Housing Act 1985 — Secure tenancies — Local authority interest in dwelling-house held under licence — Whether agreement with occupying tenant excluded from secure tenancies by para 6, Schedule 1 to the Housing Act 1985 — Local authority’s appeal allowed
agreement dated March 1 1990 Lawlodge Property Services permitted the plaintiff
council to use premises at 41A Hermitage Road, London N4, to provide temporary
housing accommodation for homeless persons — The agreement was described as a
licence — On the same date the defendant and his family were given temporary
accommodation in the premises by the council — Following the council’s offer of
a secure tenancy of permanent accommodation elsewhere, and the defendant’s
declining the offer, the plaintiff council served notice to quit on March 20
1991 and commenced proceedings seeking possession — Judge Tibber gave judgment
for the defendant holding that he had a secure tenancy of the premises by
reason of being a secure licensee, his licence not being excluded from being a
secure licence by para 6 of Schedule 1 to the 1985 Act because the interest of
the council was held by way of a licence and not a lease — The council appealed
council and Lawlodge plainly demonstrated that it was a licence as so described
— The terms ‘leased’ and ‘lessor’ in the context of para 6 of Schedule 1 to the
Act not only include a lease in a technical sense and a lessor of such a lease
but also cover persons who hold lesser interests under a licence — The word
‘leased’ is used to indicate that the interest of the local authority landlord
is to be a lesser interest than the freehold — That interpretation is in accord
with what is the policy to be discerned from the schedule which was intended by
Parliament — The defendant did not have a secure tenancy
The following
case is referred to in this report.
Street v Mountford [1985] AC 809; [1985] 2 WLR 877; [1985] 2 All ER
289; [1985] 1 EGLR 128; (1985) 274 EG 821, HL
This was an
appeal by the plaintiffs, Tower Hamlets London Borough Council, from an order
dated October 22 1991 of Judge Tibber in Edmonton County Court dismissing a
claim by the plaintiffs against the defendant, Mr Sabru Miah, for possession of
41A Hermitage Road, London N4.
Ashley
Underwood (instructed by the acting head of legal services to Tower Hamlets
London Borough Council) appeared for the appellants; Martin Seaward (instructed
by T V Edwards) represented the respondent.
Giving
judgment, NEILL LJ said: This is an appeal by Tower Hamlets London
Borough Council against the order dated October 22 1991 of Judge Tibber in
Edmonton County Court dismissing a claim by the council against Mr Sabru Miah
for possession of 41A Hermitage Road, London N4. The judge held that Mr Miah
was a secure licensee of the premises and was therefore entitled to the
protection afforded by Part IV of the Housing Act 1985.
Between about
November 7 1986 and March 1 1990 the council provided accommodation to Mr Miah
and his family at premises other than 41A Hermitage Road. The accommodation was
provided on the basis that Mr Miah and his family were homeless.
On March 1
1990 the council made an agreement with a firm called Lawlodge Property
Services permitting the council to use the premises at 41A Hermitage Road for
providing temporary housing accommodation for homeless persons. By clause 4 of
the agreement the council were given the right to nominate persons, being
homeless persons as defined by Part III of the Housing Act 1985, to occupy the
premises. The agreement was described as a licence, and the council were
described as the licensee. Clause 6 of the additional clauses provided that the
licence might be terminated by either party giving not less than seven days’ notice
in writing. The agreement also contained a provision whereby the licensee (that
is the council) agreed:
to use the
Premises for no other purpose than as temporary housing accommodation in
accordance with the Licensee’s powers under the provisions of the Housing Act
1985 Part 3 and to permit the Grantor [that is the firm] to inspect any
agreement licence or other documentation under or by virtue of which the
Nominees are temporarily accommodated in the Premises.
In the further
clause 3 the licensee agreed ‘not to do anything whereby the Licensee creates
as between itself and any nominee any secure or other tenancy’.
On the same
day, March 1 1990, Mr Miah and his family moved to 41A Hermitage Road. Six
weeks or so later, on May 16 1990, the council made an offer to Mr Miah of a
secure tenancy at 33 Oban House, Oban Street, London E14. Mr Miah declined the
offer. The council said that when he declined it he declined it unreasonably.
On March 20 1991, some 10 months later, the council served a notice to quit. The
present proceedings were started by the issue of the plaint on August 15 1991.
It is
necessary to refer next to some of the provisions of the Housing Act 1985. The
Act contains a number of Parts. Part II is concerned with the provision of
housing accommodation, Part III is concerned with housing the homeless and Part
IV is concerned with secure tenancies and the rights of secure tenants. A
number of sections in Part III dealing with housing the homeless impose duties
on local housing authorities with regard to homeless persons. Specific duties
are imposed requiring the authority to secure that accommodation is made
available to such persons.
In the present
case Mr Miah relies on the provisions of section 79 of the Act, which is the
first section in Part IV. That section provides as follows:
79.–(1) A tenancy under which a
dwelling-house is let as a separate dwelling is a secure tenancy at any time
when the conditions described in sections 80 and 81 as the landlord condition
and the tenant condition are satisfied.
