Possession: Recent Developments

1.  Tolerated Trespassers

Lambeth LBC v. O’Kane; Helena Housing Ltd v. Pinder & Ors [2005] EWCA Civ 1010 (The Times 22nd September 2005, Legal Action September 2005 15).

A so-called tolerated trespasser was not transformed into a secure tenant by the mere fact of being allowed to remain in occupation even if the landlord changed the terms of that occupation. The facts of the situation had to force the conclusion that a new tenancy had been created.

The Defendants were secure tenants. Their landlords obtained suspended possession orders (“SPOs”) based upon rent arrears. The terms of the SPOs were breached and the Defendants became tolerated trespassers.

In Lambeth LBC v O’Kane, the former tenant, a Mr Kennedy, was living in a same-sex relationship with Mr O’Kane.  Mr Kennedy died.  Mr O’Kane sought to succeed to the tenancy. Before his death, but after breaching the terms of the SPO, Lambeth sent Mr. Kennedy notice of variation of tenancy conditions and 4 notices of revision of rent and water charges. It referred to rent and not mesne profits.  Mr O’Kane argued that by its actions Lambeth had either waived the breaches of the SPO or entered into a new tenancy.  HHJ Welchman rejected those arguments.

In Helena Housing Ltd v Pinder, after breach of the SPOs, the landlord sent new rent cards with an increased ‘rent’. Relying on this, the ‘tenants’ applied to the court to discharge warrants for possession on the basis that new tenancies had been created. HHJ Mackay rejected their applications.

The Court of Appeal dismissed appeals by all the occupants.  It was held that:

• It was not open to a landlord to waive breaches of an order so as to resuscitate the original tenancy. There had to be an application to the court (Marshall v. Bradford MDC (2001) EWCA Civ 594 applied).

• Special circumstances were required before a new tenancy could be found between a tolerated trespasser and the former landlord who had permitted him to remain in occupation. It was not enough that the facts were consistent with a new tenancy: they must actually force that conclusion (Burrows v. Brent LBC (1996) 1 WLR 1448 applied). There was no inconsistency between Burrows and previous authority on the issue of intention (Street v. Mountford (1985) AC 809 considered). The question whether a new tenancy arose was a matter for the trial judge. In Lambeth LBC v O’Kane, rent increases were consistent with the landlord’s desire to increase mesne profits. There was nothing in those increases to force the conclusion that the landlord intended to create a new tenancy.  In all the circumstances the judge was entitled to conclude that there was no new tenancy and accordingly the appeal failed. In Helena Housing Ltd v Pinder, the same reasoning applied subject to the submission on joint tenancies.

• It was not essential to a conclusion that no new tenancy had been created that the ‘limbo tenancy’ was capable of being revived using section 85 of the Housing Act (“HA”) 1985. The fact that the tenancy could be revived was a factor of some weight in considering whether a new tenancy had been created. Even with the practical loss of revivability there was nothing to take Pinder’s case out of the normal situation of a former landlord simply being content to forbear from enforcing the possession order. There was no factor which was consistent only with the creation of a new tenancy.

• In Pinder’s case, where the landlord was the assignee of the local authority’s housing stock, the true interpretation of the deed of assignment was that arrears of mesne profits owed by tolerated trespassers had been assigned in the same way as arrears of rent.

Newham LBC v. Hawkins & Ors [2005] EWCA Civ 451 (The Times 3rd May 2005, Legal Action June 2005 30)

A former tenant whose landlord had obtained a possession order and who was occupying as a tolerated trespasser did not acquire a new tenancy merely by remaining in possession and continuing to pay rent. To create a new tenancy, there had to be evidence of intention such as an offer of new terms or a demand for increased rent, or an order of the court under section 82 of HA 1985 postponing the order for possession.

Mr. Hawkins was a secure tenant. On his death his widow succeeded to the tenancy under section 87 of HA1985. She fell into arrears with the rent. An SPO was made. She breached the SPO but later a substantial payment of arrears was made. Newham treated it as having cleared the account so that the widow was reinstated to the original tenancy. However, the possession order did not provide in terms that it would come to an end once the arrears were paid off. When the widow died, Newham sought possession on the ground that her sons had no right to succeed to the tenancy because their mother was herself a successor. The judge found that the local authority had not created a new tenancy and that the widow occupied the property either as a tolerated trespasser or, if Newham had waived her breaches of the SPO, under her original secure tenancy so that in either case the sons had no right of succession. The sons claimed that their mother’s tenancy had come to an end, because of section 82 (2) of the 1985 Act, after she had breached the SPO, and that the conduct of Newham was consistent with an agreement for a new tenancy.

The Court of Appeal held that where an SPO is made and breached, but the local authority permits a person to remain in occupation, that person is a ‘tolerated trespasser’.  In the ordinary case of a tolerated trespasser there is no creation of a new secure tenancy. In this case all that happened was that Newham agreed, after the SPO was breached, that the widow could continue to remain in occupation provided that she made satisfactory payments of rent thereafter. There was no offer of new terms or demand for an increased rent which might have shown that the intention of the parties was to create a new tenancy. The widow could have applied under section 85 (2) of the 1985 Act for possession to be postponed. That would have revived her original tenancy retrospectively. This case was not exceptional and there were no facts on which the judge could have found that a new tenancy had arisen (unlike Swindon BC v. Aston (2003) HLR 610, where the tenancy had revived because the landlord actually sent the tenant a new tenancy agreement.).

Banjo v. Brent LBC [2005] EWCA Civ 292 (The Times 29th March 2005)

It is doubtful whether Parliament intended a tenancy at will to be a secure tenancy, even where the conditions in sections 80 and 81 of HA 1985 are satisfied, and once a tenancy at will is terminated the occupier’s status is that of a trespasser.

A former tenant who remains in occupation without paying rent after the expiry of a fixed term of more than 21 years has no more than a tenancy at will, which is ended by the taking of proceedings for possession. The tenancy at will does not take effect as a secure tenancy.

The effect of section 85 of the Housing Act 1985 was that no secure tenancy could arise by reason only of continued occupation following the determination of a fixed term tenancy which exceeded 21 years.

