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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Royal Borough of Kensington and Chelsea v. Khan & Wellcome Trust [2001] EWHC Ch 411 (8th June, 2001)
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Cite as: [2001] EWHC Ch 411
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Royal Borough of Kensington and Chelsea v. Khan & Wellcome Trust [2001] EWHC Ch 411 (8th June, 2001)
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IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION |
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CH 2001 PTA 0036
(HC 1999 03227)
Royal Courts of Justice
Strand
London WC2A 2LL
Friday, 8 June 2001
Before
MR JUSTICE LAWRENCE
COLLINS
Between
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THE
ROYAL BOROUGH OF KENSINGTON AND CHELSEA
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Claimant/Respondent | ||
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and |
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(1)
AMANULLAH KHAN |
Defendant/Appellant |
JUDGMENT
(Approved by the Court for handing down)
Mr Clive Jones
(instructed by the Legal Services Department, Royal Borough of Kensington and
Chelsea) appeared on behalf of the Claimant/Respondent.
Mr Aditya
Kumar Sen (instructed by CM Atif & Co) appeared on behalf of the First
Defendant/Appellant.
Hearing: 4 May 2001
Mr Justice Lawrence Collins
I Introduction
1. Under legislation now consolidated in the Housing Act 1985 a local authority may serve on the person having control of premises a notice requiring repairs to be undertaken in respect of houses which are unfit for human habitation, or in a state of serious disrepair, or, in the case of houses in multiple occupation, requiring works to be done (including the provision of means of fire escape). The legislation empowers the local authority to effect the work itself in the case of non-compliance, and to recover the cost of so doing. It also imposes a statutory charge on the premises to secure those costs and interest. This case raises a short point of some practical significance on the limitation period applicable to the enforcement by a local authority of the statutory charge. This is an appeal, with the permission of Park J., by Mr Amanullah Khan ("Mr Khan") from a decision of Master Price that the proceedings by the local authority for possession were not statute-barred.
II The facts
2. On July 30, 1999 the Royal Borough of Kensington and Chelsea ("the local authority") commenced proceedings seeking an order for possession of 215 Brompton Road, London SW3 ("the premises"). Mr Khan has a lease of the premises (for less than 21 years) which is split into 15 dwellings. The Wellcome Trust is the freeholder and this appeal does not involve it.
3. On November 17, 1982 the local authority served 4 notices on Mr Khan in relation to the property requiring him: (1) pursuant to section 9(1A) of the Housing Act 1957 to execute works, on the ground that substantial repairs were required to bring the premises up to a reasonable standard; (2) pursuant to section 14(1) of the Housing Act 1961 to execute works so as to comply with the Housing (Management of Houses in Multiple Occupation) Regulations 1962; (3) pursuant to section 15(1) of the Housing Act 1961 to execute certain works on the basis that the premises were unsuitable for multiple occupation; and (4) pursuant to Housing Act 1980, Sched. 24, para.2, to carry out fire escape works.
4. Mr Khan did not comply with the notices and the local authority carried out the work at a cost of about £100,000 (including VAT), of which Mr Khan paid about half in February 1987. The local authority made a written demand on July 13, 1987 for reimbursement of the balance of the expenses incurred by them, £49,963.67. Mr Khan commenced proceedings in the High Court in September 1989 to challenge the validity of the 1987 demand. The proceedings were dismissed for want of prosecution in April 1998. He also appealed in the West London County Court against the demand, long after the 21 day limit and long after the demand had become operative, which partially overlapped the High Court proceedings and also challenged the quality of the work carried out and the quantum of the expenses. That appeal was struck out in May 1998. The amount due to the local authority falls to be reduced by compensation due to Mr Khan in respect of a control order made in 1996 in relation to the premises under the Housing Act 1985.
III The issue
5. Mr Khan's position is that the proceedings are out of time because the action is subject to a 6 year time bar under section 9 of the Limitation Act 1980, or a 12 year time bar under sections 15 and 20, and in each case time began to run from the date on which the works were completed, namely early 1987. The local authority's position is that the 12 year period under section 15 of the Limitation Act 1980 is the relevant period, and that time began to run when the local authority became entitled to enforce the charge, namely 21 days from the date of deemed service of the 1987 demand, and that time began to run therefore on August 5, 1987. Consequently, according to the local authority, the proceedings are not statute-barred.
