United Kingdom House of Lords Decisions

HOUSE OF LORDS

Lord Bingham of Cornhill Lord Hope of Craighead Lord Hutton Lord Scott of Foscote Lord Rodger of Earlsferry

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

ON 14 NOVEMBER 2002

[2002] UKHL 45

LORD BINGHAM OF CORNHILL

My Lords,

    1. These proceedings concern the interrelationship between section 5 of the Green Belt (London and Home Counties) Act 1938, which subjects the alienation of Green Belt land as there defined to a condition of ministerial consent, and Part V of the Housing Act 1985, which (consolidating provisions first enacted in 1980) gives qualifying secure tenants a right to acquire the freehold or a lease of their dwelling-house without any requirement of ministerial consent. The problem is one of statutory construction. For the Secretary of State it is argued that Parliament intended section 5 of the 1938 Act to operate even in a case to which Part V of the 1985 Act is applicable. For the tenant it is argued that Parliament intended the Part V regime to apply in cases falling within its provisions irrespective of the terms of section 5. The Court of Appeal (Thorpe, Buxton and Laws LJJ), by a majority (Buxton LJ dissenting), found for the tenant, and the Secretary of State appeals.

    2. I am indebted to my noble and learned friend Lord Scott of Foscote for summarising the legislative and factual basis of this appeal, which I need not repeat. I am in full agreement with his conclusions.

    3. The issue of construction before the House cannot be resolved by resort to drafting conventions. On the Secretary of State's construction one might have expected to find in the 1985 Act a stipulation that nothing in Part V should affect the operation of section 5 of the 1938 Act. On the tenant's construction one might have expected a provision similar in effect to that found in section 109(2) of the Housing Act 1988 as originally enacted:

"Nothing in section 5 of the Green Belt (London and Home Counties) Act 1938 (restrictions on alienation of land by local authorities) applies in relation to a disposal of land included in an acquisition under this Part."

As it is, the 1985 Act makes no reference at all to the 1938 Act. Thus the intention of Parliament must be inferred by considering the terms and purposes of both Acts in their respective contexts.

    4. Both section 5 and Part V concern the transfer of land by a local authority as owner to a third party for consideration. To that extent they cover the same ground. But only to that extent: the differences between the two regimes are very much more striking and fundamental. The object of the 1938 Act was to preserve open land in and around central London from industrial and building development. To that end, section 5 restrained the disposal of Green Belt land (as defined in the Act) in the ownership of local authorities by imposing a requirement of ministerial consent. It was an environmental measure, seeking to protect and preserve the suburban countryside. The 1985 Act had the quite different object of enabling local authority tenants to become owners (or effective owners) of their own homes, for a variety of social, political and economic reasons.

    5. The second difference flows from the first. The 1938 Act was primarily concerned with open, undeveloped areas of land. To the extent that there were buildings on these areas of land, they were incidental and were not the focus of the Act. In contrast, the sole focus of the 1985 Act was on dwelling houses to which any open land (in the form of gardens) was incidental.

    6. Section 5 was directed, and in its terms was directed only, to a local authority wishing to sell (or exchange, or appropriate) Green Belt land. Thus it was obliged, among other things, to publicise its proposal and seek the consent of any other local authority which had contributed towards the cost of purchasing the land. If the local authority did not wish to dispose of the land, it did not have to do so, and there would be no proposal to publicise, no consent to seek and no occasion for obtaining ministerial consent. Where a secure tenant, relying on Part V of the 1985 Act, claims to exercise the right to buy, the situation is quite otherwise. If the tenant meets the statutory requirements and none of the statutory exceptions applies, the local authority has no choice but to transfer the relevant interest to the claimant on terms governed by the statute, regardless of whether it wishes to do so or not. Its volition is irrelevant.

    7. Thus, whereas section 5 imposed restraints on local authorities wishing to dispose of Green Belt land, Part V conferred on secure tenants seeking to acquire ownership (or effective ownership) of their homes the right to do so. In section 118 of the 1985 Act this was defined as

"the right, in the circumstances and subject to the conditions and exceptions stated in the following provisions of this Part"

to acquire the freehold or be granted a lease of the tenant's dwelling house. This statutory formulation clearly suggested, on its face, that the circumstances in which and the conditions and exceptions subject to which a tenant was entitled to buy were to be found in the 1985 Act itself and not elsewhere. This reading of the section is reflected in Form RTB2 as prescribed in Schedule 2 to the Housing (Right to Buy) (Prescribed Forms) Regulations 1986 (S1 2194/1986) where the following appears:

"NOTE TO TENANT

Your right to buy can only be denied in the circumstances set out in the Housing Act 1985, as amended . . ."

    8. In considering the intention of Parliament when passing the 1985 Act, or perhaps more properly the intention of the draftsman in settling its terms, there are three (but only three) hypotheses to be considered: (1) that reference to the 1938 Act was omitted because it was regarded as clear that the 1938 Act would continue to operate, in cases to which it applied, irrespective of the terms of Part V; (2) that reference to the 1938 Act was omitted because it was not in the mind of the draftsman of Part V; (3) that reference to the 1938 Act was omitted because Part V was not seen to encroach upon or conflict with the operation of section 5.

    9. I would reject the first hypothesis for two reasons. First, it is the practice of parliamentary draftsmen to show an abundance of caution and to favour the avoidance of doubt. Secondly, had the draftsman conceived that a secure tenant's right to buy could be subject to a condition of ministerial consent under section 5 that right would not have been defined in section 118 in the terms quoted in paragraph 7 above, and provision would have been made for asserting and admitting or denying, and handling, claims to exercise the right to buy where ministerial consent was required. If I concluded (as I do not) that section 5 was intended to operate in cases covered by Part V, I would agree with Buxton LJ that the Part V procedures could be made to work, but the absence of any indication that the procedures were devised to apply to conditional rights fortifies the inference that section 5 was not intended to operate in cases covered by Part V. Had it been so intended, the draftsman would have imposed a duty on a local authority to refer to the Secretary of State a claim to exercise the right to buy made by a tenant whose case fell within section 5.

