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Session 2008 - 09 Publications on the Internet Judgments PDF Print Version 
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| Judgments - Knowsley Housing Trust (Respondents) v White (FC) (Appellant) Honeygan-Green (Respondent) v London Borough of Islington (Appellants) Porter (FC) (Appellant) v Shepherds Bush Housing Association (Respondents) |
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HOUSE OF LORDS SESSION 2008-09 [2008] UKHL 70 on appeal from: [2007]EWCA Civ 404 [2008] EWCA Civ 363 [2008]EWCA Civ 196 OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE Knowsley Housing Trust (Respondents) v White (FC) (Appellant) Honeygan-Green (Respondent) v London Borough of Islington (Appellants) Porter (FC) (Appellant) v Shepherds Bush Housing Association (Respondents) Appellate Committee Lord Hoffmann Lord Walker of Gestingthorpe Lord Brown of Eaton-under-Heywood Lord Mance Lord Neuberger of Abbotsbury Counsel Appellant (Knowsley): Jan Luba QC Adam Fullwood (Instructed by Keoghs and Nicholls, Lindsel & Harris) Appellants (Honeygan-Green): Andrew Arden QC Iain Colville (Instructed by London Borough of Islington) Appellant (Porter): Richard Drabble QC Miles Croally (Instructed by Sharpe Pritchard for Oliver Fisher ) Respondents (Knowsley): Edward Bartley Jones QC Michael Singleton (Instructed by Anthony Collins Solicitors LLP) Respondent (Honeygan-Green): Richard Drabble QC Adrian Jack (Instructed by Wilson Barca Solicitors) Respondents (Porter): Ashley Underwood QC Catherine Rowlands (Instructed by Prince Evans) Interveners (Knowsley and Porter) Treasury Solicitors Christopher Baker (Instructed by Secretary of State for Communities and Local Government) Hearing dates: 8, 9, 13 OCTOBER 2008 ON WEDNESDAY 10 DECEMBER 2008 HOUSE OF LORDS OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE Knowsley Housing Trust (Respondents) v White (FC) (Appellant) Honeygan-Green (Respondent) v London Borough of Islington (Appellants) Porter (FC) (Appellant) v Shepherds Bush Housing Association (Respondents) [2008] UKHL 70 LORD HOFFMANN My Lords, 1. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Neuberger of Abbotsbury. For the reasons he gives, with which I agree, I would allow the appeals in Knowsley Housing Trust v White and Porter v Shepherds Bush Housing Association, but dismiss the appeal in Honeygan-Green v Islington London Borough Council. LORD WALKER OF GESTINGTHORPE My Lords, 2. I have had the privilege of reading in draft the magisterial opinion of my noble and learned friend Lord Neuberger of Abbotsbury. I am in full agreement with it, and for the reasons that Lord Neuberger gives I would dispose of these three appeals as he proposes. 3. I venture to add one brief footnote, and I do so largely as a matter of respect for Lord Browne-Wilkinson, who gave the leading speech in this House in Burrows v Brent London Borough Council [1996] 1 WLR 1448. Lord Browne-Wilkinson did not, as I read the authorities, invent the rather unfortunate phrase “tolerated trespasser.” It seems to have been coined by counsel for the local authority when that case was before the Court of Appeal: see Auld LJ (1995) 27 HLR 748, 752, quoted by Millett LJ in London Borough of Greenwich v Regan (1996) 72 P & CR 507, 517 (decided on 31 January 1996, while Burrows was on its way to this House). Both Auld LJ (in Burrows) and Millett LJ (in Regan) set out the expression “tolerated trespasser” in inverted commas, rather as if they were holding it at arm’s length. Millett LJ went on to explain that it was not an appropriate expression because in Regan the Court of Appeal (for good reason, on the facts of that case) had not considered the effect of section 85 of the Housing Act 1985. 4. When Burrows reached this House Regan was approved and section 85 was given its proper significance. Lord Browne-Wilkinson quoted the expression “tolerated trespasser”—again, in inverted commas—at pp 1452E and 1455C, and in the latter passage he could be said to have tolerated it. He did not wholly-heartedly endorse it. But it has since then become too firmly embedded to be dislodged. LORD BROWN OF EATON-UNDER-HEYWOOD My Lords, 5. I have had the advantage of reading in draft the opinion of my noble and learned friend Lord Neuberger of Abbotsbury. I agree with everything he says and would dispose of these appeals exactly as he suggests. LORD MANCE My Lords, 6. I have had the benefit of reading in draft the speech of my noble and learned friend, Lord Neuberger of Abbotsbury. I agree with him that the appeals should be allowed in Knowsley Housing Trust v White and Porter v Shepherds Bush Housing Association, but dismissed in Honeygan-Green v Islington London Borough Council, in each case for the reasons he gives, subject to one qualification not critical to the outcome. 