Eastleigh Borough Council v Walsh [1985] UKHL 12

House of Lords

Between

Eastleigh Borough CouncilAppellant

WalshRespondent

Before

Lord Scarman

Lord Keith of Kinkel

Lord Bridge of Harwich

Lord Brightman

Lord Templeman

Date 28 March 1985

[1]HOUSE OF LORDS 28 March 1985 EASTLEIGH BOROUGH COUNCIL (RESPONDENT) v. WALSH (A.P.) (APPELLANT) (ENGLAND) Lord Scarman Lord Keith of Kinkel Lord Bridge of Harwich Lord Brightman Lord Templeman LORD SCARMAN My Lords, For the reasons to be developed in the speech of my noble and learned friend, Lord Bridge of Harwich, a draft of which I have read, I would allow the appeal. LORD KEITH OF KINKEL My Lords,

[2]I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Bridge of Harwich. I agree with it, and for the reasons he gives I too would allow the appeal. LORD BRIDGE OF HARWICH My Lords,

[3]The respondent local authority ("the authority") seek to evict the appellant from a three-bedroom council house, 97 Falcon Square, Eastleigh ("the house"), which he has occupied since 15 October 1981. The appellant claims now to be entitled to the benefit of a secure tenancy of the house under Part I Chapter II of the Housing Act 1980 ("the Act of 1980"). He was originally let into possession as a homeless person claiming to have a priority need pursuant to the Housing (Homeless Persons) Act 1977 ("the Act of 1977"). In putting forward this claim he either misled the authority in the first place or failed to notify them shortly afterwards, as he was in law bound to do, of a change of circumstance which invalidated his claim. Hence he attracts little sympathy. The issue, however, on which the outcome of the appeal depends is whether the appellant was originally let into possession of the house as a tenant or as a licensee. As will be seen when I recount the history against the background of the relevant statutory provisions, this issue need never have arisen if the authority had taken the right steps at the right time.

[4]If, at the end of this protracted and expensive litigation, it turns out 'that the authority have allowed the appellant to acquire a secure tenancy, which he certainly did not deserve, it is regrettably due to nothing but their own ineptitude.

[5]Before turning to the facts it is appropriate to summarise the relevant provisions of the now ail too familiar Act of 1977. The Act places an obligation on local authorities to secure accommodation for persons who have a priority need (as defined in section 2) and are not homeless intentionally (as defined in section 17). Nothing in this case turns on the second criterion; the relevant aspect of the first criterion is whether the appellant had at the material time, in the words of section 2(1)(a), "dependent children who are residing with him or who might reasonably be expected to reside with him."

[6]There are three situations where a local authority is placed under an obligation to provide temporary accommodation for persons who claim or have claimed an entitlement under the Act of 1977 to permanent accommodation. First, whenever a claim is made under the Act, the local authority must make "appropriate inquiries" as defined by section 3(2) to establish the bona fides of the claim. But section 3(4) provides:

"If the authority have reason to believe that the person who applied to them may be homeless and have a priority need, they shall secure that accommodation is made available for his occupation pending any decision which they may make as a result of their inquiries . . ."

[7]Secondly, if the appropriate inquiries lead to the conclusion that the claimant has a priority need but became homeless intentionally they "shall secure that accommodation is made available for his occupation for such period as they consider will give him a reasonable opportunity of himself securing accommodation for his occupation": section 4(3). Thirdly, if any issue arises as to which of two local authorities must accept the eventual housing obligation, the authority to whom the homeless person's claim was originally made must provide temporary accommodation for him pending resolution of the difference between the two local authorities concerned: section 5(6). With respect to the first and third of these situations the local authority is under a duty ' to notify the person claiming an entitlement to accommodation under the Act(a) of the outcome of their "appropriate inquiries": section 8(1), and

(b) of the resolution of any difference between local authorities as to which must provide the claimant with permanent accommodation: section 8(5).

