SHEFFIELD CITY COUNCIL v LISA HOPKINS [2001] EWCA Civ 1023

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM SHEFFIELD COUNTY COURT
(HIS HONOUR JUDGE BARTFIELD)
[2001] EWCA Civ 1023Case No B2/2000/3797Venue Royal Courts of Justice, The Strand, London, Tuesday 19 June 2001
Between
SHEFFIELD CITY COUNCILAppellant/ClaimantLISA HOPKINSRespondent/Defendant
Before
Lord Chief Justice of EnglandLord Woolf of BarnesLord Justice TuckeyLady Justice ArdenMR BRIAN McGUIRE and MR THOMAS TYSON (instructed by the City Solicitor, Sheffield City Council, Sheffield S1 2HH) appeared on behalf of THE APPELLANTMR KIM LEWISON QC and MR JAMES STARK (instructed the Law Centre, Sheffield S3 8GW) appeared on behalf of THE RESPONDENTDate 19 June 2001
[1]Tuesday 19 June 2001 THE LORD CHIEF JUSTICE: This is a second appeal which is brought before this court as a result of permission being granted by Arden LJ. For the purposes of this judgment I will set out the background to the issues which are before us, relying substantially on her clear analysis of the background to the appeal, for which I am most grateful. The Background[2]The appeal comes before this court from an order of His Honour Judge Bartfield made on 7 December 2000, dismissing the appeal from the judgment of District Judge Oldham given on 2 November 2000. In his judgment of 7 December 2000, the judge relied on the reasoning of the district judge. It is therefore not necessary to refer to his judgment, other than to indicate that he thought the issue was worthy of appeal. However, he was unable to give permission to appeal, this being a second appeal.[3]The proceedings arise out of an order for possession which was made in respect of a secure tenancy of 571 Martin Street, Sheffield, the tenancy having been granted by Sheffield City Council (the appellant) on 30 August 1999. Since the tenant (the respondent) moved there, complaints had been made about her conduct relating to the keeping of animals at the property. The respondent was sent written warnings concerning these complaints in October, November and December 1999. In December 1999, the appellant sent a written warning to the respondent, notifying her that proceedings for rent arrears may be taken as no payments of rent had been made.[4]On 24 February 2000, the appellant issued a summons for possession of the property. Attached to the particulars of claim was the schedule of the respondent's rent account history showing that no repayments had ever been made.[5]On 3 July 2000, District Judge Hawksworth made an order for possession suspended on terms which required the respondent to give possession on 31 July 2000 unless she paid the current rent and a specified amount off the arrears, the first of such payments to be made on 10 July 2000. The terms were not complied with. A request for a warrant of possession was issued by the appellant on 10 August 2000. The respondent then issued an application seeking suspension of the warrant for possession. She explained her reasons for non-compliance with the order of 3 July as being due to illness and depression.[6]At the hearing on 20 September 2000, the appellant made representations in support of an application to adduce evidence that, in addition to her failure to pay the arrears of rent, the tenant was guilty of nuisance.[7]The arguments which were advanced raised issues as to the extent of the discretion of the court permitted by section 85 of the Housing Act 1985 to which it will be necessary to refer later. By an application dated 5 October 2000, the respondent applied for an order that there should be a preliminary hearing on the legal issue as to whether matters other than non-payment of rent could be raised in proceedings where the issue was the suspension of execution. District Judge Oldham, before whom the matter came, concluded that it was not appropriate in the circumstances to consider any matter other than the default of the tenant in relation to rent. Towards the conclusion of his judgment he said:
"It seems to me that there is merit in the Defendant's argument. Where the Act has laid down a regulatory mechanism, one cannot look in isolation at parts of that mechanism. There is an obligation to be specific. Only on grounds specified in a notice can the court make an order. If then, a warrant is issued and an application is made to suspend it, it is not logical to allow the whole history to be opened up, nor is there any support for that contention in the statute. It is not surprising that there is a power and discretion in rent cases to impose other conditions if appropriate. It is not logical to look at matters not relevant to the ground and to allow the landlord to rely on matters not in the proceedings up to then."
[8]He added:
"For these reasons in the circumstances of this case, the consideration of suspension of the warrant should relate only to the original ground and not extend to matters that are outside those grounds."