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2. Procedure

North British HA Ltd v. Matthews & Ors. [2004] EWCA Civ 1736 ((2005) HLR 17, The Times 11th January 2005, Legal Action February 2005 35)

In possession proceedings, a power to adjourn a hearing date, for the purpose of enabling a tenant to reduce his rent arrears below the level founding the claim for possession, might be exercised in exceptional circumstances, but the fact that the arrears were attributable to maladministration on the part of a housing benefit authority from whom the tenant claimed benefit was not an exceptional circumstance, so that application of the statutory scheme was potentially draconian.

In all four cases, each defendant was a weekly assured shorthold tenant of a housing association. The tenants, who received housing benefit, fell into rent arrears. The landlords served notices of proceedings for possession under Ground 8 of Schedule 2 to HA 1988 and subsequently commenced possession proceedings. At the possession hearings, each tenant conceded that he or she owed more than 8 weeks arrears at both the date of the service of the notice and the date of the hearing, but applied for an adjournment to allow them time to reduce the arrears to less than 8 weeks. In support of their applications, each of the tenants claimed that the arrears were due to maladministration or other unjustified failures by their respective housing benefit authorities, resulting in non-payment of housing benefit.  In each case, the District Judge refused to adjourn the hearing of the claim because there was no jurisdiction to do so and even if there was, on the ground that it would have been wrong to exercise it. On appeal, 2 main issues were raised:

(1)        whether, before being satisfied that the landlord is entitled to possession under Ground 8, a county court has the power to adjourn the hearing to enable the tenant to pay off the arrears, and
(2)        if there is such a power, in what circumstances it should be exercised.

The Court of Appeal dismissed the appeals, holding as follows:

• For the purposes of Ground 8 of Schedule 2 to HA 1988, the date of the hearing is the date when the claim is heard, it is not a date fixed for the hearing if on that date an adjournment is granted without a hearing taking place at all.
• A court may properly exercise its discretion to adjourn the hearing of a possession claim before being satisfied that the landlord is entitled to possession, for example where there is no judge available to hear the claim, the tenant cannot attend court because of ill-health or to enable the tenant to put forward a defence to the claim.
• Although a court may adjourn a possession hearing to allow the tenant to defend the claim, absent exceptional circumstances it may not do so where the purpose of that adjournment is to allow him to change the factual position, thereby creating a defence which he did not have when the adjournment was sought  Such exceptional circumstances arise where the refusal of an adjournment would be considered to be outrageously unjust by any fair-minded person; the fact that rent arrears are due to maladministration by a housing benefit authority is not, however, such an exceptional circumstance.
• For the purposes of Section 9 (6) of HA 1988, a court is not satisfied that the landlord is entitled to possession until the judge has given a judgement and effect is given to that judgement in a perfected court order, it is therefore not too late to seek an adjournment in order to defend proceedings even though the judge has stated that the arrears have been proved.

Akram v. Adam [2004] EWCA Civ 1601 ((2005) HLR 14, Legal Action February 2005 38)

The landlord sought possession against a Rent Act tenant in respect of one room in a house. The landlord’s solicitors posted the claim form with notification of a hearing that was listed on 16th September 2003 to the tenant at the property. At the time the tenant was away from the property looking after his sick mother. The claim form was not delivered to the tenant’s room nor was it retained by the Post Office in accordance with arrangements made by the tenant with the Postman. The tenant was not aware of the hearing and did not attend. A possession order was made. On 21st October 2003 the tenant applied for the possession order to be set aside.

The District Judge set aside the order on the ground that having regard to all the circumstances, including the previous proceedings, the claim had not been properly served. The Circuit Judge allowed the appeal by the landlord. He held that the claim form had been served on the tenant in accordance with the requirements of CPR 6.5 and that therefore, he could only set aside the order if he was satisfied that the tenant had a reasonable prospect of success at trial. He held that there was no defence to the proceedings. The tenant appealed contending that he was entitled to have the order set aside as of right and also argued that failure to set aside the judgement would violate his right to a fair trial under Article 6 of the ECHR.

The Court of Appeal dismissed the appeal by the tenant, holding as follows:

• Judgement against the tenant had been regularly entered as the proceedings had been posted to his usual or last known address in accordance with CPR 6.5.  As the proceedings had been properly served, the possession order could only be set aside if the tenant could show, inter alia, that he had a reasonable prospect of success at trial. As the defence had no merit at all, the Circuit Judge had been right to dismiss the application.
• The guarantee of a fair trial in Article 6 entitles a defendant in a civil action to be heard but nothing in Article 6 requires there to be a full trial in every case. If judgement has been entered against a defendant in his absence or judgement is entered in default, Article 6 does not entitle the defendant to a trial if the court is satisfied that he does not have an arguable defence.

Moat Housing Group- South Ltd v. Harris & Hartless [2004] EWCA Civ 1852 (The Times 13th January 2005)

When the court was considering whether to grant a stay, pending appeal, of an order for possession, a number of factors fell to be considered, including the presence of children and the potential prejudice to each of the parties.

After a history of neighbour disputes, a 14-day possession order was made against the assured tenants, who had four children aged 6 to 14 years. An ASBO was also made against the tenants excluding them from properties owned by the landlord and a wide area of their home town. The tenants appealed and sought a stay.

The Court of Appeal granted the stay.  Brooke LJ said that:

• The court had to look at the reasonableness of the process by which it was considered appropriate to make a possession order “effectively abandoning four young children” where there appeared to have been no previous discussion between their social landlord and the relevant education authorities.
• Regard had to be had to the potential prejudice to the parties and in particular: (a)          if the stay were to be refused, the risk of the appeal being stifled;

(b)        if the stay were granted and the appeal failed, the risk that the landlord would be unable to enforce the judgment; and
(c)        if the stay were refused and the appeal succeeded, but the judgment was enforced in the meantime, the risks to the family.

• The risks to the family, especially the young children and practical matters such as the children’s schooling and the danger that the Defendants might end up in bed and breakfast accommodation in another town, led to the conclusion that a stay should be granted pending the hearing of the appeal.

A stay was granted on terms including undertakings that the Defendants must use their best endeavours to control the children and on the footing that, if the undertakings should be breached, the Defendants would face potential imprisonment for contempt of court. The stay might also be lifted upon the Claimant’s application.

