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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55.  In Knowsley Housing Trust v White, the facts are as follows. Mrs White was granted a weekly tenancy of 34 Chesterfield Drive, Tower Hill, Kirkby, Liverpool by Knowsley Borough Council on 19 April 1993. As the Council was a local authority, this was a secure tenancy within the 1985 Act. On 15 July 2002, Knowsley Housing Trust (“Knowsley”) acquired the whole of the Council’s housing stock, whereupon Mrs White became an assured tenant under the 1988 Act. However, her right to buy was preserved by sections 171A to H of the 1985 Act.

56.  Mrs White fell into arrears, and, after serving notice of intention to do so, Knowsley issued possession proceedings in the Liverpool County Court on 15 April 2004 on the grounds of non-payment of rent. On 8 June 2004, the District Judge made the following order, which was in the form then generally in use in the County Courts:

“… The court orders that

(1)  The defendant give the claimant possession … on or before 6 July 2004.

(2)  The defendant pay the claimant £2,132.52 for rent arrears.

(3)  The defendant pay the claimant’s costs of the claim £130.00.

(4)  The defendant pay the total of £2,262.52 to the claimant.

(5)  This order is not to be enforced so long as the defendant pays the claimant the rent arrears and the amount for use and occupation and costs totalling £2262.52 by the payments set out below

       in addition to the current rent

       Payments required

       £5.00 per week, the first payment being made on or before 14 June 2004.”

57.  Although she remained in occupation, Mrs White failed to pay in accordance with these terms, and Knowsley obtained a warrant to enforce the possession order. Mrs White applied to suspend the possession order, and, on 26 October 2004, the District Judge suspended the warrant on terms that she pay a lump sum and the “current rent … together with £5 per week off the arrears". Thereafter, Mrs White did not comply with the terms of this latter order, although she made significant payments from time to time, so that her total arrears have remained, and to this day remain, at a fairly constant figure, around £2000 to £2500.

58.  Meanwhile, on 20 January 2005, Mrs White served notice under section 122 of the 1985 Act claiming the right to buy the property. Knowsley admitted her right to buy, and thereafter both parties took the steps provided for by the 1985 Act with a view to completing the sale. However, on 13 February 2006, Knowsley contended that Mrs White had ceased to have the right to buy, as she was no longer an assured tenant following her failure to comply with the terms of the court orders. Mrs White then applied for a declaration that, notwithstanding that failure, she remained an assured tenant. That application was dismissed by His Honour Judge Mackay on 14 September 2006, and his decision was upheld by the Court of Appeal (Buxton, Longmore LJJ and Sir Martin Nourse) on 2 May 2007 ([2007] EWCA Civ 404, [2007] 1 WLR 2897). Mrs White now appeals to your Lordships’ House.

59.  In the second appeal, Porter v Shepherds Bush Housing Association, the facts are as follows. Shepherds Bush Housing Association (“the Association”) granted Mr Porter a tenancy of Flat 3, 1 Bolingbroke Road, London W14 on 26 July 1983. As the tenancy was granted by a housing association between 1980 and 1988, it was a secure tenancy, which, at all material times, was within the ambit of Part IV of the 1985 Act. Mr Porter fell into arrears with his rent, and the Association claimed possession in the West London County Court. On 18 August 1997, the District Judge made the following order, which reflected the standard form then in use:

“1.  The court has decided that unless you make the payments as set out in paragraph 3 you must give the plaintiff possession … on 15 September 1997.

2.  You must also pay to the plaintiff £2,338.40 for unpaid rent, use and occupation of the property ….

3.  You must pay the plaintiff the total amount of £2338.40 by instalments of £5 per week in addition to the current rent. The current rent is £34 per week: The first payment of both these amounts must be made on or before 1 September 1997.

4.  When you have paid the total amounts mentioned, the plaintiff will not be able to take any steps to evict you as a result of this order.

5.  If you do not pay the money owed and costs by the dates given and the current rent, the plaintiff can ask the court bailiff to evict you…” (paragraph numbering added).

60.  Mr Porter failed to comply with the terms of para 3 of this order, although some arrears were paid off. The Association then obtained a warrant for possession, but, on 30 August 2000 pursuant to an application by Mr Porter, the District Judge ordered that the warrant be suspended “on condition that [Mr Porter] do pay current rent and £5 per week towards the arrears, the next payment to be made on or before 13 September 2000". Mr Porter failed to comply.

