What constitutes a defect or a lack of repair for the landlord to be liable for tenant’s injury?

This the first of a couple of cases involving liability under sections 2 Occupiers Liability Act 1957 and 4 of the Defective Premises Act 1972 and stairs, or rather in relation to the falling off of stairs

Gillian Drysdale v Joanne Hedges (2012) QBD 27/07/2012 [On Lawtel, not on Bailii yet]

Ms Drysdale was the tenant of Ms Hedges. The property was a mid terrace Victorian house on 3 levels (basement, ground and first). There were 3 steps up to the front door, without a handrail before the relevant date. There was a low (18″) wall between the middle step and the lowered area in front of the basement, about an 8 foot drop, and no wall at all at the top step.

The tenancy agreement was signed by the tenant on 8 October 2009, but backdated to 5 October 2009. Ms D had been provided with the keys some days before and spent the night of 4 October in the property. On 5 October, her fiance, Mr Stuart, arrived with a van load of possession. Her undisputed account was that on 5 October, which was a rainy day, she and Mr Stuart were jointly carrying a large box into the property, with her at the front, going backwards. She slipped on the middle step and fell over the low wall into the basement area, causing serious back injuries.

Ms D claimed, on the basis that the steps were “unduly slippery” due to being painted, being wet and the presence of dirt. In addition, Ms D alleged that the side wall was not sufficiently high and/or no guard rail was fitted.

The specific heads were breach of section 2 Occupiers Liability Act 1957, breach of repairing covenant in the tenancy agreement and section 4 DPA and common law duty of care.

Following evidence from both parties and from experts for both parties (albeit neither found to be ‘an expert in slipping’), the Court found as fact that the Defendant had painted the steps, renewed annually, for some years before the incident date, principally to improve their appearance. The paint was an external paint but not specifically non=slip and described as a ‘semi=gloss’ finish. The painting of the steps had increased the risk of slipping, particularly when the steps were wet, but the Defendant did not consider that painting the steps would increase the risk of slipping. The side wall was inadequate to prevent falls. The drop was dangerous and, while not unusual at the time the house was built, should have been regarded as dangerous by a reasonable landlord. There was no history of people slipping on the steps. Whether any dirt increase the risk of slipping was speculative.

Turning to liability, the Court held:

Section 2 Occupier Liability Act – this has been pleaded in the alternative if it was found that Ms D had not been the tenant at the time of the accident. However, Section 2 was held to be of no application, not merely on the issue of the commencement of the tenancy. S.2 was of general application, but a landlord’s duty was defined by s.4 DPA 1972. It could not have been Parliament’s intention that both sections would define a landlord’s duty. S.4 DPA replaced s.4 of the OLA, so it was to s.4 DPA that one must look for the full extent of the landlord’s liability in tort, at least normally. Support for this found in Murphy v Brentwood District Council [1991] 1 AC 398 where the House of Lords declined to accept a duty beyond that set out in the DPA.

Section 4 Defective Premises Act – Occupation in contemplation of the letting of the premises was covered by 4(3)(b)(i) or (iii), so it covered the circumstances of Ms H occupation.

A ‘relevant defect’ for the purposes of s.4 had to involve the premises being ‘not in good repair’ (Quick v Taff Ely BC [1986] QB 809 cited), meaning worse than it was at some earlier time. Alker v Collingwood [2007] 1 WLR 2230 cited on a duty to repair not being equivalent to a duty to make safe. Putting in a good condition did not equate to putting in a safe condition.. Laws LJ at p2236 said:

A house may offer many hazards: a very steep stairway with no railings; a hidden step; some other hazard inside or outside the house of the kind often found perhaps in particular older properties. I do not think it can be said that the Act requires a landlord on proof only of the conditions I have described for the application of Section 4 to make safe any such dangerous feature.

The wall to the steps could not be said to be out of repair. There was no evidence that it had ever been oter than it was. While the Claimant argued that the application of paint to the steps had put them out of repair, such that there was a defect that the removal of the paint would remedy, the Court did not accept this:

It is stretching the meaning of the word ‘repair’ to apply it to the removal of paint. The paint did not replace the stone but was additional to it. The stone did not require repair. The paint did not require repair: what it required was removal.

There was no breach of s.4 DPA (and also no breach of clause 3.2 of the tenancy agreement which contained the landlord’s repairing obligations – “to maintain the structure and exterior in good repair”.

Breach of Common Law duty – Cavalier v Pope [1906] AC 428 held that a landlord who let a property in a dangerous condition had no duty of care to the tenant and no duty to remedy the defect. The Claimant pointed to the duty found for public landlords in Rimmer v Liverpool CC, the Court of Appeal had found a liability for a Local Authority landlord which had designed, built and let properties. The Court of Appeal followed this in Targett v Torfaen BC [1992] 3 All ER. However, Boldack v East Lindsay DC 31 HLR 41 held that Cavalier v Pope was binding authority unless it could be distinguished.

The Claimant sought to argue for a duty of care, relying on Lips v Older [2005] PIQR P14, where a (1/3) duty had been found in respect of a tenant who had fallen off a low retaining wall into a lowered area. However, Cavalier v Pope was not raised in that case, which apparently found on the basis of common law negligence and a duty to make the entrance area reasonably safe. Lips was cited and followed in in Sowerby v Charlton [2006] 1 WLR 568, again a fall into an unguarded drop, but again without Cavalier v Pope being cited.

The Court held that Sowerby was not binding Court of Appeal authority for the proposition that a common law duty of care was owed in the circumstances of this case. Sowerby was primarily concerned with the CPR and the issue of whether the defendant could resile from an admission of liability. The Court’s views were in the context of what would happen if the judgment was set aside, rather than a declaring a duty. Lips v Older was a case presented and argued as common law negligence only, apparently without the existence of the duty being disputed.

In relation to Rimmer and Targett, the Claimant argued that issue was a positive duty of the landlord not to take steps to create a dangerous state of affairs and that this remained good law despite Murphy. Painting the steps fell under this positive duty.

The Court found that the unguarded drop fell under Cavalier v Pope and there was no duty to guard it. However, painting the steps gave rise to a common law duty to take reasonable care to ensure its application did not create risk of injury. Section 4 DPA covered injury arising from a failure to repair, but where the Act does not apply, the landlord owes a duty to take reasonable care not to create an unnecessary risk of injury.

However, on the facts, in painting the steps, the Defendant was doing what other people in his position would have done, applying paint said to be suitable for outdoor use, which had no warning against its use on steps or that it might become slippery in the wet. While the knowledgeable might have been alerted by ‘semi-gloss’ and ‘producing a sheen’, not the man in the street. The Claimant’s expert had acknowledged it was not unreasonable to apply the B&Q paint, though be personally would not have done. There was thus no breach of duty of care.

Claim dismissed. The Court’s sympathy to the Claimant as a victim of a decision that many consider needs to be reconsidered, but ‘the remedy can only be in another court’.

If anyone knows anything about an appeal, we’d be very interested to hear.

This is a failed possession and tenancy deposit case now of largely historic interest, though the principles still largely hold true. There is also an interesting point on the period of the tenancy – contractual date v rent date. Our thanks to Legal Action’s ‘Recent Developments in Housing Law’ , Edwards Duthie and Liz Davies for the case.

Lappin v Surace Romford County Court 13 June 2012

Ms Surace was the assured shorthold tenant of Mr Lappin on a 12 month term to 19 April 2010. On the same day – 20 April 2009 – that the tenancy was granted. Mr L served a section 21 notice. Ms Surace paid a deposit of £1,500 which Mr L protected. However, Mr L did not serve the prescribed information required under the then Housing Act 2004 s.213(5) & (6).

Ms S continued as the statutory periodic tenant. Mr L served two more s.21 notices. Each notice expired on the last day of a month (28/02/20111 and 31/10/2011) and there was no saving clause.

Mr L brought possession proceedings, presumably under the accelerated process. Deputy District Judge Oldham made a possession order. No evidence was taken but he found that the deposit was protected and it wasn’t relevant if Ms S knew that it was. He found that rent was due on the first of each month so the statutory periodic tenancy ran to the last day of each month. The s.21 notices were valid.

Ms S appealed. HHJ Wulwik allowed the appeal.

The 20 April 2009 section 21 notice was invalid as the prescribed information had not been served at that date. The DDJ had wholly failed to deal with whether Ms S had been served with the prescribed information and if so when.

There was no great difficulty in requiring a tenant to pay rent on a different date to the periodic date of the tenancy, here rent on the first of the month on a monthly periodic running from 20 of one month to 19 of the next. Salford CC v Garner [2004] EWCA Civ 364, [2004] HLR 35, CA considered. The s.21 notices should have specified the last day of the period of the tenancy, the 19 of a month.

As neither of the s,21 notices did so and there was no saving clause, the notices were invalid. Possession claim dismissed.

Of course, the Localism Act 2011 changed the rules around the period for protection of the deposit, and provision of the prescribed information. It also changed the rules on when a s.21 notice may be served if the deposit and information weren’t dealt with within 30 days of receipt of deposit. However, it remains the case that a s.21 notice is invalid if the prescribed information hasn’t been served on the tenant.

The Circuit Judge took a firm approach to what some regard as the Gordian knot of the correct termination date of a s.21 notice where the period of the tenancy and the rent payment dates do not match. Some, including DJ Hickman in the Law Gazette, don’t think it is so straightforward.

Is the Occupiers’ Liability Act 1957 still relevant in a landlord & tenant relationship, or not?

Jasmine Alexander v (1) Freshwater Properties Limited (2) Christopher Place [2012] EWCA Civ 1048

This was an appeal, decided within a few days of Drysdale v Fletcher in the High Court, but appearing to reach quite different conclusions on the applicability of the Occupiers’ Liability Act 1957. I’ll give my view on the apparent differences at the end.

Ms Alexander was the occupier (whether tenant or leaseholder is not clear) of a flat in a block. Freshwater Properties was the landlord of the block and Christopher Place was a building contractor hired by Freshwater.

Ms A suffered a traumatic partial amputation of a finger when it was caught in the front door to the block as it closed. The front door to the entrance hall was a common part.

Works had been commissioned by Freshwater, carried out by CP, including the removal, polishing and replacement of the exterior door handle to the front door.

Miss Alexander brought proceedings against both the landlord and the builder alleging breach of duty under the Occupiers’ Liability Act 1957 and negligence. It was her case that the self-closing mechanism fitted to the door was defective and that it was necessary for anyone leaving the building to pull the door shut in order to ensure that the lock engaged properly. Although positioned at knee height, the exterior handle had enabled that to be done safely. The removal of the handle made it necessary to pull the door closed by grasping its edge, taking care to move one’s fingers out of the way before it closed on them. The claimant said that the absence of the handle created a dangerous situation because it gave rise to a risk of precisely the form of injury which she had suffered on the day in question. There was a trial limited to the question of liability.

The evidence was that the self close mechanism to the door was erratic. The Recorder found that it was working on the day of the accident, but for some time, there had been a notice up reading:

“DEAR FELLOW RESIDENTS AND GUESTS,
PLEASE ALWAYS PULL OUTER DOOR FULLY CLOSED WHEN YOU GO OUT OR IN AND MAKE SURE THE CATCH CLICKS SHUT!
OR WE COULD GET STRANGERS COMI[N]G INTO THE BLOCK.
Thank you.”

Ms A had been more distracted than usual and had pulled the door harder the usual and misjudged the timing of the removal of her hand. The handle had been removed several weeks before the accident by CP and had not been replaced.

The Recorder found that the builder had been negligent in allowing the door to stay handless for so long, when it posed an obvious risk of injury. The builder should have known from the sign inside that the self closing mechanism was not reliable and so it was foreseeable that residents would resort to pulling the edge of the door.

The landlord was also liable. It knew that the self-close mechanism was defective. It had been involved in the decision to send the handle for polishing and should have been aware that it would be missing for several weeks. The landlord should have arranged a replacement or repaired the self-closing mechanism.

Liability was apportioned at 25% to the landlord, 75% to the builder, but with 25% contributory negligence by the Claimant.

The builder appealed, and then, out of time, so did the landlord. The builder argued that the Recorder had failed to apply the principles of negligence correctly, alternatively, he was wrong to assign 75% liability to the builder. The landlord also argued that the Recorder has been wrong on the principles of negligence, but in the alternative resisted the builder’s second argument on apportionment of liability.

The argument on liability was based on the way the recorder had summed up the statement of principle in Whippey v Jones [2009] EWCA Civ 452. The Recorder had said “What underlies the law is the concept of reasonable foreseeability of injury.”.

