Manchester City Council v Benjamin [2008] EWCA Civ 189

[2008] EWCA Civ 189

Case No B5/2007/1190

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

Venue ON APPEAL FROM MANCHESTER CITY COUNTY COURT

HHJ HOLMAN

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 13/03/2008

Before

LORD JUSTICE DYSON

SIR PETER GIBSON

SIR ROBIN AULD

Between

Manchester City CouncilAppellant

Dawn BenjaminRespondent

Terence Gallivan (instructed by The City Solicitor Manchester) for Appellant

Paul Whatley (instructed by Messrs Clifford Johnston & Co) for Respondent

Hearing Hearing date: 11 February 2008

Judgment

Sir Peter Gibson :

[1]This is an appeal by the Claimant, Manchester City Council (“the Council”), from the order made by His Honour Judge Holman on 17 May 2007 in the Manchester County Court whereby the Judge dismissed the Council’s claim against the Defendant, Dawn Benjamin, for possession of the property known as 11 Wintermans Road, Manchester (“the Property”), ordered the Council to convey the freehold of the Property to her pursuant to her exercise of the right to buy and ordered the Council to pay the Defendant’s costs. Permission to appeal to this court was refused by the Judge and, on the Council’s application to this court, by Pill LJ on the papers but, on a renewed application, was granted by Arden LJ.

The Facts

[2]The Property is a six-bedroom house. It had been let by the Council on a secure tenancy to the defendant’s father and mother in 1979. The Defendant and her four siblings also lived there. The father left in 1983. In March 2000 the tenancy was transferred into the mother’s sole name. The Defendant, who is 36, joined the Army in 1995. She has been a talented athlete, competing in the Olympic Games in 2000 and the Commonwealth Games in 2002. At the end of 2003 she left the Army to care for her mother, then seriously ill with cancer. The Defendant gave birth to a son in January 2004. She has been bringing the boy up as a single parent. The Defendant’s mother died on 12 December 2004. By then none of the Defendant’s siblings was in occupation of the Property.

[3]Following the death of her mother the Defendant applied to succeed to the tenancy of the Property. Initially the Council disputed the Defendant’s entitlement to succeed but it eventually accepted that she was so entitled and that she was the secure tenant of the Property.

[4]On 14 July 2005 the Council served a notice seeking possession in reliance on Ground 16 of Schedule 2 to the Housing Act 1985 (“the Act”), that is to say that the Property was more extensive than was reasonably required by the Defendant.

[5]In August 2005 the Defendant applied to purchase the Property under the right to buy provisions of the Act. The Council offered her an alternative property with two bedrooms in Chorlton.

The proceedings

[6]On 11 October 2005 the Council issued proceedings for possession of the Property. On 24 October 2005 the Defendant lodged a further application under the right to buy provisions. On 28 March 2007 the Defendant counterclaimed for an order compelling the Council to convey the Property to her. The hearing commenced the next day before the Judge. At the hearing the Council offered not only the two-bedroom house previously offered but also two three-bedroom properties, all on the Chorlton estate. During the trial it came to light that the Property and all three of the properties offered by the Council to the Defendant as suitable alternative accommodation were to be the subject of a block transfer to a registered social landlord, Southway Homes, in October 2007.

[7]The court’s ability to grant the Council possession was governed by s. 85 of the Act. This provides, so far as relevant:

“(1) The court shall not make an order for the possession of a dwelling house let under a secure tenancy except on one or more of the grounds set out in Schedule 2. (2) The court shall not make an order for possession– … (c) on the grounds set out in Part III of that Schedule (grounds 12 to 16) unless it both considers it reasonable to make the order and is satisfied that suitable accommodation will be available for the tenant when the order takes effect; and Part IV of that Schedule has effect for determining whether suitable accommodation will be available for a tenant.”

[8]Schedule 2 specifies the grounds for possession of dwelling-houses let under secure tenancies. Ground 16 in Part III of that Schedule specifies a ground on which the court may order possession if it considers it reasonable and suitable alternative accommodation is available. Ground 16 is:

“The accommodation afforded by the dwelling-house is more extensive than is reasonably required by the tenant and– (a) the tenancy vested in the tenant by virtue of section 89 (succession to periodic tenancy), the tenant being qualified to succeed by virtue of section 87(b) (members of family other than spouse) and (b) notice of the proceedings for possession was served under section 83 (or, where no such notice was served, the proceedings for possession were begun) more than six months but less than twelve months after the date of the previous tenant’s death.” (a) the tenancy vested in the tenant by virtue of section 89 (succession to periodic tenancy), the tenant being qualified to succeed by virtue of section 87(b) (members of family other than spouse) and (b) notice of the proceedings for possession was served under section 83 (or, where no such notice was served, the proceedings for possession were begun) more than six months but less than twelve months after the date of the previous tenant’s death.”

