Landlord and tenant — Tenancy or licence — Agreement between housing association and occupier — Homeless person — Housing Act 1985, sections 63(1), 65(2), 79(3) and Schedule 1, para 4 — Effect of retention of key of flat by association — Whether, if agreement by association created a tenancy, it became a secure tenancy — Appeal by occupier of flat from decision of Judge Dobry QC granting association an order for possession against the appellant — Recent decisions
on licences subsequent to Street v Mountford considered — Court of Appeal decision in Ogwr BC v Dykes not to be followed — Hadjiloucas v Crean already disapproved — Family Housing Association v Miah and Kensington and Chelsea RBC v Haydon also disapproved
mentioned that, although the relevant statutes in force at the material times
were the Housing (Homeless Persons) Act 1977 and the Housing Act 1980, the
court in the present case referred to similar provisions in the consolidating
Act, the Housing Act 1985 — There was, however, one difference which, as will
be seen, was of importance for the present case — Section 64(5) of the 1985 Act
required notification of the authority’s decision on homelessness to be given
in writing; section 8 of the 1977 Act contained no similar provision — The
appellant in the present case claimed that she had received an oral
notification
out of which the present litigation arose were as follows — The appellant was a
person claiming homelessness who had been provided with temporary accommodation
by the respondent housing association — The agreement with the association,
dated February 5 1985, described as constituting a licence, expressly stated
that the occupation was on a temporary basis, did not create a secure tenancy
and did not confer exclusive possession — A few months later the appellant was
offered the tenancy of a flat in another area by the local authority, but she rejected
it as unsuitable for various reasons — The authority considered that it had
discharged its statutory duty by making this offer — On its rejection she was
given a notice terminating her licence and, in case she did have a tenancy, a
notice to quit — In the subsequent county court proceedings, the association
claimed that she was a licensee; alternatively, if a tenant, not a secure
tenant — The appellant claimed that she was a secure tenant and alleged, in
third-party proceedings, that the authority was in breach of its statutory duty
to provide accommodation — Judge Dobry QC decided that the appellant was a
licensee and granted the housing association a possession order, dismissing the
claim against the local authority
Appeal considered the statutory provisions and the case law in detail,
including the ‘sea change’ caused by Street v Mountford, further
developed by the House of Lords in Antoniades v Villiers and by the Court
of Appeal in Aslan v Murphy — The court decided that in the present case the agreement
of February 5 1985 created not a licence but a weekly tenancy — The fact that
the association, through a housing worker, retained a key of the flat for
certain purposes was not inconsistent with a tenancy — If, nevertheless, the
agreement did create only a licence, the effect of section 79(3) of the 1985
Act was to confer on the appellant’s the same security as a tenancy — It was at
this point, however, that the complications of the security of tenure
provisions of the 1985 Act became evident
agreement of February 5 1985 created a tenancy (or a licence conferring the
same security as a tenancy) the position was that, if it was granted pursuant
to the local authority’s duty under section 63(1) (that is, merely to house the
appellant pending inquiries into her homelessness and priority need), the
tenancy never became a secure tenancy — The reason was that it terminated
before the expiry of 12 months from the date of the authority’s written
notification to the appellant of its decision on the question of homelessness:
1985 Act, Schedule 1, para 4 — The appellant presented an entirely different
picture — She claimed that her tenancy of the flat was not granted pursuant to
section 63(1) but pursuant to section 65(2), under the authority’s general duty
to accommodate a homeless person with a priority need — The validity of this
claim depended on the appellant’s establishing that the authority had notified
her orally in October 1984 of its decision, ie before the agreement of February
5 1985 — A tenancy granted under section 65(2) was not subject to the risk of
failing to last for the 12 months mentioned in Schedule 1, para 4 —
Unfortunately, this issue was not pursued before the county court judge — It
was accepted that, as the Court of Appeal had decided that the appellant had
either a tenancy or a licence covered by section 79(3), the matter must go back
to the judge for a finding on this issue
was that the appeal was allowed and the case remitted to the county court to
decide the issue as to whether the accommodation made available to the
appellant on February 5 1985 was made pursuant to the local authority’s duty
under section 63(1) or under section 65(2) — If the answer was section 63(1),
the order for possession would be reinstated — If the answer was section 65(2),
the association’s claim must be dismissed — As regards the third-party
proceedings against the authority, these were by consent dismissed
The following
cases are referred to in this report.