7. The qualification relates to the operation of sections 85(2) and (4) of the Housing Act 1985 and the Court of Appeal authorities of Marshall v Bradford Metropolitan District Council [2001] EWCA Civ 594; [2002] HLR 428 and Swindon Borough Council v Aston [2002] EWCA Civ 1850; [2003] HLR 610. These are areas covered in my noble and learned friend’s speech at paras 94 to 113. They concern the interplay of sections 85(2), (3) and (4) in a situation where a possession order is made against a secure tenant but stayed or suspended on conditions relating (usually) to the payment of arrears, rent, mesne profits and/or costs. They are areas which were not, unfortunately, the subject of any full argument before the House. 8. Full argument and a decision on these areas would have been called for in Porter v Shepherds Bush Housing Association, if the parties in that case had not at an early stage during the hearing agreed that the tenant’s appeal should be allowed (on the basis that Swindon Borough Council v Aston was wrong) and the case remitted for the County Court to exercise jurisdiction accordingly under section 85(2); after that the parties and their counsel withdrew, with permission, from the hearing before the House. While the House, in noting the parties’ agreement, reserved the right to consider the case on a wider basis, the position remains that it heard no full argument in support of any such basis. 9. Section 85 provides inter alia: “(2) On the making of an order for possession of such a dwelling-house on any of those grounds, or at any time before the execution of the order, the court may (a) stay or suspend the execution of the order, or (b) postpone the date of possession, for such period or periods as the court thinks fit. (3) On such an adjournment, stay, suspension or postponement the court (a) shall impose conditions with respect to the payment by the tenant of arrears of rent (if any) and rent or payments in respect of occupation after the termination of the tenancy (mesne profits), unless it considers that to do so would cause exceptional hardship to the tenant or would otherwise be unreasonable, and (b) may impose such other conditions as it thinks fit. (4) If the conditions are complied with, the court may, if it thinks fit, discharge or rescind the order for possession.” 10. Where the execution of an order is stayed or suspended on conditions with which the tenant complies, no problem arises. Assuming the order to be silent as to the position, the tenant can by application under section 85(4) apply for its discharge or rescission in the light of the compliance with the conditions. 11. In practice, possession orders also contain a provision, designed to avoid the necessity for a separate application under section 85(4), providing prospectively for their discharge or rescission (or for them to “cease to be enforceable”) upon satisfaction of the conditions. In Payne v Cooper [1958] 1 QB 174 the Court of Appeal acknowledged that “As a matter of English, at first sight it might be said with force that it is only when the conditions have in fact been complied with that [the] power [to discharge or rescind] arises, and may be invoked", but, in the event and in the light of existing practice, took a pragmatic view. It held (in relation to similar statutory wording to section 85(4) contained in section 4(2) of the Rent and Mortgage Interest Restrictions Act 1923) that such a provision could be regarded as a “proleptic” exercise of the power of discharge which the statutory wording provides. A further, separate application by the tenant after compliance with the conditions was therefore unnecessary. Payne v Cooper was evidently overlooked by all involved in Marshall, where one issue was whether proleptic discharge was possible. As Lord Neuberger, indicates in paras 94 to 99, the third reason given by Chadwick LJ in para 37 in Marshall cannot stand in the light of Payne v Cooper. 