Norwich CC v. Famuyiwa, 21st September 2004 (CA) (Legal Action February 2005 34, The Times 25th January 2005)

Where a judge had found a breach of a tenancy such as to make it reasonable to make a possession order, he should not overlook the possibility that the court could control the situation by postponing the date for possession upon appropriate conditions. It was open to the judge to order that the date for possession be postponed until after a further application to the court by the housing authority in the event of further breach.

In the Court of Appeal, Chadwick LJ said having found that the defendant was in breach of a clause in her tenancy prohibiting antisocial conduct, the recorder had decided that it would be absolutely pointless and “a recipe for disaster” to make a suspended order. He had been wrong to rule out the possibility that the court could meet the circumstances of the case by postponing the date for possession and imposing conditions. The situation could thereby be controlled by the court.

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3.   False Statements

Merton LBC v. Richards [2005] EWCA Civ 639 (Legal Action July 2005 27)

Ground 5 of Schedule 2 to HA 1985 sets out the following ground for possession:

“The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by: (a) the tenant, or (b) a person acting at the tenant's instigation.”

The tenant’s mother made a false statement to assist her daughter to acquire a tenancy by way of an exchange. The judge concluded that the daughter did not know of the false statement at the time the tenancy was granted and had not “instigated” the statement made by her mother who was

“[a] …woman doggedly and determinedly content to meddle in her daughter's affairs as she … thought best and without reference to her daughter where she considered that appropriate.”

On appeal the landlord submitted that: “if a daughter makes no attempt to dissuade her mother from acting on her behalf, that amounts to instigation within the meaning of Ground 5”.

The Court of Appeal disagreed.  Pill LJ (at paras 32 and 33) said:

“The word ‘instigate’ means more than tolerate. It means to bring about or initiate. The Latin source of the word, as mentioned in the Concise Oxford Dictionary, is instigate: to urge or incite. The ground refers to instigation and not merely to someone ‘acting on behalf of the tenant’. On the judge's findings of fact, there was no instigation by the respondent in this case.
Moreover, I would hold that the instigation must be of the false statement and not merely instigation of action in general on behalf of the tenant. It is true that sub-paragraph (b) could have, but does not state ‘making a false statement at the tenant's instigation’. However, the expression as a whole clearly links the instigation with the false statement, in my view. Moreover, the word ‘instigate’ fits more comfortably in this context with action to promote a specific act, than with a general instruction to act.”

Waltham Forest LBC v. Roberts [2004] EWCA Civ 940 ((2005) HLR 2)

False statements by the tenant about the ownership of other property and income from it, have been held sufficient to make a case under Ground 5 of Schedule 2 to HA 1985.

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4.  Warrants

Hay v. Community HA Ltd [2005] EWCA Civ 345 (Legal Action August 2005 18)

The tenant accrued rent arrears due in part to the local authority’s failure to pay housing benefit and also due to the tenant being hospitalised because of mental health problems. The landlord obtained an SPO which the tenant breached. A warrant was issued. The landlord’s attempts to give notice that it was about to execute the warrant were “botched”. The tenant sought to set aside the warrant. HHJ Crawford Lindsay QC refused the tenant’s application. Buckley J dismissed an appeal.

In the Court of Appeal, Sedley LJ refused the tenant’s application for permission for a second appeal. It is a matter of some seriousness if an attempt to give notice fails through ineptitude. However, that is not a legal issue but an ethical one. Further, Sedley LJ rejected a submission that whereas a landlord who does nothing except issue and execute a warrant cannot be faulted under the doctrine of oppression, a landlord who tries and fails, or at least who fails through incompetence or ineptitude, is on a par with one who lulls the tenant into a false sense of security and so is liable to have a warrant set aside.

Circle 33 HT v. Ellis, 28th July 2005 (QBD) (Legal Action October 2005 17)

The Defendant was an assured tenant in receipt of income support and housing benefit (“HB”). HB was paid direct to the landlords. The tenancy agreement included an express term that the landlords should make every effort to make direct contact with the HB department before taking enforcement action in respect of rent arrears. HB payments ceased after some time and the landlords sought possession on the ground of arrears of £1,739 at the date of the hearing.  The tenant did not attend the hearing and an outright order for possession was made. The tenant was evicted. After eviction, the tenant made enquiries and was given a letter from the local social security office  confirming that he had received income support during the relevant periods. The HB department reassessed his claim and confirmed that he had, in fact, been entitled to benefits at all material times. The tenant’s rent account was accordingly credited with the benefit payments, leaving arrears of £203. HHJ Ansell refused the tenant’s application to set aside the warrant and to be reinstated.

Holland J allowed the tenant’s appeal. It was beyond dispute that the execution of the warrant was unjust. Barnet HB department’s “inefficiency dominates the merits”. Its behaviour was“irrational”.  Leaving aside the small amount of residual indebtedness, there should have been no arrears of rent as at eviction. When HB payments ceased, there was no attempt by the landlords to contact the HB department to find out why this had happened or whether the arrears would be made up. This failure was compounded by the fact that it was the landlords who advised the tenant on eviction to make the necessary enquiries and when these proved supportive to him they were ignored by the landlords. In these circumstances, execution of the warrant was oppressive. The eviction was quashed and re-entry was permitted.

SLFHA Ltd v. Hayden, Lambeth County Court, 14th July 2005 (Legal Action October 2005 16)

 The tenant, a single man who was profoundly deaf and with a limited ability to read and write, successfully applied to set aside an order for possession and a warrant for possession on the ground of oppression.

DDJ Backhouse in setting aside the possession order, referred to the tenant’s difficulties of communication, low level of functional ability and diminished levels of support from the landlord and other support agencies. In the circumstances, the judge could not accept that sending letters to him, or leaving calling cards or writing notes were effective methods of communication. Considering the criteria in CPR 39.3 (3), although the application to set aside was made seven weeks after the tenant found out about the order, it was made promptly.  It was held as follows:

“Success in this case would involve any outcome short of an outright possession order. There seems to me to be at least a good possibility that the Defendant would be entitled to a backdated payment of housing benefit and… to a backdated payment of disability living allowance, both of which would substantially reduce his arrears.”