[9]Further statutory provisions at the end of Ground 16 govern what the court must take into account in deciding whether it is reasonable to make an order on that Ground. They are:

“The matters to be taken into account by the court in determining whether it is reasonable to make an order on this ground include– (a) the age of the tenant, (b) the period during which the tenant has occupied the dwelling-house as his only or principal home, and (c) any financial or other support given by the tenant to the previous tenant.”

Those matters are not exhaustive, as the word “include” makes clear. (a) the age of the tenant, (b) the period during which the tenant has occupied the dwelling-house as his only or principal home, and (c) any financial or other support given by the tenant to the previous tenant.”

[10]The statutory provisions governing the suitability of alternative accommodation are contained in Part IV of Schedule 2. The relevant provisions are:

“1. For the purposes of section 84(2) … (c) (case in which court is not to make an order for possession unless satisfied that suitable accommodation will be available) accommodation is suitable if it consists of premises– (a) which are to be let as a separate dwelling under a secure tenancy, … and, in the opinion of the court, the accommodation is reasonably suitable to the needs of the tenant and his family. 2. In determining whether the accommodation is reasonably suitable to the needs of the tenant and his family, regard shall be had to– (a) the nature of the accommodation which it is the practice of the landlord to allocate to persons with similar needs; ... (d) the needs (as regards extent of accommodation) and means of the tenant and his family; (e) the terms on which the accommodation is available and the terms of the secure tenancy; … .” (a) which are to be let as a separate dwelling under a secure tenancy, … (a) the nature of the accommodation which it is the practice of the landlord to allocate to persons with similar needs; ... (d) the needs (as regards extent of accommodation) and means of the tenant and his family; (e) the terms on which the accommodation is available and the terms of the secure tenancy; … .”

[11]The Defendant conceded that the accommodation afforded by the Property was more extensive than was reasonably required by her. It was not in dispute that the conditions in paragraphs (a) and (b) of Ground 16 were also satisfied. At the trial there were two principal issues for the Judge to determine: (1) was the alternative accommodation offered by the Council to the Defendant “suitable” within the meaning of s. 85(2)(c) and (2) was it reasonable to make the possession order.

[12]On the first issue Mr Whatley, who appeared for the Defendant before the Judge as he does before us, submitted that if the Council obtained an order for possession the Defendant would lose her right to buy the Property and that as she would start afresh with a new tenancy of one of the alternative properties offered to her, she could not acquire the right to buy the alternative property immediately; further he argued that she could not be a secure tenant of the alternative property once transferred to Southway Homes because she would become an assured tenant rather than a secure tenant and would have the less advantageous right to acquire under the Housing Act 1996.

[13]It was at the conclusion of Mr Whatley’s closing speech that counsel then appearing for the Council sought and obtained an adjournment, after which the Council’s case was that by reason of paragraph 4 of Schedule 4 to the Act the Defendant could rely on her period of occupation of the Property since reaching the age of 16 and that on being granted by the Council a secure tenancy of one of the alternative properties she could exercise the right to buy that property. Schedule 4 contains provisions governing the qualifying period which is to be taken into account for the right to buy and the discount in the purchase price. I shall come back to paragraph 4 of the Schedule later, but at this stage it is sufficient to say that its literal terms enable a person in the position of the Defendant to count the period since she reached 16 as a qualifying period.

The Judge pointed to s. 121(1) of the Act which provides:

“The right to buy cannot be exercised if the tenant is obliged to give up possession of the dwelling-house in pursuance of an order of the court or will be so obliged at a date specified in the order.”

The Judge found it “difficult to go behind the clear provisions of section 121”. He concluded that if the possession order were made against the Defendant, it would have the effect of bringing the current tenancy to an end and her tenancy of any of the three alternative properties would begin afresh as she would not be able to carry forward the period of occupation of the Property to the new tenancy so as to qualify her for the right to buy the premises the subject of the new tenancy. He said that by the time of the transfer to Southway Homes in October 2007 the Defendant would not have acquired the requisite five year period of occupation to enable her to exercise the right to buy. He described that as “on any view a very significant detriment” and said that arguably of itself it rendered the alternative accommodation unsuitable.

[15]The Judge went on to consider paragraph 2 of Part IV of Schedule 2. On subparagraph (a) he found that Ray Spencer, a Community Support Officer who gave evidence for the Council, was silent about the practice of the Council when offering accommodation to those with needs similar to the Defendant. However the Judge said that that was of little moment because “Plainly it would not be the practice of a local authority to offer a property with four bedrooms, still less six, to a single parent with one child.” The Judge found that the Defendant had a genuine intention to proceed with fostering and that she appeared to possess the necessary attributes. The Judge concluded that looking at all the circumstances, the loss of the right to buy was the decisive point. Accordingly, he held that the alternative accommodation would not be suitable.

