Landlord and tenant – Secure tenancy – Decant agreement – Respondent council obtaining possession order in respect of flat – Appellant’s secure tenancy thereby coming to an end – Parties later entering into “decant agreement” for appellant to move to temporary accommodation for duration of repair works to flat – Agreement reciting that appellant having secure tenancy of flat – Whether appellant entitled to move back into flat on completion of works – Whether terms of decant agreement constituting grant of new secure tenancy of that flat – Appeal allowed
In May 1981, the second respondent council let a flat in London NW10 to the appellant under a secure tenancy agreement; the first respondent was the second respondents’ managing agent in respect of that property. In 1991, the appellant’s secure tenancy terminated when the second respondents obtained an outright possession order against her on the ground of rent arrears. She remained in occupation thereafter as a “tolerated trespasser”.
In May 2005, the second respondents entered into a “decant agreement” with the appellant, providing for her to move to other temporary accommodation while they carried out necessary works of repair to the flat. The agreement described the flat as the appellant’s “permanent accommodation” let under a secure tenancy agreement dated June 1980; it was common ground that that was a mistaken reference to the May 1981 agreement. The secure tenancy of the flat was to continue but with all rights and obligations suspended until the appellant resumed occupation on completion of the works. In the meantime, she was to have a secure tenancy of the temporary accommodation, but was to give up occupation once the second respondents gave notice that the works were complete. If she failed to give up occupation as required, the second respondents were to be free to bring possession proceedings to recover the temporary accommodation on ground 8 in Schedule 2 to the Housing Act 1985.
The works to the flat took significantly longer than anticipated but were completed by December 2009. The second respondents refused to allow the appellant to return to the flat and, in February 2010, re-let it to another tenant, the third respondent.
The appellant claimed that she had a tenancy of the flat with priority over the third respondent’s tenancy. That claim was rejected in the county court; the judge held that the appellant had no tenancy since it had been terminated by the 1991 possession order. He found that the terms of the decant agreement, referring to a secure tenancy of the flat, were the result of a mutual mistake by the parties in overlooking the effect of the 1991 possession order and had not been intended to grant a new tenancy. The appellant appealed.
Held: The appeal was allowed.
Once a secure tenancy was terminated by a possession order, it could be revived only by a court order substituting a new, future date for the giving of possession; the parties could not vary or alter the terminating effect of the possession order by agreement. Although it was open to them to enter into a new tenancy of the relevant property, the creation of a new tenancy would not readily be inferred and there was a high evidential hurdle to be crossed. It was insufficient that the facts were consistent with a new tenancy; they had to compel that conclusion: Burrows v Brent London Borough Council [1996] 1 WLR 1448; [1997] 1 EGLR 32; [1997] 11 EG 150, Newham London Borough Council v Hawkins [2005] EWCA Civ 451; [2005] HLR 42; [2005] 2 EGLR 51; [2005] 29 EG 100 and Lambeth London Borough Council v O’Kane [2005] EWCA Civ 1010; [2006] HLR 2; [2005] 32 EG 67 (CS) applied.
The grant of a new tenancy could be inferred in the instant case. The decant agreement purported to recognise an existing secure tenancy created by the May 1981 tenancy agreement, notwithstanding that that tenancy had been terminated by the possession order and no application had been made to the court to vary it. However, the court should not find that the agreement was vitiated by mistake in the absence of any evidence from either party to that effect. The judge had had no evidence before him that the parties had simply forgotten the making of the earlier possession order; he had simply made an educated guess. It was better to assume that the parties had a full grasp of the relevant history but were nevertheless evincing a combined intention that, from the moment of the decant agreement, the appellant was to be recognised as having the status of a secure tenant of the flat. The parties had erred in reflecting that agreement by reciting that she was still a secure tenant under the 1981 agreement, since she was not and could not be such a tenant. However, the substance and commercial intent was that the appellant should be regarded as a secure tenant on the terms and conditions of the 1981 agreement as if it were still in force.
The commercial purpose that both the second respondents and the appellant had intended to achieve was the removal of the appellant on a temporary basis but with a right for her to return and a right for the second respondents to compel her to do so by recourse to ground 8 in Schedule 2 to the 1985 Act if necessary. Ground 8 could not apply unless the appellant held a secure tenancy of the flat immediately before she moved to the temporary accommodation. Since the decant agreement had intended the situation to be one to which ground 8 could be applied if necessary, for the scheme of the agreement to work in all its intended respects the appellant had to be a secure tenant of the flat immediately before the decant. The facts therefore forced the conclusion that, on the signing of the decant agreement in May 2005, the appellant became a secure tenant of the flat, even though she had previously been a tolerated trespasser.
Jan Luba QC and Gillian Ackland-Vincent (instructed by Edwards Duthie Solicitors) appeared for the appellant; Ranjit Bhose QC and Simon Butler (instructed by the legal department of Brent Housing Partnership Ltd) appeared for the first and second respondents; Adrian Davis (instructed by Guile Nicholas Solicitors) appeared for the third respondent.
Sally Dobson, barrister
