Housing Act 1985, Part IX — Provisions affecting unfit houses — Appeal by local housing authority against decision of recorder in county court quashing demolition order — Respondent was an elderly man owning a long leasehold interest in a terraced house which he occupied and in which he desired to remain — Housing authority, having satisfied themselves that the house was unfit for human habitation and not capable of being rendered so fit at reasonable expense, served on the respondent the usual time and place notice under section 264 of the Act to consider the future of the house — As this did not produce an offer of an undertaking to carry out works, the authority proceeded to make and serve on the respondent a demolition order under section 265 — The respondent appealed to the county court against the order under section 269 — The main ground of appeal was that the house was capable of being rendered fit at reasonable expense
evidence before the recorder in the county court it was agreed that the value
of the house in its present condition was £15,000, the cost of demolition would
be £10,000 and the value of the vacant site thereby created £5,000 — The cost
of putting the house into a habitable condition was estimated by the authority
to be some £31,355.83 and by the respondent’s advisers at £23,017.02 — If the
works set out in the Scott Schedule were carried out the authority’s valuer
said that the value of the house would be £29,000; the respondent’s valuer said
£32,000 — The cost of repairs would therefore exceed the increase in value
significantly — The recorder, however, took into account that the occupier was
anxious to keep the house as his home and to spend money on repairing it — It
was therefore reasonable to spend more than would be realisable on a sale — The
availability of an improvement grant of £9,000 could be taken into account and
the respondent had hopes of obtaining finance through the goodwill of his
daughter and her friend — The recorder decided to accept an undertaking under
section 269(3)(b) and to quash the demolition order — The housing authority
appealed
authority submitted that the recorder had erred in law by wrongly interpreting
‘reasonable expense’ in section 321 — His interpretation was said to be
‘subjective’, to have failed to pay sufficient regard to the extent to which
cost would exceed the increase of value, to have been wrong in accepting the
estimated cost figures as reasonable, to have ignored difficulties in obtaining
finance and to have incorrectly taken a discretionary improvement grant into
account — The Court of Appeal rejected the criticisms of the recorder’s
decision — The agreed valuation of the house in its existing state was
inconsistent with the proposition that it could not be made habitable at
reasonable expense — Section 321 was not definitive; it was simply a
requirement that regard should be had to a particular factor — The availability
of a grant was a proper matter for consideration when determining the question
of reasonable expense — The recorder was entitled to accept evidence as to
other finance available to the respondent — Although the matter did not arise,
it was difficult to see what benefit could have resulted to anyone from the
demolition of the house — Appeal from recorder dismissed
The following
cases are referred to in this report.
Johnson v Leicester Corporation [1934] 1 KB 638; [1934] All ER Rep
493; (1934) 103 LJKB 541; 151 LT 8; 98 JP 165; 50 TLR 214; 32 LGR 147, CA
Leslie
Maurice & Co Ltd v Willesden Corporation [1953]
2 QB 1; [1953] 2 WLR 892; [1953] 1 All ER 1014; (1953) 51 LGR 334; [1953] EGD
198; 161 EG 350, CA
This was an
appeal by Swansea City Council from the decision of Mr Recorder Bedingfield,
sitting at Swansea County Court, quashing a demolition order made by the
council in respect of 9 Frogmore Avenue, Sketty, Swansea, of which the
respondent, John Edwin Cole, was the leasehold owner and the occupier.
J Stevenson
(instructed by Sharpe Pritchard, agents for the chief executive, Swansea City
Council) appeared on behalf of the appellants; Huw Davies (instructed by Graham
Evans & Partners, of Swansea) represented the respondent.
Giving the
first judgment at the invitation of Stocker LJ, MANN LJ said: There is before
the court an appeal from Mr Recorder Bedingfield QC sitting in the Swansea
County Court on April 14 1988. Leave to appeal was given by Ralph Gibson LJ on
August 2 1988. The respondent to this appeal is John Edwin Cole. Mr Cole owns
the leasehold interest in 9 Frogmore Avenue, Sketty, Swansea. It is a long
leasehold interest having been granted in 1903 for a term of 500 years. The
property in question is a terraced house.