    10. I would also reject the second hypothesis. The Housing Act 1985 was one of three major enactments in which, pursuant to recommendations of the Law Commission (as stated in The Report on the Consolidation of the Housing Acts, Report No144 (Cmnd 9515), 2 May 1985, p 3), it was sought to consolidate for England and Wales the whole of the Housing Acts save for provisions relating to the subject-matter of the Leasehold Reform Act 1967 and the Rent Act 1977. These three enactments were supplemented by a fourth, to which extensive lists of repeals and consequential amendments were scheduled. It seems to me unlikely (although no doubt possible) that in the course of this massive consolidation exercise the 1938 Act was simply overlooked, the more so since the draftsman of the Housing Act 1988 had it in mind (see paragraph 3 above).

    11. I would accept the third hypothesis. Reference to the 1938 Act was omitted because an involuntary disposal of housing accommodation by a local authority which would not in itself undermine the beneficial environmental objectives of the 1938 Act was not understood to engage the operation of section 5. This understanding justified the terms used in section 118, which would otherwise have been misleading, and is consistent with the absence in Part V of any recognition that a tenant's exercise of the right to buy might be dependent on obtaining ministerial consent. Parliament rightly regarded the Part V regime as falling out-with the scope of section 5: there was no conflict or inconsistency between the two regimes, and hence there was no need to refer to section 5.

    12. For these reasons, and those given by Lord Scott, I would dismiss the appeal and make the declaration which he proposes. I agree with his observations on paragraph 5 of Schedule 5 to the 1985 Act. Since the London Borough of Croydon has not chosen to rely on that provision, and the relevant facts have not been investigated, the possible application of that paragraph must remain speculative. Should the council seek to rely on this paragraph hereafter, the tenant would have strong grounds for contending that the point could and should have been raised at a much earlier stage.

LORD HOPE OF CRAIGHEAD

My Lords,

    13. I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Scott of Foscote. I agree with it, and for the reasons which he has given I too would dismiss the appeal and make the declaration which he has proposed.

LORD HUTTON

My Lords,

    14. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Scott of Foscote. I agree with it, and for the reasons which he gives I too would dismiss the appeal and make the declaration which he proposes.

LORD SCOTT OF FOSCOTE

My Lords,

The issues

    15. The Green Belt (London and Home Counties) Act 1938 ("the 1938 Act") was the first modern legislative attempt to establish a Green Belt around London. The scheme of the 1938 Act was that landowners, both private landowners and local authorities, would designate their land as Green Belt land and subject it to restrictions as to user designed to ensure that it retained its open space character. I will have to explain in more detail the way in which the scheme works but it suffices for the moment to notice that once local authority land has become Green Belt land under the 1938 Act the local authority cannot sell the land without first obtaining the consent of the relevant minister, now the Secretary of State for the Environment, Transport and the Regions (see section 5). The Secretary of State is the appellant on this appeal.

    16. Under a deed dated 5 February 1948, the parties to which were the Borough of Croydon ("the council") and the London County Council ("the LCC") Coombe Wood, comprising some nine acres outside Croydon, became Green Belt land under the 1938 Act. The land included a stable block over which was residential accommodation, originally intended, I am sure, for a groom or grooms to live in. Coombe Wood has become a public park, Coombe Wood Park. The stables have become a café for visitors to the park. The residential accommodation above the café has, since 1993 been occupied by Miss O'Byrne, the respondent on this appeal.

    17. Miss O'Byrne is a landscape gardener. She entered the employment of the council in that capacity in 1988. In 1993 the council offered her a service tenancy of the Coombe Wood flat "for the better performance of [her] duties as a gardener". She accepted the offer and, with her partner and their child, still lives in the flat. Her service tenancy was not a secure tenancy under the Housing Act 1985 (section 79(2) and para 2(i) of Schedule1).

    18. In May 1994 the council engaged a private company, Serco Ltd, to take over the maintenance of the park. Miss O'Byrne's employment contract was transferred to Serco Ltd. She was no longer employed by the council. But she continued living in the flat, under the same tenancy, with the council as her landlord. Her tenancy became, therefore, a secure tenancy under the 1985 Act.

    19. The right of public sector tenants to acquire the freehold or a long lease of their homes, the so-called "right to buy", was introduced by the Housing Act 1980 and then incorporated into Part V of the 1985 Act. Miss O'Byrne as a secure tenant with a local authority landlord became, subject to a point arising under para 5 of Schedule 5 to the Act, entitled to the right to buy. The right, in her case, was a right to a long lease of the flat at a low rent and for a discounted premium (see section 118(1)(b) ).

    20. Part V of the Act sets out in detail the acquisition procedure that must be followed when a tenant seeks to exercise a section 118 right to buy. It starts with a notice served by the tenant on the landlord under section 122. The notice requires the landlord to admit or deny the tenant's right, and in the latter event to give reasons for the denial.

    21. On 6 December 1996 Miss O'Byrne served on the council a section 122 notice claiming the section 118 right to a long lease of the flat. The council, having first denied her right to buy, then admitted her right but at the same time took the point that the flat was part of Green Belt land to which the 1938 Act applied. The council said that it would be necessary for the procedures prescribed by section 5 of the 1938 Act, including the obtaining of the Secretary of State's consent, to be complied with.

    22. The council then purported to put in train the section 5 procedures; there was an advertisement of the proposed transaction in the local press, a local inquiry convened by the Secretary of State and, in due course, a recommendation from the inspector who conducted the inquiry that consent to the grant of the "right to buy" long lease to Miss O'Byrne be withheld. The Secretary of State accepted the recommendation and withheld consent. The litigation that has culminated in this appeal to your Lordships' House then ensued.

    23. The litigation took the form of a judicial review application by Miss O'Byrne in which she challenged the Secretary of State's decision to withhold consent to her acquisition of the long lease to the flat. She sought an order to quash that decision and sought also a declaration that the 1938 Act did not operate so as to deprive her of her 1985 Act right to buy. The Secretary of State was the respondent to Miss O'Byrne's judicial review application.

    24. Your Lordships were told that the council made an application to be joined as an additional respondent and that the joinder application was successful. But, surprisingly, no substantive part has been played by the council in the litigation. Indeed the council's attitude to Miss O'Byrne's attempt to exercise a section 118 right to buy seems to me to have been thoroughly equivocal. First, the council admitted her right to buy and, as Part V of the 1985 Act requires (see section 125), sent her a notice specifying "the price at which, in the council's opinions [she was] entitled to have a long lease granted to [her]". But then, having put in train the procedures required by section 5 of the 1938 Act, the council objected to the proposed transaction, purporting to do so pursuant to section 5 of the 1938 Act, thereby causing the Secretary of State to convene the inquiry. And at the inquiry the council argued against the transaction.