The builder argued that:

the Recorder failed to recognise that the builder would not be in breach of a duty of care towards those who used the front door unless a reasonable person in his position would have realised that the absence of an exterior handle might result in someone’s suffering injury by getting their fingers trapped in the door. In the present case that was highly unlikely: the door was fitted with a self-closing mechanism, the handle was not designed for closing the door, none of the residents who gave evidence thought that there was a serious risk of injury and for an accident to occur there would have to be an unusual sequence of events.

The landlord similarly argued:

that it is not enough that the defendant should have foreseen the possibility of injury; in order to be held liable it is necessary that a reasonable person in his position should have realised that the likelihood of injury was sufficiently great to require steps to be taken to prevent it. If the Recorder had adopted that approach he would have held that the risk of harm was so low that neither defendant could reasonably have been expected to guard against it.

The Court of Appeal held that the single sentence attacked “is not of itself sufficient to demonstrate that he failed to apply the correct principles, in particular the need to decide whether a reasonable person in the defendant’s position would have regarded the risk as sufficiently serious to require action.”

On the facts, the Recorder’s decision that the builder was negligent was wholly justified. The door was heavy and likely to injure fingers if trapped, the self close mechanism was clearly defective and residents were asked to pull the door closed behind them. The builder had removed the handle but failed to check how the door closed. As far as the landlord’s liability, the notice may have been put up by a resident, but an agent of the landlord visited regularly and was aware of the notice. The landlord had been a party to the decision to remove the handle and, through its agent, was aware it had been removed for some time.

The landlord sought to avoid liability by arguing that it had delegated authority for the works to the builder and so could rely on s.2(4)(b) of the Occupiers’ Liability Act:

In determining whether the occupier of premises has discharged the common duty of care to a visitor, regard is to be had to all the circumstances, so that (for example)—
[...]
(b) where damage is caused to a visitor by a danger due to the faulty execution of any work of construction, maintenance or repair by an independent contractor employed by the occupier, the occupier is not to be treated without more as answerable for the danger if in all the circumstances he had acted reasonably in entrusting the work to an independent contractor and had taken such steps (if any) as he reasonably ought in order to satisfy himself that the contractor was competent and that the work had been properly done.

But the Court of Appeal found that in failing to correct the self closing mechanism, or instructing the builder to fit a temporary handle, the landlord was personally negligent.

The landlord’s duty under section 2(1) (the “common duty of care”) was to take such care as in all the circumstances of the case was reasonable to see that the residents would be reasonably safe in using the premises. It was accepted that in the context of this case that amounted to the same as the common law duty of care. That was a personal duty which required the landlord for his own part to take all reasonable care to ensure that the residents were reasonably safe. It was not suggested that the builder was not a competent contractor or that the landlord had failed to satisfy himself properly of that fact, but that is not an answer if there has been negligence on the part of the landlord himself.

On the apportionment of liability:

The danger arose from a combination of a defective self-closing mechanism and the absence of an exterior handle. Both defendants were parties to the decision to re-polish and replace the handle and both knew that that would take some time. Both were, or should have been, aware that the door was heavy and that the self-closing mechanism did not work properly. Both were, or should have been, aware that the residents were encouraged to pull the door shut behind them when leaving the premises and both were, or should have been, aware that once the handle had been removed that could be done only by grasping the edge of the door and pulling it shut. The builder could have fitted some kind of temporary handle and, if he failed to do so, the landlord could have asked him to fit one. It might be said that the landlord, which had general responsibility for the common parts of the premises, was more responsible than the builder, because it had a general responsibility for the upkeep of the premises, including the self-closing mechanism. On the other hand, the builder had created the danger in the first place by removing the handle and failing to check that the self-closing mechanism worked properly. However, that may be, I do not think that the mere fact that the builder was responsible for the work on the handle provided a sufficient ground for holding him 75% liable. In my judgment there was no good reason in this case to attribute greater responsibility to him than to the landlord. In those circumstances I do not think that the Recorder’s apportionment of liability can stand. I would vary the order below to provide that the builder and the landlord are equally responsible.

Comment
While this case is interesting in itself on the issue of negligence and the apportionment of liability, it has concerns some questions, for instance for Case Check, that there may be a conflict with Drysdale v Hedges. Given that Drysdale v Hedges appeared to say that the Defective Premises Act had replaced Occupiers’ Liability Act for landlord/tenant cases. I’m not convinced that there is a conflict.

Firstly, this case was pleaded as an Occupiers’ Liability Act case, with no alternative DPA claim, and the issue of the DPA was not raised at first instance or on appeal.

And then it is worth noting that the relevant defect here was to the common parts of the building, retained and not demised by the landlord. Section 4 DPA is concerned specifically with premises let under a tenancy. The front steps in Drysdale were part of the demised property – a house and gardens.

A landlord may well owe a repairing obligation for the common parts under s.11(1A) on a short lease, and possibly under the express terms of a long lease. A missing door handle to the front door would be disrepair, as would a defective self-closing mechanism. It may be possible to plead personal injury arising from a disrepair liability in these circumstances but this is arguably not sufficient for DPA liability. Where an injury arises from a defect in common parts, rather than in the demised premises, Occupiers’ Liability Act may still be applicable.

Johnson v Old, Brighton County Court

We have not yet written about this case even though the first instance decision was reported in Legal Action. As it turns out this has been useful as the original decision, as written up in Legal Action has been set aside on appeal to a circuit judge. While this might appear to be a stunning example of perspicacity it is actually complete luck caused by pressure of work.

In summary the case is one relating to tenancy deposit protection. The definition of a tenancy deposit is given in s212 of the Housing Act 2004 as:

any money intended to be held (by the landlord or otherwise) as security for—
(a)the performance of any obligations of the tenant, or
(b)the discharge of any liability of his,
arising under or in connection with the tenancy.

This definition is unaffected by the changes made to the tenancy deposit protection regime in s184 of the Localism Act 2011.

In this case the tenancy agreement had been poorly prepared. It stated the rent as being payable both six monthly in advance and had a separate clause stating it was payable monthly. Clearly this was not what had been agreed between the parties and it would not have been possible for the landlord to enforce it. However, at first instance the judge appeared to take the document at face value and held that the rent in advance component was a deposit.

The decision was appealed by the landlord to a circuit judge who has taken the opposing view. He has restored the position on the facts as opposed to the documentary position. However, we understand that the tenant has now sought permission to appeal from the Court of Appeal. This will be a very important decision if it is appealed as it could give some badly needed guidance on what a deposit is and how a court is to decide in more marginal cases.

With thanks to James Browne of Lamb Chambers for filling in some of the gaps.

An unlawful eviction case with some unusual dramatis personae.

Rebecca Claire Webb v Samina Amreen Birmingham County Court 31 August 2012 [Unreported elsewhere]

Ms Webb was the assured shorthold tenant of Ms Amreen, for a 6 month term from September 2007 then a statutory periodic. A deposit of £540 had been paid, but was not protected. Ms Webb lived at the property with two children.

Over a period leading up to 23 June 2008, Ms Amreen conducted a campaign of harassment intended to drive Ms Webb from the property. This followed a gap of a month in housing benefit payments. There were texts threatening to ‘turn up with the bailiffs’ and repeated attendances at the property. Ms Amreen was warned by the Council’s Tenancy Relations officer about her conduct but ignored this.

Matters culminated in June when Ms Webb found Ms Amreen trying to climb in through a back window to the property. Ms Amreen told Ms Webb she had to go as it was her house and that she would move in with Ms Webb and live there if Ms Webb didn’t go. Ms Webb called the police and the TRO as Ms Amreen had said she would return the next day. On 23 June 2008, Ms Amreen arrived with a number of family members, including her father, Raja Amin, who was a Magistrate. The police and the TRO also arrived.

In the ensuing events, Ms Amreen threatened to break the windows, tried to enter the property, threatened Ms Webb and was rude to police officers. Mr Amin threaten the police officers with publicity if they arrested him as he was a magistrate (Ms Amreen worked for the BBC and was an aspiring presenter). He refused to leave the property when asked by the police, and when warned he would be arrested told the police it would be on TV that they had arrested a magistrate for being at his own house.

At 6 in the evening, under this pressure, Ms Webb moved out with the belongings she could manage to take. Her children stayed with family members and Ms Webb sofa surfed until November 2008 when they were given temporary accommodation.

Birmingham CC prosecuted Ms Amreen under the Protection from Eviction Act. In December 2009 she was convicted on four counts in Coventry Crown Court, reduced to three counts on appeal in September 2011.

Ms Webb’s brought a claim for unlawful eviction and harassment. Initially Ms Amreen was represented and filed a defence and counterclaim. This was struck out for non-compliance with unless orders. The hearing for assessment of damages was heard before HHJ Robert Owen QC at Birmingham County Court. Ms Amreen did not attend.

General damages of £16,000 (160 days at £100 per day)
Aggravated damages of £3500
Exemplary damages of £2500
Special damages of £498.40
Penalty of 3 times deposit and return of deposit under s.214 Housing Act 2004 £2160
Interest £1972

Total £26,630.40
Costs to Ms Webb

I don’t know on what basis exemplary damages were assessed but will try to find out. I also don’t know whether Mr Amin remains a JP, but in the light of the recent Judicial blogging guidance about not identifying oneself as a judicial office holder online, his actions have a certain resonance.

Thanks to Saeed Ashiq of Community Law Partnership, who acted for Ms Webb, for the note of the case.

Does the landlord’s repairing duty under Section 11 Landlord and Tenant Act 1985 extend to damage by fire, flood or tempest?

LB Hammersmith and Fulham v Carty is a County Court judgment reported on Hardwicke Chamber’s site which raises some interesting issues on the interpretation of Section 11(2)(b) of LTA 1985. This provides:

(2) The covenant implied by subsection (1) (“the lessor’s repairing covenant”) shall not be construed as requiring the lessor—
(a) [...]
(b) to rebuild or reinstate the premises in the case of destruction or damage by fire, or by tempest, flood or other inevitable accident, or
(c) [...]

Ms C was a secure tenant of H&F (whose tenancy agreement repairing duties were limited to s.11 specifically). There was a fire in April 2010, which was started in a neighbouring flat through arson by the tenant. The fire gutted that flat and did considerable damage to the walls, ceilings and electrics in the common area outside the flats. There was smoke damage to Ms C’s flat, but the only other particular issue was a smoke damaged air vent that required replacement. Ms C also complained about a lingering smell of smoke.

After the fire Ms C had moved out. Although repairs and temporary lighting were fitted in the communal part within some weeks, Ms C did not move back in, despite H&F insisting the property was fit for use. It appears she also stopped paying rent, or some rent.

H&F brought a claim for possession, Ms C counterclaimed for disrepair. The principle issue was the smoke damaged air vent.

H&F argued that as the fire had not been caused by disrepair or H&F’s actions, the resulting damage to common parts, which was accepted to be disrepair fell under s.11(2)(b) and that therefore no liability arose to Ms C.

It isn’t clear if Ms C was represented – I suspect not, but any information welcomed – but the District Judge apparently agreed with H&F and found that there was no liability for the fire related disrepair.

The Hardwicke note suggests that this argument could be extended to, for example, cases of water penetration between flats where the landlord is not primarily liable for the escape of water in the first place. It suggests that it would be a defence to a claim for the damage to the claimant’s flat (damaged plaster, walls, ceiling, electrics etc.) that the damage was the result of a ‘flood’ so no liability on the landlord’s part to rebuild or reinstate under s.11(2)(b).

I have doubts about this, beginning with the viability of describing a persistent, or intermittent but long term, leak as a ‘flood’…

noun
1 an overflow of a large amount of water beyond its normal limits, especially over what is normally dry land: [Source]

or

a : a rising and overflowing of a body of water especially onto normally dry land; also : a condition of overflowing [source]

It is also rare for water penetration to be due to the other tenant, or rather be due to something that does not fall under the landlord’s repairing obligation in that flat. Leaseholders are a different issue – but then a nuisance claim may depend on the landlord’s reserved right of entry to carry out repairs, if any (a post for another time).

So, if this argument is to have any role, it would arguably only be in cases of a one off, large scale flooding, caused wholly by the other tenant, or, as in this case, fire.