The appellant
to the appeal is the local housing authority for the area in which the property
is situate. The matter concerns a demolition order made by the appellant. It is
convenient that I should go immediately to the statutory provisions which are
contained in Part IX of the Housing Act 1985. Those provisions have existed in
a substantially similar form for many years before they appeared in this
consolidating Act. Section 264 provides:
(1) Where the local housing authority are
satisfied that a house is unfit for human habitation and not capable of being
rendered so fit at reasonable expense, they shall serve on —
(a) the person having control of the house,
and I omit
certain words
notice of a
time (at least 21 days after the service of the notice) and place at which the
condition of the house and any offer which he may wish to submit with respect
to the carrying out of works, or the future user of the premises, will be
considered by the authority.
(2) Every person on whom such a notice is served
is entitled to be heard when the matter is so taken into consideration.
(3) A person on whom such a notice is served
shall, if he intends to submit an offer with respect to the carrying out of
works —
(a) within 21 days from the date of the service
of the notice on him, serve on the authority notice in writing of his intention
to make such an offer, and
(b) within such reasonable period as the
authority may allow, submit to them a list of the works which he offers to
carry out.
(4) The local housing authority may, if after
consultation with an owner or mortgagee of the house they think fit to do so,
accept an undertaking from him, either —
(a) that he will within a specified period carry
out such works as will, in the opinion of the authority, render the house fit
for human habitation, or
(b) that the house will not be used for human
habitation until the authority, on being satisfied that it has been rendered
fit for that purpose, cancel the undertaking.
I need not read
the further subsections.
Two at least
of the expressions used in the subsections I have read are terms of art. ‘Unfit
for human habitation’ is defined in section 604 of the Act, which provides in
subsection (1):
In determining
for any of the purposes of this Act whether premises are unfit for human
habitation, regard shall be had to their condition in respect of the following
matters —
repair,
stability, freedom from damp, internal arrangement, natural lighting,
ventilation, water supply, drainage and sanitary conveniences, facilities for
the preparation and cooking of food and for the disposal of waste water;
and the
premises shall be deemed to be unfit if, and only if, they are so far defective
in one or more of those matters that they are not reasonably suitable for
occupation in that condition.
That term of
art does not vex us in this case; the second, however, does. It is in section
321, which has to show that it can be repaired at reasonable expense. It
provides:
In
determining for the purpose of this Part whether premises can be rendered it
for human habitation at a reasonable expense, regard shall be had to the
estimated cost of the works necessary to render them so fit and the value which
it is estimated they will have when the works are completed.
I shall return
to that later.
I continue
with the passage through Part IX of the Act, and section 265 provides:
(1) If no undertaking under section 264 is
accepted by the local housing authority or it, where they have accepted such an
undertaking —
(a) any work to which the undertaking relates is
not carried out within the specified period, or
(b) the house is at any time used in
contravention of the terms of the undertaking, the authority shall forthwith
make a demolition or closing order in respect of the premises to which the
notice under that section relates.
(2) The authority shall make a demolition order unless
—
(a) they consider it inexpedient to make a
demolition order having regard to the effect of the demolition on another
building, or
(b) section 304(1) applies . . .
in which case
they shall make a closing order.
Section 304 has
no materiality in the present case. It refers to listed or potentially listed
buildings. Section 267 deals with the content of a demolition order and section
268 deals with service of an order.
Section 269
confers a right of appeal against an order. Subsection (1) provides:
A person
aggrieved by a demolition or closing order may, within 21 days after the date
of the service of the order, appeal to the county court.
Subsection (2)
I will omit. Subsection (3) provides:
On an appeal
the court —
(a) may make such order either confirming or
quashing or varying the order as it thinks fit, and
(b) may, if it thinks fit, accept from an
appellant any undertaking which might have been accepted by the local housing
authority.
Subsection (4)
provides:
The court
shall not accept an undertaking to carry out works from an appellant on whom a
notice was served under section 264(1) . . . unless the appellant complied with
the requirements of section 264(3)
which is of
course the duty to give notice of an intention to offer an undertaking and to
supply a list of the works.
