England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MANSFIELD CROWN COURT
(HIS HONOUR JUDGE PUGSLEY)

		Royal Courts of Justice Strand London, WC2A 2LL
		3 June 2015

1. LORD JUSTICE SULLIVAN:

Introduction

2. This is an appeal with the permission of the judge from the order dated 14 March 2014 of HHJ Pugsley, declaring on a preliminary issue that the respondent council had elected to operate an introductory tenancy regime for the purposes of Section 124 of the Housing Act 1996 ("The 1996 Act") and therefore that the tenancy granted by the respondent to the appellant on 7 July 2011 was an introductory tenancy for the purposes of part V of the 1996 Act.

Section 124

3. The introductory tenancy regime was established by chapter 1 in part V of the 1996 Act. The relevant provisions are contained in section 124, and are as follows:

"(1) A local housing authority ... may elect to operate an introductory tenancy regime.

(2) When such an election is in force, every periodic tenancy of a dwelling house entered into or adopted by the authority ... shall if it would otherwise be a secure tenancy, be an introduction tenancy unless immediately before the tenancy was entered into or adopted the tenant, or, in the case of joint tenants, one or more of them was (a) a secure tenant at the same or another dwelling house, or (b)[...]

(3) Sub-section (2) does not apply to a tenancy entered into or adopted in pursuance of a contract made before the election was made.

(4) For the purposes of this chapter, a periodic tenancy is adopted by a person if that person becomes the landlord under the tenancy, whether on a disposal or surrender of the interest of the former landlord.

(5) An election under this section may be revoked at any time without prejudice to the making of a further connection."

The appellant's tenancy

4. On 7 July 2011, the respondent granted the appellant what was described as an introductory tenancy commencing on 1 August 2011 for a period of 12 months, following which it would become a secure tenancy. The appellant fell into arrears with the rent and, following a number of warning letters, the respondent issued a claim for possession of the property. In his defence to those proceedings, the appellant contended that the respondent's introductory tenancy regime was unlawful because the respondent had not elected to operate an introductory tenancy regime in accordance with section 124(1) of the 1996 Act at the time that his tenancy was granted in 2011. The appellant sought a declaration that he was a secure tenant. On 5 September 2013, the following preliminary issue was ordered to be tried:

"Whether or not the [appellant's] tenancy was an introductory tenancy."

Facts

5. HHJ Pugsley did not hear any oral evidence. He determined the preliminary issue on the basis of copies of the relevant reports and minutes of the respondent's Housing and Environmental Health Committee, which on, 5 May 1998 became the respondent's Community Services' Committee, which were provided as exhibits to a witness statement of Karen White, the respondent's Director of Safety. For present purposes, the relevant reports and minutes are as follows:
6. At a meeting of the committee on 27 March 1997, the respondent's Director of Housing and Environmental Mental Health informed the committee that the 1996 Act had introduced the consent of introductory tenancies.
7. His report summarised the features in the introductory tenancy regime and recommended that he should undertake consultation with tenants on the proposed adoption of introductory tenancies and report back to the committee. His recommendation was accepted. On 3 July 1997, the committee gave further consideration to the matter in response to a request from the tenant's federation that it needed further time to consider the implications of the proposal. Having considered the matter, the Tenants' Federation wrote to the Director saying that the proposal should be rejected because the existing regime could be made to work effectively. The Director reported to the committee at its meeting on 18 September 1997. Having referred to the letter from the Tenants' Federation, the Director said:

"It is evident from both the reply of the Federation and following discussions of the area and district panels that many tenants are uncertain as to the implications that introductory tenancies would have, and I know that some tenants voiced fears that it may lead to victimisation of vulnerable tenants.

Whilst I am conscious of these concerns, I believe that experience elsewhere in the country demonstrates that it is possible for the council to build in sufficient safeguards to protect tenants from spurious complaints.

I am also conscious that the council needs to contrast these concerns with the genuine fear and distress that can be caused to tenants as a result of flagrant breaches of tenancy conditions. This will always involve striking a balance between the need to curb the actions of the minority and the freedoms of the majority.

It is a difficult balance to strike, but I believe there is evidence that we are currently failing to protect a number of tenants from the corrosive effects of persistent flagrant breaches of tenancy conditions and anti-social behaviour.

In spite of the views of the Federation, I there form the view that the most prudent approach would be to try the adoption of introductory tenancies, closely monitored by the housing management sub-committee with the full report on their effect after the first year of operation."

8. The Director's report contained the following recommendation:

"That the director of Housing and Environmental Health be authorised to implement introductory tenancies on a trial basis of one year, with monitoring being undertaken by the housing management sub-committee."

9. Paragraph 60 of the committee's minutes for its meeting on 18 September 1997 said under the heading

Introductory Tenancies:

"The Director of Housing and Environmental Health reported on a proposal to commence introductory tenancies to protect existing tenants from anti-social behaviour and breaches of tenancy conditions caused by a minority of new tenants.

Agreed that:

(a) The Director of Housing and Environmental Health be authorised:

(i) To implement introductory tenancies on a trial basis for one year to be monitored by the Housing Managing sub-committee.

