England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT SITTING AT CENTRAL LONDON
HH JUDGE LAMB QC
2WT00757

		Royal Courts of Justice Strand, London, WC2A 2LL
		31st July 2015

Lord Justice Patten :

1. This is an appeal by Mrs Tompkins against an order of HH Judge Lamb QC dated 26 September 2014 declaring that she and her husband hold the property at 230 Southcroft Road, London, SW17 ("the Property") under a non-secure tenancy. The appellant's case is that she and Mr Tompkins were granted by the London Borough of Wandsworth ("the Council") an introductory tenancy of the Property pursuant to s.124 of the Housing Act 1996 ("HA 1996") which has now become a secure tenancy. The Council's case, in short, is that this was a legal impossibility in the circumstances in which the tenancy was granted and that Mr and Mrs Tompkins have never enjoyed more than a non-secure tenancy granted to them pursuant to the Council's interim duty under s.188 HA 1996 to provide accommodation to them as homeless persons in priority need.
2. In order to understand how this issue has arisen, it is necessary to refer to the background history which I can do relatively shortly.
3. In November 2010 Mr and Mrs Tompkins and their four children vacated the property they were occupying in North London following various acts of violence by one of their neighbours. They went to live at the home of Mr Tompkins's grandmother in Streatham, SW16. She had died shortly before and Mr Tompkins made an application to succeed to her tenancy of the premises. This was unsuccessful and in April 2011 the family were evicted and applied to the Council for accommodation on grounds of homelessness. The Council, whilst not accepting that they owed to Mr and Mrs Tompkins the full housing duty under s.193 HA 1996, were satisfied that they qualified for temporary accommodation pursuant to the interim duty under s.188. They were therefore housed in bed and breakfast accommodation at the Trochee Hotel in Wimbledon whilst the Council considered the position.
4. On 6 May 2011 the Council made a decision under s.184 HA 1996 that Mr and Mrs Tompkins were intentionally homeless. The Council was asked to review this decision and by 2 June 2011 had decided to quash the decision. But it continued to investigate whether it had been reasonable for the family to continue to occupy their former home in North London: see s.191(1) HA 1996.
5. By this time the Council was becoming concerned about the length of time Mr  and Mrs Tompkins had occupied their accommodation at the Trochee Hotel (in all about 9 weeks) and offered them accommodation at 95 Danebury Avenue which Mrs Tompkins says she rejected because of the condition of the property. About a week later the Council offered to accommodate them at the Property which they viewed on 28 June 2011.
6. As I mentioned earlier, the Council, having revoked its decision of 6 May 2011, continued to investigate the question of intentional homelessness. In a letter to a housing advice association (Threshold Housing Advice) of 2 June 2011 informing them of the decision to revoke, the Council told them that it was treating the application by Mr and Mrs Tompkins as an ongoing homelessness application, which it clearly was. In its letter to Mr and Mrs Tompkins of 21 June 2011 offering to accommodate them at the Property, the Council said that it was:

"now able to provide you with alternative temporary accommodation in accordance with its duties under the Housing Act 1996 (Part VII), as amended.

…

You have the right to request a review of the suitability of this offer irrespective of whether you wish to accept or refuse it. If you have concerns about the offer you should advise the accompanying officer at the viewing. You may request such a review any time up until 21 days from the date of receipt of this letter. If you request a review upon either acceptance or refusal, you will need to provide reasons why you feel the offer is unsuitable or why you feel that it is not reasonable for you to accept it".