    25. The main issue which arises for your Lordships' decision is whether section 5 of the 1938 Act can have any application to a secure tenant's right to buy under Part V of the 1985 Act. Two reasons why it cannot have been put forward.

    26. First, there is the question whether section 5, correctly construed, applies only to proposed alienations of Green Belt land which the local authority owner wants to carry out, ie. voluntary alienations, and does not, therefore, apply to proposed alienations brought about by compulsory expropriation provisions. The 1985 Act right to buy procedures, like the enfranchisement procedures under the Leasehold Enfranchisement Act 1967 and under chapter 1 of the Leasehold Reform, Housing and Urban Development Act 1993 and like the right of tenants under chapter 2 of the 1993 Act to a new lease at a discounted premium, are compulsory expropriation procedures.

    27. If the right view is that section 5 of the 1938 Act has no application where the local authority owner is not proposing to sell but is required by statute to grant the tenant a freehold or long lease, as the case may be, on compensation terms prescribed by the statute, there is an end of this case.

    28. Both the first instance judge, Goldring J, and the Court of Appeal took the view that, as a matter of construction of the 1938 Act, section 5 could not be confined to voluntary alienations.

    29. If that is right, and section 5, correctly construed, does apply to land to which the 1985 Act right to buy applies, then the second question arises, namely whether the inconsistency between the section 5 procedures and requirements on the one hand and the right to buy provisions on the other hand requires the conclusion that the 1985 Act has, by necessary implication, pro tanto repealed or disapplied section 5. On this point Goldring J held that section 5 had not been repealed or disapplied and, accordingly, that the right to buy could only be exercised over Green Belt land subject to the 1938 Act where the Secretary of State had given the requisite section 5 consent. In the Court of Appeal Buxton LJ came to the same conclusion but Laws LJ, with whom Thorpe LJ agreed, concluded that the machinery prescribed by the 1985 Act for giving effect to the right to buy could not be operated consistently with the section 5 procedures. He held that the 1938 Act was "pro tanto impliedly repealed by the right to buy legislation".

    30. There are other issues between the parties which may arise, depending on the way in which the main issue is decided, but it is convenient to set those aside for later mention if necessary. A decision on the main issue requires a closer examination first of the 1938 Act and then of the right to buy provisions in the 1985 Act.

The 1938 Act

    31. Section 3 of the 1938 Act provided for the manner in which a Green Belt around London would be established. Either private owners or local authorities could declare their land to be Green Belt land and enter into restrictive covenants for that purpose (see section 3(a) and (b)). In addition, local authorities were given power to purchase land for the purpose of it becoming Green Belt land or to contribute to the purchase price on the purchase of land for that purpose by some other local authority (section 3(c)). Basic to the scheme was that the Green Belt land, whether privately owned or local authority owned, would be subject to suitable restrictive covenants. And section 10 of the Act imposed restrictions on the erection of buildings on Green Belt land.

    32. In the 1948 deed whereby Coombe Wood became Green Belt land, the council, which had purchased the land for £14,000, entered into covenants with the LCC, which had contributed £2,732 to the purchase price. The covenants were restrictive of the use to which Coombe Wood could be put. In particular, there was a covenant

"That the said lands or any part thereof shall not at any time hereafter be used without the written consent of the London Council previously had and obtained for any purpose other than

(a)  a public open space within the meaning of the Open Spaces Act 1906 or (b) public walks and pleasure grounds …. or (c) …. to provide for outdoor games or recreations."

    33. There was also a covenant against any building on the land

"…. other than a building which is ancillary to the purpose or purposes (authorised as aforesaid) for which the said lands or appropriate part thereof is for the time being used unless the consent of the London Council shall have been first had and obtained."

    34. In 1948 there was already at least one building on the land. The building consisted of the stables and residential accommodation to which I have already referred. The stables became a café and the residential accommodation became occupied by Miss O'Byrne who had duties in connection with the management of the park. It is easy to accept that both the café and Miss O'Byrne's occupation can be regarded as reasonably ancillary to the enjoyment of the park by the public and therefore as consistent with the user restriction in the 1948 deed.

    35. The enforceability of restrictions such as these against successors in title of the covenantor might have presented some problems under the general law— since the restrictions were intended to benefit the public rather than any neighbouring land of the covenantee—but section 22(1) of the 1938 Act provided in terms that covenants by a Green Belt landowner with a local authority could be enforced by the local authority against the covenantor and any successors in title (section 22(1)). Moreover section 84 of the Law of Property Act 1925, under which the Lands Tribunal can vary or discharge restrictive covenants on various grounds, was expressly disapplied (section 22(2)). So, initially at least, the Coombe Wood restrictions would have been enforceable by the LCC against the council and any successors in title of the council.

    36. In 1963 the functions of the LCC in relation, inter alia, to Coombe Wood became vested in the council. So the odd position was reached, and has since pertained, that the council was both covenantor and covenantee in respect of the restrictions in the 1948 deed. But the status of the land as Green Belt land was not affected and, under section 23 of the 1938 Act—

"Any restrictions on Green Belt land by this Act or by any declaration made in manner provided by this Act may be enforced by the minister …. "

So there is, I think, no doubt but that the restrictive covenants contained in the 1948 deed have continued to bind Coombe Wood notwithstanding the unity of covenantor and covenantee.

    37. The 1938 Act placed no restriction on the freedom of private owners of Green Belt land to dispose of the land. The land would, however, remain subject to the Green Belt user restrictions and building restrictions, assuming no problem arose out of non-registration of the restrictions under the Land Charges Act 1925 or the Land Registration Act 1925 (see section 31 of the 1938 Act). The restrictions would remain enforceable either by the local authority covenantee or by the minister.