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5.   Notice to Quit by Joint Tenant

R (McCann) v. Birmingham CC [2004] EWHC 2156 (Admin) (Legal Action November 2004 24)

The Defendants were joint secure tenants. After allegations of domestic violence, the wife moved out, handed back the keys and later at the request of the landlord, signed a notice to quit, terminating the tenancy. She did not understand that it would bring the tenancy to an end. The landlord’s possession claim against the husband was dismissed but that decision was overturned by the Court of Appeal, which held that Article 8 of the ECHR was not available as a defence to possession proceedings (McCann v. Birmingham CC [2003] EWCA Civ 1783). The husband applied for judicial review of the landlord’s decision, claiming that it was not entitled to try to side-step his right to possession by seeking a notice to quit from his wife, rather than by taking proceedings under Ground 2A of Schedule 2 to HA 1985. Further, it was argued that, the decision was flawed because it was taken without considering al material facts (including his Article 8 rights) and without ensuring that his wife considered the position on an informed basis.

Leveson J  dismissed the application for judicial review by the husband. The existence of a statutory mechanism to obtain possession on the ground of domestic violence by a tenant does not, of itself, render unlawful other methods of achieving the same result. Where a notice to quit can be given, there is no justification for requiring a different mechanism to be used, particularly as the statutory route is likely to be lengthy, cumbersome and expensive. Furthermore, it would be wrong not to follow the Court of Appeal’s decision in relation to the considerations, including Article 8, which the landlord had to bear in mind before asking the wife to sign a notice to quit. Finally, the fact that the wife did not appreciate the effect of a notice to quit did not give rise to a right to challenge the notice. In obtaining the notice to quit, the landlords had been formalising the position to bring the wife’s contractual relationship with it into line with its policy of requiring relinquishment of the tenancy after the breakdown of the relationship and before rehousing.

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6.  Suitable Alternative Accommodation

Amrit Holdings Co Ltd v. Shahbakhti [2005] All ER (D) 37 (Mar) (Legal Action April 2005 29)

The Defendant had been a regulated tenant under the Rent Act 1977 since 1978. The landlord sought possession on the basis that alternative accommodation was available, namely one of many residential properties owned by the Defendant that he let as investment properties. The alternative accommodation had been held on an assured shorthold tenancy by one of his many tenants. That tenancy had come to an end but the tenant was still in possession. HHJ Lindsay QC dismissed the claim for possession after balancing the financial consequences to the Defendant of making a possession order (he would have had to rearrange his financial investment affairs) against the lack of any financial hardship caused to the landlord in dismissing the claim for possession.
The Court of Appeal dismissed the appeal. It was open to the judge to take the view that it was not reasonable to force the Defendant to move to the alternative accommodation even on an assumption that it was available. That was a decision which could not be interfered with. For a dwelling which is owned and let out by a defendant tenant to be available as suitable alternative accommodation for the purposes of section 98 (1) (a) of the Rent Act 1977, it must be reasonable to expect the tenant to obtain possession of it. That issue overlaps with the question whether it is reasonable to make a possession order based on the availability of such alternative accommodation. In considering whether it was reasonable to grant a possession order the judge had correctly taken into account the financial consequences to the parties both of making and of not making an order. It could not be said that the judge’s decision as to whether it was reasonable to make an order was outside his discretion.

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7. Draft Rent Arrears Protocol

The Civil Justice Council is proposing to recommend a pre-action protocol relating to proceedings in which a claim is made by a landlord against a tenant for possession of domestic premises for arrears of rent. The purpose is to ensure that all reasonable steps are taken to avoid the necessity to commence litigation. The protocol is addressed in the main to social landlords. One of the major problems it seeks to deal with is that of claims for housing benefit. Although mainly addressed to social landlords, it is intended that large parts of the protocol should also apply to private landlords.

The consultation period was until 15th September 2005.

The proposed protocol reflects current guidance on good practice to social landlords in the collection of rent arrears. The key elements of the proposed protocol are as follows:

• Immediate contact will be made with the tenant on falling into arrears for advice and to discuss affordable repayments based on income and expenditure.
• The landlord will provide regular rent statements showing payments made and the running total of arrears. This applies equally to tenants on housing benefit.
• Where the tenant has difficulty understanding or reading English the landlord will make special arrangements (social landlords only).
• Where the tenant is on benefits the landlord will offer the facility that rent arrears be paid directly from any entitlement to benefit.
• The landlord will assist the tenant with any claim for housing benefit and liaise with the authorities where necessary. The landlord will not commence proceedings where it is likely that housing benefit will be paid. If appropriate the tenant will be referred to a specialist debt advice agency (social landlords only).
• After service of a notice but before proceedings the landlord will contact the tenant to discuss repayment. If the tenant complies with an affordable agreement to repay the arrears court action will be postponed so long as the tenant continues to comply.
• The landlord will provide the tenant with a rent statement no later than 10 days before the hearing and will inform the tenant of the date and time of the hearing and the order it will seek. The landlord will inform the tenant that the tenant must attend the hearing.

See further www.civiljusticecouncil.gov.uk/911.htm

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8.  CPR

The 40th amendment to the Civil Procedure Rules contains changes relating to possession claims. In particular there is a new rule (55.10A) and new PD55B providing for a system of new service, “Possession Claims Online”, in specified county courts. There will be on-line claim forms, defence forms and application forms. It will also be possible to pay the court fees on-line. The service will be accessed via www.possessionclaim.gov.uk. The site will set out the specified courts and the dates from which the service will be available in each specified court. The DCA Civil Procedure site suggests that the PD is in force from 1st October 2005. However, it appears that the service is not up and running yet.

Other changes to the CPR (in force from 1st October 2005) include:

• changes to take account of the new ability to apply to the court to apply for the right to buy in anti-social behaviour cases;
• use of CPR 55 where a suspension claim is made in the same claim as a possession claim (as with demotion claims); otherwise CPR 65 is to be used;
• a new requirement in rent and mortgage cases to provide a schedule relating to the arrears for the period of two years immediately preceding the claim; if the claimant wishes to rely on a longer period he must state as much in the particulars of claim and exhibit a longer schedule to a witness statement.

