Possession Proceedings

The courts continue to clarify the position following the decisions of the Supreme Court in Manchester City Council v Pinnock [2010] UKSC 45; [2011] 2 AC 104 and Hounslow London Borough Council v Powell [2011] UKSC 8; [2011] 2 AC 18 on the application of Article 8 ECHR to defend possession proceedings.

In Southend-on-Sea Borough Council v Armour (QBD, judgment of 18 October 2012), Cranston J dismissed an appeal by the Council against a finding that it would be disproportionate to grant a possession order. The Defendant was an introductory tenant, who had allegedly verbally abused neighbours. Possession proceedings took 11 months to come to trial, by which time the Defendant had been diagnosed with Asperger’s and depression, as well as there having been no further incidents. The Recorder upheld the proportionality of the Council’s original decision to seek possession, but had regard to the situation since the filing of the claim and held that it would no longer be proportionate to order eviction. Cranston J agreed, holding that since proportionality was to be determined at the date of the hearing the Recorder’s decision contained no error. There would have been a breach of Article 8 ECHR.

The seriously arguable breach of Article 8 threshold established by the Supreme Court was maintained by the Court of Appeal in Thurrock Borough Council v West [2012] EWCA Civ 1435, in which the Defendant had been living in a property with grandparents to whom a weekly tenancy had been granted. The Defendant argued that following the death of both grandparents it would be disproportionate to evict from the home he had been in for four years, when he would be unable to find comparable accommodation in the private sector. The County Court refused possession. The Court of Appeal overturned this on appeal, holding that there was nothing exceptional about the case in the least, and the seriously arguable threshold had not been met. A possession order would not be a breach of Article 8.

Thurrock was applied in Evans v Brent London Borough Council (QBD, judgment of 18 December 2012), in which the Defendant claimed that she had been living with her ill father until his death and that she should be entitled to succeed to his secure tenancy. The County Court ordered possession, holding that she had not resided with her father in the 12 months prior to his death, that there was therefore no right of succession under s.87 of the Housing Act 1985 and that it was not seriously arguable that the Council would breach Article 8 if it did not permit her to remain in the property. The Defendant’s appeal was allowed by Ramsey J in part, holding that the factual dispute about the Defendant’s residence within the last 12 months was the subject of conflicting evidence and was not suitable for summary judgment. However, Ramsey J dismissed the Article 8 appeal, agreeing that it was not seriously arguable that there was any breach, and also that it was not seriously arguable that there had been any fettering by the Council.

In ordinary cases, an order for possession may be suspended under s.85 of the Housing Act 1985. In Birmingham City Council v Ashton [2012] EWCA Civ 1557 the Defendant had a serious criminal record, including for threats to neighbours, which led to the Council seeking a possession order. The County Court suspended the possession order, in the light of the lack of recent incidents and the receipt of support services, on terms that an anti-social behaviour injunction was complied with. The Court of Appeal allowed the Council’s appeal on the basis that the judge had failed to consider the future risk of anti-social behaviour, as to which medical evidence showed that there was a 20-30% chance of future unacceptable conduct (even with support). Once a possession has been made the burden is on the party seeking suspension to show that the behaviour is unlikely to recur. The case was remitted for reconsideration. 

Strasbourg Cases

Article 8 continues to be a source of UK litigation both domestically (see above) and in Strasbourg. The most recent decision of the European Court of Human Rights came in Buckland v UK (App. No. 40060/08), which was about gypsies. The Applicant was a gypsy who lived on a caravan site in Neath and who was given notice to terminate her licence in 2004. She refused to go and in 2006 the County Court made an order for possession under the Caravan Sites Act 1968 and Mobile Homes Act 1983, suspending the order for 12 months. The judge did not consider the proportionality of the possession order as the case occurred prior to the judgment of the Supreme Court in Pinnock (above) that this was required by Article 8. The European Court held that to comply with Article 8, a court had to be satisfied that it was proportionate to make a possession order which had not been done. Although the Applicant could have applied for a further suspension, this would not remove the incompatibility: suspension merely delays but does not remove the threat of eviction.