    38. But the position in relation to Green Belt land owned by a local authority was different. Section 5 of the 1938 Act restricts the power of the local authority to sell it, to exchange it or to appropriate it for use for non-Green Belt purposes. If it wants to do any of these things, the local authority must first advertise its proposal in the local press, seek the consent of the county council in whose area the land is situated and the consent of any local authority that has contributed to the costs of its acquisition ("a contributing local authority") and obtain the consent of the minister. If the county council or a contributing local authority object to the proposal, the minister, before deciding whether or not to consent, must convene a local inquiry. The local authority's proposal, be it for a sale, an exchange of land, or an appropriation for other purposes, cannot be effected unless the minister consents. When consenting, if he does, the minister has power to free the land from all or some of the Green Belt restrictions that bind it. No doubt he would at least free the land from any restrictions that would impede the new use intended for the land.

    39. Section 6 of the Act is complementary to section 5. It provides comparable procedure where, instead of the local authority owner of the Green Belt land wanting to sell, some other local authority or statutory undertaker wants to acquire the land compulsorily for its own statutory purposes. Under section 6 the requisite procedure is initiated not by the local authority owner of the land, but by the would-be acquirer of the land. The would-be acquirer cannot put in train compulsory purchase machinery unless and until the consent of the minister has been obtained. And, in giving his consent, if he does, the minister, as under section 5, has power to free the land from its Green Belt restrictions.

    40. There are two types of compulsory acquisition which are expressly excepted from the section 6 procedures. First, the section 6 procedures do not apply where the statutory power of acquisition specifically identifies the land to be acquired. Such a statute overrides the section 6 procedures. Secondly, the section 6 procedures do not apply to the compulsory acquisitions referred to in section 8. Section 8 relates to Green Belt land required for highways. Where land is to be compulsorily acquired for highway purposes, the section 6 procedures do not apply and the land is, on possession being taken by the acquiring authority, automatically freed from any Green Belt restrictions (see section 8(3)).

    41. It is clear that the compulsory acquisitions dealt with or referred to in section 6 do not include compulsory acquisitions by private individuals who are not statutory undertakers, that is to say—

"…. any persons authorised by any enactment or by any order rule or regulation made under any enactment to construct work …. " etc. (section 2(1))

    42. The section 6 procedures do not, therefore, apply to acquisitions under Part V of the 1985 Act. Do the section 5 procedures apply? Section 5 provides, so far as relevant, that

"Subject to the provisions of section 6 … of this Act before Green Belt land vested in a local authority … is sold or …. is exchanged or …. is appropriated [for other purposes] …. the local authority …. in whom the land is vested shall—

(a)  publish in one or more newspapers circulating in the locality in which the land proposed to be sold … is situate a notice of the proposal …. specifying …. the time …. within which and the manner in which objections to such sale exchange or appropriation can be made

(b)  serve a copy of such notice on every contributing local authority and on the county council

(c)  seek the consent of every contributing local authority and of the county council to such sale exchange or appropriation;

(d)  send to the Minister a copy of every such notice and of every consent which has been obtained to such sale exchange or appropriation;

(e)  obtain the consent of the Minister.

(2)  The Minister before giving his consent under this section shall consider any objections which he has received to the proposed sale exchange or appropriation.

(3)  If the consent of any contributing local authority or of the county council is not obtained by the local authority …. in whom the land is vested …. the Minister shall before consenting to the sale exchange or appropriation cause a local inquiry to be held …

(5)  An order of the Minister made under this section may contain such terms and conditions (if any) as shall appear to him to be just and where such order is made with reference to the sale or appropriation of Green Belt land may also provide that the land to which the order relates shall as from such date as the Minister may specify be free (to such extent as may be specified in such order) from the restrictions imposed upon it whether by this Act or by any declaration made or covenant entered into in manner provided by and for the purposes of this Act."

    43. My Lords it seems to me plain that Parliament, in enacting section 5, was dealing with dispositions that the local authority owner of the Green Belt land in question desired to make. Paragraph (a) of sub-section (1) refers to "the land proposed to be sold …." Whose is the proposal to sell? Plainly, it is the local authority's proposal. The obligation to advertise the proposal is placed by paragraph (a) on the local authority. It is expressed as a mandatory obligation— "… the local authority …. shall ….". It is an obligation that must be discharged "before Green Belt land …. is sold". If a local authority simply does nothing, neither advertises nor sells, it is not, as it seems to me, in breach of any obligation under the Act. A compulsory purchase under statutory powers does not need any action by the owner of the land in question. The statutory price fixing procedures and the statutory vesting procedures can achieve the completion of the compulsory purchase in the face of an unwilling and deliberately inactive owner of the land.

    44. So the procedural obligations imposed by section 5(1) on the local authority owner of the land only bite where it is the local authority that wants, if it can, to carry out the proposed disposition. Section 5 was never intended, in my opinion, to apply to dispositions of Green Belt land forced on a local authority owner by statutory provisions for compulsory expropriation.

    45. It was section 6, supplemented by section 8, that was intended to deal with compulsory expropriation, and, indeed, did deal with all forms of compulsory expropriation to which local authority land might, in 1938, have been subject. As at 1938 I can discern no gap between the provisions of section 5, dealing with voluntary dispositions of local authority owned Green Belt land, and those of sections 6 and 8, dealing with compulsory dispositions of such land, and none has been suggested by counsel. The provisions of section 5 were not intended to apply to, and their language is not apt to apply to, compulsory dispositions.

    46. Is the inapplicability of section 5 to compulsory dispositions altered by the advent of the compulsory "right to buy" provisions of the 1985 Act? A similar question might have arisen under the Leasehold Reform Act 1967. It is, I think, relatively unlikely that 1938 Act Green Belt land owned by a local authority would be subject to a long tenancy at a low rent so as to attract the enfranchisement rights conferred by the 1967 Act. But it is conceptually possible. It is conceptually possible, also, that local authority owned Green Belt land might be subject to the collective enfranchisement rights conferred by chapter 1 of the 1993 Act or to the rights to acquire new leases conferred by chapter 2 of that Act. So the issue is not necessarily confined to the right to buy provisions of the 1985 Act. But that is the context in which the issue in the present case has arisen.

The 1985 Act

    47. The expression "right to buy" is an attention catching expression but does not accurately describe the rights conferred on a secure tenant to whom Part V of the 1985 Act applies. Section 118(1) defines the "right to buy" as

"…. the right, in the circumstances and subject to the conditions and exceptions stated in the following provisions of this Part—

(a)  if the dwelling-house is a house and the landlord owns the freehold, to acquire the freehold of the dwelling-house;

(b)  if the landlord does not own the freehold or if the dwelling-house is a flat (whether or not the landlord owns the freehold), to be granted a lease of the dwelling-house."