I think I need
not refer further to the statutory provisions and I turn to what
chronologically occurred in this case. On November 11 1986 a notice was served
pursuant to section 264. The service of that notice did not excite from Mr Cole
any offer of an undertaking. Accordingly there was served upon Mr Cole a
demolition order dated April 1987. That order purported to be made under the
Housing Act 1957. But nothing turns on that and it may be taken to have been
served under section 265 of the consolidating Act. On April 30 1987 Mr Cole
appealed to the county court pursuant of the liberty given by section 269 of
the 1985 Act. He sets out grounds of appeal. They were live in number. The only
one which in the event has remained in play is that the house was capable of
being rendered fit for human habitation at reasonable expense. Originally it
was asserted that the premises are not in any respect unfit for human
habitation; that was not pursued and indeed the premises are, to use a neutral
phrase, not in good condition. That will appear from the council’s response to
the notice of appeal to the county court:
1.1 Repair Details of all the repairs that
are required are contained in the Scott Schedule attached to this report. The
disrepair is so extensive that the house is judged to be unfit for human
habitation in this respect alone.
The Scott
Schedule disclosed some 44 items.
1.2 Stability
The rear addition of the property which contains three rooms at
basement, ground and first floor level shows clear evidence of structural
instability. There is a large crack in the rear wall through which daylight is
easily visible from inside the first floor rear annexe room. This and other
cracks indicate failure of the foundations possibly due to subsidence which may
be progressive. The extent of the movement is such that the rear addition is
not considered to be repairable, and requires complete demolition. The roof,
which has been renewed at some time in the past with concrete tiles, shows
signs of structural distress.
1.3 Freedom from Dampness All basement rooms are subject to rising
dampness. Every room in the house is subject to penetrating dampness due to the
perished condition of the external rendering and leaking rainwater goods. The
dampness is particularly severe in rooms on the rear elevation.
1.4 Natural Lighting This is poor in the basement rooms and
also the ground floor middle and rear rooms.
1.5 Preparation and Cooking of Food and
Disposal of Waste Water The walls of
the kitchen are subject to both rising and penetrating campness. Plaster on all
walls is extensively perished so making food preparation unhygienic.
We have seen
photographs of the premises and, again to use a neutral expression, they are
not in good condition. However, Mr Cole, who is over 70 years old and who has
resided in the premises for some 40 odd years, would wish to end his days in
them. His daughter also resides in the premises, except perhaps at the
weekends, when she goes to stay with a friend.
The appeal to
the county court was the appeal which gives rise to this present hearing.
Evidence was given on both sides. It was agreed by the valuer called for Mr
Cole and by the council’s witness that the value of the premises in their
existing condition was £15,000. It was said and was not challenged that the
cost of demolishing the premises would be £10,000 and that the vacant site
thereby created would be worth £5,000. The cost of putting the premises into a
habitable condition was said by the council to be some £31,355.83. Mr Cole’s
advisers put the figure at £23,017.02. If the works set out in the Scott
Schedule which was so advanced in total were executed the council’s valuer said
that the value of the premises would be £29,000; the respondent’s valuer said
£32,000. That is a difference in value which is readily understandable.
Professional men can take shades of view, but the difference may not be thought
to be substantial.
It is perhaps
appropriate that I read the note of the judgment given by Mr Recorder
Bedingfield:
This is a
case of considerable importance to the council staff. There was a duty on the
council to apply its policy. Its officers acted in good faith and to the
highest standards. I also have regard to the appellant’s trauma of looking
after his diabetic wife and his desire to remain in the house where he has
lived for over 40 years. I have the advantage of expert evidence by Mr Sutton.
Both parties are agreed that the house in its present condition is worth about
£15,000 on the open market. As a cleared site it is worth about £5,000. The
cost of demolition would be substantial. After works of repair the council
values the property at about £29,000, and Mr Sutton values it at about £32,000.
The estate agent
— I interpose,
that is Mr Sutton called on behalf of Mr Cole —
has more
experience of market value than Mr James but I don’t need to make any findings
as between them. A purchaser on the open market would find the house worth much
more than site value. The cost of repairs would exceed the increase in value of
the house significantly. Therefore it would not be a commercial venture
— and the
learned recorder has interposed at that stage a manuscript note in which he
said:
If any
purchaser would spend between £15,000 price and repairs
— which I take
to mean the repairs and cost —
more than he
could recoup on immediate resale I did not (think) that the expense of repair
could be declared unreasonable, for the property was valueless unless made fit
as a dwelling house. A purchaser, perhaps equally eligible for grants, could
not be in a better position than the existing owner. So I am sure that, as the
crucial link in my reasoning, I said at line 18, after commercial venture ‘As
reasonable for purchaser, must be reasonable for Mr Cole’ because that was the
point at issue.