12. Lord Neuberger concludes in paras 109-110 that compliance with the conditions in the context of section 85(4) and of the type of orders made in the cases before the House must mean strict compliance. While it is not critical to the conclusions that I reach, I am by no means confident that it does. Time is not normally of the essence in a non-commercial context, unless the wording makes clear expressly or by implication that it is; and Bennion on Statutory Interpretation (5th ed) (2008) p 868 notes that “as with all enactments, expressions relating to time are to be construed with common sense. So a strictly literal meaning will not be applied if the purpose of the enactment requires otherwise". Here the wording of the order made in Islington London Borough Council v Honeygan-Green does not make clear that time is of the essence, and I fully understand the argument that Parliament may not have envisaged that minor failures to comply with the conditions set under section 85(3) would preclude the exercise of the court’s power under section 85(4). So there may be a considerable case for saying that substantial compliance with such conditions suffices. It may be objected that this could involve a distinction between non-compliance which converts a tenant into a tolerated trespasser under section 85(2) and (3) and non-compliance which precludes use of section 85(4). But, I am not even sure that it would necessarily do that. Substantial performance could be regarded as the test both of compliance under paragraph 5 of the order in Honeygan-Green setting the conditions regarding payments and of compliance for the purposes of paragraph 6 proleptically discharging that order in the event of compliance with such conditions. 13. Whether this is so or not, however, a substantial case could be made for reading the word “substantially” into subsection (4) before the words “complied with". This would mean that, even where the court imposed precise conditions which fell to be performed punctiliously under section 85(3), the court would have a degree of flexibility in relation to the discharge or rescission of the order under section 85(4). I do not see such a result as unworkable. It might be objected that any test of substantial compliance involves uncertainty. But it would on any view be open to a court expressly to introduce conditions with which the tenant was required to do no more than substantially comply under subsection (3) as well as subsection (4). The situation most obviously in mind in subsection (4) is (as the court acknowledged in Payne v Cooper) one where a court is exercising its power after the event (ex post facto), at which stage it should be possible to judge with relative ease whether or not there has been substantial compliance. The extension of the operation of subsection (4) to permit prospective discharge (para 11 above) may leave some scope for uncertainty in a situation in which the parties are not bound to go to court. But that is a mere side-effect of extending the subsection to a situation other than that with which it was on its face primarily concerned. It provides no reason to treat subsection (4) as requiring more than substantial performance if it should otherwise be so construed. 14. It is of course also open to a court to avoid all these difficulties by framing conditions which are appropriate in all the circumstances, bearing in mind amongst other things the consequences of non-compliance. In Bristol City Council v Hassan [2006] EWCA Civ 656; [2006] 1 WLR 2582, the Court of Appeal showed the way, by holding that it was open to a court to order a tenant to give up possession on a date to be fixed by the court on an application by the landlord, not to be made so long as the tenant paid the current rent and the regular periodic payments towards arrears, etc required by the order and to be determined (wherever possible) on the papers without a hearing. That neatly avoids all the difficulties discussed in the previous paragraphs. 15. Where there is an order for possession, a secure tenant will often fail to comply with its conditions. The secure tenant thereupon becomes a tolerated trespasser. Later, however, he or she may satisfy all arrears. Marshall also held that, in this situation, a provision in the order that it should “cease to be enforceable when the arrears …. are satisfied” could not and did not have the effect under section 85(4) of reviving the original secure tenancy. Swindon held that this position could not be redeemed by an application under section 85(2), on the ground that “an application to postpone the date of possession was not possible since the order had ceased to be enforceable” (para 20). 16. I agree that Swindon was wrong, for the reasons given in relation to that case in paras 111 to 113 of Lord Neuberger’s speech. Otherwise the problem arises that a secure tenant who has become a tolerated trespasser, but then pays up all the arrears, cannot in any way revive his or her tenancy. However, once Swindon is overruled, subsections (2) and (3) of section 85 provide the sufficient solution. The tenant can, even after paying up all arrears, apply for a variation of the possession order to cover the late payment of the arrears, and so obtain discharge. 