7. Part VII, of course, contains the homelessness provisions. The letter of 21 June was signed by Mrs Bernadello, the Council's Temporary Accommodation Manager.
8. Mr and Mrs Tompkins liked the Property when they inspected it on 28 June and were told to go to the housing department at Wandsworth Town Hall to sign the tenancy agreement, which they did later that day. The document which they were given to sign was the appropriate form for the grant of an introductory tenancy. It was headed : "Grant of Introductory Tenancy"; contained the address of the Property and details of the rent and other outgoings; and then, at the bottom of the form, included a "Certificate of Acceptor(s)" signed by Mr and Mrs Tompkins containing the following terms:

"I/We accept that I am/we are jointly responsible for complying with all of the Tenancy Conditions, including the payment of rent. I/We understand that the tenancy will become a secure tenancy at the end of the trial period unless:

1. The tenancy has ceased to be an introductory tenancy before that date.

2. Court proceedings for possession have been issued by the Council; or

3. The tenancy has been terminated (e.g. by a Court Order for Possession)."

9. Mrs Tompkins took the tenancy agreement to Threshold Housing which had previously advised them on their homelessness application. They advised her that, on the basis that they had been granted an introductory tenancy, she and her husband were no longer homeless and should withdraw their homelessness application. Threshold Housing also contacted the Council to obtain a copy of the s.184 decision on homelessness to enable them to close their file on the application.
10. As a result of this, the Council e-mailed Threshold Housing Advice on 11 July 2011 to say that Mr and Mrs Tompkins had not been offered an introductory tenancy and that the Property had been provided as temporary accommodation pending further inquiries on the issue of intentional homelessness. Later, in a letter of 12 September, the Council said that the introductory tenancy form had been used in error and that Mr and Mrs Tompkins should have been granted a non-secure tenancy of the Property pending the completion of the s.184 inquiry.
11. Regardless of the merits of the dispute about the nature of the tenancy which it had granted, the Council could have resolved the situation by serving notice of proceedings and then commencing proceedings for possession within the 12 month trial period commencing on the grant of the tenancy: see s.127-129 HA 1996. The Council served notice of possession proceedings on 21 May 2012 but did not issue the claim for possession until 4 July 2012; one day too late. As a result of this, the Council was not able to seek possession based solely on the s.128 notice of proceedings but, instead, amended the claim form and the particulars of claim to plead that, by virtue of s.124(2) HA 1996 and Schedule 1, paragraph 4, of the Housing Act 1985 ("HA 1985"), the tenancy granted on 4 July 2011 was incapable at law of taking effect as an introductory tenancy.
12. It is convenient at this stage to set out the statutory provisions referred to in the pleadings. So far as material, s.124 HA 1996 (which is contained in Part V of HA 1996) provides:

"(1) A local housing authority or a housing action trust 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 or trust shall, if it would otherwise be a secure tenancy, be an introductory tenancy,…"

13. The question whether the tenancy would otherwise be a secure tenancy is determined by reference to s.79 HA 1985. This provides:

"(1) A tenancy under which a dwelling-house is let as a separate dwelling is a secure tenancy at any time when the conditions described in sections 80 and 81 as the landlord condition and the tenant condition are satisfied.

(2) Subsection (1) has effect subject to—

(a) the exceptions in Schedule 1 (tenancies which are not secure tenancies),…"

14. It is common ground that the landlord and tenant conditions (which are dealt with in ss.80 and 81 HA 1985) were satisfied in this case but the Council relies on one of the exceptions in Schedule 1, paragraph 4, which states:

"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."