And then there is a fundamental question of whether the argument is right overall in its application to disrepair. Section 2(b) concerns liability to ‘rebuild or reinstate the premises’, (rather oddly as the rest of s.11, including (1) and (1A), refers to the ‘dwelling house’ and/or ‘building’). But arguably ‘rebuild or reinstate the premises’ has a different meaning to ‘keep in repair and proper working order’ the structure, exterior, water, gas, electricity, sanitation heating etc. (S.1 and s.1A), whether fire, flood or indeed tempest is involved. Destruction of the premises, not disrepair, would seem to be the target, otherwise s.11(1) has a very odd set of exclusions. ‘Reinstate’ is not used elsewhere in s.11 at all, so is arguably not synonymous with ‘repair’ – which was the argument made in this case.

But this might well be an argument we see played out in the future. It will no doubt be used by landlords.

Ayannuga v Swindells (2012) CA (Civ) 6 November 2012. On Lawtel but not on BAILII yet.

The Court of Appeal has recently ruled on a tenancy deposit protection case regarding the issue of prescribed information. Here T had paid a deposit and L had protected it in one of the approved schemes but he had not given the prescribed information as required by the Housing (Tenancy Deposits)(Prescribed Information) Order 2007. T allegedly fell into rent arrears and L sought possession. T counter-claimed on the basis of lack of compliance with the Prescribed Information Order. L admitted non-compliance with the Order but argued that the requirement was largely procedural, that the purpose of the legislation was to protect deposits (which had been done) and that T could have found out all he wanted to know from the scheme administrator. The lower Court dismissed T’s claim holding that information in the tenancy agreement coupled with the further information provided by L during the hearing was enough to comply with the requirements of the Order.

T appealed. A very heavyweight Court of Appeal (Etherton LJ, Lewison LJ) disagreed entirely with L and the lower Court. It held that the information requirement was not merely a minor procedural one. They were of real importance as they told tenants how they could seek to recover their money and how they could dispute deductions without litigation. The Court of Appeal upheld the decision of the High Court on this issue in Suurpere v Nice (our report here). The lower Court had acted outside the bounds of proper judicial evaluation. L was clearly in violation of the order and the penal;ites of s214, Housing Act 2004 applied. Therefore L was ordered to return the deposit plus a penalty equivalent to three times the deposit.

Appeal allowed.

Discussion
The Court of Appeal has done a couple of important things here:

1. It has upheld the view of the High Court from Suurpere. The Prescribed Information is not a support to the main purpose of the legislation, protection of deposits. It is a key part of the two elements of the legislation. Mere protection without the information is simply not enough to discharge the landlord’s obligations. In addition, it confirms that landlords must supply that information themselves not leave tenants to go on a hunt to work it out themselves.
2. Where there is argument about whether the information the landlord has provided is sufficient then the test is as set out by the Court of Appeal in Ravenseft Properties v Hall. That is (with paraphrasing):
   

   whether, notwithstanding any errors and omissions, the notice is “substantially to the same effect” in accomplishing the statutory purpose of telling the proposed tenant of

   their rights and the procedures operated by the relevant tenancy deposit scheme for recovering their money and contesting deductions.

The upshot is that the Prescribed Information really does matter and landlords need to ensure they have it right. Tenants now have a clear additional means of defending possession actions based on s21, Housing Act 1988 or on rent arrears. While some landlords will be annoyed by this decision it is really the only proper course. Parliament must have intended that the Prescribed Information was of importance because they went to the trouble of setting out in some detail what it had to say. If you also consider that one purpose of the schemes was to remove deposit litigation from the small claims track in the county court then the importance of tenants knowing how to contest deductions without using he court system is obvious.

We bring you two interesting reports from the world of Rent Repayment Orders. Briefly, these stem from a power under s73 and 74 of the Housing Act 2004. These sections allow a Residential Property Tribunal to award a tenant or local authority the return of rent or housing benefits where the landlord has been operating an unlicensed HMO.

Legislative Context
The provisions are a little different. For tenants the Landlord must have been convicted of operating an unlicensed HMO or the Local Authority must have already obtained an order for the return of Housing Benefit and, after this has occurred, the tenants may then apply for the return of rent for the period of 12 months preceding the date of their application to the RPT. The RPT should award such sum as they consider reasonable. For Local Authorities their is no need to wait for a conviction and they can apply directly to the RPT for the return of benefit for the 12 months preceding the service of a notice to the landlord informing him that they propose to take action. They are also entitled to the whole sum of the Benefit payments back, there is no assessment by the RPT.

Clearly the system does more for Local Authorities than tenants and, in practice, tenants often find it hard to recover a substantial sum of money because by the time a prosecution has been completed they have been out of the property for some time. In addition the RPT is extremely variable about its level of reward with variations in decisions from £5 up to 100% of the rent.

RPT
Context over, the first case of note is an RPT decision which appears to be an award of the largest ever sum on a rent repayment order. We have limited details (and should thank 24dash for the information) but the award is for £39,000 and follows on from a conviction for failure to licence in Highbury Magistrates Court in June 2012. Disturbingly, in the comments section of the story is a comment by someone stating that they were the tenant who obtained the order, doubting their ability to recover money, and asserting that the property is still being used unlawfully.

We also believe that this is the largest ever RPT award but anyone who knows different or who has more information on the case please get in touch.

Upper Tribunal
As if the above was not enough, our Rent Repayment river has burst its banks with the further downpour of an Upper Tribunal decision on the same topic. We think this is the first one and as Upper Tribunal decisions are binding on the RPT it is likely to be important.

Parker v Waller & Ors [2012] UKUT 301 (LC) is an appeal against a Southern RPT decision to award 100% of the rent for the 12 months preceding an application by the tenants, some £15,423.63.

The facts are fairly simple. P was the landlord of a property in Southsea. He failed to obtain an HMO licence. He was convicted in his absence of the offence of failing to licence and HMO under s61, Housing Act 2004 on 15 November 2010 and was fined the, surprisingly small, sum of £525 plus costs. P applied for a licence on 21 January 2011. The tenants duly applied to the RPT for repayment orders in February 2011 and the RPT awarded them the entirety of their rent back for the various periods they had lived in the property. The RPT specifically stated that they “found no reason to limit the repayment orders to less than the full amount”.

P appealed. Permission was granted by the UT specifically because of the quote above on the basis that this was an improper use of the discretion of the RPT. Their role was not to start from the maximum and then find reasons to limit it.

At the appeal P made several arguments:

First, he asserted that the period for which the Repayment Order was made should not commence earlier than the date of conviction. He was of the belief that the property was licensed and was unaware that he was committing an offence until he had received the notice of conviction. P accepted before the RPT and UT that he should have defended the matter if that was his contention but pointed to difficulties in his personal and business life which had meant him leaving the matter.

Second, the RPT was wrong to ignore the condition of the property and award the full sum. It was not in disrepair and the tenants had arguably suffered no loss. His financial circumstances had not been considered by the RPT and neither had the relatively small fine. The RPT had not made any specific findings of misconduct in his part and the purpose of repayment orders was not to create a windfall payment to tenants.

W countered the second argument at the RPT and again before the UT. He pointed out that the property had been the subject of HHSRS notices from the Council and that he had been rehoused due to disrepair. He pointed out that P was the director of a firm of local Lettings agents and therefore had no excuse for not being fully aware of the law.

This is where it gets complicated. The UT had little choice but to embark on a consideration of the purposes of Rent Repayment Orders. In the absence of sufficient information in the rather convoluted legislation reference was made to the Hansard and in particular to the comments of Lord Bassam at the time the provisions were introduced. I am going to spare you this discussion and skip to the conclusions of the UT.

1. The repayment order provisions are penal in nature. Therefore the RPT must be satisfied that it has considered all the factors set out in the legislation, any other material factors, and it must be certain on each case that there is a clear entitlement on behalf of the tenant to the money;
2. In the case of tenants the landlord will already have been fined by the magistrates in most cases. Therefore the RPT must take this into account and consider the total amount that will be paid by the landlord. It is accepted that this may create an unhappy tension between the fine and RRO. The RPT should have regard to the fine awarded by the magistrates Court as against the maximum fine level of £20,000 and should consider this is a reflection of the seriousness of the offence. However, the RPT is entitled to come to a different view on seriousness from the magistrates;
3. There is no presumption that a Repayment Order should be for the full sum paid during the relevant period. The RPT must take an overall view of what is reasonable.
4. The total length of the offence is relevant when considering the seriousness of it;
5. The fact that the tenants have had the use of the property during the order period is not relevant or is a minor issue. It is the essence of the provisions that the tenant should have rent returned. Therefore the tenant will always obtain something of a windfall. Reduction in this regard should only be made if the tenant has been guilty of some misconduct.
6. Utility payments which are included in the rent can be included in a Repayment Order as they fall within the ambit of the legislation. However, they should only be included in the most serious cases;
7. Conduct and financial circumstances should be considered by the RPT. However, a property professional should expect to be dealt with more harshly.

Turning to the particular facts of the case the UT held that the RPT had been wrong to assume that the period of payment should end with the date of the tenant’s application. They had not in fact had enough information on this point to come to any settled conclusion. However, the UT considered the payment period ended on the date that the license application was made, that was 21 January 2011. However, the UT stated that P was “clearly wrong” in asserting that the payment period could only begin from the date of his conviction. He was clearly committing the offence prior to that date. However, the RPT again made a mistake in failing to find precisely when the period commenced. The RPT was wrong to take as its starting point an award of 100% rent to the tenants and then consider whether that should be reduced. It should make a reasonable award taking into account the relevant factors. Repayment Orders for occupiers should be contrasted with those for Housing Benefit. The RPT was again wrong to ignore P’s financial circumstances, his payment of utility bills, and the seriousness of the offence, they must weigh all material considerations. Finally, the RPT were not wrong to refuse to order salted or staged payments as they had no power to do so.

Appeal allowed. The UT remade the decision itself and reduced the sum awarded to the tenants to 75% of the rent for a shorter period ending with the date of the licence application.

It is worth noting from the further comments on this case that the RPT are therefore required to make clear decisions on:

1. That the offence was committed, simple in most situations;
2. What the start and end dates of the payment period are with reference to the application dates and the offence dates;
3. How serious the offence was;
4. The appropriate amount to award taking into account all material factors;
5. Whether the tenant’s conduct means that a deduction should be made.

This is a pretty thorough and detailed decision. It clearly sets out how the RPT should consider and calculate Repayment Orders. I would expect this decision to come to characterise how RPT repayment order decisions are made in future.

So, I gave a talk on the deposit scheme post Localism Act on Tuesday morning, then surface to immediately find word of a new wheeze being tried by landlords. Just how quickly can one become outdated?

The Housing Act 2004 as amended by the Localism Act 2011 and in force from 6 April 2012 appears to say that if a deposit has not been protected within 30 days (or by 7 May 2012 for deposits taken before 6 April 2012), then no section 21 notice may be served unless the deposit (with agreed deductions) has been returned to the tenant or dealt with in s.214 proceedings by court order.

The new wheeze, being used by landlords who failed to protect, served a s.21 and are now seeking to rely on it, goes something like this…

The relevant parts of s.215 are:

s.215

(1) [Subject to subsection (2A),] if a tenancy deposit has been paid in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy at a time when—
(a) the deposit is not being held in accordance with an authorised scheme, or
(b) section 213(3) has not been complied with in relation to the deposit.

[…]

(2A) Subsections (1) and (2) do not apply in a case where—
(a) the deposit has been returned to the tenant in full or with such deductions as are agreed between the landlord and tenant, or
(b) an application to a county court has been made under section 214(1) and has been determined by the court, withdrawn or settled by agreement between the parties.

The argument being that (2A)(a) means that once the deposit has been returned to the tenant, (1) does not apply, with effectively retrospective effect, so any s.21 previously served is valid once the deposit has been returned, and the notice can be relied on in possession proceedings. (Accelerated proceedings couldn’t be issued in the meantime, as the landlord must declare the deposit protected or no deposit taken. Further, there would be the added complication of whether the s.21 was valid – as in served – at the date of issue of the claim).

Now, it has to be said that (2A) could have been more precisely worded – ‘ceases to have effect’, say, or even just ‘do not apply in a case once..’. But at the same time for a clause to have retrospective effect, one would expect to see that clearly specified. I would put myself on the ‘no retrospective effect’ side of the argument. For the issue of whether the tenant had in fact been served with a s.21 to turn on whether the landlord had at some later point returned an unprotected deposit to the tenant, strikes me as going against all certainty of notice.

But the fact that the opposite is arguable will no doubt mean some landlords succeeding on this point in the County Court.

I have an awful suspicion that this one will be destined for a higher court, just when we thought deposit scheme issues had been more or less sorted out.