[16]On the second issue, the reasonableness of making an order for possession, the Judge reviewed the various points taken by the parties. He noted the Council’s arguments that(a) it needed the Property in order the better to deploy its housing stock and

(b) a significant number of families were waiting for a property the size of the Property. He criticised the evidence of Mr Spencer, saying that no reliance could be placed on Mr Spencer’s figures that there were 5 or 6 six-bedroom houses in the Council’s housing stock, that Mr Spencer could not give reliable figures as to how long people had been waiting on the waiting list and that Mr Spencer could not tell the court how many people wanted a six-bedroom property. The Judge relied on the remarks of Neuberger LJ, giving the only reasoned judgment in this court in Basildon District Council v Wahlen

[2006] 1 WLR 2744

, that while better deployment of housing stock is a valid consideration for a Council seeking a possession order, there must be a genuine and practical desire to improve deployment and the simple fact of losing a house under the right to buy provisions was an impermissible justification. The Judge, having observed Mr Spencer and noted his “unconvincing answers”, drew the inference that the Council’s wish not to lose a six-bedroom house from its housing stock was the main rationale of Mr Spencer’s position. The Judge, in considering the argument relating to the better deployment of the Council’s housing stock, took into account that the estate was to be transferred to Southway Homes.

[17]The Judge regarded the length of the occupation by the Defendant of the Property – 28 years – as an important feature. He noted that as well as caring for her mother in the last twelve months of her life the Defendant provided financial support in improving the Property, in that she had expended some £7,000. The Judge also took into account the Defendant’s exemplary character, and the fact that her exercise of the right to buy was genuine as was the intention to foster up to three children. He concluded:

“54. I have a balancing exercise to perform. On the evidence before me, the Claimant’s case, beyond the fact that, as matters currently stand, the Defendant does not need a six bedroom house, is not particularly strong. I remain of the view, even if I am wrong in my earlier conclusion about Right to Buy and the Defendant would be able to proceed to buy the alternative property immediately. The factors favouring the Defendant are more compelling, in particular (without detracting from the others) the length of occupation, the financial support to mother and the intention to foster. I therefore conclude that, even if the alternative accommodation were suitable, it would not be reasonable to make a possession order.”

[18]Pill LJ, in refusing permission to appeal on the papers, would have given permission if the issue on the suitability of the alternative accommodation had been decisive of the appeal. However, on the issue of the reasonableness of making a possession order, he said that having regard to the presence of material which was in the Defendant’s favour and to the margin of discretion which this court is required to give to the judge performing the balancing exercise, he did not consider that the Council’s prospects of success were sufficient.

[19]Arden LJ, in giving permission, also thought that there was a real prospect of success on the first issue. On the second issue she said that two considerations taken into account by the Judge, viz the transfer to Southway Homes and the evidence of Mr Spencer not being consistent with the Council having as its motivation the better deployment of housing stock, were arguably not considerations which ought to have been taken into account in the way in which they were taken into account.

[20]Before this Court Mr Gallivan for the Council submitted that the Judge erred on both issues.

Suitability

[21]On the first issue Mr Gallivan argued that the Judge confused two different questions: the circumstances in which the right to buy would arise on completion of the qualifying period and the circumstances in which the right to buy has arisen but cannot be exercised under s. 121(1). He submitted that the Judge should have held that in the event that he made an order for possession in respect of the Property, the Defendant would be unable to exercise the right to buy the Property, but that once a secure tenancy of suitable alternative accommodation had been granted to her, she would enjoy the right to buy in respect of that other property by virtue of paragraph 4 of Schedule 4.

[22]Mr Whatley pointed out that neither Schedule 4 nor the body of the Act dealt expressly with the issue of whether a tenant’s accrued time entitlement for the qualifying period survived the making of a possession order. He described that as a drafting lacuna on which the Council sought to rely. He submitted that the right to buy is a statutory personal right in the hands of a secure tenant, and that just as an order for possession serves to bring all aspects of a secure tenancy to an end (such that the right of a tenant to seek relief from forfeiture was also extinguished, as this court held in Artesian Residential Developments Ltd v Beck

[2000] QB 541

), so an order for possession will terminate all of the personal statutory rights in the hands of the tenant, including the right to buy. He said that this was expressly provided by s. 121. He argued that what was plainly not contemplated was that the accrued time entitlement should survive the making of a possession order and that had it been, it would have had to be the subject of specific legislative provision given what he called “the apparent inconsistency” with s. 121. In this context he referred us to two other statutory provisions. One is s. 121A(5)(c), providing that where an order suspending the right to buy in a case of anti-social behaviour is made, the order is not to affect the computation of any period in accordance with Schedule 4. The other is s. 171F restricting the making of possession orders against tenants protected either by the Rent Act 1977 or the Housing Act 1988 (in the latter case allowing a possession order where suitable alternative accommodation is or will be available to the tenant) unless the court is satisfied that the preserved right to buy under s. 171B will continue to be exercisable in relation to the new dwelling-house.

