|Judgments - Regina v Secretary of State for the Environment, Transport and the Regions (Appellant) and others Ex Parte O'Byrne (Respondent)
43. My Lords it seems to me plain that Parliament, in enacting section 5, was dealing with dispositions that the local authority owner of the Green Belt land in question desired to make. Paragraph (a) of sub-section (1) refers to "the land proposed to be sold ." Whose is the proposal to sell? Plainly, it is the local authority's proposal. The obligation to advertise the proposal is placed by paragraph (a) on the local authority. It is expressed as a mandatory obligation " the local authority . shall .". It is an obligation that must be discharged "before Green Belt land . is sold". If a local authority simply does nothing, neither advertises nor sells, it is not, as it seems to me, in breach of any obligation under the Act. A compulsory purchase under statutory powers does not need any action by the owner of the land in question. The statutory price fixing procedures and the statutory vesting procedures can achieve the completion of the compulsory purchase in the face of an unwilling and deliberately inactive owner of the land.
44. So the procedural obligations imposed by section 5(1) on the local authority owner of the land only bite where it is the local authority that wants, if it can, to carry out the proposed disposition. Section 5 was never intended, in my opinion, to apply to dispositions of Green Belt land forced on a local authority owner by statutory provisions for compulsory expropriation.
45. It was section 6, supplemented by section 8, that was intended to deal with compulsory expropriation, and, indeed, did deal with all forms of compulsory expropriation to which local authority land might, in 1938, have been subject. As at 1938 I can discern no gap between the provisions of section 5, dealing with voluntary dispositions of local authority owned Green Belt land, and those of sections 6 and 8, dealing with compulsory dispositions of such land, and none has been suggested by counsel. The provisions of section 5 were not intended to apply to, and their language is not apt to apply to, compulsory dispositions.
46. Is the inapplicability of section 5 to compulsory dispositions altered by the advent of the compulsory "right to buy" provisions of the 1985 Act? A similar question might have arisen under the Leasehold Reform Act 1967. It is, I think, relatively unlikely that 1938 Act Green Belt land owned by a local authority would be subject to a long tenancy at a low rent so as to attract the enfranchisement rights conferred by the 1967 Act. But it is conceptually possible. It is conceptually possible, also, that local authority owned Green Belt land might be subject to the collective enfranchisement rights conferred by chapter 1 of the 1993 Act or to the rights to acquire new leases conferred by chapter 2 of that Act. So the issue is not necessarily confined to the right to buy provisions of the 1985 Act. But that is the context in which the issue in the present case has arisen.
The 1985 Act
47. The expression "right to buy" is an attention catching expression but does not accurately describe the rights conferred on a secure tenant to whom Part V of the 1985 Act applies. Section 118(1) defines the "right to buy" as
It is (b) that applies in this case.
48. The section 118(1) right is a "right . subject to the conditions and exceptions stated ." but it is subject to nothing else. Within the limits of the definition of the right it is expressed as an absolute right. Section 121 specifies two circumstances in which a tenant is barred from exercising the section 118 right. One relates to forfeiture of the tenancy, the other to the tenant's bankruptcy. Neither is relevant in this case. There is no other expressed circumstance in which the tenant is barred from exercising the section 118 right.
49. In order to exercise the section 118 right, the tenant must start by giving written notice to that effect to the landlord (section 122). Miss O'Byrne gave such a notice. The landlord is then placed under a statutory obligation to respond by either admitting or denying the tenant's right (section 124). The council responded to Miss O'Byrne's section 122 notice by admitting her right but then qualifying the admission by contending that she could not exercise the right unless the requirements of section 5 of the 1938 Act, including the obtaining of the Secretary of State's consent, were complied with.
50. Sections 125 to 131 deal with the price to be paid by the tenant for the freehold or, as the case may be, the long lease. Put very shortly and broadly, the price is the market value less discounts depending on the length of time the tenant has held his tenancy and occupied the premises as his home.