A G
Securities v Vaughan [1988] 2 WLR 689;
[1988] 2 All ER 173; [1988] 1 EGLR 36; [1988] 06 EG 112, CA
Antoniades v Villiers [1988] 3 WLR 139; [1988] 2 All ER 309; [1988] 1
EGLR 59; [1988] 17 EG 122; CA
Aslan v Murphy (Nos 1 & 2) [1989] 3 All ER 130; [1989] 2 EGLR
57; [1989] 38 EG 109, CA
Eastleigh
Borough Council v Walsh [1985] 1 WLR 525;
[1985] 2 All ER 112; (1985) 83 LGR 525, HL
Family
Housing Association v Miah [1982] 5 HLR 94
Hadjiloucas v Crean [1988] 1 WLR 1006; [1987] 3 All ER 1008; [1987] 2
EGLR 60; (1987) 284 EG 927, CA
Kensington
and Chelsea Royal London Borough v Haydn
[1984] 17 HLR 114
Minister
of Health v Bellotti [1944] KB 298; [1944] 1
All ER 238
Ogwr
Borough Council v Dykes [1989] 1 WLR 295, CA
R v Hillingdon London Borough Council, ex parte Puhlhofer
[1986] 1 AC 484; [1986] 2 WLR 259; [1986] 1 All ER 467; (1986) 84 LGR 385, CA
Street v Mountford [1985] AC 809; [1985] 2 WLR 877; [1985] 2 All ER
289; [1985] 1 EGLR 128; (1985) 274 EG 821, HL
Young v Bristol Aeroplane Co Ltd [1944] KB 718
This was an
appeal by the defendant, Mrs Galina Jones, from an order by Judge Dobry QC, at
Bloomsbury County Court, granting to the plaintiffs, the Family Housing
Association (the present respondents), an order for the possession of a flat at
67 Chepstow Road, Paddington. The appellant also complained of the judge’s
refusal to allow an amendment to a third-party notice against the local
authority, Westminster City Council.
Andrew Arden
and Miss Linda Pearce (instructed by Brocklesby & Co) appeared on behalf of
the appellant; David Neuberger QC and Mark Dencer (instructed by Oliver O
Fisher & Co) represented the respondents; Andrew Collins QC and Clive Hugh
Jones (instructed by the solicitor to Westminster City Council) represented the
council (third party).
Giving the
first judgment at the invitation of Slade LJ, BALCOMBE LJ said: The
appellant, Mrs Galina Jones, is Russian by birth. In 1977 she married her
husband, a British national, in Moscow and their son Nicolas was born in
England on December 8 1980. Subsequently the family made England their home and
lived in a rented flat at 18 St Stephen’s Gardens, London W2. However, Mr Jones
then returned to Russia, leaving his wife and son in London. She was unable to
stay on in the St Stephen’s Gardens flat and in September 1984 she applied to
the Westminster City Council’s Homeless Persons Unit. The council first
accepted that she might be homeless and have a priority need within the
relevant statutory provisions and subsequently accepted that she was indeed homeless
and had a priority need. They gave her written notice to that effect by letter
dated February 13 1985. However, Mrs Jones asserts that they had previously
given her oral notice to the same effect on October 23 1984, conditionally upon
her production of certain documents, which she produced on November 6 1984. I
will deal later in this judgment with the relevance of this assertion, if
established.
The council
has certain freehold properties awaiting development which it has made
available as temporary accommodation for homeless families. On April 1 1983 the
council granted a licence of these properties to the Family Housing Association
(‘FHA’) so that FHA could use the properties as temporary housing accommodation
for homeless families referred to them by the council. One such
and on February 5 1985 they entered into an agreement with her to allow her and
Nicolas to occupy Flat C at 67 Chepstow Road. This is a self-contained flat
consisting of two rooms with the usual facilities. Since a major issue on this
appeal is the nature of the rights granted to Mrs Jones by the agreement, I set
out below the relevant portions:
Family Housing
Association is a non-profit making housing Association. The Emergency Housing
Service is concerned only with the rehabilitation and management of short-life
properties and for the temporary accommodation only of families and
single persons. All Agreements in connection with the use of this
property are for non-secure tenants only.
AGREEMENT for
the use of TEMPORARY ACCOMMODATION AT 67 FLAT C CHEPSTOW ROAD W2
(the property)
AGREEMENT to
commence on 10/2/85
1 I MRS GALINA JONES
accept the
property to accommodate only myself and Nicolas (8.12.80)
2 I understand that our occupation is on a
temporary basis only, and does not constitute a secure tenancy.
3 I undertake:-
(a) to pay Family Housing Association (on behalf
of the London Borough of Westminster) an accommodation charge of £13.80 per
week (plus £N/A per week for gas and electricity) throughout the time I have
occupation. This payment is due in advance, weekly
. . .
(e) Not to impede access to the property to any
representative, agent, or builder, of Family Housing Association, for
Inspection or maintenance or any other purpose.
(f) To notify Family Housing Association as
soon as I accept permanent accommodation, to make proper arrangements for the
return of the keys, and to pay all outstanding charges up to the date of
vacation . . .
4 I clearly understand that this is a temporary
accommodation only and is arranged through the Homeless Families Unit of the
London Borough of Westminster and I undertake to give up occupation of the
property when required to do so and to leave it clean and in good order . .
.
5 I understand that the Licence is granted on
the basis that I do not have exclusive possession of the property as against
the Family Housing Association . . .
7 Payment of the first week’s charges for
occupation is conclusive acceptance by the occupants of these conditions.