[23]Mr Whatley drew our attention to two cases in which the courts have regarded the extinction of the accrued time entitlement on the making of a possession order as uncontroversial. The first was Kensington & Chelsea RLBC v Hislop

[2004] HLR 434

in which Lindsay J mentioned some factors appropriate to be taken into account. At paragraph 22 he said:

“A factor which, in my view, is likely to tip the balance one way or another is that, if the right to buy prevails, then the landlord, if a local authority, loses the premises as part of its housing stock for ever whereas, upon a tenant being given alternative accommodation by a local authority, in many cases the right to buy on a tenant’s behalf will be once again available after an appropriate further period and will, in alleged under-occupation cases, then apply to premises which will less deplete the local authority’s available supply of space.”

[24]The second was Basildon District Council v Wahlen in which this court allowed the District Council’s appeal from the order of a District Judge enforcing the right to buy of a secure tenant who had succeeded to his mother’s secure tenancy. Neuberger LJ, with whom Moses LJ agreed, said this in paragraph 30:

“If the council obtains an order for possession, Mr Wahlen will have to move out of the house which has been his only home for 28 years, he will lose his otherwise unassailable right to buy that house at a discount, and, while he will acquire a tenancy of a new property which in due course he will be able to buy, any right to buy will be put off for five years, which would be likely (but not of course certain) to be financially disadvantageous.”

[25]The main point to which argument was directed on the first issue is what the Judge called the decisive point and that turns on a question of construction of the Act. As I see it, the right to buy which is conferred on a secure tenant by s. 118(1) of the Act is the right to buy the dwelling-house of which the secure tenant is the tenant. I read s. 121(1) as similarly providing that the right to buy the dwelling-house of which the secure tenant is the tenant cannot be exercised if the tenant is obliged to give up possession of that dwelling-house pursuant to a possession order. It does not purport to deal with the right to buy any other dwelling-house. S. 119(1) imposes the condition of the qualifying period which is to be taken into account for the right to buy to arise and the terms of Schedule 4 govern that condition.

[26]Schedule 4 provides– “1. The period to be taken into account–(a) for the purposes of section 119 … is the period qualifying, or the aggregate of the periods qualifying under the following provisions of this Schedule. Periods occupying accommodation subject to public sector tenancy 2. A period qualifies under this paragraph if it is a period during which, before the relevant time– (a) the secure tenant, or

(b) his spouse (if they were living together at the relevant time), or

(c) a deceased spouse of his (if they were living together at the time of the death), was a public sector tenant or was the spouse of a public sector tenant and occupied as his only or principal home the dwelling-house of which the spouse was such a tenant. … 4(1) This paragraph applies where the public sector tenant of a dwelling-house died or otherwise ceased to be a public sector tenant of the dwelling-house, and thereupon a child of his who occupied the dwelling-house as his only or principal home (the ‘new tenant’) became the public sector tenant of the dwelling-house (whether under the same or under another public sector tenancy).

Periods occupying accommodation subject to public sector tenancy

(a) or before another period within this paragraph,

[27]It is not in dispute that the Defendant’s mother was the public sector tenant of the Property nor that on the mother’s death the period since she reached 16 is a period during which she was a public sector tenant. The question is whether, if the Defendant becomes the secure tenant of an alternative property made available by the Council on the making of a possession order, she has the right to buy the alternative property because of the qualifying period which accrued in respect of the occupation of the Property.