61.  On 29 April 2004, at a time when his arrears were some £1,400, Mr Porter issued proceedings against the Association for damages for disrepair. The Association defended the claim on the basis that, in the light of his failure to comply with the terms imposed by the two orders, Mr Porter had ceased to be a tenant, and therefore could not claim damages for disrepair.

62.  On 9 January 2006, Mr Porter made a payment which put his rent account into credit, thereby discharging all the arrears. Meanwhile, on 3 January 2006, in anticipation of the arrears being cleared, Mr Porter made an application for the discharge of the suspended possession order made against him. That application was dismissed by the District Judge on 16 June 2006, and, although he gave Mr Porter permission to appeal, His Honour Judge Simpson dismissed his appeal on 22 December 2006. A second appeal by Mr Porter to the Court of Appeal (Pill, Sedley and Longmore LJJ) was dismissed on 19 March 2008 ([2008] EWCA Civ 196). Mr Porter now appeals to your Lordships’ House.

63.  In the third appeal, Islington London Borough Council v Honeygan-Green the facts are these. Islington granted Mrs Honeygan-Green a secure tenancy of 73B Crouch Hill, London N4 on 2 July 1990. On 23 May 2000, Mrs Honeygan-Green exercised her right to buy by serving a notice under section 122 of the 1985 Act. Although Islington accepted that she had the right to buy, completion of the transaction was delayed through no fault of hers: indeed, she served notices of delay on Islington in June and July 2002.

64.  Meanwhile, Mrs Honeygan-Green fell into arrears with her rent, and, on 14 July 2002, Islington issued proceedings for possession against her in the Clerkenwell County Court. On 4 October 2002, the District Judge made an order that:

“1.  The defendant give the claimant possession … on or before 1 November 2002.

2.  The defendant pay the claimant £482.45 for rent arrears.

3.  The defendant pay the claimant’s costs of the claim; £120 to be added to arrears.

4.  The defendant pay the total of £602.45 to the claimant.

5.  This order is not to be enforced so long as the defendant pays the claimant the rent arrears and the … costs totalling £602.45 by the payments set out below in addition to the current rent

       Payments required

       £50 per week, the first payment being made on or before 18 October 2002.

6.  Upon payment of the arrears in full, claim do stand dismissed.”

65.  Mrs Honeygan-Green failed to pay the amounts stipulated in accordance with para 5 of this order, although she did make some payments. In March 2003 Islington contended that she had therefore lost her secure tenancy. Thereafter she paid off all the arrears and costs, and, pursuant to her application, the District Judge made an order on 8 July 2003 discharging the possession order.

66.  However, Mrs Honeygan-Green then fell into arrears again, and Islington issued fresh possession proceedings against her on this ground on 23 February 2005. Mrs Honeygan-Green served a defence and counter-claim. In her counter-claim, she sought a declaration that, subject to her paying off any arrears which had accrued, she was entitled to buy the property pursuant to her section 122 notice of 23 May 2000. Having paid off the arrears, she then sought summary judgment on her counter-claim, in the form of an injunction requiring Islington to transfer the property to her. On 28 April 2006, His Honour Judge Marr-Johnson acceded to her application, but Islington’s appeal was allowed by Nelson J on 25 May 2007. Mrs Honeygan-Green’s appeal was allowed by the Court of Appeal (Pill, Keene and Maurice Kay LJJ) on 22 April 2008 ([2008] EWCA Civ 363). Islington now appeals to your Lordships’ House.

The issues to be determined

67.  The three appeals give rise to the following principal issues:

(a)  Where a suspended order for possession, such as that made in Mrs White’s case, is made under the 1988 Act, when does the tenancy come to an end?

(b)  (i) Can the court, when making a suspended possession order under the 1985 Act, proleptically direct that the order be discharged once the terms have been complied with?

(ii) If so, can the court proleptically direct that the order be discharged even if the terms of the suspension have not been strictly complied with?

(c)  In the case of a suspended order under the 1985 Act, without a proleptic discharge provision, can a tenant who has not complied with the terms of suspension, but has paid off the arrears and costs, seek a discharge or variation of the order?