17. Marshall holds that section 85(4) does not enable a court proleptically to discharge a stayed or suspended order for possession in the situation mentioned in the preceding two paragraphs. In my opinion (and subject to the possibility that substantial compliance suffices), Marshall was right on this particular point, which represents the second reason given by Chadwick LJ in para 37: “Second, in a case where the secure tenancy has been brought to an end under the provisions of section 82(2) of the Act, section 85(4) does not, of itself, empower the court to discharge or rescind the order for possession. The power to discharge or rescind conferred by section 85(4) of the Act arises only “if the conditions are complied with". In this context, “the conditions” must be a reference to the conditions (if any) imposed - either initially or by way of variation - under section 85(3) in the existing possession order. In a case where the secure tenancy has come to an end under section 82(2), either there will have been no conditions or, ex hypothesi, the conditions will not have been complied with. The point is recognised by Lord Browne-Wilkinson in the Burrows case [Burrows v. Brent London Borough Council [1996] 1 WLR 1448] (at page 1455G).” (emphasis in bold added) 18. This reasoning seems to me impossible to fault. Parliament empowered the court in subsection (3) to “impose conditions” and, in the next subsection, “if the conditions are complied with” to discharge or rescind the order. The “conditions” referred to can only be one and the same set of conditions. It may be that a reference to “substantial” compliance can and should be read in. But one thing is clear: subsection (4) does not give the court power to discharge or rescind an order if the conditions set under subsection (3) have not been (either punctiliously or, if one reads the word into subsection (4), substantially) complied with. Subject therefore to the possibility that substantial compliance suffices, the power conferred by subsection (4) does not extend to situations, where, in or after breach of the conditions, arrears of rent are paid up late. However, since Swindon was wrongly decided, the tenant can always seek to resolve the situation, by applying under subsections (2) and (3) to vary the conditions (or in the case of an absolute order to introduce conditions: see para 21 below) in order to regularise what has in fact happened and in this way revive the original secure tenancy. 19. This analysis means that the occurrence of discharge or rescission will depend on punctilious (or, if one reads this into subsection (4), substantial) compliance with the conditions which appear in the possession order as made or varied. The contrary analysis makes discharge or rescission depend on the happenchance of payment in full of the arrears, whenever the tenant may decide or be able to procure that that should occur and even if the tenant has been up till then in very substantial non-compliance with the conditions. A tenant may default, become a tolerated trespasser, be sued by the landlord and then at the door of the court tender the whole outstanding arrears, months or maybe even years after the default. The proceedings are rendered nugatory. A landlord contemplating or bringing proceedings will have no idea whether, and no influence over whether, they will succeed or be undermined at some future time. Such an analysis also undermines legal certainty. The onus ought in this situation to be on the tenant who has defaulted and who has become a tolerated trespasser to seek and obtain relief, which the court may then decide whether to give on further conditions (eg as to interest or costs). It is appropriate that the court should in this context have a discretion. 20. I add these three points. First, although the practice has developed otherwise, the situation most obviously in mind in subsection (4) is one where the power under subsection (4) is invoked after the event, rather than on the proleptic basis to which the Court of Appeal in Payne v Cooper was prepared to extend it. In that situation, the tenant would have to apply to the court for discharge or rescission of the possession order. If “the conditions” imposed under subsection (3) had been complied (or substantially complied) with, the application would be under subsection (4), and, if they had not been, it would fall naturally under subsections (2) and (3) and be for the court in its discretion to decide whether to grant a further stay, suspension or postponement on varied conditions with which the tenant could comply. 