Tenant completing procedures giving rise to right to buy – Landlord council taking possession proceedings which would, if successful, defeat tenant’s right – Tenant counterclaiming for order compelling coveyance – Tenant seeking to have counterclaim determined first – Whether court can adjourn tenant’s application
The respondent (the tenant) was at all material times a secure tenant of house belonging to the appellant council on their Southmead Estate. By a notice served in April 1994 the tenant purported to exercise his right to buy the house under Part V of the Housing Act 1985. That right was admitted by the council who, by further notice dated June 30 1994, stated the price (£16,660) and other terms of sale. On July 4 1994 the council served a notice under Part IV of the Act informing the tenant that they intended to claim possession on grounds which included ground 2 of Schedule 2 (use of house constituting a nuisance and annoyance to neighbours), and on September 21 1994 issued proceedings for possession. At that stage the particulars of the conduct complained of did not include allegations of drug dealing. On October 14 1994 the tenant accepted the council’s terms for the sale of the house, following which his solicitors, by letter dated November 4 1994, approved the form of transfer and called for completion, whereupon the council amended their possession claim to include allegations that the house had been used for dealing in drugs.
On January 4 1995 the tenant served a defence, and counterclaimed for an order to compel conveyance of the house. On January 10 1995 the tenant applied for an order (described as an “injunction” in section 138 of the 1985 Act) to compel conveyance. That order was refused, on equitable grounds, by the district judge, who directed that both claims be heard together. That decision was overturned by the county court judge, who held that the tenant was entitled to an immediate injunction, a ruling which precluded the council from opposing the right to buy on the ground (afforded by section 121 of the Act) that the tenant was obliged to give up possession in pursuance of a court order. The Court of Appeal upheld that ruling, finding itself constrained by its own decision in Dance v Welwyn Hatfield District Council [1990] 1 WLR 1097 to hold that the court had no power to adjourn where the exercise of that power could prejudice the substance of the tenant’s claim. The council appealed to the House of Lords.
Held The appeal was allowed .
1. Unlike its Scottish equivalent, the right to buy under the 1985 Act did not arise out of a contract made or deemed to have been made between the parties. For that reason, unless certain specific exceptions applied, a tenant who had complied with the prescribed procedures was entitled as of right to his “injunction”. It followed that any discretion to adjourn could not be based on principles governing equitable remedies but only upon the general procedural power given by Ord 13 r 3(1) of the County Court Rules. However, there was nothing in the 1985 Act which expressly or impliedly displaced or reduced that power. Moreover, if the tenant was correct, the outcome of his application would depend upon the accidents of the court lists, or a race to judgment. The decision in Dance (supra) should accordingly be overruled.
2. Since the House was not called upon to exercise the discretion as to adjournment, the matter should be remitted to the county court to rehear the appeal from the district judge.
Andrew Arden QC and Robert Levy (instructed by the solicitor to Bristol City Council) appeared for the appellants; David Woolley QC and Alex Ralton (instructed by Trumps, of Bristol) appeared for the respondent.