According to this article, the Residential Landlords Association are up in arms about the European Court of Human Rights being about to rule on article 8 defences in a case affecting private land owners. Richard Jones, the RLA policy director (and a solicitor who some might think should really know better) is quoted as saying:

“If Europe decides that respect for the home provisions within the Human Rights Convention apply to private landlords this will lead to a mass exodus of landlords, causing untold misery for those in desperate need of a place to live.”

There are a few problems with that statement, but perhaps the most immediate one is that the case the RLA appear to be on about is not actually in front of the ECtHR at all. It is, in fact, in front of the entirely UK based Court of Appeal, Malik v Persons Unknown, (the Heathrow trespass case – our earlier report) in Mid January 2013. Somehow this appears in the article as the ‘ECHR’s court of appeal’…

This isn’t the first time the RLA has wholly inaccurately got its knickers in a twist about Art 8 cases. One might have thought they would have learnt to check before fulminating about ‘Europe deciding’.

Oh, was that a wolf?

An appeal against conviction on an illegal eviction case. We didn’t report it at the time, but in R v Jay Allen & Razwan Mohammed, in Sheffield County Court, September 2012, Jay Allen was convicted of illegal eviction under section 1(3A) Protection from Eviction Act 1977. A newspaper report is here.

In short, the tenant, who was in rent arrears, was threatened. The altercation was partly recorded by the tenant. An extract runs:

JA – “Right, get your stuff.  I want you to leave, go.”

T – “You can’t just kick me out on the street.”

JA – “I am. I am doing.”

T – “It’s against the law that (unclear).

JA – “Do I look like I care?”

Sounds on phone

JA – “You can do it this way or you can do it the hard way.  It’s up to you.”

The tenant was then forced out of the property, without his shoes and without his belongings, by Razwan Mohammed, on Jay Allen’s direction. Jay Allen then threw the tenant’s shoes at him, hitting him. The tenant was subsequently let back in. Sheffield City Council prosecuted.

Jay Allen was sentenced to 9 months custodial sentence and costs of £5,755. Razwan Mohammed sentenced to 6 months prison, suspended, and a curfew and tag.

Jay Allen appealed against conviction. There were 5 grounds, only one of which was given permission. At the trial, there was evidence that during the threatening conversation in the flat, and while telling the tenant to pack up his belongings and leave, Jay Allen had found some bottles in the tenant’s wardrobe, which contained urine. At trial, the Judge had refused to allow the jury to consider whether the statutory defence in s.1(3B) PEA 1977 applied after Jay Allen had found the bottles. Jay Allen argued that the Judge should have allowed the jury to consider whether the statutory defence in s.1 (3B) applied to Allen’s acts after the discovery of the bottle(s) of urine.

S.1(3B) provides

A person shall not be guilty of an offence under subsection (3A) above if he proves that he had reasonable grounds for doing the acts or withdrawing or withholding the services in question.

At hearing on 17 April 2013, the Court of Appeal dismissed the Appeal. The Judge below had been right to withdraw the statutory defence in respect of the discovery of the bottles of urine because Mr. Allen had only raised it in evidence to justify his decision not to allow the tenant back into the property after the tenant had been removed from the address.  This was after the acts asserted by the prosecution as comprising the harassment of the tenant.   The Court declined to go any further into the question of what might be a reasonable ground, but endorsed the view of the Judge below that Jay Allen’s other behaviour towards the tenant could not be supported by reasonable grounds.

Costs of £2,550 against Jay Allen.

It is worth noting that Jay Allen was the director of a property company with 7 properties at the time of the trial. Whether he still is, we don’t know.

Johnson & Ors v Old [2013] EWCA Civ 415

The Court of Appeal has been turning its mind to another of the odd questions that has sprung from the fertile litigious bosom of tenancy deposit protection. In this case the argument was over the question of rent payable in advance.

The Law and The Problem
In s212(8), Housing Act 2004 there is a definition of a deposit as follows:

“tenancy deposit”, in relation to a shorthold tenancy, means any money intended to be held (by the landlord or otherwise) as security for—
(a)the performance of any obligations of the tenant, or
(b)the discharge of any liability of his,
arising under or in connection with the tenancy.

It is the practice of some landlords and agents, in cases where the tenant’s credit worthiness is in doubt to ask the tenant to pay 6 months rent in advance. At the end of the six months they commonly pay rent monthly (either on a continued fixed term or periodic tenancy) having. so to speak, proven their worth. These situations are usually expressed in the tenancy agreement as a statement that the rent is calculated monthly obligation to pay the rent monthly with a further statement stating that it is due six-monthly in advance. Less well drafted agreements are more inconsistent and have a provision requiring payment of the rent monthly and a second provision which is in tension with it stating that the rent is to be paid for six months in advance. This has led some commentators to suggest that a requirement for rent to be paid 6 monthly in advance is actually security for the tenant to fail to pay the rent monthly and it therefore it counts as a deposit.

The Facts
And so it was in this case. Ms Old took a tenancy of a property. She had a good credit history but no immediate income and so she was offered a 6 month tenancy with the rent payable six monthly in advance. The tenancy was very poorly worded and expressed the rent as actually paytable monthly but then had a further provision expressing the rent to be payable every 6 months. The tenancy was renewed several times for further 6 month terms on the same 6 monthly payment provision and then became periodic with the rent payable monthly. The landlord duly sought possession based on an s21 notice served some time before and this was defended on the basis that at the time the notice was served the deposit (the six months advance rent) had not been protected. The situation was made worse because the agreement was worded in such a way that it appeared that the tenant was being asked to pay the rent for the periodic tenancy at a much earlier stage.

The Appeal
The Court of appeal rapidly sliced the issues put before it down to one question to consider. They then made clear that the agreement had to be considered as a whole and no one clause could be used to demonstrate that there was a deposit without looking at the whole agreement and its overall effect.
The Court approached the main issue, was rent in advance security by considering two issues. First, that there is a crucial difference between an obligation or liability and the security for that obligation or liability. A payment as security is not intended to discharge the obligation or liability. It is intended as an assurance that the obligation or liability is to be discharged at some future time. A payment which is intended to discharge the obligation or liability is just that. The fact of making the payment discharges with the liability. Having made this first point clear the Court applied a devastating analysis by asking itself how the tenant would have responded were she asked to make a payment of the monthly rent having already paid the six months in advance. It concluded that she would have responded that she had already paid the rent. That being the case the money already paid could not possibly be a security for the discharge of the obligation but rather a discharge of the obligation to pay rent. This killed the issue stone dead.

Comment
This is probably a fairly dull issue for many people. However, rent in advance is common in the private sector and particularly in relation to those on lower incomes who have weak credit status. I don’t think this case should have won on appeal and I have been making similar arguments to the Court of Appeal to anyone who will listen for several months (my wife is so bored of this case!). If Ms Old had won it would have caused a major problem for many landlords and letting agents. However, it would be nice to see some way of reducing the use of rent in advance, which is a serious kerb on many tenants being able to access the private rented sector. This case would have largely ended the practice if it had gone the other way and so there is some sadness about its lack of success.

At the very beginning of social housing, with the Peabody Estates in the 1860s, prospective tenants faced imposed requirements that we would now consider to be extraneous to the tenancy: Mandatory smallpox vaccinations; curfews; and cleaning rotas before 10 am for communal areas, sinks and WCs. But even the Victorian paternalists didn’t lower themselves to the patronising, small minded and teeth-grindingly passive-aggressive approach apparently in vogue for 21st century social landlords

Since the Localism Act, there has been a clear tendency for some local authorities to set conditions on access to social housing and retaining it which go into the realm of prescribing behaviour. Westminster, Hammersmith and Fulham, Wandsworth and Barnet, for example, have or are seeking to introduce allocation policies or tenancy conditions requiring tenants to be in employment or training, not to be earning too much, or too little, to be making a ‘contribution to the community’, or not to allow their visitors to cause a nuisance or commit an offence anywhere in the borough (this last did not work out well for Wandsworth…). Renewal of flexible tenancies can depend on such factors

Now a housing association has got into the act. Yarlington Housing Group, with some 9000 properties in the South West, has introduced a ‘Household Ambition Agreement’ for all prospective new tenants. Yes, anyone taking up a 7 year fixed tenancy with Yarlington will have to sign an agreement to, well, better themselves. The kind of things Yarlington have in mind are

gaining employment, adopting a healthy lifestyle, getting a qualification or contributing to their local community.

A healthy lifestyle? The future of your tenancy relies on your ‘salad and brisk walk’ score? The ’5-a-day’ tenancy condition?

The tenant’s performance against the ambition agreement will apparently be a factor in assessing whether a further tenancy will be granted at the end of the fixed term.

Yarlington understand that not everybody might be keen on the idea of their landlord setting and monitoring their aspirational achievements, so:

If they decide that they do not want to take advantage of this opportunity [sic], they will be advised to bid for homes offered by other housing providers who do not have a similar scheme.

Yes, it is the 5-a-day way or the highway. Yarlington’s executive director, the euphoniously named Phyllida Culpin, expects

everyone entering this with us to do the very best that they are able.

Tenants are to be the very best that they can be! And eat more fruit! This is tenancy management by way of motivational poster come passive aggressive post it note stuck to the fridge.

It does not appear to have occurred to Yarlington that some prospective tenants might not need or want to have ambitions or aspirations beyond what they already have. All must aspire, regardless. It might well be that some tenants might have ambitions and aspirations that Yarlington don’t think should count. Who gets to determine the terms of the agreement? I suspect we can guess the answer.

It also doesn’t appear to have occurred to Yarlington that, well, stuff happens. People suffer life crises, relationship breakdown, major health issues and all the other vicissitudes of human existence. Does the Ambition Agreement review come with an extenuating circumstances box?

Yarlington have not committed the error of including the ambition agreement in the terms and conditions of tenancy. As Wandsworth found out, such extraneous terms, not directly bearing on the occupation of the property, are likely to be unenforceable, as per RMR Housing v Combs [1951] 1 K.B. 486

However, if Yarlington’s assessment of the tenant’s progress against their ambition agreement is indeed a factor in deciding whether to grant a further tenancy at the end of the 7 years, this thing is serious. Yarlington’s policy and management of the project may well be open to challenge, potentially under public law (if Weaver v L&Q applies) or possibly via Article 8. In addition, it is not hard to imagine circumstances in which Equality Act 2010 and Article 14 may come into play.

Exactly how much of a factor in the decision to offer a further tenancy would living up to your aspirations be? How measured? What is the mechanism for comparison with others on a scale of performance? What specific grades would result in what specific effect on the tenancy review?

What if the tenant disagrees with Yarlington’s assessment of their performance? Is there a review process? Would Yarlington be under an obligation to provide reasons for its findings on the tenant’s performance?

If you haven’t been the best you can be, but have been quite good at it, on the whole and by and large, would you lose out to someone who has definitely been the best they can be, or possibly better? Is this a perverse incentive to under aspire in the first place, so the targets are easier?

Support for tenants to develop, to learn skills and to aid them in management of their household, is undoubtedly a good thing. However, codifying ’improving your tenants’ into a passive-aggressive housing management scheme, with a very real penalty for the tenant, is unworkable, probably unfair and, I suspect, open to challenge unless very, very carefully thought through.

[Update 3 May 2013. I have had a discussion with someone from Yarlington on twitter. The discussion can be found here. They were very pleasant, but I'm not sure what light if any it generated.]

The detail of this may have passed you by at the time, it certainly did me, but amongst the wind and posturing of David Cameron’s ‘big speech’ in March on stopping immigrants from getting things from healthcare to driving licences was quite a significant snippet on the private rental sector.

You have probably already registered the proposals for what Cameron calls ‘state sector’ housing – presumably meaning social housing – which is to introduce statutory allocation guidance:

New migrants should not expect to be given a home on arrival.  And yet at present almost one in ten new social lettings go to foreign nationals.  So, I am going to introduce new statutory housing allocation guidance this spring to create a local residence test.  Now, what this should mean is that local people rightly get priority in the social housing system.  And migrants will need to have lived here and contributing – contributed to this country for at least two years before they can qualify.

This is apparently to include EU migrants, beyond accession country restrictions. Good luck with that. However, many Councils already have residence period preferences and/or restrictions in place. (And, in passing, got to love that irrelevant statistic in the second sentence. How long have those almost 1 in 10 tenants been resident, David?). So, while this is nasty in tone, it partly amounts to smoke and mirrors in terms of policy, save possibly for those on the homeless route.

However, the next paragraph has a bit of a surprise:

Now, finally, as the Deputy Prime Minister set out on Friday, we’re going to radically toughen up the way we deal with illegal migrants working in this country.  Frankly, right now, today it is too easy to be an illegal migrant in Britain.  It’s too easy to get a driving license, get a house without a check on your immigration status.  So we are legislating to make sure illegal migrants can’t have driving licenses. I’ve already said how we’re changing the rules on social housing.  I now want us to make sure that private landlords check their tenants’ immigration status with consequences for those rogue landlords who fail to do so.

