Court’s discretion — Tenant claiming injunction to enforce right to buy — Local authority making possession claim — Order in which conflicting claims to be decided — Whether alleged breach of covenant depriving tenant of status as secure tenant — Court of first instance giving tenant injunction — Local authority’s appeal dismissed
The defendant, L, was granted a tenancy by the appellant’s local authority in September 1987. In April 1994, L made efforts to acquire the freehold by giving notice in writing so as to exercise his right to buy under section 122 of the Housing Act 1985. The authority responded on June 30 giving notice of the price and other terms for the conveyance. However, the premises were being kept under observation by the police for alleged drug dealing, an involvement which L denies, and the local authority issued possession proceedings on September 21 1994.
On October 14 the tenant accepted the terms of the local authority for buying the property. He then sought an injunction which was reluctantly granted, the judge finding that L, having claimed to exercise the right to buy and having established his right to do so, there was no alternative but to grant the injunction. The order in which the cross-claims should be heard was not dealt with as the judge, having found in favour of the tenant on his right to buy, decided that the possession action had become pointless. On appeal, it was argued on behalf of the local authority that the question of the grant of an injunction should not have been determined until after the claim for possession had been decided.
Held The appeal was dismissed.
1. The central issue on which the appeal turned was the extent of the court’s discretion to select the order for determining a possession claim by the local authority and a claim by a tenant for an injunction to enforce a right to buy, where both claims were made at the same time. That order was critically important. If the possession order was made prior to the claim for an injunction, it could bring to an end the tenant’s right to buy. If the claim for an injunction was heard first, that could pre-empt the possession claim, as happened in the present case.
2. In Taylor v Newham London Borough Council [1993] 1 WLR 444, it was held that the court would be “doing great violence to the obvious intention of Parliament…to block…the opportunities open to reluctant landlords to obstruct the acquisition of title by their tenants”.
3. The present case raised an extreme situation. It was accepted that the court would proceed on the basis that the tenant had been in alleged flagrant breach of his obligation under the lease by carrying on an allegedly criminal business from his council house.
4. However, the question was whether L had achieved a position in which he was entitled to a remedy under the 1985 Act, which obliged the landlord to make the tenant a grant of the dwelling-house in fee simple absolute: section 138.
5. Once the conditions were satisfied, it would appear that the statutory entitlement to the grant of the freehold then existed as of right and there was no discretion to withhold it.
6. While it was relevant to ask whether the tenant applying for relief was a secure tenant, a breach of covenant by the tenant did not deprive him of his status as a secure tenant. Nor did the commencement of possession proceedings. Nothing short of an actual possession order of the court would bar the right to buy.
Robert Levy (instructed by the solicitor to Bristol City Council) appeared for the local authority; Alexander Ralton (instructed by Trump & Partners, of Bristol) appeared for the respondent.