[8]Until the Act of 1980 came into force the question whether a local authority provided temporary accommodation for any person to whom they owed an obligation under section 3(4), section 4(3) or section 5(6) of the Act of 1977 by granting a licence or a weekly tenancy was of no consequence. Local authority tenants enjoyed no statutory security of tenure. Consequently, once the local authority decided that the temporary occupant of local authority accommodation should be removed, his status as licensee or weekly tenant was of no practical importance in relation to the legal process of obtaining an order for possession against him. The Act of 1980, which introduced for the first time security of tenure for tenants of, inter alia, local authority houses, was careful to preserve this position with respect to temporary tenancies granted under the Act of 1977, as with respect to many other special cases where there are good reasons of social policy why security of tenure should not be granted. Section 91 of the Act of 1980 substituted a new section 104 for the previous section of that number in Part V of the Housing Act 1957. The new section provides so far as relevant:

"(1) Without prejudice to the provisions of Chapter I of Part I of the Housing Act 1980 (right to buy public sector houses), a local authority shall have power by this section, but not otherwise, to dispose of any land which they have acquired or appropriated for the purposes of this part of this Act. (2) A disposal under this section may be effected in any manner but is not to be made without the consent of the Minister, except in a case falling within subsection (3) below. (3) No consent is required for the letting of any land under a secure tenancy (within the meaning of section 28 of the Act of 1980) or under what would be a secure tenancy but for any of paragraphs 2 to 13 of Schedule 3 to that Act (certain lettings which do not create secure tenancies)."

[9]Section 28 of the Act of 1980, which creates the new secure tenancy, is expressed to be "subject to the exceptions in Schedule 3 to this Act." Accordingly, one turns to Schedule 3 and finds the following provision in paragraph 5:

"A tenancy granted in pursuance of section 3(4), 4(3) or 5(6) of the Housing (Homeless Persons) Act 1977 is not a secure tenancy before the expiry of a period of twelve months beginning with the date on which the tenant has received the notification required by section 8(1) of that Act or, if he received a notification under section 8(5) of that Act, that notification, unless he has before the expiry of that period been notified by the landlord that the tenancy is to be regarded as a secure tenancy."

[10]In September 1981 the appellant applied to the authority for accommodation as a homeless person under the Act of 1977. At some date before 13 October 1981 he, and presumably his wife (though this is not clear from the documents or from any finding of the trial judge), were interviewed by an official of the authority. The appellant and his wife have "dependent children." It has never been suggested that they became homeless intentionally. On 13 October 1981 the Chief Housing Officer of the authority wrote a letter to the appellant and his wife in the following terms:

"Dear Mr. and Mrs. Walsh, Housing Accommodation Address 97 Falcon Square, Eastleigh 3 Bed House. Gross Weekly Rent £19.09 Proposed tenancy commencement date 19 October 1981 In compliance with the Housing (Homeless Persons) Act 1977, I am authorised to offer you the tenancy of the above property, pending a decision which may be made as a result of further inquiries. You will be notified of the result of these investigations in due course."

[11]I should pause to interject that no point has been, or, so far as I can see, could be raised on the issue that the original offer was to the appellant and his wife jointly, not to the appellant alone. The appellant was given the key to view the premises.

(b) a receipt which he signed in the following terms:

"KEY RECEIPT. I acknowledge receipt of six keys of -Address:- 97 Falcon Square, Eastleigh.

(c) a document entitled "

Eastleigh District Council - Housing Department. Conditions of Tenancy." This document contained the following relevant terms:

"1. The tenancy may be ended by either the council or the tenant giving not less than four weeks notice in writing to expire at twelve noon on a Monday. "2. The rent will become due each Monday, for the week beginning that day. In addition to the rent, the total amount payable includes charges for General Rates, Water Rate, and may include others such as for heating. All these charges may be varied without giving four weeks notice. "3. [Positive tenant's covenants]. "4. and 5. [Negative tenant's covenants]. "9. Acceptance of the tenancy shall be conclusive evidence of the tenant's agreement to the above conditions."

