Local Government and Housing Act 1989, Part VIII – Application for renovation grant – Tenancy not executed by deed and taking effect as equitable interest only – Whether tenant having owner’s interest – Whether equitable interest capable of being a term of years absolute – Council refusing application – High Court quashing council’s decision – Appeal dismissed
On July 5 1994 the applicant and her ex-husband were granted an assured shorthold tenancy of 24 Shipton Street, London, for a term of 10 years. The agreement was not executed by deed and, accordingly, only took effect as an equitable interest. In 1995 she sought a renovation grant under Part VIII of the Local Government and Housing Act 1989. By virtue of section 104(1) of the 1989 Act “a local housing authority may not entertain an application for a grant . . . unless they are satisfied that – (a) the applicant has, or proposes to acquire, an owner’s interest . . . on which the relevant works are to be carried out; . . .”. By subsection 2 “owner’s interest” was defined as “an interest which – (a) is held by the applicant alone or jointly with others; and (b) is either an estate in fee simple absolute in possession or a term of years absolute of which not less than five years remain unexpired at the date of the application”.
The council refused the application, even though the applicant had a term of years of which not less than five years remained unexpired, on the ground that the applicant only had an equitable interest that did not amount to a legal term within subsection (2) and, accordingly, did not have an owner’s interest. The applicant sought judicial review of the council’s decision. The High Court quashed the council’s decision holding that the applicant had an interest that, for all practical purposes, was as good as a legal interest, and there was no reason to exclude her from a grant on that ground alone. The council appealed contending that parliament had chosen to use the word “owner”, and it chose to import the concepts of fee simple absolute in possession and of term of years absolute when those interests are the only estates capable of existing at law: section 1(1) of the Law of Property Act 1925.
Held The appeal was dismissed.
The definition of “estate owner” in section 1(4) of the 1925 Act made it clear that it referred to the owner of a legal estate. That definition was not imported into the 1989 Act. Section 1(1) of the 1925 Act only referred to those estates that were “capable” of existing at law, and it did not exclude equitable estates corresponding to those legal estates. It would have been surprising if parliament had intended to distinguish between legal and equitable leases in the 1989 Act. Therefore, the applicant did have an “owner’s interest” within section 104(1) of the 1989 Act.
Ashley Underwood (instructed by the solicitor to Tower Hamlets London Borough Council) appeared for the appellant council; Tracey Bloom (instructed by McMillen Hamilton McCarthy) appeared for the respondent.
Thomas Elliott, barrister