    It is (b) that applies in this case.

    48. The section 118(1) right is a "right …. subject to the conditions and exceptions stated …." but it is subject to nothing else. Within the limits of the definition of the right it is expressed as an absolute right. Section 121 specifies two circumstances in which a tenant is barred from exercising the section 118 right. One relates to forfeiture of the tenancy, the other to the tenant's bankruptcy. Neither is relevant in this case. There is no other expressed circumstance in which the tenant is barred from exercising the section 118 right.

    49. In order to exercise the section 118 right, the tenant must start by giving written notice to that effect to the landlord (section 122). Miss O'Byrne gave such a notice. The landlord is then placed under a statutory obligation to respond by either admitting or denying the tenant's right (section 124). The council responded to Miss O'Byrne's section 122 notice by admitting her right but then qualifying the admission by contending that she could not exercise the right unless the requirements of section 5 of the 1938 Act, including the obtaining of the Secretary of State's consent, were complied with.

    50. Sections 125 to 131 deal with the price to be paid by the tenant for the freehold or, as the case may be, the long lease. Put very shortly and broadly, the price is the market value less discounts depending on the length of time the tenant has held his tenancy and occupied the premises as his home.

    51. It is a feature of the Part V provisions that, notwithstanding that the tenant has given a section 122 notice, that the price has been agreed or, in default of agreement, fixed and that the landlord has come under a duty to convey the fee simple or grant the long lease (see section 138), the tenant has no obligation to complete the transaction. The tenant can withdraw from the transaction at any time up to the point at which there is an exchange of conveyance or lease for purchase price. The landlord's remedy, if the tenant drags his feet, is to serve completion notices on the tenant under sections 140 and 141 and, if the tenant still fails to complete, the tenant's right to buy is "…. deemed to be withdrawn …." (section 141(4)).

    52. The Part V provisions to which I have referred underline the dichotomy between, on the one hand, consensual sales between willing vendor and willing purchaser where there is mutuality of obligations and, on the other hand, Part V dispositions under which the landlord's willingness is irrelevant and the tenant is at no stage bound to complete.

    53. Schedule 6 to the 1985 Act deals with the content of the conveyance or lease whereby the right to buy is given effect to. Paragraph 4 says that—

"The conveyance or grant shall include such provisions (if any) as the landlord may require to secure that the tenant is bound by, or to indemnify the landlord against breaches of restrictive covenants …. which affect the dwelling house …. and are enforceable for the benefit of other property."

and, under paragraph 5,

"…. the conveyance or grant may include such other covenants and conditions as are reasonable in the circumstances."

    54. These Schedule 6 provisions need to be kept in mind in considering the consequences of the exercise of a right to buy where the land in question is 1938 Act Green Belt land.

Is the 1985 Act "right to buy" subject to the section 5 requirements of the 1938 Act?

    55. In my opinion, section 5, correctly construed, has no application to dispositions of 1938 Act Green Belt land brought about by the compulsory expropriation provisions of Part V of the 1985 Act.

    56. The intention of the section is to restrict the ability of local authorities to effect voluntary dispositions of Green Belt land. The language of the section to which I have already referred, seems to me to make that clear. Section 5, read in conjunction with section 6, makes clear that the former section was not intended to deal with compulsory acquisitions under compulsory powers.

    57. In R v Secretary of State for the Environment ex parte Enfield London Borough Council (1988) 86 LGR 549 McNeill J, declined to accept counsel's submission that section 5 was limited to voluntary disposals of Green Belt land. The decision was followed by Goldring J in the present case. On appeal, Buxton LJ, with whom on this point Laws and Thorpe LJJ agreed, came to the same conclusion. Buxton LJ referred to the possibility that a 1985 Act right to buy might have to be implemented against an unwilling local authority landlord by the intervention of the Secretary of State under sections 164 and 165 and commented, at para 19, that it would then be "less easy to see the transaction as involving a sale". He went on to say that that

"merely reinforces the conclusion that the general and usual case envisaged by the 1985 Act is not one of forced transfer, but of, however reluctant, sale."

    58. In my respectful opinion, however, the Lord Justice was concentrating on the wrong Act. The question is not whether a 1985 Act right to buy transaction can be reasonably described as a "sale". In some cases, where the local authority landlord is co-operative, perhaps it can. But the critical question is whether a 1985 Act right to buy transaction is a disposition to which section 5 of the 1938 Act applies. That question requires concentration on the 1938 Act. What types of transaction was section 5 contemplating? The transactions contemplated were, in my opinion, transactions where the local authority owner was a voluntary disponer. The meaning to be attributed to the words "proposed to be sold" that appear in section 5(1) must draw upon the context in which those words appear. The context appears to me inescapably to exclude the class of non-voluntary dispositions, compulsory expropriations, of which a disposition giving effect to the 1985 Act right to buy is a member.

    59. For these reasons, in my opinion, section 5 has no application to 1985 Act right to buy transactions. It is not, in my view, necessary to ask whether Part V of the 1985 Act has impliedly repealed pro tanto or disapplied section 5. But if it were necessary to address that question I would answer it by holding there to be a clear disapplication. Section 118 confers a defined right on secure tenants. If section 5 is applied the tenant does not have the right as defined, but only a lesser right. His right would be subject to a condition, nowhere expressed in Part V, the fulfilment of which would be dependant on an uncertain future event, namely, the obtaining of the Secretary of State's consent. A right subject to this condition would not be the right conferred by section 118. If necessary, I would hold, therefore, that section 5 of the 1938 Act was disapplied by section 118(1) of the 1985 Act.

Conclusion

    60. Miss O'Byrne is entitled in my opinion, to the right to a long lease conferred by section 118 of the 1985 Act. There are two additional points that seem to me worth making.