See further:
Civil Procedure (Amendment No 3) Rules 2005 (SI 2005/2292)
DCA website – Notes to accompany the 40th Update

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DISREPAIR: RECENT DEVELOPMENTS

Liability

1.         Contractual liability

Thornton and Jarret v Birmingham CC (Legal Action November 2004, 27)

The tenant complained of severe dampness affecting her home, which she occupied with her 2 children aged 9 and 11, as a result of rising dampness, penetrating dampness from a fractured drain and condensation from June 1998 to October 1998. She also complained that in carrying out a modernisation plan, including the installation of UPVC windows, a new kitchen and bathroom from October 1998 to March 1999, the Council took too long and interfered with her everyday life so as to constitute a breach of the covenant of quiet enjoyment. The premises were much improved from March 1999 but some defects remained.

HHJ McKenna rejected a claim that it was reasonable to delay all repairs until the modernisation programme began in October 1998 and found that the works should have been undertaken by the end of July 1998. He accepted that the works were very noisy, dirty and disruptive, with the tenant confined to one bedroom for over 3 months but that no specific criticism could be made of the manner in which the Council carried out the works. Applying the test as to whether there had been a breach of the covenant of quiet enjoyment as set out in Goldmile Properties Ltd v Speiro Lecouritis [2003] EWCA Civ 49 (Legal Action November 2003), namely whether the Defendant had taken all reasonable steps to minimise the potential risks, the judge found that the landlord had breached the covenant of quiet enjoyment. He was not satisfied that the landlord had taken all reasonable steps as it had not re-housed the tenant as it should have done, particularly given the ages of her 2 children; it was irrelevant that the tenant did not ask to be re-housed. He also found that the council was unable to rely on the tenant’s failure to continue complaining after the works were done to avoid liability after March 1999.

Islington LBC v Keane, Clerkenwell CC, 20th January 2005

In a rent arrears action a tenant brought a Part 20 claim in relation to the fact that he had been left without a cold water supply from his kitchen tap for several years. It was agreed that the likely cause of the defect was a defective or perished washer. The landlord disputed liability on the basis that the tenant was obliged to replace tap washers under the express terms of the tenancy agreement and that the defect did not fall within the implied obligation under section 11(1)(b) of the Landlord and Tenant Act 1985 to keep the installations in the dwelling house for the supply of water in repair and proper working order.

DJ Stary rejected both these arguments, holding that to replace a defective washer was not one of the little jobs about the place which a reasonable tenant must do, as most people would call in a plumber to do it and, accordingly, given that it was covered by the implied obligation on the landlord to repair the landlord could not transfer liability for the repair onto the tenant. In so far as the tenancy sought to impose liability onto the tenant for replacing washers other then those installed for washing machines and/or dishwashers, the repairing obligation was void.

Peters v Lewisham LBC [2004] EWCA Civ 618 (Legal Action, November 2004 27)

The Claimant in a 6-page document drafted by her husband made various claims for breach of statutory duties under the Housing Act (HA”) 1996, the Disability Discrimination Act (“DDA”) 1995, misfeasance in public office and nuisance. All of the claims were struck out by the District Judge, whose decision was upheld on appeal by the Circuit Judge.

Neuberger LJ adjourned an application for permission to appeal this decision to enable consideration to be given to it being agreed that the claim be re-pleaded as a disrepair claim for breach of an obligation to repair in the Claimant’s licence agreement and under the Defective Premises Act (“DPA”)1972, as photos appended to the claim indicated that the Claimant did have an arguably good claim for damages arising from the state of the premises in which Lewisham had housed her. Both the DJ and CJ had failed to consider whether it was appropriate to allow the Claimant to proceed on a claim arising from her contractual relationship with the Council, which had nothing to do with its statutory duties.

British Glass Manufacturers Confederation v University of Sheffield [2003] EWHC 3108 (Ch), [2004] L&TR 14 (Legal Action November 2004 27)

The university demised premises to British Glass for 1,000 years on the basis that it would erect a laboratory and other buildings and keep such buildings in repair.  British Glass sought a declaration that it was entitled to demolish the laboratory and replace it with other buildings and the university sought to argue that such wholesale demolition would be a breach of the tenant's covenant to repair.

Lewison J decided that the issue turned on what the terms of the lease, read in context, would convey to a reasonable reader and concluded that in the context of there being no restriction on the use to which the property could be put and the term of the lease being 1,000 years, the parties must have contemplated that different buildings might be erected during the term. Accordingly the terms of the lease did not prohibit the demolition and reconstruction of the buildings comprised in the lease.

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2.         Unfair Contract Terms

The Unfair Contract Terms Act 1977 does not apply to a lease, but the Unfair Terms in Consumer Contracts Regulations (SI1999/2083) (“UTCCR”) do apply.

R (Khatun) v Newham LBC [2004] EWCA Civ 55, ([2004] 3 WLR 417, Times 27 February 2004)

The Court of Appeal held that a contract to provide accommodation is a consumer contract like any other and rejected the Council's argument that the UTCCR should not apply to a local authority acting for the public benefit. Council lettings under Part VII of HA 1996 were subject to UTCCR and to Council Directive 93/13/EEC(OJ 1993 L95) (“the Directive”) on unfair terms in consumer contracts, since those applied generally to the grant or transfer of an interest in land. Laws LJ concluded that the provisions were intended to cover transactions in land, did apply to the Council as a public body and had the effect of making the council a “supplier or seller” and the applicants “customers” within the meaning of UTCCR and the Directive.
The Office of Fair Trading (“OFT”) has produced guidance on unfair terms in tenancy agreements (OFT 356 November 2001) which outlines the ways in which a standard tenancy agreement may contain unfair provisions about repairs. It states that:
“any one sided term that gives the landlord too much advantage over you may be unfair.”
Examples given of terms which may be unfair are if:
“it makes you pay an excessive interest rate or extra penalty charges for late payment of rent, it makes you pay for repairs which are the landlord’s responsibility, it makes you hand the property back in a better state than you received it, it allows the landlord to enter the premises without giving you reasonable notice, except in an emergency.”

See the OFT leaflet “Unfair tenancy terms – don’t get caught out.” (www.oft.gov.uk) for further information.