Wait, private landlords are to be required to check all prospective tenants’ immigration status? With penalties if they do not?

Apart from the immediate prospect of people being driven into unsafe ‘accommodation’ run by unscrupulous ‘rogue’ (and love that co-option of Shelter’s term) landlords, and the high likelihood of knee jerk racist assumptions by landlords concerned to avoid ‘illegals’, how could this wheeze of Cameron’s possibly actually work?

The starting point has to be that the government (and local authorities) have no idea who is a landlord, and who is responsible for what property. The flip side is that landlords have no means to check on immigration status. There is no realistic prospect that I can see of existing regulations being bent or stretched to cover PRS landlords, and no scheme of penalties for failing to do so (though I have been told of a failed attempt by UKBA to pressure landlords in Cambridge into thinking they were covered by hotel regulations in this regard. More on this when I get it).

So, practically, how could such a scheme requiring landlords to undertake checks of immigration status and penalising them if they didn’t actually work. Only two options spring to mind.

One is to basically do nothing at all, but allow for landlords to be penalised should by any chance, their property be raided by UKBA and illegal immigrants found to be living there.

The other is to bring in a register of landlords, possibly held by the local authority, and possibly require landlords to provide details of tenants. Quite how compulsion to register would be handled is an open question, as is where the cost would land, though the landlords would be the obvious target for that. But this would, in effect, introduce the obligatory landlord register that successive governments and landlords’ bodies have been so keen to avoid.

Quite what will come out of Communities and Local Government in response to this promise of Cameron’s will be interesting to see. Somehow, though, it is one policy I wouldn’t be surprised to see quietly peter out at consultation stage…

In which two [now confirmed as four] Housing Associations behave very badly in anticipation of the benefit cap.

Haringey is one of the pilot boroughs for the benefit cap, limiting the total amount of benefit, including housing benefit/LHA (and astonishingly Child Benefit) that any household can receive to £500 per week. The prospective effects of the benefit cap on housing provision and the homeless have become apparent in the astonishing actions of two [now three] Housing Associations.

First up, and in Haringey, Genesis. The Guardian reported on ‘eviction letters’ being send to Genesis tenants because of the benefit cap. Although it isn’t clear from the report, I’ve established that these were all people who were on assured shorthold tenancies, organised through Haringey Council as temporary accommodation for homeless applicants to whom Haringey owed a duty under Part VII Housing Act 1996. The properties are leased by Genesis from private landlords.

Here is the letter Genesis were sending out. The opening paragraphs state pretty unequivocally what the reason is for the letter and what Genesis are going to do.

The letter goes on to state:

And it is signed by someone describing themselves as a ‘Legal Administrator’.

From this, it seems pretty clear what Genesis are doing. Having identified households that will be subject to the benefit cap, they are serving section 21 notices and preparing to bring possession proceedings, so that warrants can be sought at short notice if rent arrears build up.

The line about ‘we may have to return properties to the owner’ makes no sense. These are properties that Genesis has leased.

There are, as far as I can see, two options for Genesis’ reasoning here. Either the rent Genesis pays under its leases is close to the rent it charges its homeless tenants, so that any shortfall would be a deficit on the rent Genesis has to pay. Or Genesis wants to maintain its income stream from these properties and is not willing to countenance a shortfall in rent, even if it clears the rent Genesis has to pay the landlord in turn.

However, what is clear is that Genesis are not waiting for arrears to accrue, if indeed they do, but are pre-emptively putting themselves in a position to obtain an eviction warrant should they feel any need or wish to do so.

Haringey Council are reportedly furious. Understandably so, as any households evicted by Genesis would be landed right back on Haringey to rehouse, with all the issues of the benefit cap applying. It will be astonishingly difficult for Haringey to find suitable temporary accommodation, and it appears that at least one social housing provider is pulling out of such provision.

We should note that Genesis have issued a press release in response to the Guardian piece. It says, in part:

Genesis regrets any distress that the letter dated 11 April 2013 and sent out to 57 temporary housing residents in the London Borough of Haringey may have caused to these families. At Genesis we have strict processes in place to ensure all our communications to our residents are of the highest standard, we accept that on this occasion we did not meet this standard.

The letter was not a notice of eviction; Genesis is not evicting, nor has it sought to evict any residents as a result of welfare reform. We have contacted all those that received this letter, to reassure them of this fact.

Genesis acts in partnership for these properties with the London Borough of Haringey and third party landlords.  The nature of temporary housing is such that managing agents have lease obligations, guaranteeing a landlord full vacant possession at the end of the lease. In order to ensure that this happens, a section 21 notice is required. These letters were for that purpose.

Hm. This is routine? They serve Section 21 notices routinely on their AST tenants of leased property? The letter was a bit of a whoopsie? I frankly have my doubts. Anyone fancy a FOI request for relevant decisions and records? Even if the letter was an error, this is clearly an issue and potential policy approach that Genesis have considered, in detail.

My doubts about Genesis mea non culpa were compounded when a letter from another housing association landed in my inbox today. This time it is Newlon Housing Trust and the London borough involved, I believe, is not a benefit cap pilot borough. So, this letter is anticipation of the roll out of the cap in October. Again, it is sent to homeless applicants housed under ASTs as temporary accommodation for the Council. The letter, in whole, is in this image:

This is quite simply jawdropping bad. Newlon is actually advising the tenants that there is no need for them to do anything about having a possession order made against them, apart from taking it to the homeless unit.

As with the Genesis letter, Newlon are taking pre-emptive possession proceedings based entirely on the prospect of the benefit changes maybe causing a rise in arrears. Again the ‘in case we have to return the property to the owner’ line is trotted out, but makes no practical sense.

One letter might be a bit of a cock up. Two is a trend. Housing Associations’ response to the threat of the benefit cap to the lucrative ‘temporary accommodation’ market is to serve possession proceedings so that tenancies can be terminated as quickly as possible should there be arrears issues.

But what if these proceedings were defended? It seems to me that there is a clear opening for both a public law and human rights Art 8 proportionality defence to these proceedings, based as they are on Section 21 and mandatory possession claims. These are pre-emptive and speculative proceedings. In addition, Newlon’s letter seems to me to teeter on abuse of process, in as much as it actively seeks to discourage tenants from doing anything about the claim and seeking legal advice is not mentioned at all.

And if the claims were defended, the whole aim of quick and easy possession proceedings, enabling quick and easy eviction, would be defeated.

Nonetheless, the actions of these Housing Associations are a clear indication of where the benefit reforms and benefit cap will leave homeless applicants, particularly in London. It is hard to see how and where they could remain in London when even Housing Associations will not provide temporary accommodation affordable under the benefit cap.

[Update. Apparently A2 Dominion have been doing something similar. More when I get details.]

[Update 3 May 2013. New on A2 Dominion.

Yes, A2 Dominion have been doing the same thing, since at least December 2012. LB Ealing tenants in temporary accommodation have been facing possession claims under the accelerated possession procedure following service of s.21 notices.

Here is A2 Dominion's letter to a solicitor, setting out very clearly their rationale for serving a section 21 notice and bringing possession proceedings.

And here is the resulting possession order, obtained under the accelerated possession procedure. A2 Dominion's purpose is clear - to be able to obtain vacant possession simply by applying for a warrant of eviction - ahead of anticipated arrears. Ealing is not one of the benefit cap pilot boroughs, so A2 Dominion brought proceedings at least 7 months ahead of the benefit cap coming into effect.

The clear indication is that this is approaching a general practice, at least in London.]

[Update 7 May 2013. And another Housing Association is confirmed as doing the same thing. Here is a February letter to a solicitor from Notting Hill Housing Trust, which is as blunt as blunt can be about the purpose of the section 21 notice served, and about the Housing Association expecting the Council to pick up the burden of rehousing.

Again, if they then pursue possession proceedings, this is simply an attempt to reduce the tenant's security of tenure in advance of anticipated problems after welfare reforms and the benefit cap kick in.]

The entrepreneurialisation of social housing over the last twenty years has led to a diversity in the types of shared ownership.  Of course, the standard leasehold type (what in the old days was called DIYSO) predominates, but there are a multitude of other types.  In Ker v Optima Community Association [2013] EWCA Civ 579, the Court of Appeal had to deal with one of these other types in Optima’s claim for possession; but in quite odd circumstances for, by the time of the hearing of the appeal, Ms Ker had accepted that the property was unaffordable for her so that she had to give up possession.  What was in issue seems to have been whether she was entitled to return of some of the amounts she had paid.  Patten LJ, who gave the only substantive judgment, held that she did not have such a claim and ordered possession.

The case appears, then, to lack significance: this was an unusual type of SO scheme, and effectively the possession claim was uncontested.  However, it does give a number of indications about the potential for Art 8 and A1P1 defences to mandatory possession in shared ownership cases, and in that respect takes us a little bit further than Midland Heart v Richardson (links to our report, with lots of interesting comments).  It is also significant because of the detail the Court goes into about shared ownership grants and about the potential mis-selling of the product when advertisers and marketers get hold of it.

Optima developed an estate with a mix of general needs and shared ownership housing.  They were unfortunately hit by the housing “crisis” and could not shift at least some of the shared ownership properties.  They got permission from the then Housing Corporation to offer some of the properties on what became known as a flexi-buy scheme.  Under this scheme, first time buyers who could not afford a deposit for a property went into occupation of the property as an assured shorthold tenant, paying a market rent; when they were able to buy the property on a standard form shared ownership lease (between 25%-75% share), Optima would contribute to the deposit the difference between the market rent paid and the social rent (in this case around £320 pm).  The advertisers wrote, “To make things even easier, you’ll get around £2,500 for every year you rent with us to use as your deposit”; the marketers wrote, “FlexiBuy is a route to home ownership. With FlexiBuy you can rent a property from us and then choose to buy later under Shared Ownership. We will give you a proportion of your rent back to you to use as a deposit when you choose to buy”.

What Ms Ker actually signed was two documents: the first was an AST with rent at £700 pm; the second was an option agreement in which the Optima contribution to purchase was described as a “deposit incentive”.  She would receive the deposit incentive when she exercised the option to buy the property.  The advertisers and marketers do not appear to have referred to the fact that the option agreement would terminate if the tenancy terminated (among others).  Ms Ker said that she read and understood the option agreement before signing it.  Furthermore, she knew that she could not afford the market rent on her own small salary, and would need housing benefit to top up; Optima did not know this (had they known, they would not have offered the property to her because it “was not intended for tenants dependent on housing benefit”).  After a year or so, arrears began to accrue – Ms Ker had a car accident and she had become pregnant with her second child, both of which affected her ability to work.  Housing benefit would only cover the social rent.  Optima offered the possibility of going to intermediate rent, but Ms Ker would lose her option.  In the event, Optima served a s. 21 notice and eventually claimed possession.

Ms Ker pursued a range of defences at the County Court, but possession was ordered.  Before the Court of Appeal, the argument proceeded on the basis of Art 8 and A1P1.  The latter would only be successful if the amount paid by Ms Ker over and above the social rent (which would be repaid in the event that she exercised her option) was her possessions.  It was noted that this amount was about the same as the outstanding rent arrears.  It was pointed out that none of the post-Pinnock case law deals with issues “… where  the consequences of the loss of the tenancy are more than the loss of possession”, and it would not be proportionate to order possession where the arrears were represented by the deposit rather than the rental element.

The Art 8 defence was never a great runner, but it was argued that, if Ms Ker had paid up the full rent or was unable to get a mortgage to purchase a share in the property, and Optima had served a s 21 notice, then that notice would be bad.  The Court agreed – it would be an act of bad faith on the part of Optima and an attempt to frustrate the shared ownership scheme, which would be challengeable on ordinary public law grounds ([30]).  But that was not this case and ”It is difficult to see without more why Optima should be precluded from terminating the option agreement and the tenancy when the alternative is to allow the tenant to become a long-term tenant which is what neither party ever contemplated” [31].

