Secure periodic tenancy granted to joint tenants – One tenant leaving to live elsewhere – Departing tenant purporting to release her interest to the remaining tenant – Whether deed of release rendered ineffective by Housing Act 1985 – Meaning of “assigned” as used in 1985 Act
In February 1994 the claimant (B) and her friend H became secure tenants of the defendant council on taking a weekly tenancy in their joint names of a three-bedroom flat in London NW5. The flat was also occupied by B’s six-year-old son. In July 1996 H bought a property elsewhere and moved out, having reached an understanding with B, who did not wish to move to a smaller flat, that B would thereafter find the entire rent. B and H had at all material times been advised that: (i) so long as the joint tenancy subsisted, B’s entitlement to housing benefit would continue to be based on one half of the rent; (ii) the tenancy, being a secure periodic tenancy, was (as provided by section 91(1) of the Housing Act 1985) “not capable of being assigned”; and (iii) by reason of the ruling of the House of Lords in Hammersmith and Fulham London Borough Council v Monk [1992] 1 EGLR 65, H could not serve a notice to quit without terminating the joint tenancy altogether.
Faced with a refusal by the council to let the flat to B alone, B and H executed a professionally-drawn deed in July 1996, whereby H purported to “release” her legal and beneficial interest under the tenancy to B, who purportedly accepted the same to hold as the sole secure tenant. The council disputed the validity of the deed and obtained a county court ruling that it amounted to an ineffective assignment. Following a reversal of that ruling by the Court of Appeal [1997] PLSCS 343, the council appealed to the House of Lords.
Held: The appeal was allowed.
1. As a matter of conveyancing, the vesting of the entire interest in the property in B could have been achieved either by an assignment by H and B to B (such method having been first permitted by section 72(4) of the Law of Property Act 1925) or by a deed of release effected by H in favour of B, as expressly preserved by section 36(2) of the 1925 Act. It would make no sense if the application of section 91(1) were to depend on which of the two methods was used. Nor was there anything in the 1985 Act to indicate that the word “assign” should not apply where one joint tenant dropped out. The notion that a joint tenant had nothing to transfer to the other joint tenant, because each already owned the whole, should not obscure the fact that the transaction would ordinarily be regarded as a transfer of H’s rights in the flat to B. By reason of section 91(1), that object was incapable of achievement, whatever the form of words used.
2. (Per Lord Hobhouse) The tenancy was a contractual tenancy entered into by three persons. There was, accordingly, a fundamental contractual objection to the submission that H could, without serving a notice to quit, escape from her obligations by an act to which the council were not a party and to which they had not assented.
3. (Per Lord Millet, dissenting) A release operated to extinguish the interest of a joint tenant and not to assign it. The difference, though technical, was not a formality. An interest under a joint tenancy could not be assigned, save in the circumstances provided for by section 72(4) of the 1925 Act. By granting a lease to two or more joint lessees in the knowledge that their number must eventually reduce to one, the lessors had already signified their consent to any or either becoming sole lessee. Section 91(1) could not be made to include a release without doing considerable violence to the language: Varley v Coppard (1872) LR 7 CP 505 disapproved.
Sylvester Carrott (instructed by Camden Community Law Centre) appeared for the claimant; Bryan McGuire (instructed by the solicitor to Camden London Borough Council) appeared for the defendants.
Alan Cooklin, barrister