Of significant potential importance was the qualification entered in the Separate Opinion of Judge de Gaetano, which is worth quoting in full:

“My only reservation in this case is with the principle as set out in the second sentence of paragraph 65. This sentence is a verbatim reproduction of what is found in § 50 of McCann and in § 68 of Kay (the sentence was slightly modified, but not in substance, in § 43 of Paulić). However, all the cases quoted in support of the principle as thus formulated (including, indirectly, Connors) are cases where the landlord was either the Government or a local authority. None were cases where the landlord was a private individual. In my view while it is perfectly reasonable to require that an eviction or repossession notice issued by the Government or by a local authority – both of which are normally under a public law obligation to provide accommodation for people within their jurisdiction – or possibly even by a private entity in receipt of public funds, should be capable of being challenged on the grounds of proportionality, when the landlord is a private individual the tenant’s right should in principle be limited to challenging whether the occupation – tenancy, lease, encroachment concession, et cetera – has in fact come to an end according to law. In this latter case the proportionality of the eviction or repossession in light of the relevant principles under Article 8 should not come into the equation. This is not to say, of course, that the Government may not, by legislation, impose restrictions on the use of the property by the landlord upon or after the termination of the occupancy, from which restrictions the last tenant or occupant might even benefit (see, by way of analogy, James and Others v the United Kingdom, no. 8793/79, 21 February 1986; Hutten-Czapska v. Poland, [GC] no. 35014/97, 19 June 2006); but this is a totally different issue from what is being proposed in the second sentence of paragraph 65.”

The Supreme Court had expressly refused in Pinnock to express a decided view on the horizontal effect of Article 8 to possession proceedings involving a private landlord. The pessimistic might read Judge de Gaetano’s feeling the need to enter a Separate Opinion as an indication that the majority had indeed intended their judgment to be read more broadly. It doubtful that this point will remain undecided for very much longer.

A breach of Article 1 of Protocol 1 was found in Bjelajic v Serbia (App. No. 6282/06), where the Applicant had obtained a domestic judgment ordering a State-run company to carry out repair work water damage to her flat, which was not complied with for five years. The Court found that the substantial delay in enforcing the order had not been justified and finding of a violation was made.

A breach of the same Article was also found in Tunyan v Armenia (App. No. 22912/05), in which the Applicant was the leasehold owner of a flat in which she resided. The Armenian Government expropriated the property (and the surrounding area) by decree in 2002 and the Applicant refused to accept the compensation. The eviction was upheld domestically. Relying on its previous decision in Minasyan v Armenia (App. No. 27651/05) that expropriation of land required primary legislation, a breach of Article 1 was found.

Homelessness

The Court of Appeal has now twice reiterated that the question of whether a citizen of the EU is temporarily unable to work as the result of illness or accident, such that they should continue to treated as a worker and therefore entitled to reside in a Member State, under Article 7 of Directive 2004/38, is a question of fact: Konodyba v Royal Borough of Kensington and Chelsea [2012] EWCA Civ 982; Samin v City of Westminster [2012] EWCA Civ 1468. In the latter case (the former having been dismissed because the main issue was res judicata) the Court noted that the Claimant had hardly worked in the UK at all and could not therefore be said to be only temporarily unable to work, given his range of physical and mental health problems.

Where an individual has been refused homelessness assistance under Part 7 of the Housing Act 1996 because the local authority does not accept that she falls into a category of priority need – such as being at risk of domestic violence – an appeal to the County Court lies only on a point of law against the review decision: s.204. The Court has no jurisdiction to make findings of fact: Bubb v London Borough of Wandsworth [2011] EWCA Civ 1285. This was reiterated in Richmond upon Thames London Borough Council v Kubick [2012] EWHC 3292 (QB) where the Claimant had sought to adduce a witness statement undermining the evidence relied on by the Council. Leggatt J allowed the appeal against the decision to allow the statement to be adduced.

Part 7 duties do not apply to those who are intentionally homeless within the meaning of s.191 of the Housing Act 1996. In Carthew v Exeter City Council (CA, 4 December 2012) the Claimant left the home she shared with her partner when their relationship broke down, after she had transferred the property to her former partner at an earlier stage in the relationship because she could not afford to pay the outgoings herself. The Court of Appeal remitted the case for reconsideration because although the Council was entitled to treat the transfer of the property as the cause of her homelessness, it (and the County Court) had failed to consider why the Claimant had had to carry out the transfer and whether it was in fact affordable for her to live in on her own.