But the key to the case was rightly analysed as whether the £700 pm rent also included a deposit, which was one of Ms Ker’s possessions for the purposes of A1P1. If it was, it was argued that this gave rise to an Art 8 right as well unless Optima was willing to repay that money to Ms Ker. It is on this argument that, in my humble opinion, Patten LJ makes an error for he argues that “there is nothing in the Strasbourg jurisprudence cited to us which suggests that the determination of what constitutes property is anything but a matter of domestic law”; and it is that point which colours his analysis. For, construing the AST and option together, Ms Ker’s case was hopeless on that narrow interpretation. Ms Ker had no proprietary claim to the deposit, and Ms Ker’s entitlement to it depended on her exercising the option which she clearly could not do. Here, Ms Ker’s counsel were, I think, quite clever, because, having been boxed into a corner, they tried to duck their way out of it by arguing that the agreement was a pretence (in the sense described by Lord Templeman in Antoniades v Villiers and extended by the Court of Appeal in Bankway Properties v Pensfold-Dunsfold [2001] EWCA Civ 528): “In the present case there has been no attempt to evade the provisions of any statutory regime but Ms Ker’s case is that the judge should have considered all the circumstances (including the subsequent consequences of the agreements) in determining what rights they conferred on her. Her case in a nutshell is that the advertising material I have referred to spoke of allowing a tenant to save under the scheme for a deposit but the combination of the tenancy agreement and the option agreement, if literally construed, will result in the events which have happened in her losing the deposit she has saved for if possession is ordered” ([44]).  The Court of Appeal were having none of that argument, though, because the case was unlike Antoniades and other cases which had followed it, and Ms Ker had understood the product.

So, Ms Ker lost in the CA.  But there are indications here that an A1P1 defence to a possession claim in a shared ownership matter might well have legs, so to speak, but there is an issue as to wether this will just enable the buyer to have a money claim or whether it will constitute a ground of defence to the possession claim – as we all know by now, proportionality is heavily fact-dependent, and the grantor is always in the box seat.

There are still some questions to be cleared up on tenancy deposit law and this Court of Appeal case neatly deals with one of them, while opening up what might be a very large can of worms.

Superstrike Ltd v Rodrigues [2013] EWCA Civ 669

Where a deposit was taken on an assured shorthold tenancy before April 2007, when the Housing Act 2004 provisions came into force, but the tenancy became a statutory periodic tenancy after April 2007, does the deposit fall to be dealt with under the Housing Act 2004 requirements and do the penalties for non compliance apply?

The facts in this case are straightforward. Rodrigues was the assured shorthold tenant of Superstrike. The tenancy began in January 2007 with a term of 12 months. A deposit of £606.66 (a month’s rent) was paid in January 2007. In January 2008, the tenancy became a statutory periodic tenancy. In June 2011, S served a s.21 Notice and then brought possession proceedings. In May 2012, the possession claim was dismissed, though for reasons not at issue in this appeal. On appeal to a Circuit Judge, a possession order was granted, on the basis that the deposit had been taken before April 2007. So, to the Court of Appeal.

There was one main ground of appeal.

On the statutory periodic tenancy arising in January 2008, a deposit was received in respect of a tenancy, which fell under the requirements of s.213 HA 2004, thus failure to protect meant s.215 applied and the s.21 Notice was invalid.

There were two questions for the Court to decide. First, did the statutory periodic tenancy constitute a new tenancy? Second, had the deposit been ‘received’ by the landlord in respect of that tenancy in the meaning of section 213.

The Court of Appeal made short shrift of the first issue:

It is clear from the 1988 Act that what happens at the end of the fixed period tenancy is the creation of a new and distinct statutory tenancy, rather than, for example, the continuation of the tenant’s previous status. I do not see that there can be any doubt as to that. It was so held in relation to a comparable provision in the 1988 Act in N & D (London) Ltd v Gadson (1991) 24 HLR 64.

This left the second issue, of whether the deposit had been ‘received’ in January 2008 at the start of the new statutory periodic tenancy. The landlord argued that:

section 213 only applies when the deposit is “physically received” after 6 April 2007. By physical receipt he meant payment by cash, cheque, bank transfer or in some other comparable way, such as occurred in the present case in January 2007. He supported this argument by a submission that, if the appellant’s contention were correct, many private landlords would have been caught, and caught unawares, by a need to comply with section 213 on the expiry, after the commencement date, of a fixed term assured shorthold tenancy created before that date, if the tenant remains in possession, no new tenancy agreement being entered into, and the deposit, which had previously been paid and was still held, simply staying where it was with nothing said about it. He pointed to the absence of any transitional provision in the Act or in the commencement order. If so, he argued, the landlord would have to go to the otherwise unnecessary and pointless trouble and expense of arranging for the deposit to be held in accordance with an authorised scheme, simply in order to be able to recover possession of the premises by serving a section 21 notice.

R argued that

even though no money changed hands and no book entries were made at that stage, nevertheless the landlord had to be treated as having received the amount of the deposit, referable to the new tenancy, on 8 January 2008. Otherwise the deposit would only have been held as security for obligations and liabilities under the original fixed period tenancy, which would make no sense, at least for the landlord. If the landlord is, therefore, treated as holding the deposit in relation to the new tenancy, it must be treated as having received it for that purpose.

As s.212(8) referred to money in the form of cash or otherwise, it was clear that it didn’t have to be physical currency, payment by cheque or bank transfer could amount to payment and receipt. This provision should be construed broadly. Payment had been held to cover situations other than cash, cheque or bank transfer in White v Elmdene Estates Ltd [1960] 1 QB 1, [1960] AC 528, where an obligation to give a £500 discount on a sale associated with a tenancy letting had been found to be payment of a premium. This had been approved in Hanoman v Southwark London Borough Council (No 2) [2009] UKHL 29.

The Court of Appeal agreed with R.

The 2004 Act has to be construed in the light of the provisions of the 1988 Act as regards assured shorthold tenancies, including section 5. Once the new statutory periodic tenancy had come into being after the commencement date, a tenant’s deposit being already held, it would be necessary to consider whether and if so how the 2004 Act applied. As I have said already, it must have been the landlord’s position, by then, that it held the sum of £606.66 as a deposit as security for the performance of the tenant’s obligations, or for the discharge of any liability of the tenant, arising under or in connection with the new tenancy. That could only be the correct legal position if that sum of money was to be treated as having been paid pursuant to the tenant’s obligation under the periodic tenancy to provide a deposit. That obligation only arose on the expiry of the fixed term tenancy, so the payment at the beginning of that fixed term cannot have given rise to the position which obtained once the fixed term had expired. [...]

The tenant should be treated as having paid the amount of the deposit to the landlord in respect of the new tenancy, by way of set-off against the landlord’s obligation to account to the tenant for the deposit in respect of the previous tenancy, given that the landlord did not seek payment out of the prior deposit for the consequences of any prior breach of the tenancy agreement.

It follows that, on my analysis, the tenant did pay, and the landlord did receive, the sum of £606.66 by way of a deposit in respect of the new periodic tenancy in January 2008, and so the obligations under section 213 applied to the deposit so received. As is common ground, they were not performed. Section 215(1) therefore applied so that the landlord could not validly give notice under section 21 of the 1988 Act. The notice purportedly given on 22 June 2011 was thus ineffective and the grounds for possession were not made out.

As there had been no claim by the tenant, as yet, for the return of the deposit and a penalty under s.214, the only order was for the dismissal of the possession claim.

Intriguingly, but also frustratingly, the Judgment notes a second line of appeal by the tenant, that the wording of s.215(1) meant that no s.21 notice could be served if a deposit was not protected, regardless of when the deposit was received, so even if taken for a statutory periodic before April 2007. There was not need to decide on this and it was left for another case, where the facts of this case wouldn’t apply.

Comment

It is good to finally have this point settled by the Court of Appeal. I have long argued that a statutory periodic was a new tenancy, and that in order for the landlord to hold the deposit against the tenant’s performance of that new tenancy, the deposit must have been received anew, even if by a notional set off against repayment of the old deposit. But apparently this decision has come as a surprise in some quarters.

The s.215(1) argument remains to be heard. It is also worth recalling that the commencement order for the Localism Act 2011 amendments to Housing Act 2004 stated that the amended scheme applies to all deposits held for ASTs in effect on or after the commencement date, with no exemption for pre April 2007 deposits. But even if successful, these arguments would now only be required where a tenancy had become a statutory periodic prior to April 2007.

There is a further issue, however. If a deposit is ‘retained’ from one tenancy to the next (whether statutory periodic or new tenancy agreement), and therefore ‘received’ in respect of the new tenancy, there is also the obligation to provide the prescribed information. So even if the deposit was already protected, when a tenancy goes from fixed term to statutory periodic, does the obligation to serve the prescribed information arise again? While the actual information may be unchanged, and has arguably already been served ahead of the new tenancy, it might also be the case that it should be served again when the deposit is ‘received’ in respect of the new tenancy.

If the prescribed information is not served within the 30 day period (since April 2012), no s.21 notice is valid until it is served (and a failure to serve within 30 days opens up a potential s.214 claim). So, if there is a requirement to serve the information again on a new tenancy, whether statutory periodic or by agreement, when the deposit is held over/received again, I suspect that a very large number of landlords and/or agents would be in breach. I expect to see this issue come up very soon indeed.

Congratulations to Martin Westgate QC and Ben Chataway for the tenant for this case.

A quick note on an ongoing County Court case that raises some interesting questions. (As it is an ongoing case, all apparent statements of fact are as set out in the judgment and should be taken as being untested at trial).

Leicester Housing Association Ltd v Armstrong. Leicester County Court 5 March 2013 [Not published elsewhere, we have a copy].

This was the summary hearing of Mr Armstrong’s defence to LHA’s claim for possession. Mr A had a ‘starter’ tenancy from LHA, which was an assured shorthold of 12 months term. At the end of the 12 months, the tenancy would automatically convert into an assured tenancy, provided that no steps had been taken to gain possession in the meantime. The property was a 2 bed flat in a new build scheme, a mix of social housing and private ownership. Barretts (for they were the developers) still had a sales team on site.

On the evidence at the summary hearing, (and therefore as yet untested), Mr A was homeless, a former serviceman and police officer. At interview with LHA it was noted that Mr A was subject to fits and seizures. He also had mental health issues, resulting from service experience, and an ongoing battle with alcohol dependence. LHA had a medical report on these issues prior to granting Mr A a tenancy.

The tenancy agreement had usual sort of clause on not causing a nuisance to people living, visiting or otherwise lawfully in the vicinity of the property.

The tenancy agreement said that a s.21 notice could be used to end the starter tenancy if the tenant’s behaviour was a breach of tenancy conditions. It went on to set out a review procedure of a decision to use a s.21 notice. The tenant could request a review of the decision within 14 days of service of the notice. The review would be carried out in accordance with the ‘starter tenancy policy’.

The policy stated:

7.7 At the appeal hearing the Officer (responsible for serving the Notice) will present their evidence for the case. This should include the following . .
Evidence (eg case note, diary sheets, witness statements, warning letter) . . .
Vulnerabilities/support needs. . .

7.8 The resident will then be called on to explain their version of events and the reasons why LHA-ASRA should not start legal proceedings to claim possession of their home. The resident may bring along someone for support but this should not be a legal representative.

7.9 The Chair of the meeting will review all the evidence and inform the resident of their decision within 7 days of the appeal hearing. This should be done via letter and should include a summary of the key findings.

There were apparently a number of complaints about Mr A’s alleged behaviour. There was a meeting about Mr A between a police officer, a consultant psychiatrist and a housing officer from LHA (Mr PW), about which Mr A was not informed. Nor was Mr A provided with the notes of the meeting. Shortly afterwards  Barretts sent an email with complaints about Mr A’s alleged behavior. A few days later, Mr PW served a section 21 notice on Mr with a letter stating that this was “because complaints of anti-social behaviour had been made against you, members of your household and/or visitors to your home”. There was no further detail of the alleged behaviour or complaints.

Mr A put in an appeal against the section 21 notice, without knowing the specific allegations against him. Mr A accepted that he had been ill because of changes in his medication, that ambulance teams had attended, with the police as this was required by the ambulance service, but denying being violent, threatening or committing ASB.

Before the hearing of the appeal, LHA told Mr A they were to discuss ‘complaints from four residents regarding police having to be called [...] because of inappropriate or dangerous behaviour in your home and the surrounding area”. This was apparently the extent of the information given to Mr A about the allegations before the hearing.

Immediately before the hearing and apparently at the Claimant’s request, Mr A’s Community Nurse wrote to the Claimant setting out that Mr A had maintained his abstinence from alcohol and that there had been no incidents involving the police since the ‘professionals meeting’.

The appeal hearing resulted in a decision to uphold the section 21 notice. However, the note of the meeting raised 5 specific incidents apparently raised by Barretts and other residents. It was no clear if these had been put to Mr A. The incidents as noted did not tally with those raised in the ‘professionals meeting’, either by date or in the detail, such that it did not appear that the appeal hearing had the full facts in front of it. Mr PW was not at the hearing and did not ‘present the evidence’ for the case. The conclusions of the note of the hearing also appeared to have failed to take into account the information from the Community Nurse.