    61. First, I have had some worries as to whether para 5 of Schedule 5 to the 1985 Act applies to Miss O'Byrne's tenancy. Schedule 5 specifies exceptions to the right to buy. The para 5 exception applies where the dwelling house

"(a)  forms part of … a building which … is held mainly for purposes other than housing purposes and consists mainly of accommodation other than housing accommodation …; and

(b)  was let to the tenant … in consequence of the tenant … being in the employment of the landlord or of— a local authority …"

    62. There seems to me to be no doubt at all but that sub-paragraph (b) applies. The sub-paragraph is referring to the circumstances when tenancy was first granted. It is uncertain on the facts whether sub-paragraph (a) applies. It is also uncertain whether, if sub-paragraph (a) does apply, it is still open to the council to take the point. These uncertainties cannot be resolved by your Lordships.

    63. Second, your Lordships have not been addressed as to the consequences of the grant to Miss O'Byrne of a new lease pursuant to her right to buy. The new lease would be a lease for a term of 125 years (see para 12 of Schedule 6) and questions might arise as to what provisions should be included in the lease to take account of the Green Belt restrictions which would continue to apply. The continued occupation of the flat by Miss O'Byrne and her family for as long as she continued to be employed in connection with the maintenance of Coombe Wood Park would, I think, be consistent with the user restriction contained in the 1948 deed. But what the position would be if Miss O'Byrne ceased to be so employed, or if the flat became occupied by someone else whose occupation had nothing to do with the maintenance of Coombe Wood Park, is another matter. On a sale under section 5 of the 1938 Act to which the Secretary of State had consented, the property could be freed from the restrictions. But if, as I would hold, section 5 has no application, the property would, it seems to me, prima facie continue to be subject to the restrictions. Your Lordships were not addressed on these difficulties and they do not arise strictly on this appeal. I mention them simply for the purpose of drawing attention to matters that may still need to be addressed.

    64. I would, for the reasons expressed, dismiss the Secretary of State's appeal and make a declaration that the 1938 Act does not operate to deprive Miss O'Byrne of the right to buy pursuant to section 118 of the 1985 Act.

LORD RODGER OF EARLSFERRY

My Lords,

    65. I have had the privilege of reading in draft the speech prepared by my noble and learned friend, Lord Scott of Foscote. I agree that, for the reasons he gives, your Lordships should dispose of the appeal by making the declaration that he proposes. Since we are differing significantly from the approach of the Court of Appeal, I add some observations of my own.

    66. Coombe Wood is an area of open ground of some 9 acres lying within what is now the London Borough of Croydon ("Croydon"). In 1898 the owner of the estate built a substantial mansion, Coombe Wood House, and stables to serve the house. In 1948 Croydon bought both Coombe Wood and Coombe Wood House, including the stable block, and opened the area to the public as a park. The house is now a restaurant and the stables are no longer used for horses. In 1954 the storage area above the stables was converted into a flat ("the flat") which was occupied by an employee of Croydon Parks Department until 1987, after which other tenants occupied it. In 1993 the respondent became a service tenant of the flat for the better performance of her duties as a gardener employed by Croydon. In 1994 the respondent, though continuing to work as a gardener, ceased to be a council employee. It is accepted that she then became a secure tenant of the flat. The present appeal arises out of the respondent's claim to exercise a right to buy the flat in terms of section 122 of the Housing Act 1985 ("the 1985 Act").

    67. The expression "the right to buy" first appeared in the statute book in the heading to chapter 1 of the Housing Act 1980. It referred to a right that was created by the very first section of the Act. In the side-note to that section the draftsman described the right as "a right to acquire freehold or long lease". This description of the new right was more exact, as can be seen from the relevant terms of section 1(1):

"A secure tenant has the right -

(a) if the dwelling-house is a house, to acquire the freehold of the dwelling-house;

(b) if the dwelling house is a flat, to be granted a long lease of the dwelling-house;

…

in the circumstances and subject to the conditions and exceptions stated in the following provisions of this chapter."

Subsection (2) went on to say that in chapter 1 of the Act "the right mentioned in subsection (1)(a) and (b) is referred to as the right to buy".

    68. When the housing legislation was subsequently amended and consolidated in the 1985 Act the substance of these provisions was re-enacted in section 118(1):

"A secure tenant has the right to buy, that is to say, the right, in the circumstances and subject to the conditions and exceptions stated in the following provisions of this Part -

if the dwelling-house is a house and the landlord owns the freehold, to acquire the freehold of the dwelling-house;

if the landlord does not own the freehold or if the dwelling-house is a flat (whether or not the landlord owns the freehold), to be granted a lease of the dwelling-house."

Section 118 is found in Part V of the 1985 Act which is entitled "The Right to Buy" and the same heading is used to describe the first group of sections in Part V which define who has the right and who can exercise it. The side-note to section 118 is also "The right to buy".

    69. While the legislature has gone out of its way, particularly in the 1985 Act, to describe the secure tenant's right as a right to "buy" the property, on closer examination it can be seen that the right conferred on the tenant is, more precisely, a right to acquire the freehold or to be granted a long lease, as the case may be. When the draftsman calls that right "the right to buy", this is not merely a convenient shorthand description for drafting purposes. It is also Parliament's equivalent of a soundbite: it sums up briefly, and in popular language, the broad thrust of what is involved. The policy enshrined in the Act was easily presented to the public in these terms. Calling it the right to buy also emphasised that under the Act the rights are on the side of the tenants and the obligations on the side of the landlords. It is therefore no accident that the 1985 Act never describes the landlord as a seller nor his obligations as those of a seller. Indeed the only place where the terminology of selling as opposed to buying is used is in section 127, providing that the value of the house is to be calculated by reference to the price which it would realise "if sold on the open market by a willing vendor". Despite this, of course, politicians and the media have consistently spoken of "council house sales".

    70. The true nature of the right to buy under the 1985 Act was analysed by Lord Hoffmann in Bristol City Council v Lovell [1998] 1 WLR 446, 453H. As he pointed out, the 1985 Act, unlike the equivalent Scottish legislation, does not bring into existence a deemed contract of sale but, rather, misses out the contractual stage of normal conveyancing. The tenant's right is wholly the creation of statute and the landlord's corresponding duty, to be found in section 138(1) of the Act, is either to make a grant of the dwelling-house in fee simple or to grant a lease. The method of enforcing that duty is by injunction under section 138(3). Lord Hoffmann's analysis reveals just how far a 1985 Act transaction differs from a normal sale and conveyance. That difference is only further emphasised by the special price régime, by the absence of obligations on the tenant until a very late stage in the transaction and by the power of the Secretary of State to intervene under section 168 to enable tenants to exercise their right to buy where they are having, or may have, difficulty in doing so effectively and expeditiously. For these reasons I respectfully consider that in the Court of Appeal Buxton LJ got the emphasis wrong when he said (in para 19) that "the machinery to implement the statutory purpose uses the presumptions and the vocabulary of a contract of sale" and that "the general and usual case envisaged by the 1985 Act is not one of forced transfer, but of, however reluctant, sale." The transaction is, rather, a sui generis creation of the 1985 Act.