Resolving the Issues[9]On the issue in relation to which the district judge gave his decision, there is no previous authority from a higher court. However, two County Courts decisions have been placed before us: Islington London Borough Council v Reeves (LAG Bulletin, June 1997) and Hammersmith and Fulham London Borough Council v Brown (Current Law, May 2000), in which this very same issue was dealt with by County Courts which took diametrically different views.[10]In my judgment, the issue has to be resolved by considering the terms of the relevant provisions, namely Part IV of the Housing Act 1985. We have had the advantage of helpful argument by Mr Brian McGuire on behalf of Sheffield City Council, and by Mr Kim Lewison QC (who did not appear in the courts below). Mr Lewison submits that it is necessary to treat Part IV of the Housing Act as containing a code. I agree that that is the correct approach. Part IV commences with section 79 which deals with secure tenancies, with which we are here concerned. Section 80 identifies social landlords such as Sheffield City Council. Section 81 identifies the tenants in which Part IV applies. Section 82 sets out the nature of a tenancy which is granted security by the Act. It states that a secure tenancy to which Part IV applies cannot be brought to an end by the landlord except by obtaining an order of the court for the possession of the dwelling house or an order under subsection (3) of that section. Subsection (2) provides:
"Where the landlord obtains an order for the possession of the dwelling-house, the tenancy ends on the date on which the tenant is to give up possession in pursuance of the order."
[11]Section 83 sets out the importance of notice being given to the tenant before proceedings for possession are commenced. Mr Lewison emphasises that section 83 makes it clear that if proceedings for possession follow the giving of the notice, those proceedings are usually controlled by the notice which has been given to the tenant prior to the commencement of the proceedings. Section 83 so far as relevant provides:
"(1) The court shall not entertain proceedings for the possession of a dwelling-house let under a secure tenancy or proceedings for the termination of a secure tenancy unless -- (a) the landlord has served a notice on the tenant complying with the provisions of this section, or (b) the court considers it just and equitable to dispense with the requirement of such a notice. (2) A notice under this section shall -- (a) be in a form prescribed by regulations made by the Secretary of State; (b) specify the ground on which the court will be asked to make an order for the possession of the dwelling-house or for the termination of the tenancy, and (c) give particulars of that ground. (3) Where the tenancy is a periodic tenancy and the ground or one of the grounds specified in the notice is Ground 2 in Schedule 2 (nuisance or other anti-social behaviour), the notice -- (a) shall also -- (i)state that proceedings for the possession of the dwelling-house may be begun immediately, and (ii)specify the date sought by the landlord as the date on which the tenant is to give up possession of the dwelling-house...."
[12]It will be noted that those provisions refer to the ground on which the court is to be asked to make an order. Mr McGuire on behalf of the City Council attaches importance to the use of the term "ground". As we will see later, he does so because there is a distinction between the ground on which the court is asked to make an order and the question of whether the court is prepared to make an order which involves consideration as to whether it is reasonable to do so.[13]I pass over section 83A, which contains additional requirements, and go to section 84 which deals with grounds and orders for possession. Subsection (2) provides:
"The court shall not make an order for possession -- (a) on the grounds set out in Part I of that Schedule (grounds 1 to 8), unless it considers it reasonable to make the order [my emphasis]...."
[14]Subsection (3) provides:
"Where a notice under section 83 has been served on the tenant, the court shall not make such an order on any of those grounds above unless the ground is specified in the notice; but the grounds so specified may be altered or added to with the leave of the court."
[15]It will be seen that the provisions to which I have referred so far bear out Mr Lewison's submission that identification of the ground is an important part of the code leading to the court considering whether or not to make an order for possession.[16]Section 85 so far as relevant provides:
"(1) Where proceedings are brought for possession of a dwelling-house let under a secure tenancy on any of the grounds set out in Part I or Part III of Schedule 2 (grounds 1 to 8 and 12 to 16: cases in which the court must be satisfied that it is reasonable to make a possession order), the court may adjourn the proceedings for such period or periods as it thinks fit. (2) On the making of an order for possession of such a dwelling-house on any of those grounds, or at any time before the execution of the order, the court may -- (a) stay or suspend the execution of the order, or (b) postpone the date of possession, for such period or periods as the court thinks fit. (3) On such an adjournment, stay, suspension or postponement the court -- (a) shall impose conditions with respect to the payment by the tenant of arrears of rent (if any) and rent or payments in respect of occupation after the termination of the tenancy (mesne profits), unless it considers that to do so would cause exceptional hardship to the tenant or would otherwise be unreasonable, and (b) may impose such other conditions as it thinks fit. (4) If the conditions are complied with, the court may, if it thinks fit, discharge or rescind the order for possession."