Since I
supposed the 18 month undertaking a solution agreeable to both parties I did
not hear argument from Mr McKay on what I thought the interesting point, how
far an environmental health officer can reject as unreasonable an expense which
the owner is happy to pay.
I return to
the main body of the judgment:
I read the
Act as enabling me to permit Mr Cole to spend more than can be recovered on
sale. I am not bound by a property developer’s slide rule. The appellant is
anxious to keep it as his own home and to spend money on repairing it. It is
reasonable therefore to spend more than would be realisable on a sale. I bear
in mind the difference between the parties’ costings of the work. Mr Cole is an
honest witness and with connections in the trade could ensure that the work
would be done at a fair cost. I take into account the availability of an
improvement grant of £9,000. I consider that the extra cost is reasonable for
Mr Cole to bear. Mr Sutton has not given detailed consideration as to whether
the cost may be reduced by a one-storey extension only. Mr Cole is acting
reasonably by suggesting that he would do the work. However he has no money and
therefore he is dependent on the goodwill of his daughter and her friend. In
view of Mr Cole’s age and health he may be putting off the work and simply
staying there until his death. I bear in mind that Mr Cronin says it would be
economically better to sell the house as it stands now. There is a danger if
the appeal is allowed of the work not being undertaken. The council therefore
needs some security. There are considerable problems of Mr Cole obtaining
finance. 18 months seems a realistic period for doing the work. I act therefore
under para (b) of section 269(3) by accepting an undertaking from the
appellant to do the work in the Schedule within 18 months. I make an order that
the demolition order be quashed on the basis of the undertaking given.
The
undertaking given was given at the request of the local authority when they
sensed that the learned recorder was not in their favour upon the substantive
issue. There was an attempt before this court to amend the grounds of appeal in
the sense that the learned recorder had no power to accept an undertaking from
the appellant to carry out works under section 269(3) of the Act by reason of
the provisions of section 269(4). We refused leave to amend the grounds of
appeal. It seemed to us that such a volte-face was not tolerable and was really
inconsistent with the substantive case advanced.
The grounds of
appeal then remained as originally lodged. The learned recorder, it is said,
erred in law in that he wrongly misinterpreted the phrase ‘reasonable expense’
referred to in section 321 of the Housing Act 1985 in that he:
(i) Wrongly took into account the period of time
that the above-named appellant had resided at no 9 Frogmore Avenue, Sketty,
Swansea, West Glamorgan;
(ii) Considered the said phrase from a subjective
(ie the above-named appellant’s view-point rather than objectively);
(iii) Failed to have sufficient regard to the extent
to which the cost of putting the said property into a state of human habitation
exceeded the increase in value of the said property by reason of such works (ie
failed to have sufficient regard for the said section 321);
(iv) Decided that the estimated costs of works (ie
the appellant’s estimated figure of £23,017.02 or the respondent’s estimated
figure of £31,355.83) was reasonable;
(v) Took into account the possibility of the
above-named appellant obtaining finance for such works to be undertaken, but
ignoring the likelihood that a mortgage would not be available in respect of
the said property in its present condition;
(vi) Took into account the matter of a
discretionary improvement grant (as opposed to a mandatory repair grant);
(vii) Had regard to the above-named appellant’s
valuation of the property, after works had been undertaken, being in a good
state of repair, as opposed to being in a state of repair fit for human
habitation.
As to point
(vii), I say at once that I think there is nothing in that argument. The two
valuers gave their valuations; a margin of difference between them is a
perfectly understandable one having regard to the nature of the art of
valuation. I can also say at once that I think the learned recorder did wrongly
take into account the period of time that the appellant had resided at 9
Frogmore Avenue. That is, of course, ground (i).
Mr Stevenson,
for the local housing authority, focused his arguments in substance upon
section 321. In that regard he referred us to two authorities. The first, in
point of time, is Leslie Maurice & Co Ltd v Willesden Corporation
[1953] 2 QB 1, in particular at p 5, where the then Master of the Rolls,
Lord Evershed, observed, by reference to earlier legislation which is
substantially similar but not entirely similar to that in the 1985 Act:
If the matter
rested solely upon the Housing Act 1936, it is clear from the terms of
subsection (3) that the question for determination, namely, whether the house
can be rendered fit for human habitation at a reasonable expense, is one which
has to be determined in what has been called an objective way; that is, without
regard to any particular circumstances affecting the person who is in control
of the premises and the interest which he has.