    71. The nature of the transaction and whether or not it can properly be regarded as a "sale" are critical to the issue which lies at the heart of this case. When Croydon bought the Coombe Wood estate in 1948, the London County Council ("the LCC") contributed a sixth of the purchase price. This was the consideration for a declaration by Croydon, in terms of section 3(a) of the Green Belt (London and Home Counties) Act 1938, that the lands which they had bought were "to be part of the Green Belt round London". Croydon also covenanted with the LCC that the lands should not at any time thereafter be used without the written consent of the LCC for any purpose other than a public open space or public walks and pleasure grounds or to provide for outdoor games or recreations. By virtue of the declaration the estate and buildings, including the stable block, became Green Belt land and became subject to section 5 of the 1938 Act which places restrictions on the power of a local authority to alienate such land. In particular, section 5(1) provides that "before Green Belt land vested in a local authority or a parish council is sold or … is exchanged or ... is appropriated … the local authority or parish council in whom the land is vested shall" go through certain procedures. These include seeking the consent of every local authority that contributed to the cost incurred in acquiring the land or in providing any consideration for a covenant restricting the user of the land. The final step in the procedure is obtaining the consent of the Secretary of State.

    72. As the appellant in these proceedings, the Secretary of State contends that granting a long lease of the flat to the respondent in terms of section 138 of the 1985 Act would amount to Croydon "selling" the flat to her within the meaning of section 5(1) of the 1938 Act. All the judges in the courts below accepted that contention. The Secretary of State further contends - and Buxton LJ in the Court of Appeal accepted - that, before the flat could be "sold", Croydon would accordingly have to obtain the Secretary of State's consent in terms of section 5(1). Therefore, since the Secretary of State in fact refused his consent on 3 February 1999 after a public inquiry, the transaction under the 1985 Act cannot proceed. By contrast, Laws and Thorpe LJJ held that there is no place within the mechanics of the 1985 Act for the 1938 Act procedures to operate. The provisions of the two Acts are so inconsistent with, or repugnant to, one another that they cannot stand together and the relevant provisions of the 1938 Act must accordingly have been pro tanto impliedly repealed by the 1985 Act. For that reason they concluded that - despite the terms of section 5(1) - the consent procedure does not actually apply to the respondent's application under section 122 of the 1985 Act.

    73. The Court of Appeal saw the crucial issue as being whether section 5 was in force in respect of 1985 Act transactions or had been pro tanto impliedly repealed. As Lord Scott of Foscote pointed out during the hearing, it would perhaps be more accurate to say that the issue was whether either the 1938 Act or the 1985 Act should be regarded as containing an implied provision to the effect that section 5 was not to apply to transactions under the 1985 Act. That particular issue arises, however, only if the references in section 5(1) to Green Belt land being "sold" can properly be construed as covering the acquisition of the freehold or the grant of a long lease, in return for payment of the purchase price, under the 1985 Act. If not, then section 5 and the procedures which it lays down have, for that reason, no application in a case such as the present. Any question of the 1985 Act impliedly amending the 1938 Act falls away.

    74. Like all of your Lordships, I am satisfied that, properly construed, section 5 would not apply to any grant by Croydon of a long lease to the respondent in terms of the 1985 Act. Section 5 lays down procedures that the local authority must go through before Green Belt land is "sold". Words such as "sale", "sell" or "sold", as ordinarily understood, refer to a voluntary transaction involving a contract to convey and a conveyance of property in return for a money consideration. Plainly, if "sold" in section 5 is to be given this ordinary meaning, the section could not apply to the grant of a lease of the flat under the 1985 Act. Of course, as Lord Reid acknowledged in Kirkness v John Hudson & Co Ltd [1955] AC 696, 729 the terminology of sale can sometimes be applied beyond its normal and correct meaning, but he added that "it is only permissible to give to a word some meaning other than its ordinary meaning if the context so requires." On behalf of the Secretary of State Mr Hobson argued that in the context of section 5 "sold" not only could be, but indeed had to be, given an extended meaning, which would be apt to include a grant of a long lease under the 1985 Act.

    75. In support of that submission he pointed to the opening words of section 5: "Subject to the provisions of section 6…." These words showed, he said, that, had they not been inserted, the situations contemplated by section 6 would have fallen within the scope of section 5. In particular, section 6(1)(b) dealt with the proposed acquisition of Green Belt land vested in a local authority by the exercise of compulsory purchase powers. So "sold" in section 5 must be wide enough to bring that kind of transaction within its scope. On that basis a 1985 Act transaction would be covered too. Although section 6 is addressed to the acquiring body, in my view there would be some force in that argument if the opening words of section 5 stood alone. Nor would the argument be fully met by Mr Crampin's counter-argument, based on an exception to section 6(1), that the opening words of section 5 were intended to remove from the purview of that section voluntary disposals of land that is specifically mentioned in the enactment conferring the powers to acquire it. The counter-argument does not reach section 6(1)(b).

    76. The opening words are, however, only one of a number of elements in the context formed by section 5. Lord Scott of Foscote has shown how the others point to "sold" referring, according to its normal meaning, to the voluntary disposal of land by a local authority in accordance with a contract. Section 6(1)(a) is a further pointer that section 5 is intended to deal with cases where the local authority agrees to part with its Green Belt land. More importantly, when "sold" is given its normal meaning, the procedural steps set out in section 5 all make sense. The difficulties and distortions arise when the word is given a wider interpretation and section 5 is applied to a case, like the present, where the local authority does not wish to part with the subjects but may be obliged to do so under a statutory procedure. The context within which "sold" occurs in section 5, therefore, so far from requiring it to be given a wider meaning, strongly suggests that it should be given its normal meaning. So interpreted, it does not catch a 1985 Act transaction.