[17]It is section 85 with which this appeal is primarily concerned. Mr McGuire argues that there is no qualification on the discretion which the court is given by section 85(2) as to the staying or suspending of the execution of an order, or postponing the date of possession. He submits that it would be wrong to read into the terms of section 85(2) any qualification which is not expressed by the legislature. He submits that it is perfectly appropriate for a court to make an order for possession subject to a condition and on breach of that condition to take into account the sort of conduct on the part of the tenant relied upon here by the City Council, even though the grounds on which the order was made was confined to the non-payment of rent. He points out, in support of his contention, that the terms of section 85(3) cover the very position that he submits arises for consideration here. There is an obligation placed upon the court, when considering the sort of application which was before District Judge Oldham, to impose a condition with regard to the payment of arrears of rent and a discretion to make such other conditions as the court thinks fit. Furthermore, he argues that if the respondent's contentions are right, that would be to the disadvantage of the tenant. The tenant might want the court to deal with other favourable matters. For example, he says that, for reasons quite unconnected with rent, the tenant might want an order for possession made at a postponed date to suit the tenant's convenience. He submits that it is desirable that the court's discretion should be as wide as possible to accede to applications on behalf of the tenant. He also refers to section 85(4), where the widest discretion is given to the court to discharge or rescind orders for possession. He submits that the use of the words "as the court thinks fit" in subsections (2), (3) and (4) indicate a wide degree of discretion in the court.[18]Mr Lewison, on the other hand, says that when the matter is looked at as a whole the position is that the same specific approach indicated by section 83 should also be applied in the exercise of the discretion conferred on the court by section 85.[19]A question which arose in the course of argument was the court's approach when considering an application for possession as to the requirement of reasonableness. If a landlord is seeking to recover possession on the grounds that there has been non-payment of rent, when considering the question of reasonableness can the court be asked to conclude that it is reasonable to make an order for possession relying on matters other than the defaults in the payment of rent?[20]The dual requirements of a ground for possession or (as it then was described) a "case" for possession and the need for it to be reasonable to make an order existed under the Rent Acts and is well established within that legislation. It is accepted by both sides that the discretion of the court with regard to reasonableness under the Rent Acts is not limited to circumstances connected with the case which is relied on for seeking possession. This is supported by the decision in Cumming v Danson [1942] 2 All ER 653, to which we have been referred.[21]In relation to the Housing Act 1985, there has been a decision of this court in Darlington Borough Council v Sterling 29 HLR 309, 316, in which in the course of his judgment Mummery LJ took the same view as to the requirement of reasonableness in Part IV of the Housing Act 1985. However, it is not clear from the judgment or from the report that the arguments on which Mr Lewison relies were ever considered by the Court of Appeal in relation to the issues which were before it. It is relevant to note that the members of the court were Millett and Mummery LJJ who can speak with considerable authority on the issues which were before them. The relevance of the Darlington case is no more than that if the court's discretion in relation to reasonableness is not confined by the ground upon which possession is sought, it is difficult to see how the same is not true in respect of the subsequent discretion given to the court under section 85(2).[22]Under section 85(2) I have little doubt that the legislation did not seek to confine the discretion of the court to facts connected to the ground which was relied upon for initially seeking possession. Nor is the court restricted to the ground on which the order is made. It would be very unfortunate if the position were otherwise. There could be matters occurring subsequent to the order for possession which make it very clear that it would be wrong to suspend or stay the execution of an order for possession. The consequence of Mr Lewison's submission if that were to happen would e that the only remedy that the landlord could have would be to seek a new order for possession if the court were to suspend or stay the execution of the order which had already been made because they were not able to take into account the new material which had arisen since the order for possession was made.[23]In Part IV of the Housing Act we are concerned with social landlords who often have to deal with the problems of large housing estates. There may be many situations where considerable inconvenience and disturbance is caused as a result of tenants not complying with the ordinary standards which can be expected of those living in an urban setting. In my judgment, it was not the intention of Parliament that a social landlord should be required to rely upon unnecessary grounds in order to obtain an order for possession just in case subsequently they would need to rely on a further ground in order to avoid a suspension or stay of the execution of the order.