cannot be successfully impugned it is necessary to decide whether Mr Lintott is right about this but I have to say I doubt whether he is. It seems to me that the words "reasonable result" in the Code and indeed the words "likely consequence" in the dictum of Laws LJ must be read in their ordinary sense.
31. Mr Lindsay Johnson, for the tenant, gave the example of a vindictive eviction brought about by an unreasonable landlord as a result of which a tenant becomes homeless. It would be unlikely that in those circumstance the tenant would be intentionally homeless.

Good faith, unawareness of a relevant fact?

32. The suggested relevant fact of which it is suggested that Mr and Mrs Najim were unaware is the supposed fact that the withholding of comparatively small sums of rent would lead to non renewal of short-hold assured tenancy. But the relevant fact of which a tenant is unaware must, in my view, exist at the time of the deliberate act or omission on his part. The subsection 191(2) is intended to deal with genuine mistake or misapprehension of existing fact not with future events which may or may not occur.
33. Reliance was placed by Mr Johnson on 0'Connor v Kensington RLBC [2004] EWCA Civ 394, [2004] HLR 37. But that was a case in which the tenant believed in good faith that the rent was being paid by the person whom he had allowed to occupy the premises while he was away. This court held that it did not matter whether that belief was reasonable; it was sufficient that it was a genuine belief. But the belief has to be a belief in an existing fact, not a misplaced belief in the likelihood of the happening or otherwise of future event.
34. Similarly in Ugiagbe v Southwark London Borough Council [2009] PTSR 1465, the relevant fact of which the tenant was unaware was that she had security of tenure and could not be required to leave without a court order. That was also a matter of existing fact not a matter of belief in the happening or otherwise of some future event. Moreover paragraph 40 of the reviewing officer's decision shows that she had section 191(2) of the 1996 Act well in mind in any event.
35. I would therefore not accede to the respondent's notice and for the reasons I have already given I would allow this appeal.
36. LORD JUSTICE KITCHIN: I agree.
37. LORD JUSTICE FLOYD: I also agree.