Local authority — Housing — Possession — Husband obtaining secure tenancy by fraudulent misrepresentation — Husband assigning tenancy to wife — Whether possession available where tenancy validly assigned — Whether landlord entitled to rescind where tenancy induced by fraud — Appeal dismissed
The appellant council accepted that they were under a duty to provide accommodation for the first and second respondents, who were wife and husband respectively, on the basis that they were homeless persons within Part VII of the Housing Act 1996. Accordingly, in October 2000, they granted the second respondent a secure tenancy of a two-bedroom flat. In November 2001, he assigned it to the first respondent.
The appellants subsequently sought rescission of the secure tenancy on the ground that they had been induced to grant it by a fraudulent misrepresentation together with an order for possession consequent upon the rescission; or alternatively, an order for possession under ground 5 of Schedule 2 to the Housing Act 1985 since they had been induced to grant the tenancy by a false statement made knowingly or recklessly by “(a) the tenant, or (b) a person acting at the tenant’s instigation”.
The county court dealt with those questions as preliminary issues and concluded that the appellants were not entitled to succeed on either ground. The appellants appealed. The issues for the Court of Appeal were whether: (i) ground 5 was available where the secure tenancy had been assigned; and (ii) rescission was available where a landlord had been induced to grant a secure tenancy by a fraudulent misrepresentation that had been made by or on behalf of the tenant.
Held: The appeal was dismissed.
(1) Ground 5 could not be used against an assignee of a tenancy in order to obtain possession and to terminate the secure tenancy even where, on assumed facts, the assignee had been a party to the fraudulent representations that had induced the landlord to grant the tenancy.
The language of ground 5 was plain and unambiguous and could not be read as referring to the person who was the tenant at the date of the grant of the tenancy and not at the date of the hearing. The phrase “the tenant is…” was expressed in the present tense and could refer only to the current tenant, that is, the person from whom possession was being sought. It was therefore impossible to read “the tenant” as including predecessors in title, since the conditions for possession were that the landlord had been induced to grant the tenancy by a false statement made by the person who was the tenant at the time of the hearing.
(2) Section 82 of the 1985 Act provided that a landlord could bring a secure tenancy to an end only by obtaining an order for possession and not in any other way, for example, by obtaining an order for rescission. The fact that an order for rescission operated retrospectively did not mean that until the order had been made the contract did not exist. Until and unless a voidable contract was brought to an end, it continued to have full effect.
The express wording of section 82, read together with section 84, showed that parliament had intended to take away from landlords the right to terminate secure tenancies by rescission, whether for misrepresentation or on any other ground.
Andrew Arden QC and Terence Gallivan (instructed by the legal department of Islington London Borough Council) appeared for the appellants; Jonathan Seitler QC and Nicholas Nicol (instructed by Lewis Nedas & Co) appeared for the respondents.
Eileen O’Grady, barrister