51. It is a feature of the Part V provisions that, notwithstanding that the tenant has given a section 122 notice, that the price has been agreed or, in default of agreement, fixed and that the landlord has come under a duty to convey the fee simple or grant the long lease (see section 138), the tenant has no obligation to complete the transaction. The tenant can withdraw from the transaction at any time up to the point at which there is an exchange of conveyance or lease for purchase price. The landlord's remedy, if the tenant drags his feet, is to serve completion notices on the tenant under sections 140 and 141 and, if the tenant still fails to complete, the tenant's right to buy is " . deemed to be withdrawn ." (section 141(4)).
52. The Part V provisions to which I have referred underline the dichotomy between, on the one hand, consensual sales between willing vendor and willing purchaser where there is mutuality of obligations and, on the other hand, Part V dispositions under which the landlord's willingness is irrelevant and the tenant is at no stage bound to complete.
53. Schedule 6 to the 1985 Act deals with the content of the conveyance or lease whereby the right to buy is given effect to. Paragraph 4 says that
and, under paragraph 5,
54. These Schedule 6 provisions need to be kept in mind in considering the consequences of the exercise of a right to buy where the land in question is 1938 Act Green Belt land.
Is the 1985 Act "right to buy" subject to the section 5 requirements of the 1938 Act?
55. In my opinion, section 5, correctly construed, has no application to dispositions of 1938 Act Green Belt land brought about by the compulsory expropriation provisions of Part V of the 1985 Act.
56. The intention of the section is to restrict the ability of local authorities to effect voluntary dispositions of Green Belt land. The language of the section to which I have already referred, seems to me to make that clear. Section 5, read in conjunction with section 6, makes clear that the former section was not intended to deal with compulsory acquisitions under compulsory powers.
57. In R v Secretary of State for the Environment ex parte Enfield London Borough Council (1988) 86 LGR 549 McNeill J, declined to accept counsel's submission that section 5 was limited to voluntary disposals of Green Belt land. The decision was followed by Goldring J in the present case. On appeal, Buxton LJ, with whom on this point Laws and Thorpe LJJ agreed, came to the same conclusion. Buxton LJ referred to the possibility that a 1985 Act right to buy might have to be implemented against an unwilling local authority landlord by the intervention of the Secretary of State under sections 164 and 165 and commented, at para 19, that it would then be "less easy to see the transaction as involving a sale". He went on to say that that
58. In my respectful opinion, however, the Lord Justice was concentrating on the wrong Act. The question is not whether a 1985 Act right to buy transaction can be reasonably described as a "sale". In some cases, where the local authority landlord is co-operative, perhaps it can. But the critical question is whether a 1985 Act right to buy transaction is a disposition to which section 5 of the 1938 Act applies. That question requires concentration on the 1938 Act. What types of transaction was section 5 contemplating? The transactions contemplated were, in my opinion, transactions where the local authority owner was a voluntary disponer. The meaning to be attributed to the words "proposed to be sold" that appear in section 5(1) must draw upon the context in which those words appear. The context appears to me inescapably to exclude the class of non-voluntary dispositions, compulsory expropriations, of which a disposition giving effect to the 1985 Act right to buy is a member.
59. For these reasons, in my opinion, section 5 has no application to 1985 Act right to buy transactions. It is not, in my view, necessary to ask whether Part V of the 1985 Act has impliedly repealed pro tanto or disapplied section 5. But if it were necessary to address that question I would answer it by holding there to be a clear disapplication. Section 118 confers a defined right on secure tenants. If section 5 is applied the tenant does not have the right as defined, but only a lesser right. His right would be subject to a condition, nowhere expressed in Part V, the fulfilment of which would be dependant on an uncertain future event, namely, the obtaining of the Secretary of State's consent. A right subject to this condition would not be the right conferred by section 118. If necessary, I would hold, therefore, that section 5 of the 1938 Act was disapplied by section 118(1) of the 1985 Act.
60. Miss O'Byrne is entitled in my opinion, to the right to a long lease conferred by section 118 of the 1985 Act. There are two additional points that seem to me worth making.