    77. For these reasons I am satisfied that Parliament did not intend the procedures in section 5 of the 1938 Act to apply to a conveyance of the freehold of a house or to a grant of a long lease of a flat under Part V of the 1985 Act. There is accordingly no overlap between section 5 of the 1938 Act and the 1985 Act and the issue which divided the members of the Court of Appeal does not arise.

    78. The conclusion that section 5 of the 1938 Act does not apply to 1985 Act transactions would be unsatisfactory if it appeared to be inconsistent with the overall approach of the 1985 Act or if it seemed likely to undermine the operation of the 1938 Act. In fact, however, neither possible objection has any force.

    79. As I have suggested already, the key section in the 1985 Act is section 118, declaring the right to buy. It unequivocally declares that secure tenants have that right "subject to the conditions and exceptions stated in the following provisions of" Part V of the Act. The original version of this straightforward declaration opened the 1980 Act. Parliament must have intended to say to secure tenants that, if they or their advisers study the provisions of the 1985 Act and apply them to their particular situation, they can discover whether they enjoy the right to buy: they need look no further. And a secure tenant might well wish to know whether he had such a right, even if he had no present intention of exercising it. Of course, in any given case, certain questions of fact might arise, especially as to whether one of the exceptions from the right set out in Schedule 5 applied. These questions would have to be resolved - if need be, by proceedings in the county court. But section 118 makes it clear that, once the facts are ascertained, the answer as to whether the tenant has a right to buy is to be found in the 1985 Act. In that sense the Act is designed to be a complete code. As my noble and learned friend, Lord Bingham of Cornhill, pointed out during the hearing, the note to the tenant on form RTB2 in schedule 2 to the Housing (Right to Buy)(Prescribed Forms) Regulations 1986 ("Your right to buy can only be denied in the circumstances set out in the Housing Act 1985, as amended") suggests that this is indeed how the Secretary of State himself interpreted the legislation in 1986. It would therefore be wholly inconsistent with the language and approach of section 118 if the tenant's right to buy not only depended on some provision to be found outside the 1985 Act but, even more importantly, on some future and unpredictable grant or refusal of consent by the Secretary of State. Counsel for the appellant pointed to no other relevant matter that would so drastically undermine the clear terms of section 118.

    80. The 1985 Act distinguishes sharply between circumstances where a secure tenant's right to buy does not arise (sections 119 and 120 and Schedule 5) and circumstances where a secure tenant has the right to buy but cannot exercise it (section 121). When a secure tenant serves notice on the landlord under section 122, he "claims to exercise the right to buy". By notice under section 124, the landlord may admit the tenant's right to buy or deny it and state the reason why, in his view, the tenant does not have the right. The precise language of section 122 indicates that it is concerned with the tenant's claim to exercise a right which, depending on the facts, has already either arisen or not arisen. Similarly, under section 124, depending on the facts, the landlord either admits or denies that, in the circumstances, the tenant's right to buy has (already) arisen. I respectfully agree with Laws LJ that section 124 does not give the landlord power, at one and the same time, both to admit the tenant's right to buy and to deny his right to exercise that right. As Laws LJ points out, this would be tantamount to suspending the operation of the tenant's right to buy until the Secretary of State's decision under section 5 of the 1938 Act was known. Similarly, the idea that the existence of a tenant's right to buy could be dependent on such a contingency is wholly inconsistent with the scheme of the 1985 Act. These considerations tend to confirm that Parliament would never have intended or envisaged that section 5 should be interpreted as applying to 1985 Act transactions.

    81. In the present case, as can be seen from subsequent correspondence, on 17 December 1996 Croydon replied to the respondent's section 122 notice by issuing a section 124 notice denying her right to buy - apparently on the basis that the terms on which she occupied the flat made it exempt from the right to buy provisions. Presumably, this objection related to paragraph 5(1)(b) of schedule 5 to the 1985 Act. On 6 June 1997, however, Croydon wrote to the respondent indicating that on reconsideration of the evidence they no longer adhered to that objection and that a further notice would be issued under section 124, admitting her right to buy. That was duly done and the second section 124 notice now regulates the position. Understandably, counsel for the parties to the appeal could cast no light on precisely why Croydon had eventually concluded that the respondent's case fell outside the scope of paragraph 5. But it is plain that Croydon considered at length various factual and legal matters and reached a view, from which they have not sought to depart in these proceedings even though they were joined as a party. The House must proceed on the basis of that view.

    82. Nevertheless, the fact that the respondent's case has at least some of the characteristics of one where no right to buy would arise under paragraph 5 of Schedule 5 makes it somewhat different from the run-of-the-mill case of a secure tenant acquiring his council house. More particularly, the fact that the flat is situated in a small complex of buildings near to where the public have access gave some scope for Croydon to argue at the public inquiry that the security and convenient running of the park and neighbouring premises might be adversely affected if the flat passed from their ownership and control. These and similar considerations appear to lie at the heart of the inspector's recommendation, which the Secretary of State accepted, that consent to the "sale" should be refused.

    83. My Lords, it would not be appropriate, in a case where the House has decided that section 5 of the 1938 Act does not apply, to seek to define precisely which issues the Secretary of State may take into account when deciding whether to grant or refuse consent under that section. None the less, it is important to remember that Parliament's aim in enacting the 1938 Act was essentially to maintain open space around London. It did so, in terms of the long title, by making provision "for the preservation from industrial or building development of areas of land in and around the administrative county of London". Section 10 in particular prohibited the erection of any building on Green Belt land without the necessary consents. There were, of course, necessary exceptions to this prohibition, but it went a long way towards achieving Parliament's aim of keeping the landscape open. That landscape would be made up, for the most part, of private land to which the public would have no right of access, but in which they could still take delight when walking or cycling or on a motor or charabanc excursion from the city. Other sections, such as section 22, envisaged a system of covenants restricting the use of particular areas of land, while section 27 set out various purposes, such as recreation, camping and agriculture, for which Green Belt land could be used without infringing the Act. In essence, therefore, the 1938 Act was concerned to establish both public and private Green Belt land around London and to prevent industrial or building development on it. By contrast, the Act was not concerned with prescribing what should actually be done with the land. That was left to the owners, whether private individuals or companies or public authorities, to decide. Croydon duly decided to open Coombe Wood as a public park.