(d)  If a tenant who has served notice exercising the right to buy is then made subject to a suspended possession order, does the right to buy pursuant to the notice revive if and when the order is discharged?

68.  I propose to consider those issues in turn, and then deal with the disposal of the instant three appeals. Before doing so, however, it is worth referring to the recent citation by Lord Hope of Craighead in Kay v Lambeth London Borough Council [2006] UKHL 10, [2006] 2 AC 465, 507 of Lord Porter’s observation in Baker v Turner [1950] AC 401, 417 that “the rules of formal logic must not be applied … with too great strictness” to legislation conferring security of tenure on residential tenants. While normal principles of interpretation should not, of course, be jettisoned, the importance of the law in this field being substantively and procedurally clear and simple is cardinal.

When does an assured tenancy subject to a possession order end?

69.  It is quite clear that a tenancy regulated by the 1977 Act does not determine when the court makes an order for possession. This is because section 2(1)(a) provides that, even if the protected (ie the contractual) tenancy has determined before, or as a result of, the possession order, the statutory tenancy will continue so long as the tenant is in occupation —ie until the order for possession is actually executed. Accordingly, if the tenancies in the three instant cases had been within the ambit of the 1977 Act, the three tenants would have remained regulated tenants throughout the period during which the suspended possession orders remained in force, and they would still be regulated tenants.

70.  This appears to have been the position under the Rent Act legislation even before it was first consolidated by the Rent Act 1968 - see Sherrin v Brand [1956] 1 QB 403. (It is unnecessary to decide whether the earlier case of American Economic Laundry Ltd v Little [1951] 1 KB 400, which may have been to a different effect, was rightly decided, as it was concerned with an outright order for possession. However, it may be worth recording my doubts whether it can be safely relied on in relation to outright possession orders under the 1977 Act.) In any event, the status, rights and obligations of a tenant, who is subject to a suspended possession order under the 1977 Act, are clear and simple. Apart from being subject to the terms of the order, he or she has all the rights and obligations of a regulated tenant under the 1977 Act.

71.  The authorities suggest that the position in relation to secure tenants under the 1985 Act is rather different. In Thompson v Elmbridge Borough Council [1987] 1 WLR 1425, a secure tenant was subject to an order that she give up possession in 28 days, on terms that operation of the order was to be suspended so long as she paid £10 per week off the arrears and the current rent. She subsequently failed to comply with those terms. The issue was whether, and if so when, the secure tenancy had determined. The Court of Appeal held that, particularly in the light of section 82(2) of the 1985 Act, “once the defendant in proceedings of this kind where there is a suspended order for possession, ceases to comply with the conditions of the order, … and there is a breach of the terms of the order, the tenancy … from that moment comes to an end” - per Russell LJ at 1430H - 1431A.

72.  The correctness of this decision was not challenged in the argument before this House in Burrows v Brent London Borough Council [1996] 1 WLR 1448, where the issue was whether a new tenancy had been created by an agreement between a landlord and a secure tenant against whom an outright order for possession had been made. As neither party challenged the reasoning in Thompson [1987] 1 WLR 1425, there was no contention that a secure tenancy only ended when the order for possession was executed. (It is fair, if maybe a little defensive, to add that it suited both parties to accept the conclusion in Thompson [1987] 1 WLR 1425.) However, both Lord Browne-Wilkinson and Lord Jauncey of Tullichettle (who gave the only reasoned opinions) expressly stated that Thompson [1987] 1 WLR 1425 was rightly decided - see at 1453 D-G and 1457C-E.

73.  Your Lordships have been referred to a number of subsequent decisions of the Court of Appeal which proceeded on the assumption that the law was indeed as stated in Thompson [1987] 1 WLR 1425, and that a secure tenancy ended when a secure tenant, who was subject to a suspended possession order, failed to comply with the terms of the suspension. There will also undoubtedly have been tens of thousands of cases in the County Courts, and, indeed, many negotiations, much legal advice, and many actions, involving secure tenancies, which also proceeded on this assumption. For completeness, I should add that in Harlow District Council v Hall [2006] 1 WLR 2116, it was held following some dicta in Burrows [1996] 1 WLR 1448, 1457 that where the terms of suspension were expressed so as to indicate that the order for possession took effect on a specified date, but execution was suspended on terms, the secure tenancy ended on the specified date, even if the terms of suspension were complied with.