(2) Subsection (1) has effect subject to —
(a) the exceptions in Schedule 1 (tenancies which
are not secure tenancies) . . .
It is not
necessary to refer to the other paragraphs of subsection (2). I come next to
subsection (3), which is in these terms:
The
provisions of this Part apply in relation to a licence to occupy a
dwelling-house (whether or not granted for a consideration) as they apply in
relation to a tenancy.
It is
submitted on behalf of Mr Miah that he was a licensee of this property, no 41A
and that (unless Schedule 1 applied) he was therefore a secure licensee by
reason of the combined effect of section 79(1) and section 79(3), because it is
common ground that the landlord condition described in section 80 is satisfied
in this case, as is the tenant condition in section 81. Accordingly, the
question in issue is whether the licence under which Mr Miah occupies no 41A is
excluded from being a secure licence by the terms of para 6 of Schedule 1.
Schedule 1 to
the 1985 Act sets out in 12 paragraphs a list of circumstances in which
tenancies are not secure tenancies. It is not necessary to refer to more than
three of those paragraphs. We are particularly concerned with para 6, but I
must come first to para 4, which is headed ‘Accommodation for homeless
persons‘ and provides as follows:
4.–(1) A tenancy granted in pursuance of —
(a) section 63 (duty to house pending inquiries
in case of apparent priority need),
(b) section 65(3) (duty to house temporarily
person found to have priority need but to have become homeless intentionally),
or
(c) section 68(1) (duty to house pending
determination whether conditions for referral of application are satisfied),
is not a
secure tenancy before the expiry of the period of twelve months beginning with
the date specified in sub-paragraph (2), unless before the expiry of that
period the tenant is notified by the landlord that the tenancy is to be
regarded as a secure tenancy.
It is
unnecessary to read subpara (2) of para 4.
Para 6 is
headed ‘Short-term arrangements‘. That is in these terms:
6. A tenancy
is not a secure tenancy if —
(a) the dwelling-house has been leased to the
landlord with vacant possession for use as temporary housing accommodation,
(b) the terms on which it has been leased include
provision for the lessor to obtain vacant possession from the landlord on the
expiry of a specified period or when required by the lessor,
(c) the lessor is not a body which is capable of
granting secure tenancies, and
(d) the landlord has no interest in the
dwelling-house other than under the lease in question or as a mortgagee.
Then, finally,
para 12 — it is not necessary to refer to all its terms — provides that in the
case of almshouses a licence to occupy a dwelling-house is not a secure tenancy
if the licence was granted by an almshouse charity, and then there are certain
other conditions to which it is unnecessary to refer.
It is accepted
on behalf of Mr Miah that if the agreement between the council and the company
dated March 1 1990 had been in the form of a lease para 6 would apply and Mr
Miah’s licence would not have been a secure licence. It is argued, however,
that as the agreement between the council and the company was both in form and
in substance a licence rather than a lease, therefore the exception in para 6
does not apply.
The judge held
first that though the description of a document as a licence or a lease is not
conclusive, bearing in mind the decision of the House of Lords in Street
v Mountford [1985] AC 809*, nevertheless looking at the facts of this
case the terms were consistent with a licence and were wholly inconsistent with
a lease. He further held, however, that the word ‘leased’ in para 6 of Schedule
1 meant a lease rather than a licence and was incapable of meaning anything
less than a lease. In his judgment, having dealt with the question of whether
the document was a licence or a lease, he put the matter as follows:
That being
so, does para 6(a) apply to it?
*Editor’s
note: Also reported at [1985] 1 EGLR 128.
— then he read
the paragraph —
The landlords
apparently acquired it with vacant possession for use as temporary housing
accommodation, but how did they acquire it, not by lease but by licence. I
think it would be wrong to go beyond the terms of the statute and say that the
same deprivation of security follows a licence as follows a lease. It would
have been perfectly open to the legislature to use some term wider than being
‘leased’ to the landlord but has not chosen to do so. In those circumstances,
it seems to me that Mr Miah is a secure [licensee]
— I think that
has been amended —
by virtue of
section 79 of the Housing Act, 1985.
In this court
on behalf of the council Mr Underwood has sought to argue two points. First, he
submits that the judge was wrong in coming to the conclusion that this document
was a licence rather than a lease. He has drawn our attention to provisions in
it which he says are consistent with exclusive possession being given to the
local authority, to the fact that there was an obligation on the local
authority to make certain that vacant possession was given up at the end of the
licence, and to the fact that there was a specific provision in the agreement
which required the local authority to ensure that no secure tenancy came into
existence. He says these provisions and indeed all the other terms of the
agreement were perfectly consistent with a lease and that this should be
construed as being a lease.
I find it
impossible to accept that argument. It seems to me that if one reads the terms
of the agreement they quite plainly demonstrate that this was a licence as it
was described. The judge went through its terms. I find it unnecessary to add
to what the judge stated as his reasons. He pointed, among other things, to the
fact that the weekly fee which was payable in respect of it was payable in
respect of a household and that during a period when no one was in occupation
as a homeless person no fee became payable. He said that looking at all the
provisions of this document they were wholly consistent with the normal terms
of a lease. I agree with him and I do not think it is necessary to say any more
about it.