IV The Housing Acts
6. Until the legislation was consolidated in the Housing Act 1985, the remedies available to the local authority for the purposes of this appeal fell into two categories, the first in relation to notices to repair under the Housing Act 1957, and the second in relation to notices to execute works to houses in multiple occupation, including the provision of means of escape from fire, under the Housing Act 1961, as amended by the Housing Act 1964, and under the Housing Act 1980. One of the notices served on Mr Khan related to the former, and the three others related to the latter.
Housing Act 1957
7. The relevant provisions of the Housing Act 1957 are as follows:
(a) where a local authority is satisfied that a house is in such a state of repair that, although it is not unfit for human habitation, substantial repairs are required to bring it up to a reasonable standard, having regard to its age, character and locality, it may serve upon the person having control of the house, a notice requiring him, within a reasonable period (not being less than 21 days), to execute the works specified in the notice: section 9(1A);
(b) if the notice is not complied with, the local authority may themselves do the work: section 10(1);
(c) the expenses of the local authority in executing the work may be recovered by it, by action or summarily as a civil debt, from the person having control of the house, together with interest from the date when a demand for the expenses was served, at a reasonable rate determined by the local authority: section 10(3), as amended by the Local Government, Planning and Land Act 1980, Sched. 6, para. 7;
(d) in summary proceedings the time within which proceedings may be taken runs from the date of service of the demand (section 10(4)) (but no such provision is made in relation to proceedings other than summary proceedings); and
(e) the demand is operative on the expiration of 21 days from the date of service of the notice if no appeal is brought under section 11 (which provides for appeals to be brought within 21 days of service of the demand): section 37(1).
8. Section 10(7) provides:
"The amount of any expenses and interest thereon due to a local authority under this section shall be a charge on the premises in respect of which the expenses were incurred, and the local authority shall for the purpose of enforcing that charge have all the same powers and remedies under the Law of Property Act, 1925, and otherwise as if they were mortgagees by deed having powers of sale and lease, of accepting surrenders of leases and of appointing a receiver."
Housing Act 1961, as amended by Housing Act 1964 and the Housing Act 1980
9. The effect of the relevant provisions is as follows:
(a) the local authority may serve notices on a person managing a house in multiple occupation notices to effect works within not less than 21 days from service of the notice if (i) the condition of the house is defective by reason of a failure to comply with the Housing (Management of House in Multiple Occupation) Regulations 1962; or (ii) the condition of the house is defective with respect to such matters as lighting, ventilation, water supply, drainage etc. or (iii) if the house is not provided with necessary means of escape from fire: Housing Act 1961, sections 14(1), (3) and 15(1), (3), and Housing Act 1980, section 147 and Sched. 24, para. 2;
(b) if the notice is not complied with, the local authority may do the work: Housing Act 1961, section 18(1); and
(c) the expenses of the local authority reasonably incurred in executing the work may be recovered by it by action, from the person on whom the notice was served, together with interest from the date when a demand for the expenses was served, at a reasonable rate determined by the local authority: Housing Act 1961, section 18(3), Local Government, Planning and Land Act 1980, Sched. 6, para. 7.
10. Section 64 of the Housing Act 1964 provides:
"(1) Subject to this section, any expenses recoverable by a local authority under section 18(3) of the Act of 1961 (default powers of local authority as respects work to be carried out under Part II of that Act) together with interest accrued due thereon, shall, until recovered, be a charge on the premises to which the notice relates and on all estates and interests therein.
(2)....within twenty-one days from that date [the date of service of the demand] any person may appeal to the county court against the demand...
(3) Until the demand becomes operative in accordance with this section the charge under subsection (1) of this section shall not take effect, ...
(4) Any such demand shall, if no appeal is brought under this section, become operative on the expiration of twenty-one days from the date of service of the demand on the person on whom the relevant notice was served; and any such demand against which an appeal is brought shall, if and so far as it is confirmed on appeal, become operative on the final determination of the appeal."