61. First, I have had some worries as to whether para 5 of Schedule 5 to the 1985 Act applies to Miss O'Byrne's tenancy. Schedule 5 specifies exceptions to the right to buy. The para 5 exception applies where the dwelling house
62. There seems to me to be no doubt at all but that sub-paragraph (b) applies. The sub-paragraph is referring to the circumstances when tenancy was first granted. It is uncertain on the facts whether sub-paragraph (a) applies. It is also uncertain whether, if sub-paragraph (a) does apply, it is still open to the council to take the point. These uncertainties cannot be resolved by your Lordships.
63. Second, your Lordships have not been addressed as to the consequences of the grant to Miss O'Byrne of a new lease pursuant to her right to buy. The new lease would be a lease for a term of 125 years (see para 12 of Schedule 6) and questions might arise as to what provisions should be included in the lease to take account of the Green Belt restrictions which would continue to apply. The continued occupation of the flat by Miss O'Byrne and her family for as long as she continued to be employed in connection with the maintenance of Coombe Wood Park would, I think, be consistent with the user restriction contained in the 1948 deed. But what the position would be if Miss O'Byrne ceased to be so employed, or if the flat became occupied by someone else whose occupation had nothing to do with the maintenance of Coombe Wood Park, is another matter. On a sale under section 5 of the 1938 Act to which the Secretary of State had consented, the property could be freed from the restrictions. But if, as I would hold, section 5 has no application, the property would, it seems to me, prima facie continue to be subject to the restrictions. Your Lordships were not addressed on these difficulties and they do not arise strictly on this appeal. I mention them simply for the purpose of drawing attention to matters that may still need to be addressed.
64. I would, for the reasons expressed, dismiss the Secretary of State's appeal and make a declaration that the 1938 Act does not operate to deprive Miss O'Byrne of the right to buy pursuant to section 118 of the 1985 Act.
LORD RODGER OF EARLSFERRY
65. I have had the privilege of reading in draft the speech prepared by my noble and learned friend, Lord Scott of Foscote. I agree that, for the reasons he gives, your Lordships should dispose of the appeal by making the declaration that he proposes. Since we are differing significantly from the approach of the Court of Appeal, I add some observations of my own.
66. Coombe Wood is an area of open ground of some 9 acres lying within what is now the London Borough of Croydon ("Croydon"). In 1898 the owner of the estate built a substantial mansion, Coombe Wood House, and stables to serve the house. In 1948 Croydon bought both Coombe Wood and Coombe Wood House, including the stable block, and opened the area to the public as a park. The house is now a restaurant and the stables are no longer used for horses. In 1954 the storage area above the stables was converted into a flat ("the flat") which was occupied by an employee of Croydon Parks Department until 1987, after which other tenants occupied it. In 1993 the respondent became a service tenant of the flat for the better performance of her duties as a gardener employed by Croydon. In 1994 the respondent, though continuing to work as a gardener, ceased to be a council employee. It is accepted that she then became a secure tenant of the flat. The present appeal arises out of the respondent's claim to exercise a right to buy the flat in terms of section 122 of the Housing Act 1985 ("the 1985 Act").
67. The expression "the right to buy" first appeared in the statute book in the heading to chapter 1 of the Housing Act 1980. It referred to a right that was created by the very first section of the Act. In the side-note to that section the draftsman described the right as "a right to acquire freehold or long lease". This description of the new right was more exact, as can be seen from the relevant terms of section 1(1):
Subsection (2) went on to say that in chapter 1 of the Act "the right mentioned in subsection (1)(a) and (b) is referred to as the right to buy".
68. When the housing legislation was subsequently amended and consolidated in the 1985 Act the substance of these provisions was re-enacted in section 118(1):
Section 118 is found in Part V of the 1985 Act which is entitled "The Right to Buy" and the same heading is used to describe the first group of sections in Part V which define who has the right and who can exercise it. The side-note to section 118 is also "The right to buy".