Mrs Jones with
Nicolas duly went into occupation of Flat C, 67 Chepstow Road. FHA in the
person of Mrs Moira Lucas, their emergency housing worker, retained keys to the
front door of the house and (without objection on the part of Mrs Jones) a key
to Mrs Jones’ flat. Mrs Lucas gave evidence to the effect that the practice of
FHA was to offer support to persons occupying their properties to discuss their
re-housing problems and to inspect the state of repair. If the occupier was not
present during a visit she would normally open the door using FHA’s key;
however, she did not remember actually using the key to Flat C as Mrs Jones was
mostly there when she called. Mrs Jones in fact twice changed the lock to the
door of the flat, but she told FHA what she had done, which was not to keep
them away.
By the letter
of February 13 1985, to which I have already referred, the council also
informed Mrs Jones that she did not have the necessary qualifications to be
re-housed within Westminster, and that she would be nominated for permanent
housing via the Greater London Mobility Scheme. In April 1985 she was offered
the tenancy of a flat at 122 Romero Square, Kidbrooke, London SE3, but she
rejected this on the grounds that it was unsuitable and unreasonable in view of
her language difficulties, community ties in the Chepstow Road area and the
state of her health. However, the council took the view that by making this
offer it had discharged its statutory obligations towards her, and in due course,
on September 30 1985, FHA served her with four weeks’ notice to terminate her
licence to occupy Flat Cat 67 Chepstow Road, expiring on October 29 1985. If,
which FHA did not admit, her occupation of the flat was also a tenancy, then on
the same date they served her with four weeks’ notice to quit the flat.
Mrs Jones did
not vacate the flat, and on September 23 1986 FHA started proceedings for
possession against her in the Bloomsbury County Court. By their particulars of
claim dated November 3 1986 they alleged that she was a licensee of the flat;
in the alternative if she were a tenant it was not a secure tenancy under the
Housing Acts. By her amended defence Mrs Jones asserted that she had a tenancy
of the flat, which was a secure tenancy under the Housing Acts; alternatively,
that FHA was estopped from denying that it was a secure tenancy. Mrs Jones also
issued a third-party notice against the council, claiming to be indemnified
against FHA’s claim for damages and costs on the ground that the council had
failed to discharge the statutory duty that they owed to her. In their defence
to the third-party notice the council averred that they had discharged their
duty by the offer of the flat at 122 Romero Square. At the hearing of the
action Mrs Jones sought leave to amend the third-party notice by claiming a
declaration that the council were in breach of their statutory duty to provide
her with accommodation and an injunction to enforce that duty; she abandoned
her claim for damages.
The action
came on for trial before His Honour Judge Dobry QC on November 26 1988. The
learned judge defined the issues before him as:
1) Was Mrs Jones a licensee or a tenant of the
flat at 67 Chepstow Road?
2) If a tenant, was she a secure tenant?
3) Should leave be given to amend the
third-party notice and, if not, should the third-party proceedings be
dismissed?
In the result
the judge said that Mrs Jones was a licensee and granted FHA an order for
possession; he refused leave to amend the third-party notice and ordered that
the claim against the council be dismissed. Mrs Jones has appealed to this
court. Before us the same issues were ventilated as before the judge, namely:
(1) tenancy or licence; (2) if tenancy, was it a secure tenancy; and (3) the
third-party proceedings. Before I turn to consider these issues in detail it is
necessary to say something about the statutory framework.
The Housing
(Homeless Persons) Act 1977 imposed on local authorities certain duties towards
homeless persons and persons threatened with homelessness. The Housing Act 1980
conferred (inter alia) security of tenure on certain tenants of local
authorities. These two Acts, with other Acts, were consolidated by the Housing
Act 1985, which came into force on April 1 1986. Thus at the relevant dates in
this case it was the earlier enactments that were in force.
Nevertheless,
the argument before us proceeded by reference to the 1985 Act, the provisions
of which, save in one instance only, to which I will refer later, are in all
material respects the same as those of the earlier Acts. Accordingly, I propose
throughout to refer to the provisions of the 1985 Act, save in the one instance
I have mentioned, but on the first occasion when I refer to any particular
section to indicate the corresponding section of the earlier Act. I should also
mention that some of the relevant provisions of the 1985 Act have in their turn
been amended by the Housing and Planning Act 1986 and the Housing Act 1988, but
since these amendments have no bearing on the present case I shall not refer to
them.
Part III of
the 1985 Act deals with housing the homeless. Section 58 (section 1 of the 1977
Act) defines homelessness and threatened homelessness. Section 59 (section 2 of
the 1977 Act) defines priority need for accommodation. Section 62 (section
3(1)-(3) of the 1977 Act) provides that if an applicant applies to a local
housing authority for accommodation and they have reason to believe that he may
be homeless or threatened with homelessness, they shall make such inquiries as
are necessary to satisfy themselves as to whether he is homeless or threatened
with homelessness; if so satisfied, they shall make any further inquiries
necessary to satisfy themselves as to whether (inter alia) he has a
priority need. Section 63(1) (section 3(4) of the 1977 Act) provides that if
the local housing authority have reason to believe that an applicant may be
homeless and have a priority need, they shall secure that accommodation is made
available for his occupation pending a decision as a result of their inquiries
under section 62.