[24]In the course of argument we were taken to Burrows v Brent London Borough Council [1996] 1 WLR 1448 in which the House of Lords considered a different issue from that which is before us today. However, in the approach both of Lord Browne-Wilkinson and Lord Jauncey of Tullichettle there is an examination of the code of the legislation with which we are concerned. Following their approach, I find nothing which is inconsistent with my conclusion that here the argument of the City Council is correct and the argument of the tenant is incorrect as to the extent of the discretion which a district judge has when faced with the decision to suspend or stay the execution of an order for possession which has been made.[25]However, the fact that an order for possession is made on one ground does not prevent a district judge from considering issues which do not fall within that ground does not mean that a district judge is always required to allow a landlord to rely on matters of a different nature in opposing an application to suspend or stay execution. It is clear as a matter of fairness that there can be circumstances where it would be quite wrong for a district judge to allow that to happen. If the code contained in the Housing Act is looked at as a whole, it can be seen that there are steps which can appropriately be taken by a landlord which would be unlikely to cause disadvantage to the landlord but would make the position clear to the tenant as to what was required of him in the circumstances.[26]The difficulty created by the approach argued for by Mr Lewison is that the landlord would be required, in circumstances where it was undesirable and would lead to delay and expense, to include additional grounds other than the obvious ground merely as a precaution. However, although that result is to be avoided, it would be perfectly appropriate for a landlord to give informed notice to a tenant (and those who represent the tenant) that although certain matters were not going to be relied on as a basis for an order for possession, if the court decided to make an order for possession the landlord would ask the court to impose a condition to prevent the conduct referred to taking place thereafter. This would be particularly appropriate where the fear is nuisance or annoyance. The condition should be sufficiently specific and clear for the tenant to be in no doubt as to the conduct that would constitute a breach of the condition. Mr Lewison submitted that if that course were to be taken, it would be important that the court should not accede to an application unless there was sufficient material to satisfy the court as to the propriety of the application for the imposition of the condition. He drew an analogy with the evidence which would be required for an interim injunction. There would have to be some prima facie evidence that there had been conduct on the part of the tenant which justified the imposition of the condition.[27]I am sympathetic to that approach. It would not need formal evidence, but if the appropriateness of the condition was in issue it would require the production of some material which would satisfy the court that the application for the imposition of the condition was justified. Judges can be relied upon to see that conditions are not unnecessarily imposed. The advantage of a condition would mean that if it was alleged that there was a breach of the condition, the matter could be adjudicated upon readily against the terms of the order which had been made.[28]I also consider that it is very important, if there are matters which are relied upon for saying that an order for possession should be the subject of further discretionary relief under section 85, that the tenant has proper notice of any allegations which are going to be made by the landlord and has the opportunity to deal with them. In considering whether an opportunity has been given to deal with the issues, the realities in a County Court must be recognised. It is especially important that district judges should not be placed in a position where they have to conduct other than the type of summary hearing that section 85 contemplates.[29]In order to try and assist district judges who have this important jurisdiction to exercise, I would seek to give the following guidance. We are concerned here with a discretion of the district judge which as a matter of law is only circumscribed by the requirement of relevancy. What is relevant is not confined to the limited grounds of the original application for possession. However, it is important that there should be consistency in the way the discretion of individual judges is exercised. Accordingly, without seeking to fetter that discretion, I would suggest that it may be helpful to district judge if they bear in mind the following points:(a) The discretion should be used to further the policy of Part IV of the Housing Act 1985, reinforced as it is by Article 8 of the European Convention on Human Rights and the Human Rights Act 1998. Accordingly, the courts should bear in mind that that policy is one which involves evicting the tenant from his or her home only after a serious breach of the tenant's obligations has been established, when it is reasonable to do so, and the tenant has been proved to have breached any condition of the order for suspension.(b) The overriding principles contained in Part 1 of the Civil Procedure Rules, and in particular the need for applications to be dealt with in a summary and proportionate manner. These principles may mean that wider issues cannot be dealt with in the framework of an application to suspend the execution of a warrant and they have to be dealt with in some other way.(c) The need for the tenant to have clear notice of the allegations being made, even though the position is one where what is being relied upon is not contained in the order for possession which was originally made.(d) The fact that the claimant had or had not included allegations as part of the original proceedings or sought to have a condition inserted which covered the allegation in the order for possession which had previously been made. If a claimant has included an allegation as part of the original proceedings, or sought to have a condition inserted, then that will be in favour of the district judge exercising his discretion to take into account the material sought to be relied upon by the landlord in opposing the tenants' application to prevent execution.