A claim was issued. Mr A’s Defence raised:

• An Article 8 proportionality defence,
• A Gateway B public law defence that the Claimant had failed to follow its own policies and procedures with regard to the decision to invoke and pursue the section 21 proceedings
• That Mr A had a disability within the meaning of the Equality Act 2010 and issuing and continuing the proceedings was discriminatory.

At first hearing, the matter was listed for a 2 hour summary hearing to determine whether the Art 8 and gateway B arguments could proceed. However, and perhaps oddly, the Equality Act defence was also considered. LHA conceded it was a public body, reserving its position on this should the case go to the Supreme Court.

On the Art 8 and Gateway B, the test the Court set was that the defences cross the threshold of being ‘seriously arguable’ with guidance from  the higher courts that the threshold was likely to be crossed in very few cases.

On the Equality Act, the Court noted that ‘there appears to be no decided case on the applicable test as to whether an Equality Act defence should be allowed to run at trial. We’ll come back to this.

On the Gateway B argument

Mr A argued that the review process was unfair, unreasonable, in breach of natural justice, and failed to follow the Claimant’s procedures, policy and tenancy agreement.

Mr A did not know the case he faced at the appeal hearing, Eastland Homes Partnership v Whyte [2010] EWHC 695 [our report]. The Appeal hearing considered matters of which MR A had had no advance warning and evidence with which he had no been provided. The appeal hearing was not conducted according to the starter tenancy policy, Mr PW did not ‘present the evidence’ and the evidence had not been supplied to Mr A. Mr A was not then allowed to explain his version of events.

Further, the policy required the Claimant to be satisfied that there was a breach of Clause D of the tenancy agreement (the nuisance clause for the purpose here). The Claimant had not attempted to so satisfy itself that there was a breach.

The Claimant argued that their scheme followed the Introductory Tenancy statutory scheme. Therefore R (Ex p McLellan) v Bracknell Forest BC [2001] 33 HLR 86 should be followed, the appeal hearing was not a formal hearing, there was no obligation to provide witness statements or schedules of allegations. The panel could determine how it carried out is function and reach a view as to the credibility of the Defendant. There was no requirement to make findings. The Claimant was entitled to take a broad view of matters. The Defendant should not be given a higher degree of protection than the Introductory tenancy regime. In any event, the available powers on a successful gateway B defence were akin to judicial review, so that at most the matter would be remitted back to the Claimant for fresh consideration, which would in practical terms make no difference [apparently pre-deciding any remitted decision].

The Court found on this ground that the Claimant’s scheme differed from the Introductory tenancy scheme. It was not statutory and was regulated by contract. While for an Introductory tenancy termination it was not necessary (pace Powell) for the Local Authority to be able to show that complaints were well founded, in this case the termination procedure could only be used if the tenant’s behaviour amounted to a breach of tenancy obligation. Therefore the Claimant had to determine whether the Defendant’s behaviour amounted to a breach of tenancy and the review should consider this issue. It was not sufficient for the Claimant simply to be satisfied that the Defendant was not a suitable person to be a tenant. This point crossed the ‘seriously arguable’ threshold,

When a review occurred it should:

• Be conducted in accordance with the rules of natural justice
• Address the key issue of whether the Defendant was in breach of the tenancy agreement and, if so, whether it was proportionate to seek an order for possession. Unlike Powell, this required a factual determination.

The Defendant was entitled to, at least, know the d the dates and substance of allegations against him. In this case it appeared that there were differences in nature and extent of allegations in the various accounts relied on by the Claimant.

The Officer serving the Section 21 did not ‘present the evidence’ at the review hearing. In the absence of other steps being taken to ensure the case and evidence was properly and fairly put, this might amount to a breach of the rules of natural justice.

The Defendant’s medical position and the report from the Community Nurse was not considered. The Defendant was apparently not even aware that a report had been obtained. Again a seriously arguable breach of natural justice.

On the Claimant’s argument that remitting the decision would make no difference, not only was it uncertain that this would be the case, a valid gateway B defence would be a complete defence to these proceedings.

On Article 8.

The Defendant argued that the Claimant proceeding with the claim for possession was disproportionate where there was no evidence or allegations of any bad behaviour since March 2012 (this hearing taking pace in January 2013).

The Claimant said that this had not been raised before, nor was any evidence of good behaviour filed. There was a last minute statement from Mr PW setting out more allegations between July 2012 and November 2012.

The Court rather oddly refers to the Claimant relying on ‘the dicta’ of Cranston J in Southend BC v Armour [2012] EWGC 3361 (QB) [our report] and then ‘to the view of Cranston J as ‘per incuriam’, apparently finding that subsequent good behaviour should not be taken into account (it may be that the transcript has errors here, but this is what it says). In any event, the Article 8 defence was found not to pass the ‘seriously arguable threshold’ and was not permitted to go to full trial, at least insofar as it was not the same as the gateway B and Equality Act defences.

On the Equality Act defence.

This was dealt with pretty much at the last minute, as the Defendant had assumed the matter would have to go to full trial and the Claimant had accordingly not responded on the point.

The Defendant argued that the Defendant had been discriminated against, unlawfully under section 15 Equality Act 2010, and that the Claimant had failed to take into account a mandatory consideration, section 149 Equality Act, in dealing with the Defendant.

The neighbours were upset because of the police attending the property, but this only occurred because of the Defendant’s mental state and because the ambulance crews required the police presence due to the Defendant’s medical history. Taking proceedings against the Defendant on the basis of those complaints from neighbours was a direct result of the Defendant’s disability and prima facie discriminatory.

The Claimant argued that the Equality Act defence should be subject to summary determination, although possibly on a lower threshold of ‘an arguable case’ rather than ‘seriously arguable’. But the answer was no, the possession claim was a proper and proportionate way of achieving a legitimate aim.

The Court found that, although this was not one of the types of cases to which summary determination applied, the issues raised were similar to the Gateway B and Art 8 issues. So, as there was a summary hearing it seemed sensible to consider the Equality Act issues at the same time.

In the absence of any authority for the threshold for doing so, the Court assumed the CPR 24 rule of ‘a real (as opposed to fanciful) prospect of success’, taken as being lower than ‘seriously arguable’.

On the basis of the pleaded case, the Defendant suffered from a disability within the meaning of the Equality Act 2010. The Claimant was aware of the Defendant’s disability.

The Decision to serve the section 21 notice and issue possession proceedings was taken (at least in part) on the basis of the Defendant’s mental health and therefore amounted to unfavourable treatment on account of his disability.

The issue was whether this was a proportionate means of achieving a legitimate aim. While the legitimate aim was likely to be the Claimant’s management of its housing stock and protection of others in the neighbourhood, the question of whether it was proportionate would involve evidence on whether there were other means of managing whatever risks might be posed by the Defendant’s health issues and a finding as to what those risks were. On the limited available evidence, it was arguable it was not proportionate.

The Equality Act claim should therefore go to full trial.

Directions given to trial.

Comment

While this is a first instance decision, and on a summary hearing at that, it is interesting. There is a practical interest in the way in which the court deals with the Art 8 and Gateway B defences, but there are also some substantial issues to consider, not least as they are likely to come up fairly often.

The distinction between a starter AST arrangement and an Introductory tenancy strikes me as right. One does not obtain the quality of a statutory regime simply by emulating its form. A starter tenancy is a creature of contract to the extent that it differs from the basic statutory provision.

The view taken of Southend v Armour, frustratingly briefly addressed, is puzzling. While Armour is indeed under appeal to the Court of Appeal, I have trouble seeing how the decision of Cranston J could be said to be ‘per incuriam’ or indeed ‘dicta’. As a High Court appeal, Armour would seem to be binding. But the transcript is not wholly clear through this whole section, so frankly, who knows what was meant!

Then the substantial issue of the Equality Act defence. Should there have been a summary hearing on this issue at all? Granted, the Court adopted the CPR 24 test for a summary judgment, rather than carrying over ‘seriously arguable’, but while CPR 24 does provide for the court to deal with summary judgment of its own motion, it seems odd in circumstances where there was no strike out application from the Claimant and, as the court admits, very little evidence on the issue before it.

It would be worrying to see courts adopting what would be a self-directed summary judgment hearing on Equality Act cases as a kind of proxy for the summary hearing in Art 8/Gateway B cases, even on a lower threshold. Not least as Equality Act issues are often complex and evidence dependent.

As this matter is ongoing, we will not be commenting on evidence or the merits of the case.

Malik v Fassenfelt & Ors [2013] EWCA Civ 798

The idea that an Englishman’s home is his castle is firmly embedded in English folklore and it finds its counterpart in the common law of the realm which provides a remedy to enable the owner of the castle to secure the eviction of trespassers from it. But what if the invaders occupy for long enough to establish their home within the keep? Whose castle is it now? Whose home must the law now protect? [Sir Alan Ward]

This was a case that was potentially important for establishing whether Article 8 defences could be run by private tenants, or by licencees and occupiers of private land. Despite Sir Alan Ward’s opening, the case falls short of being that, as we shall see.

This was the appeal of a possession order made against ‘Grow Heathrow’, squatting a patch of wasteland that would be needed for any expansion of Heathrow. At first instance, the Circuit Judge had held that article 8 was engaged, but that an immediate possession order would be given.

Consequently while Article 8 does apply in principle to cases involving a private landowner and a trespasser, it is difficult to envisage circumstances where it would have any consequence and the eviction would not be found to be a proportionate means of achieving a legitimate aim.

In addition, s.89 Housing Act 1980 did not apply to trespassers and the Court refused any extension of time before the order was to take effect.

The squatters appealed, arguing:

that the judge’s error is that she approached the matter on the basis that a failure to make anything other than a forthwith possession order would undermine the concept of private ownership of land. He [Jan Luba QC] submits that the stark choice the judge perceived to be applicable was between the land being “taken” by the occupiers and the owner being “deprived” of it and the immediate eviction of the occupiers: see paragraphs [83] and [85] of her judgment. That he submits, was a serious misdirection because the ownership of the land was never in issue nor was the existence of a right to possession. In essence he submits that the judge misdirected herself because she approached the question of possession on the basis of whether or not it was proportionate to make a possession order which took effect forthwith and not when it was proportionate to make a possession order. Article 8, he submits, introduces in the current context a temporal question, not shall the owner have possession (because he always should have possession) but when he should have possession.

The landlord had been given permission to appeal on the applicability of an Art 8 defence, but did not do so. This was significant.

On the squatters’ appeal points, all three judges were in broad agreement. Sir Alan Ward found:

Having found that Article 8 was engaged she correctly identified the issue to be whether Article 8 afforded “any additional protection to the defendants”, the question being whether eviction was a proportionate means of achieving a legitimate aim. It seems to me to be beyond question that she was considering whether to extend the time at which possession to be given. She started with the difficulty of envisaging a circumstance where eviction would not be found to be a proportionate means of achieving a legitimate aim. I can see nothing wrong with that approach. An owner is entitled to the return of his property unless some exceptional circumstances militate against it. Mr Luba does not appear to challenge her conclusion that the work they did on clearing the land did not give them any right to added time. He did, however, attack her conclusion on the grounds that her order for immediate eviction did not have regard for the fact that the land was being occupied for a beneficial social purpose. He submits that the judge’s approach precluded her from considering that as a relevant factor. I do not read her judgment in that way at all. She was fully alive to the fact that these were, if I may paraphrase, “good” squatters and not “bad” squatters and she was obviously impressed by them and to that extent sympathetic towards them. I, too, can admire the good work they have done. Nevertheless, as the Supreme Court has emphasised, see [57] in Pinnock, the wide implications involved in a consideration of the proportionality of making an order for possession is “best left to the good sense and experience of judges sitting in the county court.” I could not possibly find that the judge was not entitled to conclude that the benefits to the local community arising from the occupation of the defendants were not enough to preclude the landowner seeking to vindicate his ownership rights to the immediate return of his property.

Lord Toulson and Lloyd LJ agreed that on the facts of the case, the Judge was right to make an immediate possession order.