Section 64
(section 8 of the 1977 Act) provides that, on completing their inquiries under
section 62, the local housing authority shall notify the applicant of their
decision on the several relevant questions, eg homelessness or threatened
homelessness and priority need. However, in one material respect section 64
differs from section 8 of the 1977 Act: section 64(5) requires that the notice
shall be given in writing: there was no similar provision in the 1977 Act.
Section 65
(section 4 of the 1977 Act) imposes duties on a local housing authority towards
an applicant where they are satisfied that he is homeless. Where they are
satisfied that he has a priority need and are not satisfied that he has become
homeless intentionally they shall, unless they refer his application to another
local housing authority on grounds of local connection, secure that
accommodation becomes available for his occupation.
Section 69(1)(b)
(section 6(1)(b) of the 1977 Act) provides that a local housing
authority may perform any duty under section 65 to secure that accommodation
becomes available for the occupation of
Part IV of the
1985 Act deals with secure tenancies and the rights of secure tenants.
Subsections (1) and (2) of section 79 (section 28(1) of the 1980 Act) provide
that a tenancy under which a dwelling-house is let as a separate dwelling is a
secure tenancy at any time when the landlord and tenant conditions (described
in sections 80 and 81: subsections (2), (3) and (4) of section 28 of the 1980
Act) are satisfied, subject (inter alia) to the exceptions in Schedule
1. As it is common ground between the parties that if Mrs Jones had a tenancy
of the flat at Chepstow Road the landlord and tenant conditions were satisfied,
I need not consider them further.
Para 4(1)(a)
of Schedule 1 (para 5 of Schedule 3 to the 1980 Act) provides so far as
material that a tenancy granted in pursuance of section 63 (duty to house
pending inquiries in case of apparent priority need) is not a secure tenancy
before the expiry of a period of 12 months beginning with the date specified in
subpara (2). The relevant date in subpara (2) for the present case is the date on
which the tenant received the notification required by section 64(1)
(notification of decision on question of homelessness or threatened
homelessness). Section 79(3) (section 48(1) of the 1980 Act) is in the
following 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.
Certain
licences are by subsection (4) excepted from the operation of subsection (3),
but these exceptions are irrelevant for present purposes. Finally, it is common
ground that if Mrs Jones had a secure tenancy of the flat at Chepstow Road,
that tenancy has never been properly terminated. Accordingly, it is unnecessary
to consider the remaining provisions of Part IV of the 1985 Act.
I now turn to
the specific issues which arise on this appeal.
Licence or
tenancy
The decision
of the House of Lords in Street v Mountford [1985] AC 809*
represented a sea-change in the law on this subject. Although the difference
between a licence and a tenancy had been long established, it was believed by
many that a right of exclusive occupation could be granted to an occupier, and
that right did not amount to exclusive possession, and hence create a tenancy,
if that were the genuine intention of the parties. Lord Templeman, with whose
speech all the other Law Lords agreed, disposed of that belief in a passage (at
p 819) which has become famous:
In the
present case, the agreement dated 7 March 1983 professed an intention by both
parties to create a licence and their belief that they had in fact created a
licence. It was submitted on behalf of Mr Street that the court cannot in these
circumstances decide that the agreement created a tenancy without interfering
with the freedom of contract enjoyed by both parties. My Lords, Mr Street
enjoyed freedom to offer Mrs Mountford the right to occupy the rooms comprised
in the agreement on such lawful terms as Mr Street pleased. Mrs Mountford
enjoyed freedom to negotiate with Mr Street to obtain different terms. Both
parties enjoyed freedom to contract or not to contract and both parties
exercised that freedom by contracting on the terms set forth in the written
agreement and on no other terms. But the consequences in law of the agreement,
once concluded, can only be determined by consideration of the effect of the
agreement. If the agreement satisfied all the requirements of a tenancy, then
the agreement produced a tenancy and the parties cannot alter the effect of the
agreement by insisting that they only created a licence. The manufacture of a
five-pronged implement for manual digging results in a fork even if the
manufacturer, unfamiliar with the English language, insists that he intended to
make and has made a spade.
*Editor’s
note: Also reported at [1985] 1 EGLR 128; (1985) 274 EG 821.
However, old
habits die hard, and in two subsequent decisions of this court, Hadjiloucas
v Crean [1988] 1 WLR 1006 and Antoniades v Villiers [1988]
2 All ER 309, it was held that the parties had (or in the former case might
have) created licences, notwithstanding that the occupants had jointly
exclusive occupation. Antoniades v Villiers was reversed on
appeal by the House of Lords [1988] 3 All ER 1058, and in the course of his
speech Lord Templeman (at pp 1069-1070) expressly disapproved of this court’s
decision in Hadjiloucas v Crean. Lord Oliver of Aylmerton stated
the position with his usual clarity (at p 1070):
The decision
of this House in Street v Mountford [1985] 2 All ER 289, [1985]
AC 809 established quite clearly that if the true legal effect of the
arrangement entered into is that the occupier of residential property has
exclusive possession of the property for an ascertainable period in return for
periodical money payments a tenancy is created, whatever the label the parties
may have chosen to attach to it. Where, as in that case, the circumstances show
that the occupant is the only occupier realistically contemplated and the
premises are inherently suitable only for single occupation, there is,
generally, very little difficulty. Such an occupier normally has exclusive
possession, as indeed she did in Street v Mountford, where such
possession was conceded, unless the owner retains control and unrestricted
access for the purpose of providing attendance and services. As Lord Templeman
observed in that case, the occupier in those circumstances is either a lodger
or a tenant.