15. The Council's case, shortly stated, is that the tenancy granted to Mr and Mrs Tompkins on 4 July 2011 was a tenancy granted in pursuance of its Part VII homelessness function; in particular the interim duty under s.188 HA 1996. It was not and could not therefore have been a secure tenancy unless the notification referred to in paragraph 4 had been given. As the tenancy would not therefore have been a secure tenancy but for it being an introductory tenancy under s.124, it could not take effect as an introductory tenancy either and the grant therefore operated to confer on Mr and Mrs Tompkins a non-secure tenancy.
16. In their amended defence the appellants aver that the tenancy took effect as an introductory tenancy because the notification required under Schedule 1, paragraph 4, HA 1985 was provided by the certificate contained in the tenancy form which they signed.
17. The judge held that the tenancy was granted pursuant to the Council's homelessness functions and that the certificate did not amount to a notice under Schedule 1, paragraph 4, because it did not notify the appellants that the tenancy "is to be regarded" as a secure tenancy. It stated that the tenancy "will become" a secure tenancy at the end of the trial period. The judge construed paragraph 4 as requiring the landlord to specify that the tenancy was at the date of grant a secure tenancy: not that it would or might become one in the future. He therefore made the declaration sought.
18. It is important to begin by identifying the nature of the issue between the parties on their pleaded cases. The argument has ranged over a number of issues; the principles of construction applicable to the tenancy agreement; whether an error on the part of the Council in granting an introductory tenancy can invalidate the grant; and whether the grant of an introductory tenancy was ultra vires the Council at the relevant time and therefore void. But, in my view, none of these points properly reflects what the court has to decide. The essential issue is what was the legal effect of the agreement which the parties entered into on 4 July 2011? The answer to this question does not depend on whether one can construe the agreement so as to amount to the grant of a non-secure tenancy nor does it depend on whether the apparent grant of an introductory tenancy was ultra vires the Council's statutory powers or made in error and therefore of no effect. On any view the agreement was effective to give Mr and Mrs Tompkins a tenancy of the Property. It purported to grant a tenancy and it gave them the right to exclusive possession of the Property in return for the payment of rent. Regardless of whether it was granted pursuant to the Council's functions under Part VII HA 1996 or in exercise of the power under s.124, it created a tenancy. But the statutory regime contained in HA 1996 (and so far as relevant) HA 1985 applies to determine what kind of tenancy the agreement created regardless of how the parties chose to describe it in the agreement or even of how they may have intended it should take effect.
19. I accept that, simply in terms of the language used, the tenancy agreement purported to create an introductory tenancy. This is evident not merely from its heading but also from the terms of the certificate I have quoted which summarise the effect of ss.124-129 HA 1996. Mr Evans, for the Council, has not sought to argue either here or in the County Court that, from the context in which the agreement was entered into, the parties must be taken to have contracted for a non-secure tenancy. His case is that, however construed, the legal effect of the agreement depends not on its terms but on the operation of the statutory provisions which govern it.
20. It is again common ground that, as of 4 July 2011, the Council had elected to operate an introductory tenancy regime within the meaning of s.124(1). Mr Manning also accepts that the reference in s.124(2) to every periodic tenancy of a dwellinghouse must apply to the grant of the tenancy by the 4 July agreement. Where the parties divide is in relation to the qualification that the tenancy must be one which would otherwise be a secure tenancy. Mr Manning relies on two principal arguments. The first is the one pleaded in the amended defence that the certificate operated as a notification of a secure tenancy for the purposes of paragraph 4. This is the point considered and rejected by the judge. But, in the alternative, he relies on an argument not raised below which is that the introductory tenancy was granted not pursuant to any of the Council's functions under Part VII HA 1996 but as part of an allocation of housing accommodation under Part VI. So far as he needs to, he submits that the Council's decision to grant the introductory tenancy operated as the selection of Mr and Mrs Tompkins as introductory tenants under s.159(2)(a) HA 1996 with the consequence that ipso facto the tenancy granted became one in respect of allocated housing stock under Part VI. Paragraph 4 of Schedule 1 therefore had no application to the grant regardless of whether the certificate operated as a notification that the tenancy was secure.
21. Part VI HA 1996 is concerned with the allocation of housing accommodation. Section 159 provides:

"(1) A local housing authority shall comply with the provisions of this Part in allocating housing accommodation.

