Landlord and tenant – Breach of covenant – Determination by first-tier tribunal – Appellant landlord obtaining determination under section 168 of Commonhold and Leasehold Reform Act 2002 that respondent in breach of covenants in lease – Tribunal later dismissing second application brought in reliance on different breach – Whether breach established – Whether second application an abuse of process – Appeal allowed
In May 2003, the appellant housing co-operative let a flat in a building in London SW8 to the respondent on a weekly tenancy. The tenancy conditions included a requirement that the appellant be a member of the co-operative throughout the tenancy. In September 2013, the respondent was expelled from membership by a general meeting under the rules of the co-operative. The appellant then applied to the first-tier tribunal (FTT) for a determination, under section 168 of the Commonhold and Leasehold Reform Act 2002, that the respondent had been in breach of the covenants in the lease, that being a necessary precursor to issuing a notice under section 146 of the Law of Property Act 1925 seeking forfeiture of the lease. That was the second such application made by the appellant; on an earlier application, the FTT had previously decided that the respondent had been in breach of a covenant against using the premises for illegal purposes, causing a nuisance and also having pets on the premises.
Dismissing the second application, the FTT held that the respondent was not in breach of the tenancy conditions where he had been expelled from the co-operative against his will and had not himself taken any steps to relinquish his membership. It also took the view that the second application was an abuse of process since it relied on a ground of which the appellant knew at the time of the earlier application; the FTT expressed concerns as to why the application was being brought at all, given that the length of time since the previous determination and the second application suggested that the appellant was not aware of any current breach.
On appeal from that decision, the appellant contended that the FTT’s decision was wrong and that it could not be an abuse of process to seek a determination as to a breach of covenant which was different from the breach which had already been determined by a differently constituted FTT. The respondent conceded that he had ceased to be a member of the co-operative and that the reason for the cessation of membership was irrelevant to the issue of breach of the tenancy conditions; he also conceded that the appellant’s second application was not an abuse of process.
Held: The appeal was allowed.
The respondent’s concession in relation to his membership of the co-operative was correctly made. By the time of the FTT’s decision, the respondent was no longer a member of the co-operative and, as a matter of fact and law, he was therefore in breach of the tenancy conditions. The appellant was entitled to the determination which it sought and, if it so chose, to issue a section 146 notice. Thereafter, the appellant could apply for forfeiture of the lease, in respect of which the respondent would be entitled to make an application for relief from forfeiture.
As the respondent had also conceded, it would be inappropriate to describe the appellant’s second application as being an abuse of process since there was nothing wrong, in principle or in law, with a landlord seeking to utilise whatever powers or rights it had to seek to forfeit a lease. There were two distinct types of breach in the instant case: first, breaches by illegal use and anti-social behaviour as determined in the earlier application; and second, the breach by expulsion determined by a differently constituted FTT on the second application. The practical reason why the expulsion ground was not before the first FTT was that it had occurred subsequent to the issuance of the earlier application, and the first hearing before the FTT had taken place at a time when the co-operative’s own internal appeal procedure had not yet been exhausted, so that it was not yet known whether the issue of expulsion would be upheld. The appellant’s appeal should be allowed accordingly.
Even without the respondent’s concession, the outcome of the appeal would have been the same. The question before the FTT on both occasions was the straightforward question of whether or not there had been a breach of covenant. What happened subsequent to that determination was partly in the gift of the landlord, namely whether or not a section 146 notice should be issued and then whether possession proceedings should be issued before the county court. It was also partly in the gift of the county court, which, if and when the application for possession came before it, would decide whether possession should be granted or the forfeiture relieved. Those events were of no concern to, and were pure conjunction and speculation by, the FTT. The motivations behind the making of applications, provided that they were properly made in the sense that they raised the question of whether or not there had been a breach of a covenant in a lease, were of no concern to the FTT. The whole purpose of an application under section 168 was to leave those matters to the landlord and the county court, who could proceed in the knowledge that the FTT had determined that there was a breach.
Concerns as to why the appellant was relying the expulsion ground for forfeiting the lease, when it had not served a section 146 notice after the FTT’s first determination, were a matter for determination by the county court in the light of the facts and circumstances then presenting to it. The court would take into account not only the conduct of the respondent but also the question of whether or not it would be appropriate to grant relief from forfeiture on terms that the respondent be given an opportunity to re-apply for membership of the co-operative.
Stephen Evans appeared as representative for the appellant; Sally Goldman, of Miramar Legal, appeared for the respondent.
Sally Dobson, barrister
Click here to read the transcript of Vine Housing Co-operative Ltd v Smith