I therefore
turn to what is the more difficult part of this case. Mr Underwood as his
second argument, adopting and elaborating an argument which was originally put
to him by the court, makes the submission that in the context of para 6 the
terms ‘leased’ and ‘lessor’ not only must mean or include a lease in a
technical sense and a lessor of such a lease but also cover persons who hold
lesser interests under a licence. In the particular context of this case
‘lease’ can include ‘licence’ and ‘lessor’ can include ‘licensor’.
I see the
force of the argument which was urged upon us by counsel for Mr Miah that
section 621 of the Act contains a definition of ‘lease’, that the word ‘lease’
is used in this paragraph of Schedule 1, and that if Parliament had wished to
say ‘lease’ or ‘licence’ they could quite easily have done so. Mr Seaward quite
rightly points out that in para 12 of Schedule 1, when dealing with almshouses,
Parliament has in fact referred to a licence to occupy a dwelling-house and it
would have been a simple matter to have included some similar provision in para
6.
In the course
of the argument we have considered other provisions of the Housing Act, provisions
of the Local Government Act (section 111), and most recently the provisions of
the Local Government and Housing Act 1989, and have looked to see whether there
is any guidance as to the meaning of ‘lease’ or any reason which there may be
which would lead one to the conclusion that the word ‘lease’ must be construed
in this particular context in a narrow sense. Having had the benefit of that
argument, I remain of the opinion, which I formed when I studied these papers
at the outset, that in para 6 of Schedule 1 the words ‘leased’ and ‘lessor’
must be construed in their context as including ‘licensed’ and ‘licensor’. At
the same time I should make it clear that I accept that section 79(3) is
concerned with licences to occupy granted by the local authority and that it
does not apply directly to the contract between the local authority and the
owner of the property.
Nevertheless,
it is necessary, as I see it, to look at section 79 and the exceptions set out
in Schedule 1 together. By section 79(1) provision is made for the creation of
secure tenancies in the circumstances there described. By section 79(3) a
similar protection is conferred on licences to occupy. But from the class of
secure tenancies certain tenancies which would otherwise qualify as secure tenancies
are excluded by section 79(2)(a) and by the Schedule. I have already read para
4 of Schedule 1. That excludes tenancies granted to homeless persons under
some, but not all, of the provisions relating to the housing of homeless
persons in Part III of the Act.
Para 6 is
concerned with persons who are housed under short-term arrangements where the
dwelling-house is provided by a third person so that the local authority or
some other body specified in section 80 of the Act can use it to provide temporary
housing accommodation.
Paras 4 and 6
demonstrate to my mind that where the occupation of the dwelling-house is to be
on a short-term basis the special status of a secure tenant is not conferred.
The argument on behalf of Mr Miah involves the proposition that someone who
occupies the house as a licensee from the local authority has a security which
is not available to a tenant in precisely similar circumstances, though it is
right to say that Mr Seaward was prepared to accept that in a sense it is an
illusory security because, although as between himself and the
local authority and the owner is determined then the owner of the property can
recover possession against the licensee (that is the homeless person) as a
trespasser. That may be so, though I have an anxiety in my mind as to whether
it is consistent with section 82 of the Housing Act 1985 for the local
authority themselves to determine such a licence and therefore bring to an end
indirectly a secure tenancy or licence which they have themselves created.
But it is
unnecessary to explore that matter. It seems to me that it is unsatisfactory,
when one is considering the proper meaning of para 6, to see whether there is
some other way in which the matter can be dealt with. I find it impossible to
accept that Parliament intended that a person who was a tenant might be
prevented from becoming a secure tenant by reason of the provisions of para 6
but that someone who held the lesser status of a licensee should remain a
secure licensee. It seems to me that though the word ‘leased’ is used, the
exception in para 6 must have been intended by Parliament to cover
circumstances where, provided the other conditions in the paragraph are satisfied,
the owner of the house has made it available to the local authority under
either a lease or a licence agreement. As I see it, the word ‘leased’ is used
to indicate that the interest of the landlord local authority is to be a lesser
interest than the freehold. But a leased dwelling-house includes a
dwelling-house held under a lesser interest such as a licence.
For these
reasons, though I fully understand the arguments which led the learned judge in
his careful judgment to reach a contrary conclusion, I for my part would allow
this appeal.
Agreeing, WOOLF
LJ said: I would allow the appeal for the reasons that Neill LJ gives. It
seems to me that that is in accord with what is the policy to be discerned from
the Schedule which was intended by Parliament, that policy being to make better
use of existing houses so as to enable them to be used for the accommodation of
the homeless.
SCOTT LJ also agreed and said: It simply makes no sense to hold that a
secure licence obtained from a local authority holding a licence gives a
greater security than a secure licence obtained from a local authority that
hold a lease strictly so-called. It is, in my judgment, a permissible
construction of para 6 of Schedule 1 to the 1985 Act to hold that the greater
includes the less, that lease includes licence and that para 6 should be
construed accordingly.
Appeal
allowed; no order as to costs; legal aid taxation of respondent’s costs;
application for leave to appeal to the House of Lords refused.
