Housing Act 1985 — Right to buy — Tenant holding secure tenancy and qualified to exercise right to buy dwelling-house — Pursuant to section 123(1) and 2(a) of the Act, written notice claiming the right to buy required tenant’s daughter should share that right — Secure tenant died — Daughter not entitled to secure tenancy — Whether daughter entitled to exercise right to buy
On December 24
1973 William Robert Tonge was granted a tenancy of 9 Hutton Gardens, the
freehold of which is now vested in the appellants, Harrow London Borough
Council. Upon his death on October 9 1976 his widow, Mrs Tonge, qualified to
succeed the secure tenancy. On September 6 1988 Mrs Tonge served a written
notice on the council claiming to exercise the right to buy the house and,
pursuant to section 123(1) and 2(a), in her notice she required that
Miss Tonge, the respondent, should share the right to buy with her. By a notice
dated October 12 1988, under section 124(1), the council admitted the right to
buy of Mrs Tonge and Miss Tonge. The right to defer completion pursuant to
section 142 until September 7 1991 was claimed and acknowledged by the council.
On November 7 1990 Mrs Tonge died intestate. There having been already one
succession to the secure tenancy under section 87 of the Housing Act 1985, Miss
Tonge was not entitled to succeed to a secure tenancy. The council contended
that not being herself a secure tenant she no longer had any right to buy the
house. On April 15 1991 Miss Tonge’s solicitors informed the council of her
wish to complete conveyance. The council served a notice to quit on January 10
1991. On May 23 1991 Miss Tonge issued proceedings in the county court claiming
an injunction, pursuant to section 138(3), requiring the council to complete
the purchase. On July 4 1991 the council served a counterclaim in those
proceedings claiming possession of the house and damages for trespass. On the
hearing of those proceedings and separate proceedings for possession under Ord
24 of the County Court Rules, Judge Quarren Evans in Willesden County Court
ordered the council to convey the house to Miss Tonge. The council appealed.
Act, the right to buy belonged to Mrs Tonge and Miss Tonge jointly and that
they should be treated for the purposes of Part V of the Act as joint tenants.
The concluding words in the subsection that ‘he and they shall be treated for
the purposes of this Part as joint tenants’ and the words ‘a secure tenant’ in
the section, meant that they were to be deemed to be joint secure
tenants. Accordingly, Mrs Tonge and Miss Tonge were deemed to be joint secure
tenants for the purposes of section 138 of the Act. If they had been joint
secure tenants in the real world, Miss Tonge would, by her survivorship of Mrs
Tonge, have become the sole secure tenant on November 7 1990. Accordingly, the
effect of section 123(3) is that Miss Tonge was deemed to have been the sole
secure tenant for the purposes of section 138 from that date and, on that
footing, the council’s duty to convey the house to her became enforceable by
injunction on their receipt of her solicitor’s letters of April 15 and 17 1991.
It was implicit in section 123 that the deemed secure tenant must still occupy
the house as her only or principal home.
The following
cases are referred to in this report.
Dance v Welwyn Hatfield District Council [1990] 1 WLR 1097; [1990]
3 All ER 572; (1990) 22 HLR 339, CA
East End
Dwellings Co v Finsbury Borough Council [1952]
AC 109; [1951] 2 All ER 587; (1951) 2 P&CR 135; 49 LGR 669, HL
Jennings v Epping Forest District Council unreported July 9 1992
Sutton
London Borough Council v Swann (1985) 18 HLR
140, CA
This was an
appeal by Harrow London Borough Council from an order made by Judge Quarren
Evans in Willesden County Court, whereby he ordered the council to convey to
the respondent, Miss Patricia Jean Tonge, the freehold of 9 Hutton Gardens,
Harrow Weald, Middlesex.
Roger McCarthy
(instructed by the solicitor to Harrow London Borough Council) appeared for the
appellants; Edward Denehan (instructed by David Gouldman & Co) represented
the respondent.
Giving
judgment NOURSE LJ said: This is an appeal by Harrow London Borough
Council against an order made by Judge Quarren Evans in Willesden County Court,
whereby he ordered them to convey to the respondent, Miss Patricia Jean Tonge,
pursuant to the right to buy provisions of the Housing Act 1985, the freehold
of 9 Hutton Gardens, Harrow Weald, Middlesex. He also dismissed the council’s
claim for possession of the house. The arguments on the appeal have centred
mainly on the true construction and effect of sections 123 and 138 of the 1985
Act. All references to sections are to sections of that Act.
The facts are
not in dispute and can be shortly stated. On December 24 1973 Miss Tonge’s
father, Mr William Robert Tonge, was granted a tenancy of 9 Hutton Gardens, the
freehold of which is vested in the council. He lived there with his wife, Mrs
Winifred Tonge, and their daughter, Miss Patricia Tonge. It was, in the case of
Miss Tonge it still is, their only or principal home. Accordingly, while Mr
Tonge was alive his tenancy was a secure tenancy within sections 79, 80 and 81.
