Landlord and tenant — Possession — Suspended order — Application to set aside — Appeal — Tenant not appearing at possession order hearing — Tenant seeking to set aside possession order — Whether merits of defence or reason for non-appearance predominant consideration — Whether possession order likely to be suspended for long period valid
In November 1990 the respondent council, the owners of a house let
to the appellant tenant under a secure tenancy, obtained an order for
possession in respect of arrears of rent. The order was suspended so long as
the tenant paid the arrears, mesne profits and costs by instalments, in
addition to the rent. The tenant did not attend the court hearing or appeal the
order. In October 1995 the council obtained a warrant for possession when the
arrears were about £3,600. In December 1996 the council agreed that the tenant
could pay off the arrears at the rate of £2.41 per week. In August 1998, when
the arrears were nearly £3,500, the council applied for leave to issue the
warrant for possession and the tenant applied to set aside the possession
order. In the county court the judge refused the council leave to issue the
warrant and dismissed the tenant’s application. The tenant appealed contending,
inter alia, that an order should not continue that is unenforceable or
will only be enforced in exceptional circumstances, and that the length of time
over which the condition set by the suspended order would last was too long.
account in Shocked v Goldschmidt [1998] 1 All ER 372, where an
appellant had absented himself from the court below, were relevant. The
predominant consideration for the Court of Appeal was not whether there was a
defence on the merits but why the defendant had absented herself from the
hearing when the original order was made.
There was no reason why the tenant, who chose not to appear at the
hearing in 1990, should be permitted, so many years after the order was made,
to challenge the appropriateness of the original order. In any event, section
85(2) of the Housing Act 1985 expressly gave the court wide discretion and
expressly allowed it to suspend the execution of an order for possession. If
there were unfortunate consequences arising from possession orders that were
suspended for long periods of time, this was a political matter and for
statutory amendment.
The following cases are referred to in this report.
Burrows v Brent
London Borough Council [1996] 1 WLR 1448; [1996] 4 All ER 577; [1997] 1
EGLR 32; [1997] 11 EG 150; (1997) 29 HLR 167
Cheltenham &
Gloucester Building Society v Morgan [1996] 1 WLR 343; [1996] 1 All ER
449;(1996) 72 P&CR 46; 28 HLR 443
Greenwich London
Borough Council v Regan (1996) 28 HLR 469
Routh v Leeds
City Council unreported 12 March 1998
Shocked v Goldschmidt
[1998] 1 All ER 372
This was an appeal by the defendant, Susan Henry, from a decision
of Judge Cox, in Lambeth County Court, dismissing her application to set aside
a possession order made in possession proceedings brought by the plaintiffs,
Lambeth London Borough Council, for arrears of rent.
Charles King (instructed by Flack & Co) appeared for the
appellant; Christopher Baker (instructed by the solicitor to Lambeth London
Borough Council) represented the respondents.
Giving the first judgment, PETER
GIBSON LJ said: As long ago as 21 November 1990 an order was made in
Lambeth County Court that Lambeth London Borough Council (the council) recover
possession from Susan Henry, a secure tenant, of 16 Beecham House, Ethelred
Street, London SE11, but that order was not to be enforced for 28 days in any
event, and was suspended so long as Mrs Henry paid arrears of rent and mesne
profits and costs, all of which totalled £2,375.59, by instalments of £1.85 per
week in addition to the current rent. Mrs
hearing, nor was she represented when that order was made. She was notified of
the order by letter dated 8 December 1990. She did not seek to appeal or set
aside the order at that stage. The council claimed that Mrs Henry did not
comply with the terms of the suspension of the possession order. On 17 August
1998 the arrears were said to total nearly £3,500.
What happened in the meantime is set out in an affidavit on behalf
of the council by Penelope Harrison, a housing officer. She says that the
council did not request a warrant to enforce the order for possession until
October 1995 because Mrs Henry’s payments were initially satisfactory. However,
the council caused a warrant for the possession to be issued in October 1995
when the arrears were some £3,600 odd. The council did so because Mrs Henry did
not make any payment into her rent account for a long period.
The enforcement of the warrant was called off because Mrs Henry
agreed to have her weekly rent deducted from her Income Support and paid
directly to the council. The council made an agreement with Mrs
about clearing the arrears. On 23 December 1996 such an agreement was entered
into when the council received a promise from Mrs Henry to pay, in addition to
her current rent, £2.41 off the arrears every week. Thus, the arrears should have been going down
steadily since that date.
In August 1998 the council applied for leave to issue a warrant for
possession. It was out of time in making that application, more than six years
having elapsed since the judgment: see Ord 26 r 5(1)(a) and r 17(6) of the
County Court Rules. Mrs Henry, in turn, applied to set aside the possession
order. That application must have been made under Ord 37 r 2, that is to say,
on the basis that the order was obtained against her in her absence. She did
not seek leave to appeal out of time from the making of the original possession
order.
The two applications came
before Judge Cox on 3
to set aside the possession order. From the note of his judgment, with which we
have been supplied, it is clear that there was discussion as to why Mrs Henry
had not attended the original hearing. It appears that the judge did not accept
her explanation for not appearing on that occasion.
The judge also considered whether the order that was made was one
that was properly made. He said that he considered that the making of a
suspended order would have been inevitable because of the arrears. As he said:
I am firmly of the opinion that it would have been appropriate to
have made a suspended possession order.
So he dismissed her application.