Compulsory Purchase Orders

Compulsory purchase orders in respect of properties may be made under s.17 of the Housing Act 1985, and are subject to confirmation by the Secretary of State. Part 4 of the Housing Act 2004 entitles local authorities to take over the management of empty properties and bring them into occupation by making an Empty Dwelling Management Order. In Braithwaite v Secretary of State for Communities and Local Government [2012] EWHC 2835 (Admin) it was said that the Claimant had used the property in question only sporadically and intermittently over the previous ten years, allowing the condition of the property to deteriorate so that it was no longer of a reasonable standard.

Kenneth Parker J dismissed the claim. In particular, he held that there was no evidence that the EDMO regime under Part 4 of the 2004 Act was intended to limit or cut back the CPO powers under s.17. EDMO’s were an additional power. If a CPO could only be made where the property was empty within the meaning of the EDMO regime the local authority would be powerless to act where the owner had a permitted EDMO reason for leaving the property unoccupied. The judge accepted that the CPO regime engaged Article 8 ECHR in this type of case, but the factual findings were that the property had been left empty for a considerable period of time and had been left in a lamentable state of disrepair. There was an acute need for residential dwellings and a CPO was more likely to secure that result. The compelling social need outweighed any Article 8 right the Claimant might have and the CPO was proportionate.

Legislation

Sections 148-149 of the Localism Act 2011 came into force on 9 November 2012 by virtue of the Localism Act 2011 (Commencement No. 2 and Transitional Provisions) (England) Order 2012 (SI 2012/2599), which amend the provisions of s.193 of the Housing Act 1996 so that the duty to secure accommodation for homeless persons may be brought to an end by the acceptance or refusal of a private rented sector offer (i.e. an assured shorthold tenancy). The duty will still apply if an applicant who accepted an offer re-applies within two years.

Also coming into force on 9 November 2012 is the Homelessness (Suitability of Accommodation) (England) Order 2012 (SI 2012/2601), which sets out the circumstances in which private rented sector accommodation (above) is not to be regarded as suitable. The circumstances relate both to the physical condition of the property and the character of the landlord. It also sets out general suitability considerations which must be taken into account including: (a) if it is outside of their area, its distance from their area; (b) the significance of any disruption which would be caused to the employment, caring responsibilities or education of the applicant or any member of his household; (c) the proximity and accessibility of medical facilities and other support which are currently used or provided to the person or members of their household and are essential to their well-being; and, (d) the proximity and accessibility of local services, amenities and transport.

A series of instruments were made to come into force on 8 November 2012 to comply with the decisions of the CJEU in Case C-34/09 Gerardo Ruiz Zambrano v Office national de l’emploi [2012] 2 WLR 886 and Case C-256/11 Dereci and others v Bundesministerium fur Inneres (judgment of 15 November 2011) that where an EU national child is dependent on a non-EU national, that non-EU national must be given the right to reside and work in the Member State. The Immigration (European Economic Area) (Amendment) (No.2) Regulations 2012 (SI 2012/2560) amend the Immigration (European Economic Area) Regulations 2006 to confer a right to reside on such non-EU nationals. The non-EU national is, however, prohibited from receiving housing benefit or council tax benefit by virtue of the new Social Security (Habitual Residence) (Amendment) Regulations 2012 (SI 2012/2587) and is ineligible for an allocation under Pt.6, Housing Act 1996 by virtue of the new Allocation of Housing and Homelessness (Eligibility) (England) (Amendment) Regulations 2012 (SI 2012/2588).

Preference is to be given to certain categories of serving and former members of the armed forces by local authorities determining priorities in allocating housing accommodation from 30 November 2012: Housing Act 1996 (Additional Preference for Armed Forces) (England) Regulations 2012 (SI 2012/2989).

The Government’s root and branch of welfare benefits has significant implications for the existing systems of housing benefit. The Housing Benefit (Amendment) Regulations 2012 (SI 2012/3040) provides for the recalculation of the appropriate maximum housing benefit amount on 1 April of each year rather than on the anniversary of the previous determination (in accordance with the CPI uprating plans set out in the Rent Officer (Housing Benefit Functions) (Amendment) Order 2012). The Regulations also provide that payments to those renting in the social sector will be reduced by 14% if the claimant has one more bedroom than necessary, and 25% if two or more.