Cody v Phillips, West London CC, 4th November 2004 (Legal Action January 2005 28)

The landlord sought to recover rent arrears from the tenant who had left the premises. The tenant accepted that the arrears were owed but counterclaimed for damages for disrepair. The landlord sought to rely upon a clause in the tenancy agreement, a standard agreement used by the letting agents, which prevented any set-off or deduction whatsoever against the rent. The tenant's application to strike out the no set-off clause under UTCCR was successful.

DJ Wright considered the OFT guidance and R(Khatun) v Newham LBC and held that the clause failed the test of fairness and was contrary to the recruitment of good faith and therefore fell foul of UTCCR.

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3.         Tortious Liability

Lips v Older [2004] EWHC 1686 (Legal Action November 2004 27)

The tenant claimed damages for paraplegia sustained when he fell backward over the wall leading up to the front door of the premises owned by his landlord down a 9-foot drop to a concrete basement area.

Mackay J held that the landlord was in breach of the duty of care that he owed to his tenant, in common law negligence, to take such care as was reasonable, so that people whom he could contemplate using the path, namely a floating population of tenants including students and Mr. Lips, were safe to do so. It was reasonable to expect such tenants to return to the house in a state of inebriation and it was relevant to the standard of care that the landlord was a professional landlord and had access to advice. The erection of a handrail was cheap and would have returned the house to its original condition.  Damages were reduced by two-thirds for the tenant's contributory negligence in being drunk at the time of the accident and carrying a very heavy load which caused him to lose his balance.

Steven v Blaenau Gwent CC [2004] EWCA Civ 715 (Legal Action November 2004 27, Times 29 June 2004)

A local authority which had a general ban on window locks for fire safety reasons was not liable for injury to a child who fell from an unlocked window, even though the child’s mother had asked for a lock to be fitted.

The infant claimant fell from the first floor window of a house let by his mother from the Council having managed to open a window which could only be opened by a small child using a piece of furniture as a stepping stone and sustained serious injury. The Claimant's mother had requested window locks be fitted to the window but had been told by the Council that locks could not be fitted because of the fire risk. After the accident the Council fitted a safety catch to the window which prevented it being opened for more than 2 or 3 inches by a small child. The judge found the Council liable by analogy with the decision in Stockley v Knowsley MBC [7986] 270 EG 67, (where the Council was held liable for a flood caused when frozen pipes burst, but when warned of the possibility by the tenant, had failed to advise the tenant where or how to turn off the stopcocks), but his decision was overturned on appeal.

The Court of Appeal held that the judge was wrong to derive assistance for the decision in Stockley as there was no emergency or external threat which called for Council action or imposed upon it a duty to act. Given the judge's finding that there was no general liability on the Council to provide safety locks for its tenants, the council was entitled to take a view that its policy, which had been arrived at on the basis of a balance of risks, should be applied in the absence of evidence that its application presented exceptional risk to the safety of the Stevens family. There was no evidence that this was so. There was no breach of any pre-existing duty by the Council.

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4.         Defective Premises Act 1972

The Corporate Body of the Cathedral Church of the Holy and Undivided Trinity of Norwich v Gaskin [2004] EWHC 1918 (Ch) (Legal Action, November 2003 28)

The tenant under a 20-year lease of a property which imposed repairing obligations on the tenant sought to bring a claim in respect of the state of the property against her landlord. The claim in contract was struck out as disclosing no reasonable cause of action and permission to appeal a decision to strike out a subsequent claim under section 4 of DPA 1972 was also refused as section 4 of DPA 1972 is only applicable where the landlord has an obligation for the maintenance and repair of the premises. The tenant’s claim that the there was an implied right of entry to carry out repairs by virtue of the Cathedral Measures Act 1999, which would be elevated by section 4(4) of DPA 1972 into a duty to repair was rejected. Given the express right of entry given to the landlord to carry out repairs where the tenant is in breach of the tenant's repairing clause, there was no scope for implying into the lease any other or more extensive right of entry by virtue of any other provisions.

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5.        Limitation Period

Islington LBC v Keane, Clerkenwell CC 20th January 2005

The tenant brought a Part 20 Claim for disrepair in a rent arrears action brought by the Council. DJ Stary accepted that as the claim was a Part 20 claim the limitation period ran from the date of the original possession claim rather than the date of the Part 20 claim, giving the tenant an extra year in which to claim.

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Disrepair - Recent Developments

Damages

1.       Legal Framework

Where a landlord is in breach of a repairing covenant, the tenant is entitled to damages which, so far as money can, will put him into the position in which he would have been but for the breach (Calabar Properties Ltd v. Stitcher (1984) 1 WLR 287, (1984) 11 HLR 20). This commonly involves special damages, such as the cost of alternative accommodation, damaged belongings or redecoration, as well as general damages to reflect any discomfort and inconvenience suffered by the tenant.

Prior to the decision in Wallace v. Manchester CC (1998) 30 HLR 1111, the Court of Appeal had approved three different approaches to the assessment of general damages for discomfort and inconvenience:

(1)        an award for diminution in the value of the property to the tenant calculated by reference to a proportion of the rent payable (McCoy & Co. v. Clark (1982) 13 HLR 87);
(2)        a global assessment of discomfort and inconvenience suffered without any reference to the rent payable (Personal Representatives of Chiodi v. De Marney (1988) 21 HLR 6); and
(3)        a combination of an award for diminution in value calculated as a percentage of the rent payable and a separate sum for discomfort and inconvenience (Sturolson & Co v. Mauroux (1988) 20 HLR 332).

In Wallace, the Court of Appeal approved all three approaches but recommended that if a judge decides to assess the award on a global basis (for discomfort and inconvenience), he should cross-check it by reference to the rent payable for the period during which the landlord was in breach of covenant.

A claimant is under a duty to take all reasonable steps to mitigate the loss which he may suffer as a result of a breach of contract. If a tenant fails to take such steps to mitigate losses caused by his landlord’s breach of repairing covenant, the court may reduce an award of damages (Minchburn v. Peck (1987) 20 HLR 392).