Surprisingly, to my mind, the judge also refused the council’s
application for leave to issue a warrant. He pointed to the fact that in 1995
the arrears were higher than they were at the beginning of 1999. He said it
would be wholly inappropriate to allow the local authority to issue a warrant
in those circumstances. He dismissed the council’s application. I do not know
to what extent the judge took account of the fact that an application for a
warrant had been made in 1995, and that there had been agreements as to payment
by Mrs Henry that had not been honoured since that date. But no appeal is brought by the council from
the judge’s order, and so we must accept it for what it is.
Mr Charles King appears today for Mrs Henry and appeals on three
bases against the judge’s refusal to set aside the possession order. First, he
says, there is no merit in allowing an order to continue that is unenforceable
or will only be enforced in exceptional
circumstances. Second, he says, the original order was made in circumstances in
which it would have been impossible for the judge to have been satisfied that
it was reasonable to make a possession order. Third, he says, the length of
time over which the condition set by the suspended order would last, without
Mrs Henry ever being able to discharge the order, was too long.
As I understand it, that is to treat the order as liable to last 23
years if Mrs Henry merely paid the £1.85 per week required as a term of the
suspension over the full period, rather than earlier paying off the arrears. It
also assumes that she would not be making any application, as she could do
under the Housing Act if she complied with the order, for a variation of the
order.
Those three bases, it is to be noted, do not address the point as
to why it was that Mrs Henry did not appear when the possession order was made.
This court in Shocked v Goldschmidt [1998] 1 All ER 372 held
that, in a case like this, the predominant consideration for this court is not
whether there was a defence on the merits, but the reason why the defendant had
absented himself or herself from the hearing when the original order was made.
This court said that deliberate absenting from the court was unlikely to lead
to an order for a rehearing. Leggatt LJ, at p381, did not express himself in
terms that the court would inevitably refuse to consider the merits, but he
made it quite clear that that would be the normal course. He said that, in
considering justice between parties, the conduct of the person applying to set
aside the judgment has to be considered and, where the person has failed to
comply with orders of the court, the court would be less ready to exercise its
discretion in that person’s favour. He also referred to delay in applying to
set aside the order as being relevant. He further said that a material
consideration was whether the successful party would be prejudiced by the
judgment being set aside, especially if he could not be protected against the
financial consequences.
All these considerations seem to me to apply to the present case. I
cannot see any reason why Mrs Henry, who chose not to appear at the original
hearing when the order for possession was made, should now be permitted, so
many years after that order was made, to challenge the appropriateness of that
particular order. If that order was to be so challenged, it should have been
done at the time. In a case such as
this, where the order for possession was made in respect of a secure tenancy,
section 84(2) of the Housing Act 1985 required the court to consider whether
any of the statutory grounds for possession existed and whether it was
reasonable to make an order. It is plain that the court did consider these
matters and, as the judge said, the order made was the obvious order to make in
the circumstances.
However, I would not wish Mrs Henry to receive the impression that
this would be the only reason why her appeal could not succeed. I have to say
that I am not persuaded by any of the grounds that have been advanced by Mr
King, even if the objection to which I have referred, based on Shocked v
Goldschmidt, were not there.
In my judgment, section 85 of the Housing Act 1985, by subsection
(2), expressly gives the court a wide discretion and expressly allows the court
to suspend the execution of the order for such period or periods as the court
thinks fit. Landlords, in particular public sector landlords, are extremely
conscious of the hardship that could be caused to tenants if they were to
insist on their strict rights to possession. It is the practice of the court to
be merciful to tenants when they go into arrears and to give them a realistic
opportunity to pay off the arrears, even though this may take a considerable
period of time. But if the tenant complies with the terms for the suspension of
an order for possession, then the tenant can go back to the court to discharge
or rescind the order for possession (see subsection (4) of section 85) or make
some other order. The continuance of such an order is a benefit to the landlord
who can go to the court and ask for the order to be enforced if there is a
failure to comply with the order.
Questions such as Mr King raised with us, as to whether it is
appropriate that tenants owing substantial arrears should have the threat of
losing their homes hanging over them for a long period, seem to me to be
political questions and ones that do not go to the correctness of the making of
the order. To my mind, it is plain that the order was, as the judge said, an
appropriate one to be made. The fact that an order for possession is suspended
for what may be a long time is no novelty, either in this field or in the
related field where mortgage payments go into arrears, and this court,
particularly since the decision in Cheltenham & Gloucester Building
Society v Norgan [1996] 1 WLR 343, may well suspend the order over
the remaining period of the mortgage term, which could be for many years. Mr
King refers to the fact that the failure to comply with the term on which the
order for suspension is conditional will lead to the tenant ceasing to have a
tenancy and becoming a trespasser. Furthermore, he points to the fact that this
entails that the landlord is not responsible for obligations that are normally
owed to tenants, such as the obligation of repair. Again, if this is considered to be unsatisfactory,
that is a matter that should, in my judgment, be addressed by seeking an
amendment to the statutory provisions.
The law has been made clear by the decision of this court in Greenwich
London Borough Council v Regan (1996) 28 HLR 469, approved as it was
by the House of Lords in Burrows v Brent London Borough Council
[1996] 1 WLR 1448*. In short, those cases establish that, on the failure to
comply with a term on which the possession order is suspended, the tenant does
become a trespasser, but the tenancy may be revived in particular
circumstances, such as if there is an agreement to waive the breach.
* Editor’s note: Also reported at [1997] 1 EGLR 32
None of these matters seems to me to give Mr King any ground for
saying that there was some error by the judge in making the order that he did.
For these reasons, for my part, I would refuse this appeal.
Agreeing, SIR CHRISTOPHER
STAUGHTON said: I agree. It is now and was in January 1999 far too
late to set aside an order made nine years and four days ago.
Appeal dismissed.