The most
recent decision on this question is Aslan v Murphy (nos 1 and
2) [1989] 3 All ER 130*, where Lord Donaldson of Lymington MR, giving the
judgment of the Court of Appeal, said (at p 133):
General
principles
The status of
a tenant is essentially different from that of a lodger and owners of property
are free to make accommodation available on either basis. Which basis applies
in any particular case depends on what was the true bargain between the
parties. It is the ascertainment of that true bargain which lies at the heart
of the problem.
Labelling
The labels
which parties agree to attach to themselves or to their agreements are never
conclusive and in this particular field, in which there is enormous pressure on
the homeless to agree to any label which will facilitate the obtaining of
accommodation, they give no guidance at all. As Lord Templeman said in Street
v Mountford [1985] 2 All ER 289 at 294, [1985] AC at 819:
‘The
manufacture of a five-pronged implement for manual digging results in a fork
even if the manufacturer, unfamiliar with the English language, insists that he
intended to make and has made a spade.’
Exclusive
or non-exclusive occupation
This is the
touchstone by which the ‘spade’ of tenancy falls to be distinguished from the
‘fork’ of lodging. In this context it is necessary to consider the rights and
duties of the person making the accommodation available (the owner) and the
rights of other occupiers. The occupier has in the end to be a tenant or a
lodger. He cannot be both. But there is a spectrum of exclusivity ranging from
the occupier of a detached property under a full repairing lease, who is
without doubt a tenant, to the overnight occupier of a hotel bedroom who,
however up-market the hotel, is without doubt a lodger. The dividing line, the
sorting of the forks from the spades, will not necessarily or even usually
depend on a single factor, but on a combination of factors.
Pretences
Quite apart
from labelling, parties may succumb to the temptation to agree to pretend to
have particular rights and duties which are not in fact any part of the true
bargain. Prima facie the parties must be taken to mean what they say, but given
the pressures on both parties to pretend, albeit for different reasons, the
courts would be acting unrealistically if they did not keep a weather eye open
for pretences, taking due account of how the parties have acted in performance
of their apparent bargain. This identification and exposure of such pretences
does not necessarily lead to the conclusion that their agreement is a sham but
only to the conclusion that the terms of the true bargain are not wholly the
same as that of the bargain appearing on the face of the agreement. It is the
true rather than the apparent bargain which determines the question: tenant or
lodger?
*Editor’s
note: Also reported at [1989] 2 EGLR 57; [1989] 38 EG 109.
The judge, who
did not have the advantage of being referred to the decision of the House of
Lords in Antoniades v Villiers, which was not then reported, nor
to the decision of this court in Aslan v Murphy, which had not
then been heard, let alone reported, gave his reasons for holding that the
agreement between FHA and Mrs Jones constituted a licence as follows:
Firstly there
was no exclusive possession: because of the nature of the transaction the
accommodation was granted on a temporary basis, the landlord retained control
by restricting the occupation to the Defendant and her son, and the contract
contained a genuine and express agreement that exclusive possession was not
granted. Further the landlord in fact retained a key to the premises not as a
matter of convenience but as means of free entry to the relevant premises at
will. I also find as a fact that apart from the express terms of the written
agreement the explanation given by Mrs Lucas and indeed by Galina as to what
was agreed orally and what actually happened confirms that the transaction was
a mere licence. The regular visits of ‘support’ and for discussion of housing
problems, ie where a permanent home could be found — confirms my view as to the
nature of the relationship of the Association and its wards. This was a refuge,
a hostel for homeless people outwith the world of landlord and tenants. There
was no exclusive possession, no defined term — occupation could be given up
without notice; furthermore there were here exceptional circumstances in the
very nature of the transactions which negatived a tenancy.
Mr Neuberger
QC, for FHA before us, did not seek to support the judge’s findings that there
was no defined term or that the occupation could be given up without notice.
Clearly the payment of an ‘accommodation charge’ on a weekly basis is no
different from the payment of a weekly rent, which without more creates a
weekly
from determining Mrs Jones’ right to occupy at least before the end of the week
in respect of which that charge had been paid; in any event, even a licence
cannot be determined except on a reasonable notice — Minister of Health
v Belotti [1944] KB 298. Furthermore, the ‘genuine and express agreement
that exclusive possession was not granted’ — clause 5 of the agreement of
February 5 1985 — is as much a label as is the reference to a ‘licence’ in the
same clause, and to use Lord Templeman’s spade/fork analogy (even though most
garden forks have four tines or prongs) cannot prevent the agreement creating a
tenancy if that is its true effect.