In Lubren v. Lambeth LBC (1987) 20 HLR 165, the landlord argued that the general damages awarded to the tenant should be reduced because he had refused 2 offers of alternative accommodation. Dismissing the landlord’s appeal, Parker LJ held (at page 167) that:

“…the fact that [the offers] were made but were not taken up cannot in my view affect the question of damages; they were offers which, so far as we are aware, were not refused capriciously in any way….”

Where the defendant is awarded costs of an interlocutory hearing but the claimant succeeds in recovering damages at trial, the court may direct that the costs be set off against the damages so that the defendant pays only the balance (Lockley v. National Blood Transfusion Service (1992) 1 WLR 492).

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2.       Court of Appeal Guidance

English Churches Housing Group v Avrom Shine [2004] EWCA Civ 434 [2004] HLR 727 (Legal Action November 2004 28, The Times 2nd June 2004)

Mr. Shine, acting in person, brought a claim for the disrepair which he had suffered at his basement flat. The premises suffered from severe damp and dry rot but the claim was defended on the basis of Mr. Shine’s refusal of access.  In the course of the proceedings, an expert advised that substantial works were required, as a matter of urgency, to remove the dry rot and that these works could not be practicably carried out with the tenant in occupation. On 6th August 2001 the tenant was ordered to vacate the premises but failed to do so until February 2003, despite a number of further injunction orders against him. The remedial works to the premises were finally completed in June 2003.

HHJ Cotran awarded £19,000 covering a seven year period, including £16,000 for the 4 years immediately prior to the hearing, when the tenant had refused to move to the alternative accommodation provided.

The Court of Appeal found that the award of £16,000 was manifestly excessive. The judge had given no explanation as to how he had arrived at it and had failed to check it against the rent. It reduced the award to £8,000. It awarded 75% of the rent for the period 1999 to 2001 but gave a very substantial discount for the period 2001 to 2003 for Mr. Shine's failure to mitigate his loss. It assessed the damages payable for the period 2001 to 2003 by taking the lower figure of discounting the rent by 75% and by assessing the period of time in which the works would have been completed if Mr Shine had cooperated ,which it assessed as 9 months.

When making an award of damages under the Landlord & Tenant Act 1985 the guidance given in Wallace v Manchester CC [1998] 30 HLR 111,that damages should be assessed by reference to the rent payable, should be applied and that clear reasons should be given for a departure from that guidance. The basic rule of thumb is that the maximum award for damages should be the rental value of the premises. The Court also explained the decision in Lubren v Lambeth LBC 20 HLR 165that the test whether refusals of offers of accommodation could affect the damages awarded was whether such refusals were unreasonable.

Wall LJ said:

“Whilst we accept that the guidelines helpfully set out by Morritt LJ in Wallace v Manchester CC are not to be applied in a mechanistic or dogmatic way, and whilst we equally accept that there will be cases in which the level of distress or inconvenience experienced by a tenant may require an award in excess of the level of rent payable, we take the view that the plain inference of Morritt LJ’s judgement, and the figures identified in the case itself, demonstrate that if an award of damages for stress and inconvenience arising from a landlord’s breach of the implied covenant to repair is to exceed the level of the rental payable, clear reasons need to be given by the court for taking that course, and the facts of the case- notably the conduct of the landlord - must warrant such an award.

It must, we think, always be remembered that an award of damages under LTA 1985 s 11 is an award for breach of contract by the landlord, not for a tort committed by the landlord. It is accordingly in our judgement logical that the calculation of the award of damages for stress and inconvenience should be related to the fact that the tenant is not getting proper value for the rent, which is being paid for the defective premises. Moreover, the reason for the awards being modest is, it seems to us, related to the fact that the tenant in a secure weekly tenancy has the benefit of occupying premises at a rent, which is well below that which the same premises would be likely to command in the open market.” (page 755 at paragraphs 104 to 107)

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3.        County Court Awards

Mzae v Abigo, Bow CC 12th August 2004 (Legal Action November 2004 29)

An assured shorthold tenant of a 2-bedroomed flat suffered from disrepair throughout her tenancy, which commenced in March 2001, including dampness, cracked and loose plaster work water penetration, overflowing drains, a mouse infestation from 2003 and consistent problems with the boiler from April 2001. One bedroom was unusable because of the conditions.
HHJ Bradbury accepted that the landlord was not acting deliberately or maliciously in failing to carry out the repairs. He was referred to and was mindful of the decisions in Wallace v Manchester and English Churches Housing and Shine and in particular the recommended approach of assessment damages by way of a putative rent reduction. He made a global assessment of damages in the sum of £14,000, where the annual rent was £10 400.

[Taking a 3.5 year period of liability, this sum equates to approximately £4,000 per annum or 40% of the annual rent]

Thornton v Jarrett, Birmingham CC (Legal Action November 2004 29)

The facts are set out under “Contractual Liability” at A.1 above.  Damages of £3,000 were awarded for the period August 1998 to March 1999.  Damages of £1,000 per annum were awarded for the period from March 1999 to trial, amounting to a total award of £7,667, plus special damages of £280.

[The award for the period August 1998 to March 1999 amounts to an annual award of £4500.]

Cody v Phillips (Legal Action January 2005 28)

The facts are set out at A.2 above under “Unfair Contract Terms”.  District Judge Wright allowed the counterclaim and awarded damages of £1,500 for the 6-month period of occupation.  Although the actual disrepair was not substantial reference had to be made to the fairly substantial rent for these premises.

Sarmad v Okello, Shoreditch CC 24th October 2003 (Legal Action November 2004 29)

The tenant of a 1-bedroom flat above a restaurant made a Part 20 claim for damages for nuisance and disrepair in a possession action brought by her landlord. She complained of disrepair throughout her tenancy, which lasted from February 1999 to November 2002. The supply of hearing and hot water was intermittent for the first 3 years and in 2002 the heating broke down altogether. In addition there was water penetration to the bathroom, to the hallway and, from April 2002, to the bedroom. From 2001 there was an infestation of rats from the takeaway on the ground floor, the rats gaining access through the holes in the floors and walls.