From 15 April 2013 a cap will be applied to the total amount of welfare benefits any individual can receive: £350 per week for a single person not responsible for a child, and £500 in all other cases. Housing benefit may be reduced so as to limit benefits to the amount of the cap (although it can be reduced below 50p per week): Benefit Cap (Housing Benefit) Regulations 2012 (SI 2012/2994).

It is intended that a new Property Chamber of the First-tier Tribunal will come into effect on 1 May 2013, which will encompass the jurisdictions of the Residential Property Tribunal, Leasehold Valuation Tribunal, Rent Assessment Committee, Agricultural Land Tribunal and the Adjudicator to the Land Registry.

The Court of Appeal has today handed down an important judgment on the ability of local authorities to avoid bargains by relying on their own unlawful acts. The context of Charles Terence Estates Ltd v Cornwall Council [2012] EWCA Civ 1439 is one of housing; the Council had entered into agreements with CTE whereby CTE purchased properties and leased thm to the Council to provide accomodation for people to whom the Council owed homelessness duties. The Council argued, successfully at first instance in front of Cranston J ([2011] EWHC 2542 (QB) ; [2011] LGR 813), that in entering into the agreements – which calculated rents based upon set rates – the Council had failed to comply with its fiduciary duty to the council tax payer because it had not considered the market rents in the locality, with the result that the leases were ultra vires and void. The Court of Appeal has overturned that conclusion.

There are two points of particular importance in the context of housing law, and a more important point about virus and public authorities generally. As to housing law, the Court of Appeal held first (in arguably the only point which formed the ratio) that the section 17 of the Housing Act 1985 power to acquire land could not be read as restricting the power to acquire land at a reasonable price. Maurice Kay LJ held that to do so would invite judicialisation of the limits of legal capacity so that only upon determination of a reasonable price could capacity be ascertained, which was a surprising outcome for a local authority to argue for: at [21]. In any event, the total abscence of expert evidence before the Court as to what the market or reasonable rent was meant that it was not possible to undertake any sort of meaningful comparison and so the case failed on an evidential basis too: at [19]-[20], [22], [24]-[25] per Maurice Kay LJ and [41] per Etherton LJ.

The second housing law point is a firm rejection by their Lordships of the argument that the leases were void because the Council had been obliged by section 74 of the Local Government and Housing Act 1989 to set up a Housing Revenue Account before it could exercise the section 17 power, and that it had been failed to do so. The Court held that the Account was a matter of book-keeping, and need only be established when money was actually recieved: at [26] per Maurice Kay LJ and [43] per Etherton LJ.

Of wider significance was their Lordships’ discussion of the circumstances in which a public authority can successfull invoke its own public law error as a defence to a private law claim, and in particular, the comments on the well-known decision of Credit Suisse v Allerdale BC  [1997] QB 306, CA. There has long been a tension between the approaches of the judgements of Neill LJ and Hobhouse LJ, the former taking a broad interpretation which permitted any public law illegality to be relied upon as a defence, and the latter narrowed the application to cases involving a ‘want of capacity’ (as there was on the facts). The Court of Appeal in CTE unanimously preferred the approach of Hobhouse LJ. Maurice Kay LJ disputed that the Ansminic aggregation of all errors of law had any impact in this area, stressing the undesirablitity of a historic breach of fiduciary duty defeating an otherwise good claim by a party who had acted in good faith: at [37]. Any breaches of the Council had not gone to legal capacity. Etherton LJ drew the same distinction between ‘narrow’ ultra vires acts (in the sense of legal incapacity) and ‘wider’ ultra vires (in the sense of breach of powers or duties), preferring the approach of Hobhouse LJ because he could see no reason why the position should be any different where the transaction whose validity is questioned is that of a public body or that of a commercial party under the lack of capacity jurisprudence most famously set out in Rolled Steel Products (Holdings) Ltd v British Steel Corp [1986] Ch 246: at [48]-[52]. Moore-Bick LJ agreed with both judgments: at [39]. As a result, even if the Council’s decision to enter into the leases was ultra virus for any reason, it was a matter of ultra vires not going to capacity, and as such the leases could not be a nullity.

While the housing law findings of the Court may be some interest in future cases, the very clear alignment of the Court of Appeal with the judgment of Hobhouse LJ is of considerable wider significance for public authorities across all areas of public law.