Scottish Court of Session Decisions

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2016] CSIH 90

XA6/16

Lady Paton

Lord Malcolm

Lord McGhie

OPINION OF THE COURT

delivered by LORD McGHIE

in the cause

FALKIRK COUNCIL

Pursuers and Respondents

against

DONALD GILLIES

Defender and Appellant

Pursuers and Respondents:  Stalker, Brodies LLP

Defender and Appellant:  Anderson, Drummond Miller LLP

9 December 2016

[1]        The appeal in this case turned on a short point.  The respondents, a local housing authority, entered an occupancy agreement with the defender.  He failed to pay rent and they gave notice to bring the occupancy to an end.  They did not give the notice required to comply with the statutory provisions relating to termination of Scottish secure tenancies but contended that the agreement was governed by separate provisions relating to temporary agreements.  They did not dispute that, for the purposes of the Housing (Scotland) 2001 Act,  the agreement would fall to be treated as a secure tenancy if it did not contain an express provision saying that it was for a term of less than six months.  The sheriff held that there was no such provision.  The sheriff principal was persuaded that there was.  As will appear, we have concluded that the agreement could not properly be viewed as including such an express provision.  It is unnecessary for us to set out the appellant’s submissions which were, of course, to that effect.

 [2]       It was not disputed that the respondents could not succeed unless the agreement fell within the provisions of paragraph 5 of Schedule 1 of the Act.  The relevant provision of Schedule 1 provides that:

"A tenancy is not a Scottish secure tenancy if the house is being let to the tenant expressly on a temporary basis, for a term of less than 6 months, in fulfilment of a duty imposed on a local authority by Part II (homeless persons) of the [Housing (Scotland) Act 1987]"

[3]        It was agreed by the parties that the term “expressly” applied to  each of the specified requirements.  Reference was made to the decision of Sheriff Principal Taylor in Nisala v Glasgow City Council 2006 Hous LR 66.  It was agreed that there was adequate reference to the temporary nature of the agreement and that it was entered in fulfilment of the respondents' statutory duty.  The dispute related solely to the term.

[4]        The respondents’ main contention was that adequate expression of the term was to be found under heading 1.4 of the Occupancy Agreement.  That provided as follows:

“1.4     The Occupancy Agreement will take effect from 9 December 2009 and will continue on a fortnightly basis until the Council has carried out a full investigation of your housing circumstances and, depending on the outcome of that investigation has provided you with an offer of secure permanent accommodation or given you a reasonable opportunity to secure alternative accommodation. You will be given 28 days notice when the Occupancy Agreement is being terminated as set out in part 5 of this agreement.”

[5]        Their contention was that the phrase “on a fortnightly basis” was equivalent to an express reference to the agreement being for a term of two weeks.  They also referred to the opening sentence of clause 1.5 which provided:  “The total charge for this accommodation is £304.12 per fortnight, payable in arrears, on the last day of each rental period.”  It was submitted that the term “rental period” was synonymous with “term” or “duration” and that specifying that the rent was “£304.12 per fortnight”, payable on the last day of “each rental period”, plainly indicated that the rental period or term was a fortnight. 

[6]        For the respondents, Mr Stalker’s careful submission included reference to the implications of the various responsibilities placed on them under the Housing legislation.  There was a well-understood system in place for determining the allocation of secure tenancies.  Although they had a duty to offer a permanent tenancy to people in temporary accommodation, such people could not be forced to go to unsuitable subjects.  With the best will in the world, it was often more than a year before the investigation of the circumstances could lead to an offer of suitable permanent housing being made.  The draftsman of the agreement had clearly tried to find words which would give the tenant proper notice of the various protections he had.  For example, the provision in the agreement that the tenant was entitled to no less than 28 days’ notice was included because of the provisions to that effect in section 112 of the Rent (Scotland) Act 1984.  There were many similar agreements within the respondents’ jurisdiction.  If the defender was correct it would give rise to considerable practical difficulty for the respondents’ housing administration.

[7]        We do not doubt that the statutory provisions give rise to drafting difficulties.  It was not disputed that the statutory provision had a plain meaning and that no question of resort to other material to determine Parliament’s intention was required.  However, it was noted that the matter had previously been governed by the provisions of the Housing (Scotland) Act 1987 where the comparable provision had been in the following terms:  “A tenancy shall not be a secure tenancy if the house is being let to the tenant expressly on a temporary basis in the fulfilment of a duty imposed on a local authority by Part II [of the Housing (Scotland) Act 1987.”   