Mr Tonge died
on October 9 1976, when Mrs Tonge became qualified to succeed to the secure
tenancy by virtue of section 87. On September 6 1988, pursuant to section
122(1), Mrs Tonge served a written notice on the council claiming to exercise
the right to buy the house. Pursuant to section 123(1) and 2(a), Mrs
Tonge, in her notice, required that Miss Tonge should share the right to buy
with her. That brought into operation section 123(3), to which careful
consideration must presently be given. Mrs Tonge’s notice was received by the
council on September 7 1988. On October 12 1988, pursuant to section 124(1),
the council duly served a written notice admitting the right to buy of Mrs and
Miss Tonge.
It is agreed
that by June 6 1989 all matters relating to the grant and the amount to be left
outstanding or advanced on the security of the house had been agreed or
determined within section 138(1). Shortly
50%, the price had been fixed at £41,200 (£41,722 including costs and stamp
duty) and the amount to be left outstanding on mortgage at £20,175. The right
to defer completion pursuant to section 142 until September 7 1991 (three years
after the council’s receipt of Mrs Tonge’s notice under section 122(1)) had
been claimed by the Tonges and acknowledged by the council. A holding deposit
of £150 had been duly paid.
On November 7
1990, when the three-year period had 10 months still to run, Mrs Tonge died
intestate. There having already been one succession to the secure tenancy under
section 87, it is agreed that the final words of that section disallowed
another. The council thought, and have throughout contended, that that meant
that Miss Tonge, not being herself a secure tenant, no longer had any right to
buy the house. They returned the deposit and served notices to quit both on her
and on the President of the Family Division. However, on April 15 1991
solicitors acting for Miss Tonge wrote to the council stating that she wished
to complete the purchase by the transfer to her of the freehold interest in the
house. Two days later, on April 17, they sent the council an engrossed
conveyance which had been signed as a deed by Miss Tonge. On April 22 the
council replied, contending that she had no right to buy under the 1985 Act and
that, although a notice to quit had been served on January 10 1991, she
remained in unauthorised occupation of the property.
On May 23 1991
Miss Tonge issued proceedings in the county court claiming an injunction
pursuant to section 138(3) requiring the council to complete the purchase. On
July 4 1991 the council served a counterclaim in those proceedings claiming
possession of the house and damages for trespass. On the same day they issued
separate proceedings for possession under Ord 24 of the County Court Rules.
Both proceedings came before Judge Quarren Evans on December 5 1991, when he
gave judgment for Miss Tonge and made the order to which I have referred.
Mr McCarthy,
for the council, and Mr Denehan, for Miss Tonge, have each advanced arguments
in relation to sections 123 and 138. Both here and below Mr Denehan has based
himself primarily on section 138, which, so far as material, is in these terms:
(1) Where a secure tenant has claimed to exercise
the right to buy and that right has been established, then, as soon as all matters
relating to the grant and to the amount to be left outstanding or advanced on
the security of the dwelling-house have been agreed or determined, the landlord
shall make to the tenant —
(a) if the dwelling-house is a house and the
landlord owns the freehold, a grant of the dwelling-house for an estate in fee
simple absolute . . .
in accordance
with the following provisions of this Part.
(2) . . .
(3) The duty imposed on the landlord by
subsection (1) is enforceable by injunction.
It is
established by two decisions of this court and, I would think, by common sense
that the opening words of section 138(1), ‘Where a secure tenant has claimed to
exercise the right to buy,’ require that the person exercising the right shall
continue to be a secure tenant up to the moment of completion: see Sutton
London Borough Council v Swann (1985) 18 HLR 140 and Jennings v
Epping Forest District Council July 9 1992 (unreported). If that were
not so, the right to buy could be enforced by someone who had ceased to occupy
the property as his only or principal home. Here Mr McCarthy submits that Miss
Tonge has never been the secure tenant of the house. On the other side, Mr
Denehan, relying on another decision of this court — Dance v Welwyn
Hatfield District Council [1990] 1 WLR 1097 — has argued that, in the
circumstances I have stated, Mrs Tonge and Miss Tonge became jointly entitled
to the equitable interest in the house on June 6 1989; that Miss Tonge became
solely entitled to it by her survivorship of Mrs Tonge on November 7 1990; and
that she thereupon became and thereafter remained the secure tenant within
section 138(1).
In my opinion,
Mr Denehan’s primary argument is faced with formidable objections. Although to
do so goes further than anything which was decided in Dance, I am
prepared to assume that the entitlement to the equitable interest in the
property can arise under section 138(1) before there has been a request for
completion. But even on that assumption it is difficult to see how someone who
is entitled in equity under the equivalent of an uncompleted contract for the
purchase of property can be said to be a tenant of that property. His
occupation has no contractual origin; he has no legal estate in the property;
and in any event it must be very doubtful whether his status can be more than
that of a licensee.