This was a self-contained
flat, and it is clear that Mrs Jones and Nicolas were to be its only occupants.
Mrs Jones paid a weekly charge for her right to occupy the flat. Thus the
agreement fulfils all the requirements which Lords Templeman, Oliver of
Aylmerton and Donaldson of Lymington in the several passages quoted above
indicate as being appropriate for the creation of a tenancy: the only possible
contra-indications are the retention of a key by FHA and the purposes for which
that key was retained. (I leave out of account the judge’s reliance on the
temporary nature of the accommodation granted: a weekly tenancy, provided it is
not a secure tenancy and can be determined on a week’s notice, is just as
consistent with the provision of temporary accommodation as is a licence.) So I return to the question of the retention
of the key and the purposes for which it was retained.
The retention
of a key by itself cannot be decisive; a landlord under an undoubted tenancy
may retain a key to enable him to exercise a right reserved to him by the
tenancy to enter the demised premises to inspect the state of repair. As Lord
Donaldson of Lymington MR said in Aslan v Murphy (supra)
there is a spectrum ranging from tenant at the one end to lodger at the other.
While the rights retained by FHA in the present case may be slightly greater
than those usually retained by a landlord under a lease, I entertain no doubt
that they fall at the ‘tenant’ end of the spectrum, not the ‘lodger’ end.
In my
judgment, the learned judge was incorrect in holding that the agreement of
February 5 1985 created a licence: it created a weekly tenancy.
On this aspect
of the case I should mention finally the decision of this court in Ogwr
Borough Council v Dykes [1989] 1 WLR 295. In that case a local
housing authority had granted a homeless applicant temporary accommodation
pursuant to their obligations under section 65(3) of the 1985 Act (duty to
house temporarily person found to have priority need but to have become
homeless intentionally). This court held that the agreement constituted a
licence, notwithstanding that it otherwise fulfilled the conditions of a
tenancy referred to in the House of Lords’ decisions mentioned above.
One of the
reasons given by the court in Ogwr for holding that the agreement
created a licence rather than a tenancy was that the council were acting under
their statutory duty. On this basis the present case is distinguishable, since
FHA was under no such duty. However, Ogwr was decided before the
decision of the House of Lords in AG Securities v Vaughan; Antoniades
v Villiers [1988] 3 All ER 1058, and it is apparent from the decision of
Purchas LJ that he at least placed much reliance on the judgment of Fox LJ in AG
Securities v Vaughan in the Court of Appeal [1988] 2 WLR 689, as
well as on the decision of the Court of Appeal (to which Purchas LJ was himself
a party) in Hadjiloucas v Crean [1988] 1 WLR 1006 — see [1989] 1
WLR 295 at pp 301E-302F, 303B-C. Fox LJ was in the majority in the Court of
Appeal in AG Securities v Vaughan and the decision was reversed
in the House of Lords, while, as I have already said, Hadjiloucas v Crean
was expressly disapproved by Lord Templeman in AG Securities v Vaughan.
In my judgment, Ogwr BC v Dykes cannot be reconciled with the
subsequent decision of the House of Lords in AG Securities v Vaughan
and even if the case were not otherwise distinguishable we should be bound to
refuse to follow it under the second exception to the rule in Young v Bristol
Aeroplane Co Ltd [1944] KB 718.
The effect
of section 79(3) of the 1985 Act.
Even if,
contrary to my view, the agreement of February 5 1985 did create a licence, it
was a licence which was subject to the application of section 79(3) of the 1985
Act and so conferred upon Mrs Jones the same security of tenure as if she had
been granted a tenancy. 67C Chepstow Road was ‘let’ (granted) to her as a
separate dwelling and so would appear clearly to be within the operation of
section 79(3).
However, in
two cases in this court on the corresponding provision (section 48) of the
Housing Act 1980, it was held that a licence did not qualify for protection
unless it conferred exclusive possession in the occupant: see Family Housing
Association v Miah (1982) 5 HLR 94; Kensington and Chelsea RLBC
v Haydon (1984) 17 HLR 114. These cases were decided at a time when it
was still believed that parties could, by agreement, create a licence of a
separate dwelling conferring at least exclusive occupation on the grantee, but
that view is no longer maintainable in the light of the decisions of the House
of Lords in Street v Mountford and AG Securities v Vaughan.
As it appears to be no longer possible to create a licence granting exclusive
occupation of self-contained residential property as a separate dwelling (thus
excluding lodger-type relationships) in return for periodical money payments,
if Miah and Haydon remain good law their effect would be to
deprive section 79(3) of all operation, save only in respect of licences
granted for no consideration. That cannot have been the intention of
Parliament.
In my
judgment, the clear intention behind section 79(3) and its predecessor was to
prevent local authorities from avoiding the operation of Parts IV and V of the
Act by granting, as was then believed to be possible, licences which were in
all material respects the same as tenancies but were nevertheless not
tenancies. If Miah and Haydon are, as I believe, irreconcilable
with Street v Mountford and AG Securities v Vaughan,
then we are again bound to refuse to follow them under the second exception to
the rule in Young v Bristol Aeroplane Co Ltd.