74.  Until 2007, however, there had been no case, at least in a court of record, which involved considering the question whether the reasoning and conclusion in Thompson [1987] 1 WLR 1425, as approved in Burrows [1996] 1 WLR 1448, or indeed in Hall [2006] 1 WLR 2116, applied to assured tenancies under the 1988 Act. So, when the appeal in Knowsley [2007] 1 WLR 2897 came before the Court of Appeal, it was an open question whether an assured tenancy ended as soon as the tenant failed to comply with the terms of a suspended order for possession (although in Artesian Residential Developments Ltd v Beck [2000] QB 541, the Court of Appeal had decided that an assured tenancy determined the moment an outright order for possession was made).

75.   In Knowsley [2007] 1 WLR 2897, the Court of Appeal held that the reasoning and conclusion in Thompson [1987] 1 WLR 1425 did apply to assured tenancies (relying in part on Artesian [2000] QB 541). In my judgment, that decision was wrong, although, particularly in the light of the reasoning in the cases just referred to, it would be unfair not to acknowledge the force of the argument to the contrary (as clearly encapsulated in the judgment of Buxton LJ).

76.  Leaving Burrows [1996] 1 WLR 1448, Thompson [1987] 1 WLR 1425, Hall [2006] 1 WLR 2116, and Artesian [2000] QB 541 on one side for the moment, I consider that, on a fair and practical reading, the 1988 Act leads to the conclusion that an assured tenancy subject to a possession order does not end until possession is delivered up — ie the position of an assured tenant under the 1988 Act is, in this connection, the same as that of a regulated tenant under the 1977 Act.

77.  Unlike the 1977 Act (see section 2(1)) or the 1985 Act (see section 82(2)), the 1988 Act has no express provision which indicates when an assured tenancy subject to a possession order ends. Section 5(1) describes how such a tenancy can be brought to an end, namely “by obtaining an order of the court", but neither in section 5 nor in section 7, which gives the jurisdiction to make orders for possession, is there any express guidance as to exactly when a possession order brings the tenancy to an end (contrary to what was said by Hirst LJ in Artesian [2000] QB 541, 549A-B). In those circumstances, it is necessary to consider whether there is anything in the scheme of Part I of the 1988 Act, or any other indication in that Act, which assists in answering that question.

78.  In my opinion, consideration of the way in which Part I of the 1988 Act operates and has been drafted indicates pretty clearly that, as Mr Jan Luba QC argued for Mrs White, an assured tenancy ends only when the order for possession is executed.

79.  First, it would not otherwise be entirely easy to characterise the status of a tenant in occupation under the shadow of an order for possession. The solution adopted in relation to secure tenancies was to describe such a person as a “tolerated trespasser". This appears to me to be a conceptually peculiar, even oxymoronic, status. Even more confusingly, if, after the terms of suspension are breached, and the secure tenancy ends, the court order is varied so that the breach of the terms is, as it were, forgiven, the secure tenancy is treated as having been retrospectively revived from the date of the breach (see Burrows [1996] 1 WLR 1448, 1454H-1455A and 1455E, and the discussion and cases cited in Marshall v Bradford Metropolitan District Council [2001] EWCA Civ 594, [2002] HLR 428, at paras 7-11). So, in such a case, for the period during which he was contemporaneously treated as a tolerated trespasser, a person is retrospectively to be regarded as having been a secure tenant. There are no such conceptual problems if an assured tenant subject to a possession order remains an assured tenant up to the time he goes out of possession.

80.  If the Court of Appeal’s decision stands, there would, I believe, be tens of thousands of former assured tenants with the anomalous, and potentially retrospectively reversible, status of tolerated trespasser. This is because there are very many cases where suspended orders have been made, and it must be relatively rare that the terms of suspension are strictly complied with, and, as was decided in Thompson [1987] 1 WLR 1425, once there is a breach in the terms of the suspension, the tenant becomes a tolerated trespasser. Further, this status could, in many cases, persist for a large number of years, as the financial circumstances of many assured tenants are such that they require a very long period to clear their arrears.