[28]The statutory scheme is that if the secure tenant is to have the right to buy the freehold of the dwelling-house of which he is the tenant and the landlord is the freeholder, the conditions of Schedule 4 relating to the period to be taken into account for the purposes of s. 119 must be satisfied and that period must be of at least the number of years specified in s. 119(1). The minimum period in respect of a tenancy commencing before 18 January 2000 is 2 years and in respect of tenancies commencing after that date is 5 years. It is to be noted that the provisions are mandatory and that there is nothing in the language of s. 119 or Schedule 4 that expressly requires the qualifying period to be a period during which the secure tenant, either the original tenant or the tenant by succession to a deceased secure tenant, occupied the dwelling-house in respect of which he is given the right to buy as his only or principal home. It has not been argued by Mr Whatley that a term to the effect that the qualifying period must be a period of such occupation of the dwelling-house the subject of the right to buy is to be implied into s. 119 or Schedule 4. That being so, the “apparent inconsistency” between s. 121 and paragraph 4 of Schedule 4 does not exist. Whilst s. 121 destroys the secure tenant’s right to buy the dwelling-house made the subject of a possession order, it says nothing about the right to buy another dwelling-house not the subject of a possession order but of which the secure tenant becomes the tenant. Mr Gallivan’s construction does not involve going behind the clear provisions of Section 121.

[29]The Judge himself recognised in paragraph 32 of his judgment that the purpose of Schedule 4 is to “prevent situations arising” where, in circumstances involving no fault on the part of the tenant, the tenant moves house. The situation arising which the Judge must have had in mind was the loss of accrued time for the qualifying period, because he went on to refer to paragraph 5 of Schedule 4, saying that it was there “to address a specific situation on the basis that it would be unfair to the tenant, who is away from home serving his or her country, to be deprived of the benefit of that period.” Paragraph 5 relates to those in the regular armed forces of the Crown. Parliament may have thought it unfair that a secure tenant moving to suitable alternative accommodation following a possession order made under Ground 16 should be penalised both in relation to the qualifying period for the right to buy under s. 119 and the calculation of the discount under s. 129 in the purchase price.

[30]I can obtain no help from the decision in Artesian Residential Developments Ltd v Beck relating, as it does, to different statutory provisions which do not include anything corresponding to Schedule 4. Whether and when a personal statutory right such as the right to buy is exercisable must depend on the particular statutory provisions governing that right. Nor can the provisions of s. 121A(5)(c) or s. 171F assist in construing s. 119 and Schedule 4, if only because they were introduced by subsequent legislation and relate to different circumstances.

[31]More troubling are the remarks of judges experienced in this field to the effect that, once a possession order is made, for the secure tenant moving to suitable alternative accommodation time will have to run afresh for the right to buy the new property to become exercisable. Lindsay J’s observations in Kensington & Chelsea RLBC v Hislop were plainly obiter and it is not apparent that the point now in issue was taken before him. In Basildon District Council v Wahlen the District Judge had concluded that the tenant, a secure tenant by succession, was entitled to exercise the right to buy; he made no reference to the landlord council’s grounds for seeking possession on Ground 16 and did not perform any balancing exercise. Neuberger LJ quoted the passage from Lindsay J’s judgment to which I have referred in paragraph 23 above and, whilst making certain comments on it in paragraph 27, he did not comment on Lindsay J’s remark that the tenant’s right to buy “will be once again available after an appropriate further period”. The Lord Justice, however, must have agreed with Lindsay J on that point because of what he said in the passage to which I have referred in paragraph 24 above.

[32]Mr Whatley suggested that Neuberger LJ’s remarks are part of the ratio of this court’s decision in that case in allowing the appeal. I do not accept that. The present point was not determined by the District Judge, whose decision was reached because he had wrongly thought that he had no alternative but to grant an injunction to enforce the tenant’s right to buy, whereas he should have carried out a balancing exercise comparing the factors in favour of the tenant with the factors in favour of the local authority. Whilst Neuberger LJ was expressing his view of the factors to be compared and whilst in the passage in question he was expressing his view that one factor was the loss of the right to buy and that the right to buy the suitable alternative accommodation would not arise for five years, there is nothing in the report of that case to indicate that the specific point in issue in the present case was in issue in that case or was drawn to the court’s attention. The Judge did not regard Neuberger LJ’s remarks as decisive and I agree with him.

[33]Not without hesitation I respectfully disagree with Lindsay J’s and Neuberger LJ’s remarks for the reasons I have given. There being no other points taken by Mr Whatley as to why an express statutory provision preserving the secure tenant’s accrued time entitlement was necessary if Mr Gallivan’s construction were to prevail, or as to why the alternative accommodation would not be suitable, I would hold that the Judge erred on this point and that the alternative accommodation would be suitable.

Reasonableness

[34]Mr Gallivan properly recognises that the question whether it is reasonable to make an order for possession involves an exercise of discretion by the trial judge with which an appellate court will be reluctant to interfere unless satisfied that the judge has taken into account some irrelevant matter or left out of account some relevant matter or otherwise is plainly wrong. He submits that the exercise of discretion by the Judge proceeded on the wrong basis for a number of reasons.