(e) Whether the allegation relates to events which occurred prior to the order for possession being made. While allowance must be made for the fact that the local authority may not have wanted to have the expense of complex and contested proceedings, generally the discretion should be more readily exercised in favour of taking into account matters which had occurred subsequent to the order for possession being made than it would be if they relate to matters prior to the proceedings being commenced.(f) The practicality of dealing with contested issues of fact on a hearing for suspension etc of a warrant for execution.(g) The fact that the tenant is at mercy and the responsibilities of a public landlord to their other tenants.[30]The considerations which I have indicated should be borne in mind are not exhaustive of the circumstances which will be relevant. District judges have to exercise their discretion in a sensible and reasonable way, bearing in mind both the importance of the issue before them to the tenant who is at risk of losing his or her home, and the responsibilities of a social landlord to other tenants for whom the social landlord is responsible.[31]Before I turn to my conclusions on the present appeal, there is one further argument to which I should refer. Mr Lewison submitted that for the approach of the court to be that which I have indicated, in certain situations could result in consequences for the tenant which contravene Article 6 of the European Convention and therefore also contravene the Human Rights Act 1998. He submitted that if there was a condition which required the tenant not to behave in a particular manner, this could result in an order for possession being executed without the tenant being aware that this was proposed and therefore without the tenant being able to exercise the opportunity given to the tenant by section 85 to apply for an order for a stay or suspension of the execution at any time before execution of the order. He took as an example a tenant who at the critical time was away on holiday. This is a matter which was not fully explored in the course of argument before this court. We were not referred to authorities which may be relevant on this issue. However, for present purposes it is sufficient to indicate that if there was to be any contravention of Article 6 as a result of the matters on which Mr Lewison relies and to which I have just referred, then the remedy is not to interfere with the working of the code as I have indicated it in the course of this judgment, but for the court to use its powers to ensure that the Article 6 rights of the tenant so far as relevant are protected by the courts ensuring that the disadvantage to which Mr Lewison referred would not prejudice the tenant. How that would be achieved is best assessed in the course of proceedings where that issue arises. It does not arise directly, in my judgment, for consideration before us today since the tenant has made an application. The issue with which we have dealt is a different issue, and I say no more on the subject.What should happen as a result of our differing from the view expressed by the district judge? It was suggested in the course of argument that this is a matter upon which this court could appropriately come to a conclusion. The merits were not considered by the district judge and therefore we could exercise our powers to consider the merits. I do not doubt that we have the ability to do that. However, where the district judge was merely being asked to determine a preliminary issue, it is more appropriate that the issues should be returned to the Sheffield County Court so that a determination on the facts can be made. The judge who has the duty of dealing with that determination will no doubt take into account the views expressed in the course of this judgment.[32]I would therefore allow the appeal and make the appropriate order that the case be remitted to the Sheffield County Court.

LORD JUSTICE TUCKEY: I agree.

LADY JUSTICE ARDEN: I also agree.

[35]ADDENDUM

THE LORD CHIEF JUSTICE: In seeking permission to appeal from our decision, Mr Lewison, correctly, drew the attention of the court to the fact that in my ex tempore judgment I had not dealt with his argument that the exercise of discretion should follow the well-established practice in the analogous situation of granting a tenant relief against forfeiture for non-payment of rent. In such a situation, the conduct of the tenant is regarded as irrelevant. (See Bland v Ingrams Estates Ltd [2000] 2 WLR 1638 at page 1650.) The court had in fact considered this point but did not consider that it would be right to follow that approach on an application where what was being sought was a stay or suspension of execution of an order of the court for possession under a separate statutory code. However, the court considered that Mr Lewison's argument emphasised the importance of the judge when exercising discretion taking into account the policy of the statutory code. Tuckey and Arden LJJ agree this addition to the judgment.

ORDER

(Not part of judgment) Appeal allowed; the matter to be remitted to the district judge for further directions as to the hearing of the defendant's application to suspend the warrant of possession; the full costs of this appeal which have been incurred by the appellant are to be determined by a Costs Judge; the respondent, a party who was in recept of services funded by the Legal Services Commission do pay the appellant a nil contribution; there be a detailed assessment of the costs of the appellant which are payable out of the Community Legal Service Fund; permission to appeal refused.

Cited in 4 later judgments