District Judge Manners found the conditions intolerable and awarded damages, as follows:

(1)        £2,000 p/a (Feb 99- Feb 02), for the intermittent heating and hot water supply,

(2)        £1,750 p/a (Feb 02 -Nov 02), for the intermittent heating and hot water supply,

(3)        £1,500 p/a (Feb 99 - Feb 01) for all the other defects, and

(4)        £2,000 p/a (Feb 01 - Nov 02) when the rat infestation arose,

making a total award of £1,4250.

Cleghorn v Danesh, Croydon CC, 19th April 2004 (Legal Action November 2004 29)

The 77-year old tenant of a 1-bedroom basement flat suffered extensive damp causing mould growth throughout his property for the 5 years of his tenancy from 1996 to 2001, when he was unlawfully evicted. The windows and doors warped and rotted so they would not shut properly, the heating was defective and did not provide much heating, possibly because one of the radiators was leaking; the cistern in the bathroom leaked intermittently and even flooded on occasions.

Deputy District Judge Bridge awarded general damages at the rate of £2,500 per annum for the entire tenancy, making a total award of £12,500, and special damages of £2,500 in respect of additional gas, electricity, cleaning materials and items damaged by the damp. The total damages award in respect of the disrepair was £15,000.

Yates v Elaby, Manchester CC 23rd March 2004 (Legal Action November 2004 29)

As assured tenant of a house suffered from disrepair, including rotten window frames, allowing water penetration, episodes of flooding, dampness a defective heating and hot water system and a wood louse infestation in the kitchen throughout her tenancy which lasted 2 years.
Recorder Berkley QC, finding that this was not by any means a case of the most serious disrepair and taking into account the fact that the Claimant lived in the premises with a young baby but had on 2 occasions confirmed the tenancy relationship by further agreement, awarded general damages of £2250.

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Disrepair - Recent Developments

Miscellaneous

1.          EPAs

R (Islington LBC) v Inner London Crown Court (2003) EWHC 2500 (Legal Action December 2004 15)

The Council was prosecuted for allowing dampness and other conditions to render the tenant’s home prejudicial to health. The Council pleaded guilty at the first hearing and was fined £4,000 and ordered to pay compensation of £2,500. On appeal the Crown Court reduced the compensation payable to £1,000.

On the Council's application for Judicial Review the Divisional Court with some hesitation agreed that the fine was excessive given that the Council had pleaded guilty on the first occasion, and that the home had not been reduced to unfitness. The matter was remitted for reconsideration of the fine but with a warning that fines in the order of the £500 previously reported were so low as to be “wholly inappropriate of cases of this kind”. At the remitted hearing before the Crown Court the fine was reduced to £1500.

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2.         Procedure

Bibi v Southwark LBC , Lambeth CC, 21st July 2004 (Legal Action November 2004 26)

Southwark LBC sought to stay a number of claims where damages were sought for disrepair on the basis that they should be transferred to be dealt with under the Southwark Arbitration Scheme.
HHJ Cox decided that arbitration or any other form of alternative dispute resolution could not be forced upon reluctant parties in the light of the decision in Halsey v Milton Keynes NHS Trust [2004] EWCA Civ 576 and rejected Southwark’'s claim that the Claimant had to satisfy court that they had considered ADR and then justify their decision not to use it save in relation to costs. Southwark were ordered to pay costs on an indemnity basis.

Smolen v Solon Co-operative Housing Services Ltd [2003] EWCA Civ 1240 (Legal Action November 2004 26)

In the course of proceedings for damages for breach of repairing obligations in leases of properties let to Solon by Mr Smolen for temporary accommodation, the latter objected to the appointment of a single joint expert who had been suggested by Solon on the basis that the expert had been instructed on many previous occasions by clients of Solon’s solicitors and was not therefore visibly impartial.  HHJ Rick decided with some reluctance that Mr Smolen was entitled to feel doubts about the expert’s impartiality and, without making any finding against the expert, ordered his removal and ordered that the parties should share equally the costs of instructing him in any event. Mr. Smolen’s appeal to the Court of Appeal against this costs decision was dismissed by LJ Sedley on the basis that the judge did not consider that Solon or their solicitors had been at fault or acted had improperly in instructing the expert, and that the costs order was therefore an entirely permissible order within the judge’s discretion.

3.         Law Society Guidance on Conduct and Funding

The Law Society Rules and Ethics Committee has issued guidance about conduct in housing disrepair cases following concerns raised particularly in relation to the funding of such cases and cold calling by a small number of solicitors. The guidance emphasises that save in exceptional circumstances housing disrepair cases should be funded either by public funding or a conditional fee arrangement and that it will often be in the best interests of the client for the client to opt for public funding. It reiterates that cold calling is prohibited under the Solicitors Publicity Code 2001. The guidance is Annex H to chapter 14 of the Law Society's Professional Conduct of Solicitors Guide.

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4.         Pre Action Protocol for Housing Disrepair Cases

The Pre-action protocol for housing disrepair cases came into force on 8th December 2003. Key features include the following:
 

• The tenant is to notify the landlord as early as possible that a claim for disrepair is being considered and should propose the instruction of an expert and request disclosure. 
• A full letter of claim should be sent as soon as possible after the early notification letter and set out in detail the defects, history and effect upon the tenant.
• The landlord is to reply in detail within 20 days, sending relevant requested documents and responding to expert evidence.
• Where possible the expert should be a single joint expert (with the cost shared) and should inspect within 20 days of the letter of response.
• Where the claim is settled without litigation, the landlord should pay the tenant’s expenses.

The pre-action protocol has resulted in amendments to the Legal Services Commission’s housing guidance, particularly the Funding Code (paragraph 19.8) which indicates that legal representation is likely to be granted to pursue the protocol and that any departure from the protocol has to be justified.
The court service apparently does not record statistics for housing disrepair claims separately from other non-possession housing disputes. The full effect of the protocol in practice remains yet to be seen.

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5.         Useful Sources of Reference

Legal Action  - Repairs Round-Up (Nov and Dec 2004)

Table in Encyclopaedia of Housing Law Vol. 1 Para 1-2327.3 (County Court)

Housing Law Casebook 3rd Ed [HHJ Nic Madge] pp731-785

Repairs: Tenants Rights 3rd Edition (Luba and Knafler) pp. 197- 207.

Guidelines for the Assessment of General Damages in PI cases
[Judicial Studies Board] 5th Edition

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