[35]Mr Gallivan criticised the Judge’s inference that Mr Spencer’s rationale for his position on seeking to recover possession of the Property was the Council’s wish not to lose a six-bedroom house from its housing stock. Mr Gallivan pointed to Mr Spencer’s evidence that that was not its motivation, that such properties are very rare, that there was a growing demand for and a shrinking supply of properties of the Council, that in the four years that Mr Spencer had been a community support officer not one property of the size of the Property had become available and that it was fairly common to find statutory over-crowding (in circumstances that when a girl becomes 12 she ought not to have to share a room with a brother). Mr Gallivan also criticised the Judge for finding it relevant (albeit not decisive) to wonder how the better deployment of its housing stock was to be furthered when there was to be a transfer of housing stock to Southway Homes in a few months.

[36]Mr Whatley submitted that the Judge’s finding as to the motivation of the Council was not open to attack on appeal without compelling evidence undermining the Judge’s view. Mr Whatley pointed to the unsatisfactory evidence of Mr Spencer and stressed that the Judge’s reference to the imminent transfer of housing stock was to a point on which limited weight was put.

[37]It was not in dispute that Neuberger LJ’s comments in paragraphs 28 and 35 of his judgment in Basildon District Council v Wahlen were pertinent and correct. Better deployment of the housing stock of a local authority is a relevant reason for seeking possession of an under-occupied property and it is an impermissible justification to do so simply to avoid losing a property from that housing stock. The Lord Justice no doubt referred to that because it had been suggested by the local authority (probably in reliance on paragraph 22 of Lindsay J’s judgment in the Kensington & Chelsea case), that the reduction in housing stock was a relevant factor in the balancing exercise. But I venture to suggest that Neuberger LJ would have been astonished to find that his remarks were being used by a judge to find that a council’s motivation in seeking a possession order was to be decided on the basis of a stark choice between a council wanting to avoid a reduction in its housing stock and the better deployment of that housing stock. That astonishment would surely have been the greater in the context of a Ground 16 case where the tenant, a single mother with a baby son in occupation of a six-bedroom house, unsurprisingly conceded that the accommodation afforded by the dwelling-house was more extensive than was reasonably required by her. The Judge rightly recognised that “six-bedroom houses do not grow on trees and are likely to be a rare commodity.” Although, to the Council’s discredit, it failed to put before the Judge the statistics which it should have done, there was no reason for him to think that Mr Spencer’s general statement that there was a demand for such properties was untrue. The Judge’s inference on motivation was seemingly derived from the statement given by Mr Spencer in a witness statement about the substantial reduction in the Council’s housing stock. That inference is a huge leap to make and, defying as it does all probability in the particular circumstances of the Property, one might have expected the Judge to give some justification for it. How could any rational council not want such a rare commodity better utilised by housing in it a larger family? Mr Spencer’s evidence, as appearing from the Transcript, lends no support to the inference. On the contrary he was adamant, when the point was put in cross-examination, that the suggested motivation was not correct.

[38]The only support for the Judge’s inference appears to be the comment made by him in paragraph 50 of his judgment about the transfer to Southway Homes. In my judgment the Judge thereby treated as a relevant matter to be taken into account what ought to have been left out of account. For some years the Government has encouraged registered social landlords and other like bodies to take over the management of local authorities’ housing stock and large scale voluntary transfers have been commonplace. However, the local authorities retain their housing duties and that has remained practicable by the imposition of duties of cooperation on the registered social landlords under ss. 170 and 213 of the Act. True it is, as the Judge noted, that the obligation of cooperation is only to the extent that is reasonable in all the circumstances, but I do not accept the Judge’s comment that reasonableness is viewed only from the viewpoint of the registered social landlord. There is no reason why it should be so limited. What is reasonable in all the circumstances must be viewed objectively having regard to all the circumstances.

[39]I conclude therefore that the Judge’s inference was, with all respect to him, plainly wrong and that he took into account an irrelevant consideration in respect of the transfer to Southway Homes.

[40]The Judge in his statement in paragraph 54 of the judgment, of how he performed the balancing exercise characterised the Council’s case as being not particularly strong (beyond the fact that, as matters then stood, the Defendant did not need a six-bedroom home). In my judgment that too is plainly wrong. The Council does need the Property in order to achieve a better deployment of its housing stock, and to transfer the Property to Southway Homes does not make it unavailable to the Council in performing its housing functions. There are large families needing such accommodation. The right to buy is not completely lost to the Defendant if she becomes the secure tenant of suitable alternative accommodation such as one of the three-bedroom houses offered to her.