(2) For the purposes of this Part a local housing authority allocate housing accommodation when they—

(a) select a person to be a secure or introductory tenant of housing accommodation held by them,…"

22. The allocation of housing accommodation in accordance with s.159(1) requires the local housing authority to have in place an allocation scheme: s.167(1). This will determine the priorities and procedure for the allocation of the accommodation and the housing authority is required to comply with the scheme in making its allocations: s.167(8).
23. Because the argument that the grant of the tenancy to Mr and Mrs Tompkins involved a Part VI allocation was not pleaded as part of the defence or explored in evidence before the judge, we have no information as to the detail of the Council's allocation scheme as at 4 July 2011. Mr Evans, on behalf of the Council, therefore opposed the attempt by Mr Manning to rely on matters which were never investigated at trial and in respect of which the Council had no opportunity to lead evidence. In my judgment, this objection is well founded but I have reached the conclusion that the Part VI argument does not in fact assist Mr and Mrs Tompkins.
24. The problem about the new argument that this was a Part VI allocation in the form of the selection of Mr and Mrs Tompkins as introductory tenants is that it treats the terms of the grant as sufficient in themselves to establish the premise that this was the grant of an introductory tenancy. The essence of the argument is that because the Council granted an introductory tenancy on 4 July it must follow that this operated as a Part VI allocation and not the discharge of one of the Council's Part VII functions. The problem with this approach is that it assumes the very thing which has to be established by reference to the powers which were exercised. The correct starting point is not the terms of the grant but the nature of the statutory function which the Council was performing. It is only by addressing that question that one can determine the legal effect of what the Council did.
25. It was common ground before the judge that at the time when the tenancy of the Property was granted on 4 July the Council had not yet concluded its investigations into whether Mr and Mrs Tompkins were intentionally homeless. They had an extant homelessness application (which was only withdrawn subsequently on advice) and they were informed by the letter of 21 June 2011 that the Council intended to provide them with temporary accommodation at the Property in accordance with its Part VII duties. In the circumstances, this can only have been its interim duty under s.188 HA 1996.
26. As already explained, a tenancy granted pursuant to a function under Part VII cannot be a secure tenancy unless the notification referred to in Schedule 1, paragraph 4, HA 1996 is given. The averment by Mr and Mrs Tompkins in paragraph 7 of their defence that the certificate in the tenancy agreement operated as such a notification involves a concession that the Council was operating under Part VII rather than Part VI in relation to the tenancy granted on 4 July 2011. But that admission was inevitable in the light of the evidence.
27. Mr Evans accepts that had the issue of intentional homelessness been resolved in appellants' favour before 4 July it would have been possible for the Council to have fulfilled its full s.193 housing duty by making a Part VI allocation of housing. Section 193 HA 1996 provides:

"(1) This section applies where the local housing authority are satisfied that an applicant is homeless, eligible for assistance and has a priority need, and are not satisfied that he became homeless intentionally.

(2) Unless the authority refer the application to another local housing authority (see section 198), they shall secure that accommodation is available for occupation by the applicant.

(3) The authority are subject to the duty under this section until it ceases by virtue of any of the following provisions of this section.

…..

(6) The local housing authority shall cease to be subject to the duty under this section if the applicant—

…..

(c) accepts an offer of accommodation under Part VI (allocation of housing),…."

28. But, as of 4 July 2011, the Council did not owe Mr and Mrs Tompkins a s.193 duty and the tenancy cannot therefore have been granted pursuant to s.193(2). For the same reason, the Council's statutory duty under s.188 was continuing. Mr Manning seeks to avoid this difficulty in various ways. He accepts that the Council had not yet reached the stage of owing a s.193 duty to Mr and Mrs Tompkins. But he says that Parliament has drawn a distinction between the duties in Part VII and those in Part VI HA 1996 and that, even if unintended, the grant of an introductory tenancy took the Council into Part VI thereby in effect by-passing the transition from s.188 to s.193. He also submits that the provision which withholds security of tenure from an introductory tenancy is not paragraph 4 of Schedule 1 HA 1985 but paragraph 1A which states:

"A tenancy is not a secure tenancy if it is an introductory tenancy or a tenancy which has ceased to be an introductory tenancy—

(a) by virtue of section 133(3) of the Housing Act 1996 (disposal on death to non-qualifying person), or

(b) by virtue of the tenant, or in the case of a joint tenancy every tenant, ceasing to occupy the dwelling-house as his only or principal home."