81.  (It is true that, in common law, the status of a tenant, whose lease has been forfeited but who remains in possession, is somewhat peculiar, and that, on relief from forfeiture being granted, the lease is treated as retrospectively reinstated. However, rightly in my view, it has not been suggested that the common law approach should be applied by analogy: it is anomalous and archaic. In any event, it is an inapposite analogy, as it cannot be suggested that an order for possession under the 1988 Act relates back to the service of the possession claim — cf Canas Property Co Ltd v KL Television Services Ltd [1970] 2 QB 433.)

82.  Secondly, the invention of the tolerated trespasser under the 1985 Act has led to difficulties and uncertainties as to his or her rights and obligations as against the landlord. There is a useful summary of these problems in Bristol City Council v Hassan [2006] 1 WLR 2582, para 34. Three examples which required rulings from the Court of Appeal will suffice (although there are others, including, of course, the problem raised in Burrows [1996] 1 WLR 1448). In Pemberton v Southwark London Borough Council [2000] 1 WLR 1672, the question was whether a tolerated trespasser could sue in nuisance (she could). In Brent London Borough Council v Knightley (1997) 29 HLR 857, there was a dispute as to whether a daughter could succeed to her deceased mother’s secure tenancy when, at the time of her death, the mother was a tolerated trespasser (she could not). In Lambeth London Borough Council v Rogers (1999) 32 HLR 361, the issue was whether a secure tenant could sue the landlord for damages for breach of its repairing covenant during the time the tenant was a tolerated trespasser, given that the tenancy had been retrospectively revived (she could).

83.  In addition, concerns over the rights of tolerated trespassers have led to arguments as to the precise terms that a suspended order for possession under the 1985 Act can and should take - see Bristol City Council v Hassan [2006] 1 WLR 2582. Forms of order which appear to have an identical effect turn out not to do so - cf Thompson [1987] 1 WLR 1425 with Hall [2006] 1 WLR 2116. Quite apart from this, the rights of third parties could be detrimentally affected: it is far from clear that a landlord of a tolerated trespasser could be liable for injury to a visitor to the property concerned under the Defective Premises Act 1972. That is because such liability depends on whether the landlord can be said to be under “an obligation to the tenant for the maintenance or repair of the premises” — see section 4(1). It is fair to say that I would incline to the view that it would have such a duty. The suspended order will be on terms that the landlord is entitled to payment for the tenant’s current occupation at a rate which assumes it is liable for repair (either under the terms of the tenancy or pursuant to section 11 of the Landlord and Tenant Act 1985). In those circumstances, I consider there is a very strong case for saying the landlord would be liable under the 1972 Act. In this connection, see per Simon Brown LJ in Rogers 32 HLR 361, 371 and cf Brikom Investments Ltd v Seaford [1981] 1 WLR 863, but the point is not straightforward.

84.  These (and indeed other) issues, which are not without difficulty, have arisen under the 1985 Act in relation to the rights and status of tolerated trespassers. While they may be of interest to lawyers, they are simply not the sort of issues which legislation designed to protect residential tenants should require to be resolved. They would not arise if a tenant remained an assured tenant until possession was obtained.

85.  The third reason I consider that an assured tenancy ends only when an order for possession is executed arises from section 9 of the 1988 Act. The fact that, after making an order for possession, the court has such very wide powers to vary or discharge the order, or to stay or suspend its execution points firmly in favour of the conclusion that an assured tenancy does not end until those powers are at an end — ie until after “execution of [the] order". As mentioned in Megarry on The Rent Acts (11th ed, vol 3, pp133-134), one would expect the status of the tenant to remain the same so long as the court retained control over the terms of the order, particularly as, during that period, there would always be the possibility of the tenant being in occupation under the assured tenancy.

86.  That point is reinforced by the fact that the wording and structure of section 9 of the 1988 Act follow very closely indeed the wording and structure of section 100 of the 1977 Act. As already explained, it is quite clear that a tenancy regulated by the 1977 Act cannot end until the tenant has vacated. Given that the two sections are both concerned with the determination of the tenant’s right to occupy as a result of an order for possession, it seems likely that it was envisaged that such an order would determine an assured tenancy in the same way as it would a regulated tenancy.

 
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