[41]I acknowledge the weight of the factors in favour of the Defendant which are listed in paragraph 45 of the Judge’s judgment including the loss of the right to buy the Property and I can well understand and sympathise with her wish to remain in what has been her home for so many years. I have seen and heard nothing whatever to the detriment of the Defendant who supported her mother. It is an important factor that if a possession order is made she will lose the benefit of the improvements made by her and I acknowledge that she genuinely intends to exercise the right to buy and to foster.

[42]The Judge (in paragraph 42 of his judgment) thought that it would be necessary, in order the resolve the issue of suitability, to receive further evidence as to the financial implications for the Defendant. We have heard no submissions on this and I would be prepared to receive further argument on this point if either party so wished.

[43]Subject only to that, it would be open to and, in my opinion, appropriate for this court to perform the balancing exercise, and I would conclude that the factors in favour of the Council, to which I have referred in paragraph 40 above, outweigh those in favour of the Defendant and make it reasonable to make the order for possession. That would lead me to allow the appeal, to set aside the order of the Judge, to make the order for possession sought by the Council and to dismiss the Defendant’s counterclaim.

Sir Robin Auld:

[44]For the reasons given by Sir Peter Gibson and Lord Justice Dyson, I respectfully agree that the Council’s appeal should be allowed and that the Court should make the orders indicated by him.

[45]I add only a few words on an issue that was not taken before the Judge or on this appeal, namely, if, as he concluded, a possession order had effect so as to extinguish a secure tenant’s right to buy, to, what, if any, extent would such extinguishment bear on the issue of reasonable suitability of available alternative accommodation? The first issue before the Judge and on the appeal was whether the making of the possession order extinguished Ms Benjamin’s right to buy, not whether, if it did, it rendered alternative accommodation without such right unsuitable. The Judge, at paragraph 42 of his judgment, regarded the extinguishment – as he found it to be – “decisive” in the circumstances of the unsuitability of the available alternative property

[46]The Council’s appeal to this Court went to the correctness of the Judge’s conclusion that the possession order extinguished Ms Benjamin’s right to buy, not to the significance of such a loss to the issue of suitability of the available alternative accommodation. Indeed, the Council specifically disclaimed any issue with the Judge’s conclusion that the loss - if there was such - of a right to buy rendered the available alternative accommodation unsuitable.

[47]However, such a point may yet fall for decision in this or other cases in which a secure tenant with a statutory right to buy faces dispossession under Ground 16 where the accommodation available to him carries no such right but is otherwise reasonably suitable. The question may be whether, in such a circumstance, the absence of a right to buy the alternative property is relevant to its suitability as alternative accommodation, so as to enable a secure tenant with such a right to resist on that account an order for possession for want of suitability.

[48]The “suitability” of alternative accommodation for that purpose is both defined and qualified in paragraphs 1 and 2 of Part 1V of Schedule 2 to the Act, the relevant provisions of which Sir Peter has set out in paragraph 10 of his judgment. Paragraph 1 requires the accommodation to consist of premises to be let as a separate dwelling under a secure tenancy and to be “reasonably suitable to the needs of the tenant and his family”. Paragraph 2 requires that, in determining reasonable suitability for such needs, “regard shall be had to” a number of criteria, arguably all of which are directed at the extent to which the accommodation meets the tenant’s “needs” qua tenant and the terms under which he is to hold it qua tenant – not what statutory right he may have to acquire some other form of holding.

[49]Thus, relevant matters going to such need are: how the nature of the accommodation compares with that which the landlord allocates to persons with similar needs (2(a)); its locational convenience to the work and educational needs of the tenant and his family (2(b)); its closeness to other members of his family where closeness is essential (2(c)); the needs (as regards extent of accommodation) and means of the tenant and his family (2(d)); the respective terms on which it is available and those of the secure tenancy (2(e)); whether, if the secured tenancy is furnished, the alternative accommodation is too (2(f)).

[50]It is true that dicta of Lindsay J in Kensington & Chelsea RLBC v Hislop and of Neuberger LJ (as he then was) in Basildon DC v Wahlen, on the issue of reasonableness of making a possession order, appear to acknowledge obiter that a possession order both extinguishes a statutory right to buy and that such loss is a strong relevant factor going to the question of unsuitability.

[51]In short, it may yet fall for decision whether, if a possession order extinguishes a statutory right of the tenant to buy, it is a relevant circumstance on the issue whether available alternative accommodation is not “reasonably suitable to the needs of the tenant and his family” within the meaning of section 84(2)(c) of, and paragraphs 1 and 2 of Schedule 2, Part 1V. There is also the question of what weight it is capable of being given on the separate, but logically closely related, question whether, in any event, it is reasonable for a court to make an order for possession.