Where there was dissent was on the issue of the application of Art 8 and the rule in McPhail v Persons, Names Unknown [1973] Ch. 447

A summons can be issued for possession against squatters even though they cannot be identified by name and even though, as one squatter goes, another comes in. Judgment can be obtained summarily. It is an order that the plaintiffs “do recover” possession. That order can be enforced by a writ of possession immediately. It is an authority under which anyone who is squatting on the premises can be turned out at once. There is no provision giving any time. The court cannot give any time. It must at the behest of the owner, make an order for recovery of possession. It is then for the owner to give such time as he thinks right to the squatters. They must make their appeal to his good will and consideration, and not to the courts [Lord Denning at 458]

Sir Alan Ward trails through the subsequent Art 8 case law, from Harrow London Borough Council v Qazi [2004] 1 AC 983 from to Thurrock Borough Council v West [2012] EWCA Civ 1437 [Our note].

He then comes to the conclusion that McPhail can no longer be regarded as good law, for the following reasons:

i) It is rightly common ground that the squatters have established a home on the land by reason of the existence of a “sufficient and continuous link with a specific place” which is the autonomous test in European jurisprudence. The squatters are, therefore, entitled to respect for their homes by virtue of Article 8(1).

ii) Even if Article 8 has no direct application between a private landowner and the trespassers on his land, the Court as a public authority is obliged by section 6 of the Human Rights Act 1998 to act in a way which is compatible with that Convention right.

iii) The basic rules are not now in doubt, per Lord Hope in Powell at [33]. So the court will have to consider whether the making of a possession order is proportionate if the issue has been raised by the occupier and it has crossed the high threshold of being seriously arguable. The question will then be whether making an order for the occupiers’ eviction is a proportionate means of achieving a legitimate aim.

iv) Proportionality is, therefore, in issue. The rule in McPhail that the court has no jurisdiction to extend time to a trespasser can no longer stand against a requirement that proportionality may demand, albeit most exceptionally, that a trespasser can be given some time before being required to vacate. In Pinnock the court held at [63] that the conclusion that the court must have the ability to assess the Article 8 proportionality of making a possession order in respect of a person’s home may require certain statutory and procedural provisions to be revisited and it seems to me this is one of those procedural provisions that does require fresh treatment.

v) There are subsidiary, but not very compelling, reasons for reconsidering McPhail. Part of the ratio of that decision was that the landowner has the remedy of self help but the Criminal Law Act 1977 has prevented the use of force to evict an occupier. His opportunity to obtain immediate relief by resorting to self-help may be curtailed if the squatters refuse to leave without a fight. Standing alone the changes in the criminal law would not lead me to depart from McPhail.

vi) Another crucial factor distinguishing the present position from McPhail is the fact that in McPhail there was no defence to the claim of possession whereas, if Article 8 is engaged, then there is at least a potential defence.

For this reason, the Judge below was wrong to find that s.89 HA 1980 did not apply to trespassers and McPhail was still binding. But this had no material effect on her judgment.

However, s.89 HA 1980 must then apply, with the 6 week limit. Noting that this was found to be compatible with Art 8 in Hounslow London Borough Council v Powell [2011] UKSC 8, Sir Alan Ward also notes that in Yordanova v Bulgaria (Application No. 25446/06, dated 24th April 2012) [our note] the ECtHR said: “However, Article 8 does not impose on Contracting States an obligation to tolerate unlawful land occupation indefinitely…”.

Therefore:

I conclude that the court must approach the claim made by a private landowner against a trespasser in a similar way to that adopted to claims of various sorts made by a local authority as set out in the cases to which I have referred. Thus the test is whether the eviction is a proportionate means of achieving a legitimate aim. The fact that the landowner has a legal right to possession is a very strong factor in support of proportionality: it speaks for itself and needs no further explanation or justification. Thus, even if the defendants have established a home on the land but where they have otherwise no legal right to remain there, it is difficult to imagine circumstances which would give the defendant an unlimited and unconditional right to remain. The circumstances would have to be exceptional.

If Sir Alan Ward’s was the sole judgment, then the position would be clear, at least insofar as the application of Art 8 to private landowner cases. But it wasn’t. Both Lord Toulson and LLoyd LJ also address McPhail in their judgments. Or rather, in view of the landowner not appealing the point, they decide not to.

Lord Toulson:

It would be a considerable expansion of the law to hold that article 8 imposes a positive obligation on the state, through the courts, to prevent or delay a private citizen from recovering possession of land belonging to him which has been unlawfully occupied by another. There would also be a weighty argument that for the state to interfere in that way with a private owner’s right to possession of his property would be contrary to a long standing principle of the common law, which finds echo in article 1 to protocol 1. The principle was stated in Entick v Carrington (1765) 19 State Tr 1029, 1060:
 
“The great end for which men entered into society was to preserve their property. That right is preserved sacred and incommunicable in all instances where it has not been abridged by some public law for the good of the whole.”
 
The potential consequences of such a development and implications for other situations would need careful thought, particularly since the concepts of private life and home are so wide.
 
For those reasons I do not agree that we should hold that McPhail has ceased to represent the law in cases of trespass to privately owned land, and I would wish to reserve my opinion until such a case comes before the court in circumstances where the applicability of article 8 is in issue.

Lloyd LJ:

I too agree that the appeal should be dismissed. In a way it is matter of regret that the Respondent did not pursue the permission to appeal given to him by the judge on this point so as to challenge the judge’s conclusion that article 8 was engaged as between a private landowner and squatters because of the position of the court as a public authority. It would have been an interesting question on which I have no doubt that we would have received valuable submissions from both sides. Some of the difficulties with which it would have been necessary to grapple are interestingly discussed in Gardner and Mackenzie, Introduction to Land Law (3rd ed.), Hart Publishing 2012, at Chapter 2. There a degree of frustration is expressed as to the uncertainty:
 
“To this extent, we are still waiting to learn the horizontal reach of the ECHR into the domestic understanding of land law. It is once again disappointing that one should be reduced to awaiting a judicial announcement as to the state of the law in this way, rather than having a reasonable opportunity to deduce it, and so converse with the judges about it, oneself.”
 
The authors and other commentators will have to wait somewhat longer, though with the benefit of what Sir Alan Ward has said. It has also to be said that, if the point had been taken, it might have led to an even longer delay in giving judgment than that which has occurred, which I regret.
 
However, the fact is that the point was not taken before us, we had no submissions on it, and it does not seem to me that we ought to enter upon it so as to venture a view as to whether the judge was right or wrong. Like Lord Toulson, therefore, I reserve for a future case the question whether McPhail is good law in a case where a landowner who is not a public authority seeks possession of land occupied by a trespasser.

Comment

Well, this could have been the case to settle the application of art 8 to private landowner/landlord cases. Not only the rule in McPhail in regard to trespassers, but the application of Art 8 to section 21 possession cases, terminated private contractual tenancies and the whole panoply of private possession matters would have followed.

But it isn’t. Though Sir Alan Ward’s reasons for applicability are clear, this is not an effective precedent, given the refusal to address the issue from the other two Lords. It is, of course, quite right that the issue was not before them as a question under appeal.

That said, while it is not binding, there may well be some weight to this case in persuading County Courts that Art 8 argument can be raised in such cases, on ‘exceptional facts’ (which, I think must be pointed out yet again, is not an ‘exceptionality test’).

An indicator of the struggle between A1P1 and Art 8 right that will occur in such as case is to be found reading across Sir Alan Ward’s and Lord Toulson’s judgments in this appeal.

The position on an ‘all or nothing defence’ is clearly set out at the conclusion of Sir Alan Ward’s judgment. As Jan Luba QC points out, if the Court thinks that possession within 6 weeks would not be proportionate, the only option is to dismiss the claim for possession. Sooner or later, I suspect the Supreme Court will have to revisit s.89.

Incidentally, quite literally as Sir Alan Ward’s parting shot, and amongst praise for the advocacy in the case, there is what might just be a side swipe a the current level of political debate on human rights:

Article 8 is often much criticised, surprisingly even by those in a position of authority, as if it has incorporated some undesirable foreign jurisprudence into our law. I do not intend to enter into that debate, but read the opening words of my judgment. What I do want to emphasise is that this case demonstrates one aspect of our way of doing things which does represent the very best of British. That is our procedure for extended oral advocacy in our courts, especially in the appellate courts.

I didn’t comment here on Eric Pickles announcement of a ‘Tenants Charter’ at the Tory conference because, on inspection of the DCLG press release, it looked like a burp of a soundbite, with absolutely no significant likely effect. I contented myself with being rude about it in 140 characters on twitter, as that seemed sufficient. This didn’t stop some landlord organisations and journals getting terribly over-excited about the perceived threat of ‘required’ longer tenancies. There was (and remains) no such requirement.

However, the latest, slightly more detailed, press release does have some interesting bits in it, and perhaps more telling is the direction of travel – the recognition that private rented sector tenants are now a very large sector of the population, are likely to remain so, and that on the whole, things aren’t exactly fabulous in the PRS.

So, what is Mr Pickles proposing to bring about this brighter future, at least for hardworking tenants?

In the ‘ambitious package of proposals’ Mr Pickles:

• Announced that, within days, he would publish new regulations that will force letting and property management agents to join a compulsory redress scheme. 3,000 agents, 40% of the entire industry, have yet to join one of the schemes, which will ensure tenants’ complaints about hidden fees and poor service are investigated independently, and where a complaint is upheld, they receive compensation.

• Revealed that, for the first time the government will publish a new code of practice setting standards for the management of property in the private rented sector, with a view to making it statutory to provide greater confidence for tenants in what they can expect.

• Announced he will publish a draft of a new tenant’s charter. The charter will help tenants understand what they should expect from their rental deal, and how they can take action if they are the victim of hidden fees or poor standards of accommodation.

• Set out the timetable for the introduction of a model tenancy agreement, which landlords can use to offer longer tenancies of 3 years or more, which will, provide extra security and stability for families.

• Committed to produce extra guidance for local councils on how to protect tenants from illegal eviction, how to push for harsher penalties before magistrates for housing offences where these have a real impact on peoples’ lives, and to plan for new private rented developments in the future, including on their own land.

Mr P will also be talking to lenders about longer tenancy terms and:

• The government will review the process by which tenants can raise concerns about the standard of their private rented property and the response they should expect from their council in enforcing standards of safety and hygiene

• The review will also consider requiring landlords to repay rent where a property is found to have serious hazards. This could include allowing councils to recoup housing benefit so that taxpayers’ money is not used to support landlords who provide sub-standard property.

The only substantive element of this seems to be the imminent ‘compulsory redress scheme’ for letting agents (not, of course, a licensing scheme or setting regulatory standards, just a ‘Code of Practice’ for management of lets). One presumes that the ‘independent investigator’ will be the Property Ombudsman. (In that regard, following the BBC London expose of letting agents perfectly willing to breach Equality Act obligations and agree not to let to black potential tenants, it might be worth noting that of 36 complaints to the Ombudsman about racial discrimination by agents in the last 3 years, two resulted in a full investigation and none were upheld.)

The longer term tenancy bit remains as, at best, a right for tenant to ask for a longer tenancy. Nothing more. The landlord can refuse away without consequence or conscience. But here is the draft ‘Tenants Charter’ Guidance note for discussion anyway.

The guidance for councils might be useful in some cases. Some councils apparently still regard private sector disrepair as something they really don’t have any powers to deal with and illegal eviction as something to make tutting noises about. But without any extra funding, there will be hollow laughter from hard pressed TROs and EHOs in the councils that do take their responsibilities seriously.

The suggestion of a review of potential rent or HB repayment for properties with serious hazards is interesting, however. Where some third of London’s private rental properties fail to meet decent homes standards according to a London Assembly report, and where some 45% of PRS properties in the South West suffer from significant damp, cold or other defects according to a Shelter survey, this is clearly a problem on a very large scale. But ‘a review’? I suspect we are, at best, in ‘after the election’ land, even if there are any concrete proposals resulting.

Oh and money? There is an announcement, which may be a sleight of hand:

A £3 million fund for councils in England will help them tackle acute and complex problems with rogue landlords, and build on work to tackle ‘beds in sheds’, where £2.6 million was provided to 9 councils and backed by a ministerial task force. More than 500 illegally rented outhouses have been discovered since 2011 and action is being taken against the owners.

So is that a new £3 million, or a new £400,000?

Perhaps not an ‘ambitious package’. And of as little practical effect as a kazoo in a bagpipe band (a long story, I am still scarred). But at the very least there is a recognition that the current PRS has severe problems and that there is an increasing need for more secure, longer term tenure in the sector, given the ongoing housing crisis.

Oh and ‘hardworking’ tenants? No idea. I don’t see anything that would separate off the hardworking from the astonishingly indolent tenant. So perhaps a prize for the most jarringly awkward shoehorning of the party political buzzword du jour into a policy announcement goes to the DCLG.