29. Paragraph 1A excepts from being secure those tenancies which are either introductory tenancies or which were introductory tenancies but have ceased to be so in one of the two circumstances there specified. It does not, however, prevent an introductory tenancy from becoming secure in accordance with s.125(1) HA 1996.
30. The real problem with this argument is the one I identified earlier; namely, that it concentrates on the form rather than the circumstances of the grant. Although the Part VI power of allocation is separate from the housing duties under Part VII non sequitur that any purported grant of an introductory tenancy is a Part VI allocation. One still has to resolve the prior question of which powers were being exercised by the Council in making the grant which, as the judge has found, were those under s.188. Issuing the wrong form to the tenant does not ipso facto alter the relevant statutory function. The tenancy was granted pursuant to the Council's duty under s.188. Nor do I accept, if this is what the argument comes to, that the provisions of paragraph 1A in some way exclude the provisions of paragraph 4. It is clear as a matter of authority from the decision of this court in Westminster City Council v Boraliu [2007] EWCA Civ 1339 that the paragraphs of Schedule 1 HA 1985 have to be read as mutually exclusive to and not qualified by each other. Paragraph 1A was added by HA 1996 and merely reproduces the effect of s.124(2). Paragraph 4, on the other hand, which Chadwick LJ in Boraliu described as containing plain words, continues to govern tenancies granted pursuant to a function under Part VII (in this case s.188) which will not be secure tenancies unless the specified notification is given. It therefore provides a quite separate exclusion for the purposes of s.79 HA 1985 and prevents the grant of an introductory tenancy under s.124 in a Part VII case unless notification of security is given.
31. This brings me to the original ground of appeal in relation to whether the certificate of acceptance in the tenancy agreement operated as a paragraph 4 notification. The judge rejected this argument on the basis that the words "is to be regarded as a secure tenancy" required the notice to state that the tenancy would be secure at the date of grant and not merely at some unspecified date in the future. In terms of the construction of paragraph 4, that seems to me to be right but the main reason why I am unable to accept that the certificate functioned as a proper paragraph 4 notification is that, read as a whole and in the context in which it was signed, it cannot amount to a notification by the Council that the tenancy is to be a secure tenancy. The certificate as signed by Mr and Mrs Tompkins is simply an acknowledgement by them of the effect of ss.124-129 HA 1996. It is not any form of notification by the Council whether for the purposes of paragraph 4 or otherwise. As its title suggests, the purpose of the certificate is to provide a statement by the tenants that they have understood the general statutory provisions which govern the grant of an introductory tenancy. It is impossible in my view to read it as anything more. In these circumstances, it cannot be treated as a paragraph 4 notification nor, as the judge pointed out, does it contain the language that would be necessary for that purpose.
32. We were referred to the decision of this court in Saxon Weald Homes Ltd v Chadwick [2011] EWCA Civ 1202 as an example of a case where the landlord served a statutory notice in error but was held to be bound by its terms and effect. But that case concerned a notice under paragraph 2 of Schedule 2A to the Housing Act 1988 which, if effective, converted the tenancy from an assured shorthold tenancy into an assured tenancy and thereby prevented the landlord from obtaining an order for possession without establishing one of the Schedule 2 grounds. The notice was unambiguously a paragraph 2 notice and was not required by the circumstances in which it was sent to be read other than literally. It was also within the landlord's power at the relevant time to serve a notice of that kind. The decision does not, in my view, assist Mr and Mrs Tompkins given the terms of the certificate in this case and the circumstances in which it came to be signed.
33. For these reasons, I am satisfied that the judge was right to make a declaration that the tenancy granted to Mr and Mrs Tompkins is a non-secure tenancy and I would dismiss the appeal.

Lady Justice Gloster :

34. I agree.

Lord Justice Christopher Clarke :

35. I also agree.
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