69. While the legislature has gone out of its way, particularly in the 1985 Act, to describe the secure tenant's right as a right to "buy" the property, on closer examination it can be seen that the right conferred on the tenant is, more precisely, a right to acquire the freehold or to be granted a long lease, as the case may be. When the draftsman calls that right "the right to buy", this is not merely a convenient shorthand description for drafting purposes. It is also Parliament's equivalent of a soundbite: it sums up briefly, and in popular language, the broad thrust of what is involved. The policy enshrined in the Act was easily presented to the public in these terms. Calling it the right to buy also emphasised that under the Act the rights are on the side of the tenants and the obligations on the side of the landlords. It is therefore no accident that the 1985 Act never describes the landlord as a seller nor his obligations as those of a seller. Indeed the only place where the terminology of selling as opposed to buying is used is in section 127, providing that the value of the house is to be calculated by reference to the price which it would realise "if sold on the open market by a willing vendor". Despite this, of course, politicians and the media have consistently spoken of "council house sales".
70. The true nature of the right to buy under the 1985 Act was analysed by Lord Hoffmann in Bristol City Council v Lovell  1 WLR 446, 453H. As he pointed out, the 1985 Act, unlike the equivalent Scottish legislation, does not bring into existence a deemed contract of sale but, rather, misses out the contractual stage of normal conveyancing. The tenant's right is wholly the creation of statute and the landlord's corresponding duty, to be found in section 138(1) of the Act, is either to make a grant of the dwelling-house in fee simple or to grant a lease. The method of enforcing that duty is by injunction under section 138(3). Lord Hoffmann's analysis reveals just how far a 1985 Act transaction differs from a normal sale and conveyance. That difference is only further emphasised by the special price régime, by the absence of obligations on the tenant until a very late stage in the transaction and by the power of the Secretary of State to intervene under section 164 to enable tenants to exercise their right to buy where they are having, or may have, difficulty in doing so effectively and expeditiously. For these reasons I respectfully consider that in the Court of Appeal Buxton LJ got the emphasis wrong when he said (in para 19) that "the machinery to implement the statutory purpose uses the presumptions and the vocabulary of a contract of sale" and that "the general and usual case envisaged by the 1985 Act is not one of forced transfer, but of, however reluctant, sale." The transaction is, rather, a sui generis creation of the 1985 Act.
71. The nature of the transaction and whether or not it can properly be regarded as a "sale" are critical to the issue which lies at the heart of this case. When Croydon bought the Coombe Wood estate in 1948, the London County Council ("the LCC") contributed a sixth of the purchase price. This was the consideration for a declaration by Croydon, in terms of section 3(a) of the Green Belt (London and Home Counties) Act 1938, that the lands which they had bought were "to be part of the Green Belt round London". Croydon also covenanted with the LCC that the lands should not at any time thereafter be used without the written consent of the LCC for any purpose other than a public open space or public walks and pleasure grounds or to provide for outdoor games or recreations. By virtue of the declaration the estate and buildings, including the stable block, became Green Belt land and became subject to section 5 of the 1938 Act which places restrictions on the power of a local authority to alienate such land. In particular, section 5(1) provides that "before Green Belt land vested in a local authority or a parish council is sold or is exchanged or ... is appropriated the local authority or parish council in whom the land is vested shall" go through certain procedures. These include seeking the consent of every local authority that contributed to the cost incurred in acquiring the land or in providing any consideration for a covenant restricting the user of the land. The final step in the procedure is obtaining the consent of the Secretary of State.
72. As the appellant in these proceedings, the Secretary of State contends that granting a long lease of the flat to the respondent in terms of section 138 of the 1985 Act would amount to Croydon "selling" the flat to her within the meaning of section 5(1) of the 1938 Act. All the judges in the courts below accepted that contention. The Secretary of State further contends - and Buxton LJ in the Court of Appeal accepted - that, before the flat could be "sold", Croydon would accordingly have to obtain the Secretary of State's consent in terms of section 5(1). Therefore, since the Secretary of State in fact refused his consent on 3 February 1999 after a public inquiry, the transaction under the 1985 Act cannot proceed. By contrast, Laws and Thorpe LJJ held that there is no place within the mechanics of the 1985 Act for the 1938 Act procedures to operate. The provisions of the two Acts are so inconsistent with, or repugnant to, one another that they cannot stand together and the relevant provisions of the 1938 Act must accordingly have been pro tanto impliedly repealed by the 1985 Act. For that reason they concluded that - despite the terms of section 5(1) - the consent procedure does not actually apply to the respondent's application under section 122 of the 1985 Act.