(ii) In consultation with the chairman and vice-chairman of the committee, the determined discretionary rights for introductory tenants in accordance with part (v) of the Housing Act 1996.

(b) A further report to be submitted to this committee in 6 months."

10. Over the next 12 months, there was extensive consultation on the terms of the respondent's new tenancy agreement, which incorporated introductory tenancies. The new tenancy conditions were finalised in September 1998, and were sent to all the respondent's tenants to come into force on 9 November 1998.

Discussion

11. It is unnecessary to rehearse the events after 18 September 1997 in any detail, because Mr Colville on behalf of the appellant accepts that the committee's agreement on 18 September 1997 "to implement introductory tenancies on a trial basis for one year to be monitored by the housing management sub-committee" was an election to operate an introductory tenancy regime for the purposes of sub-section 1 of section 124.
12. At the heart of his case is the submission that, properly interpreted, the minute of 18 September 1997 meeting establishes that the committee elected to operate an introductory tenancy regime for a trial period of one year only, after which period the regime would cease to operate unless there was a further election to extend the operation of the regime. The judge rejected that submission, and in my judgment he was right to do so. For my part, I would accept that if the words of the minute are read in isolation, a decision to implement introductory tenancies "on a trial basis for one year" could be interpreted as a decision to operate an introductory tenancy regime for a finite period of one year only.
13. However, Mr Colville rightly accepts that the words in the minute should not be read in isolation but must be read in context. He further accepts that the relevant factual and a legal context in this case includes both the Director's report to the committee and the statutory framework contained in section 124, which enabled the committee to revoke an election once made at any time, see sub-section (5) of section 124. The Director had advised the committee that the most prudent approach "would be to try the adoption of introductory tenancies closely monitored by the housing management sub-committee with the full report on the effect after the first year of operation."
14. Pausing there, the Director was not advising the committee that they should elect to operate an introductory tenancy regime for a period of one year only. He was advising the committee to elect to operate an introductory tenancy regime that would be closely monitored by the housing management sub-committee with a full report on the effects of the new regime after the first year of its operation.
15. The words "after the first year of operation" suggest that, subject to the possibility of revocation in the light of the full report after the first year, there would be subsequent years of operation of the regime. Mr Colville drew our attention to the words of the Director's recommendation that he be "authorised to implement introductory tenancies on a trial basis of one year with monitoring being undertaken by the housing management sub-committee."
16. It will be noted that the Director did not ask for authorisation to implement introductory tenancies "for a trial period of one year." He was asking for authorisation to implement introductory tenancies "on a trial basis of one year." In any event, the director's recommendation must be interpreted in the context of his report as a whole. If that is done, it is clear that by referring to a "trial basis of one year" the Director was not seeking the committee's authorisation to operate the introduction tenancy regime for a period of one year only. He was seeking authorisation to operate the introductory tenancy regime on the basis that it would be monitored by a housing management committee for a trial period of a year. After which, there would be a report to the committee.
17. In the context of a statutory scheme which permitted the committee, once it had elected to operate an introductory tenancy regime, to then revoke its election at any time, that is in my judgment the obvious interpretation of the director's recommendation in the light of his earlier advice to the committee. If the monitoring of the regime by the sub-committee during the trial period of one year revealed the regime was not working as it was intended then there would be a report to the committee, which could then revoke its election to implement the regime.
18. If one turns against this background to the minute, there is no suggestion that the committee disagreed with the Director's recommendation. On the contrary, the committee granted the Director precisely the authorisation that he had sought in his report, namely to implement introductory tenancies on a trial basis for one year to be monitored by the housing management sub-committee.
19. There is no reason to believe the committee, in accepting the director's recommendation, was using his words "on a trial basis (of) for one year" in any different sense. The introductory housing regime was to be implemented "on a trial basis for one year" because, for the first year of its operation, it was to be monitored by the sub-committee which would report any concerns to the committee which could then revoke its election to operate the regime if it thought it appropriate to do so. Although Mr Colville laid considerable stress on the words "on a trial basis" in the committee's minute of 18 September 1997, it seems to me that the inclusion of those words in the minute does not support his case, which would have been stronger if the minute had simply recorded the committee's agreement to authorise the Director "to implement introductory tenancies for one year."
20. The fact that the Director had sought authorisation to implement introductory tenancies "on a trial basis" and the committee had granted him that authorisation requires one to consider the Director's report in order to understand what it was that he was seeking authorisation to implement. For the reasons that I have given I am satisfied that the Director was not seeking (and was not granted by the committee) authorisation to implement an introductory housing regime for a period of one year only.
21. He was asking for, and received, authorisation to implement the regime on the basis that its first year of operation would be monitored by a sub-committee so that if concerns emerged they could be taken back to the committee which could then revoke its election if it thought it appropriate to do so. Although there were two other grounds of appeal Mr Colville conceded that if his first ground of appeal failed then those other grounds of appeal did not arise.

Conclusion

22. I would dismiss this appeal.
23. LADY JUSTICE GLOSTER: I agree.
24. THE MASTER OF THE ROLLS: I also agree.