Housing Act 1985
11. As a result of the transitional provisions of the Housing Act 1985, it does not apply to this appeal, but for the sake of completeness, I set out here the principal provisions equivalent to the legislation set out above:
(a) the local authority has the equivalent powers to require works to be done under sections 190, 352 and 372, and to effect the works itself under sections 193 and 375;
(b) the expenses are recoverable by the local authority upon a demand, which becomes operative on the expiry of 21 days from the date of service, together with interest (at such reasonable rate as the local authority may determine) from the date of service until payment: Sched. 10, paras. 2,3, and 4.
12. By Sched. 10, para. 7:
"(1) The expenses recoverable by the authority, together with the interest accrued due, are, until recovered, a charge on the premises to which the notice related.
(2) The charge takes effect when the demand for the expenses and interest becomes operative.
(3) The authority have for the purpose of enforcing the charge the same powers and remedies under the Law of Property Act 1925 and otherwise, as if they were mortgagees by deed having powers of sale and lease, of accepting surrenders of leases and of appointing a receiver."
V Limitation Act 1980
13. In Swansea City Council v. Glass [1992] Q.B. 844 the local authority served notices under the Housing Act 1957 requiring a house to be put into proper repair. When the notices were not complied with, the local authority did the work itself, and served written demands for the expenses. The work was completed by April 1984, the demands were served on May 31, 1984 and April 25, 1985, and proceedings for recovery of the expenses were commenced on May 30, 1990, which was more than six years after completion of the works but less than six years from the date of service of the demands. The action in the county court for recovery of the expenses was held to be time-barred. The reason was that the requirement to serve a demand was a procedural condition precedent to the bringing of the action and was not an inherent element in the cause of action. Taylor L.J. said (at 852-3):
"Section 10(4) provides expressly that where the local authority opts to take summary proceedings to recover their expenses, the limitation period runs from the date of service of the demand or, if there is an appeal, the date when the demand becomes operative. Again, by implication, since no such provision is applied to proceedings in the High Court or county court, time in those proceedings does not run from the date when the demand is served or becomes operative. It will run from the accrual of the cause of action which, ex hypothesi, is a different time.
The rationale of the distinction between summary and other proceedings probably lies in the respective limitation periods. In summary proceedings the period is six months. If time were to run from the accrual of the cause of action, i.e. when the expenses were incurred, summary proceedings might often be statute-barred before they could be brought, especially where there was an appeal against the demand. In other proceedings, however, the limitation period of six years gives, or should give, the local authority ample time to sue even after an appeal against their demand. In my judgment, the expression, special to section 10(4), that time runs from service of the demand or when it becomes operative, is intended to distinguish summary proceedings from other proceedings. Inclusio unius, exclusio alterius. In other proceedings, time runs from the accrual of the cause of action, i.e. when the four elements identified above are complete. Thus, I conclude that the requirement to serve a demand is a procedural condition precedent to bringing proceedings. It is not part of the cause of action.
I am fortified in this view by consideration of what could result if the local authority were right. Upon their argument, the local authority could delay service of a demand indefinitely. Then, having served their demand long after the works were complete, they would have a further six years in which to take proceedings in the High Court or the county court."
14. So also in Hornsey Local Board v. Monarch Investment Building Society (1890) 24 Q.B.D.1 (C.A.) it was held that the cause of action by the local authority to recover paving expenses under the Local Government Act 1858 accrued at the date of the completion of the works and not from the later date when the expenses were apportioned between those whose premises fronted on the street. The decision rested on the fact that the statutory charge was imposed when the expenses were incurred, and the legislation should not be construed so as to give the local authority power to extend the limitation period by delaying the apportionment. Lopes L.J. said (at 11):
"When, then, does the right accrue to the person or persons in whose favour the charge is imposed to receive the amount secured by the charge? It appears to me that it accrues the moment the charge is imposed on the premises by the statute, that is when the expenses have been incurred and the work completed. It may be that certain things have to be done before the right can be enforced, but the right to receive what is secured by the charge arises concurrently with the charge."
15. The parties diverge on which sections of the 1980 Act are applicable on this appeal. Each accepts that section 15(1) is potentially relevant. It provides:
"No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person."
