Licence — Homeless person — Local authority providing accommodation in hostel — Accommodation stating to be under licence — Notice terminating licence to occupy — Local authority’s possession order overturned on tenant’s appeal — Local authority appealing to House of Lords — Whether secure tenancy or licence to occupy — Whether necessity for exclusive possession applying to licence as to tenancy — Appeal allowed
The appellants, Westminster City Council, provided accommodation for the respondent, C, pursuant to their duties under the Housing Act 1985, on the ground that C was homeless and that he had a priority need under section 59 of the Act. The accommodation was provided in a terrace of houses, 131-137 Cambridge Street, London SW1, which premises were used by the council as a hostel. There were 31 single rooms and limited cooking facilities for single homeless men. There was a warden and a social work team and the hostel was generally intended to be a halfway house. C entered into an agreement, addressed to him, entitled “Licence to occupy”. It set out the conditions of the licence, the undertakings by the licensee, and stated in terms that “this licence does not give you… any of the rights … of a tenant nor does it give you the right of exclusive occupation of any particular … room …”. After C was given notice to terminate, he claimed to be a secure tenant under section 79 of the 1985 Act. The trial judge, in possession proceedings, made an order in favour of the council. In an appeal to the Court of Appeal, it was held, following an earlier decision of that court in Family Housing Association v Jones [1990] 1 WLR 779, that section 79(3) must have been intended to alter the law and to confer the status of a secure tenant on a licensee who did not necessarily enjoy exclusive possession. The council appealed to the House of Lords. Section 79 provides: “(1) A tenancy under which a dwelling-house is let as a separate dwelling is a secure tenancy at any time when the conditions described in sections 80 and 81 as the landlord condition and the tenant condition are satisfied… (3) The provisions of this Part apply in relation to a licence to occupy a dwelling-house (whether or not granted for a consideration) as they apply in relation to a tenancy”.
Held The appeal was allowed
1. If the submission were correct that section 79(3) applied to any licence to occupy a dwelling-house irrespective of exclusive possession, it would confer security of tenure on a lodger and on a variety of licensees contrary to the language of the section, which applied the provisions of Part IV of the Act to a licence “as they apply in relation to a tenancy”. Part IV applied only to a tenancy of a dwelling-house let as a separate dwelling, namely with exclusive possession. Part IV therefore applied to a licence which had the same characteristics. A tenant or licensee could claim to be a secure tenant only where he had been granted exclusive possession of a separate dwelling-house, which included essential living rooms providing the necessary facilities for living, sleeping and cooking, under the Rent Acts.
2. The Rent Acts did not apply to a licence and section 48 of the Housing Act 1980 (the predecessor of section 79(3)) was enacted at the time when some private landlords granted exclusive possession of residential accommodation in the form of a licence. Section 48 of the 1980 Act made clear that such a licence created a secure tenancy and Street v Mountford [1985] 1 EGLR 128 reaffirmed the general principle that a grant of exclusive possession of residential accommodation at a rent created a tenancy protected by the Rent Acts notwithstanding that the parties intended to grant a licence and not a tenancy. In the Family Housing case, it was stated that section 79(3) was intended to alter the law and to confer the status of a secure tenant on a licensee who did not enjoy exclusive possession. In the instant case, the Court of Appeal had felt bound to follow that decision. However, section 79(3) had not altered the law. It was a consolidating measure and on its true construction and on the true construction of section 48 of the 1980 Act, whether considered together or separately, a licence could create a secure tenancy only if it conferred exclusive possession of a dwelling-house.
3. In considering the question of whether there had been a grant to C of exclusive possession by the council, such a grant would be inconsistent with the purposes for which the council provided their accommodation at the hostel. The council had legitimately and effectively retained for themselves possession of C’s room and his rights corresponded to those of a lodger. In providing accommodation for vulnerable persons, it was highly undesirable for the council to grant to any occupier a room with exclusive possession as the council needed to use all the rooms of the hostel in the interests of every occupier. C was not entitled to any particular room under the licence and its provisions were there to enable the council to discharge their responsibilities and not in order to avoid the creation of a secure tenancy.
4. The case depended on the nature of the hostel that the council maintained and would not allow a landlord, private or public, to free himself from the Rent Acts or from the restrictions of a secure tenancy merely by adopting or adapting the language of a licence to occupy.
Andrew Collins QC and Jonathan Ferris (instructed by the solicitor to the council) appeared for the appellants, Westminster City Council; and Stephen Sedley QC and Stephen Cottle (instructed by Christian Fisher & Co) appeared for the respondent.