Lord Justice Dyson:

[52]I agree that the appeal should be allowed on the grounds that the judge reached the wrong conclusion on both issues. He should not have held that the alternative accommodation was unsuitable on the grounds that the effect of the possession order would be to deprive the defendant of her right to buy; and he should not have held that it was unreasonable to make an order for possession. In view of the importance of the first issue, I propose to say in my own words why I have reached this conclusion.

[53]In my judgment, Mr Gallivan is right to draw attention to the difference in language between section 119 and 121. Section 119 provides that the right to buy “does not arise” unless the specified qualifying period has expired. Section 121 provides that the right to buy “cannot be exercised” if the tenant is obliged to give up possession of the dwelling-house in pursuance of an order of the court. Thus, once the specified qualifying period expires, the right to buy arises, although it may not be exercised where section 121 applies. Another example of a situation where the right to buy may arise but may not be exercised is provided by section 121A: the court may make a suspension order in respect of a secure tenancy (subsection (1)) and the right to buy “may not be exercised” during such period as is specified in the suspension order (subsection (2)).

[54]The fundamental point is that, once the specified qualifying period expires, the right to buy arises. The rules for the calculation of the specified qualifying period are to be found in Schedule 4. Para 4(2) is of particular relevance to the present case. If section 119(1) and Schedule 4 are read without regard to section 121(1), there can be no doubt that, on the facts of this case, the specified qualifying period has expired and therefore that the right to buy has arisen. The question raised by the first issue is whether, although the right to buy has arisen, the effect of section 121(1) is that, if the tenant leaves in pursuance of a court order, the right may not be exercised in respect of alternative accommodation.

[55]The judge considered that, if a possession order were made in respect of 11 Winterman’s Road, the effect of section 121(1) would be that the accrued right to buy would be lost in respect of any dwelling-house provided by the landlord as alternative accommodation and not only 11 Winterman’s Road, and that the tenant would have to start from scratch building up a new qualifying period. In my view, this is not the proper construction of section 121(1). The subsection provides no more than that, where the right to buy a dwelling-house has arisen pursuant to section 119(1) and Schedule 4, the tenant cannot exercise it in respect of that dwelling-house if he is obliged to give up possession of that dwelling-house in pursuance of an order. There is no warrant for giving section 121(1) any wider meaning.

[56]In my judgment, that is the natural meaning of the words of the subsection. The use of the definite article in the phrase “give up possession of the dwelling-house” is significant. It is in respect of that dwelling-house that the right to buy cannot be exercised. If it had been intended that an order to give up possession should be a bar to the exercise of the right to buy any dwelling-house, then the subsection would have been drafted rather differently. It would have provided that, where a tenant is obliged to give up possession of a dwelling-house in pursuance of an order of the court, the right to buy cannot be exercised in respect of any dwelling-house.

[57]Quite apart from the natural meaning of section 121(1), it seems inherently unlikely that Parliament would have intended to deprive secure tenants of their accrued rights to buy any property in all circumstances where they are obliged to give up possession of a dwelling-house in pursuance of a court order. I can well understand why Parliament would have intended to provide that a tenant should not be able to exercise the right to buy the dwelling-house which is the subject of an order for possession. It would be odd to provide that a tenant who is obliged to give up possession of a dwelling-house should be able to exercise the right to buy that very dwelling-house. But Mr Whatley has not suggested any reason why Parliament should have wished to deprive tenants of their rights to buy other dwelling-houses.

[58]The Housing 1985 Act draws a distinction between grounds for possession which are based on the fault of the tenant and other grounds. In the case of grounds which are not based on tenant fault (grounds 9 to 16 of Schedule 2), it is a condition for making an order for possession that suitable accommodation will be available for the tenant when the order takes effect. Where the grounds are based on tenant fault (grounds 1 to 5), this condition does not apply. It is true that the condition does not apply to grounds 6 to 8 either and these miscellaneous grounds cannot be characterised as based on tenant fault. But that does not detract from the broad distinction drawn by Schedule 2. The principle which underlies this distinction is that, where secure tenants who are not at fault are obliged to give up possession in pursuance of a court order, they should not suffer prejudice as a result of the order. It would be contrary to that principle to provide that secure tenants who are obliged to give up their homes for reasons involving no fault on their part should lose the right to exercise the right to buy where that right has arisen. I am not prepared to impute to Parliament an intention to disadvantage in this way a secure tenant whose right to buy has arisen unless the language of the statute compels me to do so. For the reasons that I have given, far from compelling such an interpretation, I consider that the language of section 121(1) points the other way.

[59]For these reasons as well as those given by Sir Peter Gibson, I would allow this appeal and make the orders that he proposes. I do not wish to comment on the interesting observations made by Sir Robin Auld on the issue that was not argued before the judge or us.