16. But, in order to support his argument that time ran from completion of the works, Mr A.K. Sen, for Mr Khan, also relies on section 9, which enacts a 6 year limitation period for actions "to recover any sum recoverable by virtue of any enactment" (which was the relevant provision in Swansea City Council v. Glass); and he relies on section 20(1) which provides that no action shall be brought to recover any principal sum of money secured by a mortgage or other charge on property after the expiration of 12 years from the date on which the right to receive the money accrued (which was in substance the provision in issue in Hornsey Local Board v. Monarch Investment Building Society), and section 20(5) which provides for a six year period for arrears of mortgage interest.
17. These proceedings are to recover the premises by an action for possession, and are not proceedings to recover sums recoverable under the Housing Acts, or to recover the principal sum secured by the statutory charge. The same considerations apply to an action by a mortgagee for possession. The limitation provisions relating to mortgages and other charges relate only to the recovery of money secured by a charge and do not affect any proceedings which a mortgagee has a right to take for obtaining possession of the property itself: see Halsbury's Laws of England, vol. 28, para. 1005. In Holmes v. Cowcher [1970] 1 W.L.R. 834, a decision on what is now section 20(5) of the 1980 Act, Stamp J. approved a passage in Megarry and Wade, Law of Real Property, which now appears in the current edition (6th ed. Harpum, 2000) at p. 1335:
"There is also a six years' period for any action for arrears of mortgage interest. But a mortgagee who exercises his power of sale may retain all arrears of interest, however old, out of the proceeds of sale for this is not recovery by action ...."
18. In my judgment, therefore, the only relevant provision is section 15. The sole question, accordingly, is the date on which the right of action to recover the land accrued. In the case of a legal mortgage (and also in the case of a legal chargee: Law of Property Act 1925, s.87), the mortgagee prima facie has a right of entry on the execution of the mortgage and so time may run prima facie from the date of execution of the mortgage; but if the mortgagee's right to possession is qualified, time begins to run from default on the date fixed for payment: see Fisher and Lightwood, Law of Mortgage, 10th ed. Tyler, 1988, p.297.
19. The Housing Acts impose a statutory charge subject to the terms of the legislation. The Housing Act 1957 provides that "the amount of any expenses and interest thereon due to a local authority...shall be a charge on the premises in respect of which the expenses were incurred" (section 10(7)), and similar words in the Public Health Act 1875 and earlier legislation were held in Hornsey Local Board v. Monarch Investment Building Society (1890) 24 Q.B.D.1, to have the effect that the statutory charge arises when the expenses have been incurred and the works completed. The demand for payment becomes operative on the expiration of 21 days from the date of service of the demand.
20. The Housing Act 1961, as amended by the Housing Act 1964, provides that (a) the "expenses recoverable by a local authority...together with interest accrued thereon shall, until recovered be a charge on the premises" (1964 Act, s.64(1)); (b) the demand becomes operative on the expiration of 21 days from the date of service of the demand (s.64(4)); (c) "Until the demand becomes operative...the charge...shall not take effect" (s.64(3)); and (d) the local authority has, for the purpose of enforcing the charge, the same powers and remedies under the Law of Property Act 1925 and otherwise as if it were a mortgagee by deed having powers of sale and lease, of accepting surrenders of leases and of appointing a receiver, and the power to appoint a receiver arises after the expiration of one month after the charge takes effect (1961 Act, s.18(5), as amended by 1964 Act, s.64(3)). The Housing Act 1985, Sched.10, paras.3 and 7 also have the effect that (a) the expenses are to be a charge; and (b) the charge takes effect when the demand becomes operative on the expiry of 21 days from service.
21. In my judgment the position with regard to the 1961 Act (and therefore also the current Housing Act 1985) is plain on its face. The charge does not take effect until the demand becomes operative and time cannot therefore begin to run for the purposes of an action for possession until 21 days after service of the demand. This is not a case like Swansea City Council v. Glass, in which the service of the demand was held to be a purely procedural bar which did not affect the prior accrual of the cause of action for expenses. The enforceability of the charge is made conditional on the demand becoming operative, and it does not take effect until that date. In my view that is also implicit in the scheme of the 1957 Act, which contains no provision for when the charge is to take effect but is explicit that the demand is operative on the expiry of 21 days after service.
22. I therefore dismiss the appeal.
© 2001 Crown Copyright