The second
authority is Johnson v Leicester Corporation [1934] 1 KB 638
where, at p 646, Slesser LJ said:
They
— that is the
local housing authority —
have to
satisfy themselves whether the house is capable at a reasonable expense of
being rendered fit for human habitation, and if they decide that it is so
capable they adopt one procedure: if they decide that it is not so capable,
they adopt another procedure, and in considering whether the house is capable
of being rendered fit at a reasonable expense, the reasonableness of the
expense must be what they consider objectively to be reasonable, that is,
considering the general condition of the house, the cost of labour, building
material, etc, and not at that stage, at any rate, what the owner may think to
be reasonable, for he is not yet taken into consultation. The local authority
have to make that decision ex parte, and unaided by the views of the owner. If
they come to the conclusion that the house is capable, at a reasonable expense,
of being rendered fit they serve a notice upon the owner requiring him within a
reasonable time to execute the necessary work.
It is to be
observed, and I think importantly to be observed, that the local authority
value the property in its existing condition in the sum of £15,000 as did the
adviser for Mr Cole. Such a valuation seems to me entirely inconsistent with
the proposition that the house could not be rendered habitable at reasonable
expense. Why, one asks rhetorically, should a person pay £15,000 for something
which cannot be rendered habitable at reasonable expense? He would scarcely do so for the pleasure of
spending £10,000 in knocking it down and selling the site for £5,000. The
answer to that question, says Mr Stevenson, is that the figure of £15,000
predicated that a purchaser would obtain a grant, both mandatory and
discretionary, in a sum approaching or perhaps just exceeding £12,000. If one
diminishes the cost of the works by that mandatory or discretionary grant one
sees a rapid advance towards the value of the premises when made habitable.
However, Mr Stevenson said that section 321 and the passages in the authorities
to which he referred us do not permit a grant to be taken into account when
considering the position of Mr Cole. A grant, it is agreed, does not depend
upon the fiscal circumstances of the applicant of the grant. Mr Cole would be
in as good a position as any purchaser. True it is he would have to move out
because the premises are currently unfit. I do not regard section 321 as a
definition. Mr Stevenson is disposed to agreed. What it does is to say in its
own terms:
In
determining for the purpose of this Part whether premises can be rendered fit
for human habitation at a reasonable expense, regard shall be had to the
estimated cost of the works necessary to render them so fit and the value which
it is estimated they will have when the works are completed.
That is not
definitive. It is simply a requirement that regard should be had to a
particular factor. For my part I do not see why the availability of grant
should not be considered when determining the question of reasonable expense.
It seems to me to be a matter which falls within the objective approach
adumbrated by Lord Evershed and Slesser LJ in the two cases. I so say because
grant does not depend upon the fiscal circumstances of the applicant.
Once grant is
taken into account, then, on the council’s own figures, it does not seem to me
that the condition precedent in section 264 about capacity to be rendered so
fit at reasonable expense has been satisfied.
Accordingly,
for that reason I think that the learned recorder was entirely entitled to
reach the conclusion which he did. As to the question of finance available to
Mr Cole, which is also queried in the grounds of appeal, there was evidence
from his daughter that she could finance a mortgage, and there was evidence
from the daughter’s friend that he could provide any deficit by means of a
mortgage on his mother’s house. The learned recorder was quite entitled to
accept that evidence, and I accordingly would dismiss this appeal. I cannot,
however, pass from the case without observing that I do not see who would
benefit from allowing the appeal, but that does not arise.
I would
dismiss it.
Agreeing,
STOCKER LJ said: There is nothing I wish to add save to observe that for my
part I cannot see what benefit could result to anyone, to Mr Cole, the housing
authority, or the ratepayers by demolishing the house in which Mr Cole
currently lives. Its consequence would be to leave an unsightly open space in
which the terraced houses would require no doubt to be shored up. It would
leave Mr Cole with no house in which to live and reduces interest in his
property from £15,000 to £5,000 at the site value and he would also incur
demolition costs.
It seems to me
clear that a far better solution is to carry out the necessary repairs which,
if done, would obviate all those disadvantages. Of course, if the recorder’s
decision cannot be
my view, however, the learned judge, for the reasons given by Mann LJ,
correctly decided to quash the demolition order.
Accordingly, I
also agree that this appeal should be dismissed.
The appeal
was dismissed with costs; legal aid taxation of the respondent’s costs was
ordered.