73. The Court of Appeal saw the crucial issue as being whether section 5 was in force in respect of 1985 Act transactions or had been pro tanto impliedly repealed. As Lord Scott of Foscote pointed out during the hearing, it would perhaps be more accurate to say that the issue was whether either the 1938 Act or the 1985 Act should be regarded as containing an implied provision to the effect that section 5 was not to apply to transactions under the 1985 Act. That particular issue arises, however, only if the references in section 5(1) to Green Belt land being "sold" can properly be construed as covering the acquisition of the freehold or the grant of a long lease, in return for payment of the purchase price, under the 1985 Act. If not, then section 5 and the procedures which it lays down have, for that reason, no application in a case such as the present. Any question of the 1985 Act impliedly amending the 1938 Act falls away.
74. Like all of your Lordships, I am satisfied that, properly construed, section 5 would not apply to any grant by Croydon of a long lease to the respondent in terms of the 1985 Act. Section 5 lays down procedures that the local authority must go through before Green Belt land is "sold". Words such as "sale", "sell" or "sold", as ordinarily understood, refer to a voluntary transaction involving a contract to convey and a conveyance of property in return for a money consideration. Plainly, if "sold" in section 5 is to be given this ordinary meaning, the section could not apply to the grant of a lease of the flat under the 1985 Act. Of course, as Lord Reid acknowledged in Kirkness v John Hudson & Co Ltd  AC 696, 729 the terminology of sale can sometimes be applied beyond its normal and correct meaning, but he added that "it is only permissible to give to a word some meaning other than its ordinary meaning if the context so requires." On behalf of the Secretary of State Mr Hobson argued that in the context of section 5 "sold" not only could be, but indeed had to be, given an extended meaning, which would be apt to include a grant of a long lease under the 1985 Act.
75. In support of that submission he pointed to the opening words of section 5: "Subject to the provisions of section 6 ." These words showed, he said, that, had they not been inserted, the situations contemplated by section 6 would have fallen within the scope of section 5. In particular, section 6(1)(b) dealt with the proposed acquisition of Green Belt land vested in a local authority by the exercise of compulsory purchase powers. So "sold" in section 5 must be wide enough to bring that kind of transaction within its scope. On that basis a 1985 Act transaction would be covered too. Although section 6 is addressed to the acquiring body, in my view there would be some force in that argument if the opening words of section 5 stood alone. Nor would the argument be fully met by Mr Crampin's counter-argument, based on an exception to section 6(1), that the opening words of section 5 were intended to remove from the purview of that section voluntary disposals of land that is specifically mentioned in the enactment conferring the powers to acquire it. The counter-argument does not reach section 6(1)(b).
76. The opening words are, however, only one of a number of elements in the context formed by section 5. Lord Scott of Foscote has shown how the others point to "sold" referring, according to its normal meaning, to the voluntary disposal of land by a local authority in accordance with a contract. Section 6(1)(a) is a further pointer that section 5 is intended to deal with cases where the local authority agrees to part with its Green Belt land. More importantly, when "sold" is given its normal meaning, the procedural steps set out in section 5 all make sense. The difficulties and distortions arise when the word is given a wider interpretation and section 5 is applied to a case, like the present, where the local authority does not wish to part with the subjects but may be obliged to do so under a statutory procedure. The context within which "sold" occurs in section 5, therefore, so far from requiring it to be given a wider meaning, strongly suggests that it should be given its normal meaning. So interpreted, it does not catch a 1985 Act transaction.
77. For these reasons I am satisfied that Parliament did not intend the procedures in section 5 of the 1938 Act to apply to a conveyance of the freehold of a house or to a grant of a long lease of a flat under Part V of the 1985 Act. There is accordingly no overlap between section 5 of the 1938 Act and the 1985 Act and the issue which divided the members of the Court of Appeal does not arise.