In the
circumstances I very much doubt whether Mr Denehan’s primary argument could
succeed. But, since the objections to it have not been fully explored in
argument and, since I am satisfied that our decision in this case must be
governed not by section 138, but by section 123, I need say no more about it. I
would add a word of caution only against the introduction of the analysis
attempted in the Dance case into other cases where it is unhelpful and
may, as it seems, cause confusion. The analysis was helpful in the Dance case,
where the essential question was whether the right to buy had already been
‘exercised’ for the purposes of section 121(1). The Vice-Chancellor and I
thought that if a stage had been reached at which the equitable interest in the
property had passed to the secure tenant, the right must have been exercised.
That is not a question which arises in the present case.
Section 123 is
in these terms:
(1) A secure tenant may in his notice under section
122 require that not more than three members of his family who are not joint
tenants but occupy the dwelling-house as their only or principal home should
share the right to buy with him.
(2) He may validly do so in the case of any such
member only if —
(a) that mem+ber is his spouse or has been
residing with him throughout the period of 12 months ending with the giving of
the notice, or
(b) the landlord consents.
(3) Where by such a notice any members of the
tenant’s family are validly required to share the right to buy with the tenant,
the right to buy belongs to the tenant and those members jointly and he and
they shall be treated for the purposes of this Part as joint tenants.
I have already
explained how it was that section 123(3) came into operation here. The
consequences it prescribed were, first, that the right to buy belonged to Mrs
Tonge and Miss Tonge jointly and, second, that they should be treated for the
purposes of Part V of the 1985 Act (sections 118 to 188) as joint tenants. In
my view, it is necessary thus to divide the consequences prescribed, as being
the only way in which due effect can be given to all the words of the
provision.
Mr McCarthy
submits that the right belonged to Mrs Tonge and Miss Tonge together and not to
one of them alone. if section 123(3) had ended at the word ‘jointly’, I would
have seen great force in that submission. But we cannot disregard the
succeeding words ‘and he and they shall be treated for the purposes of this
Part as joint tenants’. Those words are a deeming provision. It is a provision
which tells us not only what is to be deemed, but for what purposes it is to be
deemed.
What was to be
deemed here was that Mrs Tonge and Miss Tonge were joint tenants. It is clear
from the words of subsections (1) and (3) of section 123, ‘A secure tenant’ and
‘Where by such a notice any members of the tenant’s family’ etc, supported by
the terms of section 118(2), that they were to be deemed to be joint secure tenants.
Indeed, as Mr Denehan has pointed out, it is difficult to see how someone who
satisfies the tenant condition in section 81 could become a joint tenant with a
secure tenant without herself becoming a secure tenant.
Then we must
ask for what purposes Mrs Tonge and Miss Tonge were to be deemed to be joint
secure tenants. The answer is for the purposes of Part V of the 1985 Act. Part
V includes section 138. So they were deemed to be joint secure tenants for the
purposes of that section. What was the effect of that? Mr McCarthy accepts, correctly, that if Mrs
Tonge and Miss Tonge had been joint secure tenants in the real world, Miss
Tonge would, by her survivorship of Mrs Tonge, have become the sole secure
tenant on November 7 1990. So the effect of section 123(3) is that Miss Tonge
is deemed to have been the sole secure tenant for the purposes of section 138
from that date. On that footing there can be no doubt that the council’s duty
to convey the house to her became enforceable by injunction on their receipt of
her solicitors’ letters of April 15 and 17 1991 at the latest.
On this short
ground I think that Miss Tonge is entitled to succeed on this appeal. I
emphasise that we are dealing only with a case where the deemed secure tenant
still occupies the house as her only or principal home. It is, I think,
implicit in section 123(1) that that state of affairs must continue up to the
moment of completion. That again is only a matter of common sense.
It is no
disrespect to Mr McCarthy’s very clear argument to say no more than that it was
unable to persuade me that the effect of section 123(3) in the circumstances of
this case is not very plain. At every point I was reminded of some well-known
observations of Lord Asquith of Bishopstone in East End Dwellings Co v Finsbury
Borough Council [1952] AC 109 at p132:
surely, unless prohibited from doing so, also imagine as real the consequences
and incidents which, if the putative state of affairs had in fact existed, must
inevitably have flowed from or accompanied it. . . . The statute says that you
must imagine a certain state of affairs; it does not say that having done so,
you must cause or permit your imagination to boggle when it comes to the
inevitable corollaries of that state of affairs.
Although Judge
Quarren Evans accepted Mr Denehan’s primary argument as the basis of his
decision, there is a passage in his judgment which shows, I think, that he
would have been prepared to base it on section 123(3) alone. He said:
The plaintiff
accepts that she is not in her own right a secure tenant, but I decide that she
can rely upon the wording of section 123(3) to defeat the contentions of the
council. She and her mother are to be treated in relation to the right to buy
as joint tenants.
The judge
arrived at a correct decision. I would affirm it and dismiss this appeal
accordingly.
FARQUHARSON
and EVANS LJJ agreed and did not add
anything.
Appeal
dismissed with costs; legal aid taxation of the respondent’s costs; application
for leave to appeal to the House of Lords refused.