Secure tenancy – Water charges – Non-payment – Local authority landlords varying tenancy agreement to collect water charges as part of rent on behalf of utilities company – Appellant tenant refusing to pay charges – Respondent landlord obtaining suspended possession order – Whether agreement ultra vires – Whether variation unfair and ineffective – Whether making of possession order unreasonable — Appeal dismissed
The appellant was the secure tenant of a property owned by the respondent local authority. In 2005, the respondents entered into an agreement with a utilities company, pursuant to the Water Consolidation (Consequential Provisions) Act 1991, to collect, on its behalf, the water charges for supplying water and sewerage services to their residential properties.
The respondents sent a preliminary notice of that matter to their tenants and invited comments by a fixed date. In 2007, the appellant ceased to pay his water charge to the respondents and arrears of £1,451 accrued. The respondents obtained an order for possession of the property on that ground, suspended on terms that the appellant paid his rent and £5 per week towards the arrears of unpaid water charges.
The appellant appealed against the possession order. He contended that: (i) the agreement was ultra vires, since the utilities company had not been involved once the water had been paid by the respondents, leaving a bipartite arrangement between the respondents and their tenants; (ii) the purported variation of the tenancy agreement was ineffective because the respondents had failed to comply with the statutory requirements of section 103 of the 1985 Act with regard to the variation of secure tenancies; (iii) the variation was ineffective under the Unfair Terms in Consumer Contracts Regulations 1999 since it rendered the tenants liable to eviction; and (iv) in any event it had been unreasonable for the judge to make a possession order.
Held: The appeal was dismissed.
(1) The utilities company remained the water undertaker. Irrespective of whether it was strictly a matter of agency, the respondents had merely agreed to collect the water charges on behalf of the company. It was not relevant that, by agreement, the respondents paid the company in bulk and at different times from its weekly collections: Lambeth London Borough Council v Thomas (1998) 30 HLR 89 considered.
(2) What amounted to a sufficient statement of the effect of a variation depended on the circumstances. A full statement of the possible consequences of a breach was not required and a landlord could have regard to what its tenants would reasonably understand. In the instant case, the tenants had been informed that the obligation to pay water charges to the respondents would have the same effect as the obligation to pay rent: London & Clydeside Estates Ltd v Aberdeen District Council [1980] 1 EGLR 11; (1979) 253 EG 1011, R v Secretary of State for the Home Department, ex parte Jeyeanthan [2000] 1 WLR 354 applied. The appellant had known that he might be evicted if he did not pay a charge. Where the information provided had enabled the tenants to enter into a dialogue concerning the proposed variation, it was difficult to say that the respondents had failed to meet their statutory obligations.
(3) A term that was authorised by a statutory power, which related back to the time when water rates were collected through tenancy agreements, was unlikely to be unfair. Although the term was imposed unilaterally, statute also provided the procedure for doing so, thus ensuring that sufficient information about the proposed variation was provided in advance, for the purpose of consultation. The relevant term imposed an obligation to pay water charges to the respondents for water services that the tenants obtained from the utilities company. No unfairness could arise in paying for such charges on an assessed basis. R (on the application of Khatun) v Newham London Borough Council [2004] EWCA Civ 55; [2005] QB 37 and Director General of Fair Trading v First National Bank plc [2001] UKHL 52; [2002] 1 AC 481 considered.
Accordingly, the variation had not created a significant imbalance. The matter was dealt with openly, in accordance with statutory powers and requirements, after consultation, and democratically. No advantage had been taken or sought to be taken of the tenants affected by the change. The position in which the appellant found himself was not due to some unfair advantage being taken of him, but because he had refused to pay water charges: UK Housing Alliance (North West) Ltd v Francis [2010] EWCA Civ 117; [2010] 2 EGLR 81; [2010] 18 EG 100 considered.
(4) The judge had not erred in concluding that it was reasonable to make a suspended possession order. The condition imposed had allowed the appellant almost six years to pay the arrears. The court had no reason to interfere with his exercise of discretion.
Martin Westgate QC and Lindsay Johnson (instructed by Rochdale Law Centre) appeared for the appellant; Andrew Arden QC and Andrew Dymond (instructed by the legal department of Rochdale Borough Council) appeared for the respondents.
Eileen O’Grady, barrister