Security
of tenure.
Even if the
agreement of February 5 1985 created a tenancy, or a licence which conferred
the same security as a tenancy, nevertheless if it were granted pursuant to the
council’s duty under section 63(1) — to house Mrs Jones pending inquiries —
then it never became a secure tenancy because of the provisions of para 4 of
Schedule 1, it having been determined (on October 20 1985) before the expiry of
12 months from the date of the notice to her under section 64(1), which on this
hypothesis was February 13 1985. (The issue of estoppel under this head, which
was raised before the judge and rejected by him, has not been pursued on
appeal.)
There are
certain findings by the judge which indicate that he took the view that the
flat at 67C Chepstow Road was provided to Mrs Jones by the council pursuant to
their duty under section 63(1), ie before they had given her notice under
section 64(1). On this basis the order for possession against Mrs Jones was
properly made. However, by her amended defence Mrs Jones had pleaded that her
tenancy of the flat was not granted pursuant to section 63(1), but rather
pursuant to section 65(2). This defence depends upon Mrs Jones establishing
that the council had notified her (orally) of their decision that she was
homeless and in priority need in October/November 1984, ie before the agreement
of February 5 1985, which must then have been granted pursuant to the council’s
obligation under section 65(2). A tenancy granted under section 65(2) is not
excluded by para 4 of Schedule 1 and so is a secure tenancy. It is common
ground before us that this point was not pursued before the judge at his
suggestion. Accordingly, counsel accepted that if we came to the view — as I
have — that Mrs Jones had either a tenancy or a licence under section 79(3),
then the case must be remitted to the judge for a finding on this issue.
The third
party proceedings.
The third
party notice alleged a duty owed to Mrs Jones by the council to accommodate her
under section 65 and a breach of that duty by failing to offer her
accommodation. Since the word ‘accommodation’ in section 58 is not qualified by
adjectives such as ‘appropriate’ or ‘reasonable’ — R v Hillingdon
LBC, ex parte Puhlhofer [1986] AC 484 — there is no warrant for introducing
any such qualification where the same word is used in section 65. In view of
the offer to her of accommodation at 122 Romero Square, Mrs Jones sought to
meet the difficulty with which she was faced in establishing a breach of the
council’s duty under section 65 by applying for leave to amend her third party
notice so as to include (inter alia) a paragraph in the following terms:
4A For the
avoidance of any doubt it is averred by the Defendant that the said offer was,
in the circumstances, so unsuitable and unreasonable that it did not amount to
an offer at all and/or did not suffice to discharge the duty owed to the
Defendant to secure that accommodation became available for her occupation.
The only other
amendments sought went to the relief claimed by the third party notice. Our
provisional view was that Mrs Jones
duty. Mr Arden accepted this without full argument, and the appeal against the
third party was dismissed by consent on Mrs Jones’ admission that the offer
dated April 23 1985 of premises known as 122 Romero Square, Ferrier Estate,
Kidbrooke, SE3, was a discharge of the council’s duties towards her at that
time under the 1977 Act. Thus the questions which exercised the judge, whether
there was jurisdiction in the county court to grant a declaration and an
injunction when the claim for damages (other than the indemnity for costs) had
been abandoned, and whether Mrs Jones’ claim against the council for breach of
duty only be raised only in proceedings for judicial review, became academic
and we did not think it necessary or appropriate to deal with them.
Conclusion
In the result
I would allow Mrs Jones’ appeal against FHA and remit the action to Bloomsbury
County Court for determination of the issue whether the accommodation made
available to her on February 5 1985 was so made pursuant to the council’s duty
to her under section 63(1) or section 65(2). If the answer is under section
63(1), then, for the reasons already given, the order for possession in favour
of FHA should be reinstated. If the answer is under section 65(2), then it will
follow that the FHA’s claim in its present form must be dismissed.
Mrs Jones’
appeal against the dismissal of her third party proceedings has already been
dismissed.
Agreeing, SLADE
LJ said: I will add something of my own to explain a little further why,
with some misgivings, I, too, feel bound to differ from the judge’s conclusion
that the arrangements made between FHA and Mrs Jones gave rise to a licence
rather than a tenancy.
As Balcombe LJ
has said, counsel for FHA, in arguing that there was no tenancy, did not in
this court seek to support the judge’s findings that there was no defined term
or that occupation could be given up without notice. His argument in this
context rested almost entirely on the contention that there was no tenancy
because Mrs Jones has never had exclusive possession of her flat.
The judge
found as a fact that FHA retained a key to the premises ‘not as a matter of
convenience but as a means of free entry to the relevant premises’. This might
probably have sufficed to negative exclusive possession on the part of Mrs
Jones if the evidence had shown that, to the knowledge of both parties, FHA had
retained the key as a means of free entry so that it could, if it chose, impose
some third party on Mrs Jones and her son as co-occupants of the flat. However,
it has not been suggested that the parties ever contemplated that FHA would
have the right during the currency of the agreement to do so. The flat would
not have been suitable to accommodate a third party, consisting as it did of
only two rooms with the usual offices. The circumstances show that she and her
son were the only contemplated occupiers; indeed clause 1 of the agreement
expressly said so.