21. Second, in the case of an absolute order for possession, there is no question of the order including any additional “proleptic” paragraph under section 85(4). So there can be no question of any subsequent payment of arrears reviving the secure tenancy. The tenant’s position is as described by Lord Browne-Wilkinson in the passage at p1455G referred to by Chadwick LJ in Marshall, para 37: “Finally, there is a method (albeit a clumsy one) whereby the order for possession even if an immediate unconditional order, can be discharged or rescinded if so desired under section 85(4). The power in that subsection to discharge or rescind only arises “if the conditions are complied with", a requirement which cannot be satisfied in the case of an unconditional order. But there is no reason why the order cannot be discharged by consent or, if such consent is not forthcoming, by the court varying the original order so as to impose the agreed conditions and then discharging the varied order.” All other members of the House agreed with Lord Browne-Wilkinson’s reasoning. If therefore, in the case of an absolute possession order, late payment of arrears can only lead to discharge of the order by means of a further court order under section 85(2) and (3), it cannot be unlikely that the same procedure should apply in the case of a conditional order where the conditions are not complied with and the order has thus become unconditional. 22. The third point is that there is nothing in Payne v Cooper which gainsays the analysis of section 85(4) which seems clear on the face of the statute. In Payne v Cooper an absolute possession order was made against a statutory tenant, but, on later application to suspend, vary or discharge this order under section 4 of the Rent and Mortgage Interest Restrictions Act 1923, the statutory tenant obtained a further order postponing the date for possession by 28 days on condition that the tenant pay the arrears within that period. The order further provided (“proleptically”) that “on such payment the order for possession shall be discharged". The landlord challenged the court’s jurisdiction to convert an absolute order into a conditional order for possession. The Court of Appeal rejected the challenge in the light of the clear contrary wording of section 4(2) (a rejection accepted as correct in this House in Lord Browne-Wilkinson’s reasoning in Burrows: see para 21 above). The landlord further challenged the legitimacy of the proleptic discharge provision contained in the order, and, as mentioned in para 11 above, the Court of Appeal also rejected this challenge. The case was not concerned with a situation in which the tenant had failed to comply with the conditions imposed. There was no suggestion of any such failure. But the judgments contain dicta which make it clear that the Court of Appeal contemplated that proleptic discharge under the relevant wording in section 4(2) (equating with the wording in section 85(4) of the Housing Act 1985) would only be possible if the conditions imposed under the equivalent wording to section 85(2) were complied with. At p 185, Lord Evershed MR said in relation to the possibility of proleptic discharge : “The last two lines of the subsection are: “and if such conditions are complied with, the court may, if it thinks fit, discharge any such order". As a matter of English, at first sight it might be said with force that it is only when the conditions have been in fact complied with that that power arises, and may be invoked. In the present case it will be recalled that the judge combined all the operations into one order". In going on to accept the legitimacy of proleptic discharge, Lord Evershed was therefore dealing only with a situation where the conditions imposed had been complied with. Likewise, at p 189 Romer LJ explained that section 4(2) showed that the court could suspend execution or postpone the date for possession on terms “and that, if those terms are complied with, then the court may discharge or rescind the original absolute order". (emphasis added) He continued: “… the county court judge made in the present case ….[a] compendious form of order directing that on fulfilment of conditions, the original order should be discharged, instead of making an order imposing conditions, and then waiting to see if the conditions had been performed, and, if they had been performed, then making another order. I agree with the Master of the Rolls in thinking there is nothing wrong, or beyond the power of the court, in making an order in that compendious form …” (emphasis added) Again there is nothing to suggest that an order could be made imposing conditions, but providing for its proleptic discharge upon non-fulfilment (or, if one reads this into subsection (4), substantial non-fulfilment) of such conditions. Any such order would fly in the face of the statutory language, and fall outside anything contemplated by either Lord Evershed or Romer LJ. |
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