[8]        It is unnecessary for us to embark on a detailed examination of the reasoning of the sheriff or the sheriff principal and there is no need for any elaborate exposition of the word “expressly”.  Whatever precise meaning that word may have in different contexts, the intention of Parliament, in the present context, must have been to require something which drew the attention of the tenant to the fact that the term was to be for a period of less than six months.  We accept that the provision does not require use of the actual words “term of less than six months”.  But we are satisfied that it is necessary to find some wording with equivalent effect stating that the duration of the agreement is for some explicit period which does not exceed six months or that occupancy is to come to an end at some point within six months.  Such a provision would not preclude express reference to the possibility of a further agreement allowing occupancy to continue after that period.

[9]        It seems to us that the most obvious meaning to be taken from the expression “will continue on a fortnightly basis” is not that the agreement had a term of a single fortnight but that the right to occupancy would continue indefinitely from fortnight to fortnight.  Something further would be needed to show when that right was to end.  In the present case, the relevant provision follows immediately.  The parties’ express agreement was that the occupancy agreement would continue until the council had carried out a full investigation.  There was no qualification of the time they were expected to take to do that.  The reference to a fortnight can readily be understood as relating to the period in respect of which the rent was measured.

[10]      Mr Stalker’s explanation of the background to the agreement simply tends to show that this express provision did indeed reflect the agreement which the parties understood that they were entering.  The respondents were providing temporary accommodation which would continue until their investigation into the occupant’s housing circumstances was concluded.

[11]      A reference to an agreement continuing fortnightly is plainly not the same as an express provision that the agreement is only to last for a fortnight.  Lawyers might argue over precisely what the legal effect of the former could be but the tenant would understand that the right of occupation which he was being given under the agreement was not to terminate at the end of each fortnight.  The agreement does not purport to set out a mere expectation of a fresh agreement at the end of each period.  It narrates an agreement that occupation will continue.  The substantive agreement, explicitly set out, is that his occupancy will continue until the respondents have done certain things.  There is nothing to hint that this was to be completed within six months far less any express provision to that effect.

[12]      We do not accept that a “rental period” is synonymous with “term” or “duration”.  We consider that in its everyday use this expression is understood to relate to the period in respect of which instalments of rent are due.  In any event, that is the context in which it appears in clause 1.5.

[13]      It could be added that the parties’ understanding is reflected in several other provisions of the agreement.  The tenant was told explicitly that there were two “rent free” fortnights every year.  The words “rent free” in quotations might well be taken to be intended to indicate to him that in calculating the total rent he was to pay he could allow for such periods.  He was also told that the council could change the rent provided four weeks’ notice was given and that they would not normally change more than once every 12 months.  In terms of clause 5.1 the respondents had to give 28 days’ notice if they intended to terminate the agreement.  This was the only express provision about termination.  It did not attempt to define the circumstances in which notice could be given.

[14]      In short, we are not persuaded that this agreement can be read as containing any express provision which could properly be regarded as indicating, far less saying, that the appellant’s right of occupancy is to be for a term of less than six months.  The appeal succeeds on that basis.

[15]      For completeness, we note that in the grounds of appeal the appellant set out an alternative case based on the timing of the notice to quit.  It was contended that any notice required to reflect the ish date.  The notice in this case required Mr Gillies to remove before noon on a Tuesday when the agreement had started on a Wednesday.  However, this notice was served because of a failure to pay rent.  Such notices are not constrained by reference to an ish.  The appellant did attempt to advance an argument that such a notice fell to be treated as a notice of irritancy and that it did not comply with relevant procedure relating to irritancies.  However, this was an appeal by way of Stated Case to the sheriff principal and her certification of the case as suitable for appeal to this court was based solely on the issue of construction of the occupancy agreement and of the provisions of section 11 and Schedule 1 of the Housing (Scotland) Act 2001.  We have not been persuaded that there is any justification for our considering any new and separate argument based on the terms of the notice, and in light of our conclusion on the main issue it is unnecessary for us to do so. 

[16]      We also note that the respondents had an argument based on the proposition that the grant of a secure tenancy was ultra vires.  This proposition did not appear to be supported by the decision in the English case of Birmingham City Council v Qasim  [2010 HLR 19 to which reference was made but, in any event, Mr Stalker did not attempt to advance it before us, reserving the possibility of a separate action of reduction.

[17]      We sustain the appeal.  The interlocutor of the sheriff of 9 September 2015 giving effect to the decision of the sheriff principal dated 18 December 2014 falls to be recalled.  The decision of the sheriff of 8 October 2014 will accordingly stand.