The proper
inference from the judge’s findings and Mrs Lucas’ evidence appears to be that
FHA retained the key as a means of free entry to the premises merely for the
purpose of inspecting their state of repair and offering the support and
discussion of housing problems which would be appropriate to offer the occupant
of accommodation intended as temporary housing for homeless people. I do not
think that the retention of the key by FHA for these limited purposes could
suffice to enable it to sustain an assertion that Mrs Jones had not been granted
exclusive possession, or indeed that she was a mere lodger, when all the other
circumstances pointed towards her actually enjoying exclusive possession.
In accordance
with the principles established by Street v Mountford [1985] AC
809 and Aslan v Murphy (nos 1 and 2) [1989] All ER 130, the
statement in clause 5 of the agreement of Mrs Jones’ understanding that she
would not have exclusive possession as against FHA must, in my judgment, be
disregarded as not representing the true nature of the arrangement between the
parties, viewed objectively as that arrangement must be. It was as capable of
being contradicted by the facts of the case as would have been a statement of
her understanding that she was not to have a tenancy.
The House of
Lords in Street v Mountford (supra at pp 818 and 823)
recognised that in some exceptional categories of case the occupier of premises
might not be a tenant, even though his occupation was exclusive. Particular
instances given by Lord Templeman (at p 818) were the cases where the
occupation is by an owner in fee simple, a trespasser, a mortgagee in
possession, an object of charity or a service occupier. This case could be said
to have some special features, particularly having regard to (1) the
arrangements between the Westminster City Council and FHA, which permitted FHA
‘to use and manage the properties only as temporary housing accommodation
exclusively for homeless persons referred to the Licensee by the Corporation’s
Director of Housing . . . save where by prior written consent the Director of
Housing permits an alternative use’; (2) the corresponding nature of the
premises as temporary housing accommodation; (3) what could be said to be at
least a charitable element in the arrangement — it is, I think, common ground
that Mrs Jones has at all material times paid far less than the market rent;
(4) the advice and support which Mrs Jones has enjoyed as a homeless person
enjoying temporary accommodation.
The argument
which we have heard suggests to me that, whatever their wishes or intentions,
it may at least be difficult for bodies charged with responsibilities for the
housing of the homeless to enter into any arrangement pursuant to section 65(2)
of the Housing Act 1985 under which the person housed is to enjoy exclusive
occupation of premises, however temporarily, without conferring on that person
security of tenure by virtue of the Act. (It has to be borne in mind that the
saving provisions of para 4(1)(a) of Schedule 1 which apply to a tenancy
granted in pursuance of section 63 do not apply to a tenancy or licence granted
pursuant to section 65(2).)
The result
must be substantially to reduce the choice of methods available to bodies such
as FHA for dealing with their always limited supplies of housing stock. I am
not sure that this result will necessarily inure to the benefit of the class of
homeless persons in this country viewed as a whole. These are the reasons for
the misgivings expressed at the start of this judgment.
In Ogwr BC
v Dykes [1989] 1 WLR 295, Purchas LJ made the following broad statement
of principle (at p 302):
If all that
is disclosed is the granting of exclusive possession for a fixed term for
payment of a rental fee, then, in the absence of any feature indicating to the
contrary, the intention of the parties as expressed by their agreement must be
to create a tenancy. If, however, the context in which the right to exclusive
occupation is granted specifically and definitively negatives an intention to
create a tenancy, then some other interest appropriate to the intention
established by that context will be created.
If we had been
free to follow that statement of principle, there might have been grounds for
holding that there was no tenancy because the context in which the right to
exclusive occupation had been granted to Mrs Jones ‘specifically and
definitively’ negatived an intention to create one. However, for the reasons
given by Balcombe LJ, I do not think we are free to take this course.
Nor do I think
that the special features of the present case, to which I have referred
earlier, would suffice to justify the formulation by this court of a new
exceptional category of case taking it outside the Street v Mountford
principle. The decision of the House of Lords in Eastleigh BC v Walsh
[1985] 1 WLR 525 is authority for the proposition that an arrangement under
which a person is granted exclusive possession of premises, and the other
ordinary features of a tenancy are present, does not escape being a tenancy
merely because the arrangement is intended to provide temporary accommodation
for a homeless person.
I have nothing
further to add to the reasons given by Balcombe LJ for allowing Mrs Jones’
appeal against FHA and would concur in the form of order which he proposes. As
he has explained, Mrs Jones’ appeal against the dismissal of her third party
proceedings against the Westminster City Council has already been dismissed by
consent.
FARQUHARSON
LJ agreed and did not add anything.
The appeal
was allowed with costs against the Family Housing Association; the case was remitted
to the Bloomsbury County Court to decide the issue as to whether the
accommodation made available to the appellant was pursuant to section 63(1) or
section 65(2) of the Housing Act 1985; legal aid taxation of the appellant’s
costs was ordered; and the question of costs below was remitted to the county
court.