[12]There is no specific finding as to whether the appellant's wife and children moved into the house with him. The trial judge expressed some doubt about this. If they ever moved in, they soon left. The appellant was under a duty in the circumstances to notify the authority under section 11(2) of the Act of 1977 of "any change of facts material to his case." He is perhaps fortunate not to have been prosecuted for his failure to inform the authority before July 1982 that his wife and children had left him and were living in Darlington. But by July 1982 the authority had discovered 'this and wrote to the appellant on 15 July 1982 a letter, which I need not quote, but which, it is accepted, must be taken to have been the statutory notification to the appellant under section 8 of the Act of 1977 that he did not qualify as a claimant for accommodation under the Act. The letter invited him to "vacate the premises." On 19 August 1982 a further letter was addressed to the appellant by the authority, threatening that "unless you vacate the said premises within seven days of the date hereof, proceedings will be instituted against you without further notice." No "four weeks notice in writing to expire at twelve noon on a Monday" was ever served in accordance with clause 1 of the document entitled "Conditions of Tenancy" which the authority had issued and the appellant accepted as purporting to govern the parties' contractual relationship.

[13]The authority instituted proceedings for possession in the Southampton County Court on 22 February 1983. The basis of the claim as pleaded was that the appellant was a licensee, whose licence had been terminated by the authority's letter of 15 July 1982 or, by later amendment, by the letter of 19 August 1982. By a defence delivered on 3 May 1983, signed by junior counsel who has represented the appellant throughout these proceedings, it was unambiguously pleaded that the letter of 15 July 1982 was ineffective to terminate the appellant's right of occupation since "at all material times the defendant has been and now is a tenant of the said premises and not a licensee." Be it noted that at this date the authority still had more than two months, under Schedule 3, paragraph 5 of the Act of 1980, to give the necessary four weeks notice to determine the appellant's tenancy, if such it was. It passes my comprehension why they did not do so. But the fact is they did not. After the time had expired for the service of a notice to quit to prevent the appellant acquiring a secure tenancy, the defence was very properly amended to assert the appellant's claim that his tenancy had now become secure.

[14]The case was heard by Judge Starforth-Hill on 17 May 1984. Since the same junior counsel has appeared for the appellant throughout, I have no doubt that the judge's attention was drawn to Schedule 3, paragraph 5 of the Act of 1980. The essence of his decision in favour of the authority against the appellant is, nevertheless, expressed in the following terms:

"Parliament never intended or expected that what was obviously temporary accommodation should be intended to be a tenancy so that all the protection of the law followed. That runs contrary to all the reasoning that was intended behind the Act. It is inconceivable that it was ever intended that that situation was ever intended to create a tenancy."

[15]The Court of Appeal recognised that this reasoning could not be supported. I confess that, with all respect, I have found difficulty in following the alternative reasoning by which the Court of Appeal felt able to sustain the judge's conclusion. Griffiths, LJ, referred to section 48 of the Act of 1980 and observed "that it provides that a licence of the type with which we are dealing in this case, that is an exclusive licence, is to be regarded, for the purpose of security of tenure, as a tenancy." I must return to this aspect of the matter later. Griffiths, LJ, concluded his judgment by saying:

"In my view this judge was entitled to look at this arrangement with the eyes of common sense, and to conclude, as he did, that a council giving emergency shelter under this Act was not intending to create a tenancy, despite the fact that they foolishly used the same paperwork as they used for their ordinary council tenants, and that he was further entitled to draw the inference that the occupant well realised that that was the true state of affairs. Accordingly, I have come to the conclusion that the judge was right to hold that the nature of the occupancy in this case was an exclusive licence and not a tenancy, and that as it was duly determined by the council no security of tenure was obtained by the tenant, and that he rightly made his order for possession."

Stephen Brown, L.J., concluded:

". . . it was essentially a question of fact to be decided in accordance with ail evidence before the court. On the evidence before [the judge] he came to clear conclusions of fact, and he made a decision which, in my judgment, was open to him and which indeed was in accordance with common sense when looking at the whole of the evidence."

[16]I cannot, for my part, see that any question of fact arose for determination in this case. The appellant was granted exclusive possession of the house on terms which are fully set out in the contemporaneous documents, viz. the authority's offer of a tenancy dated 13 October 1981, the appellant's acceptance of that offer by the key receipt signed by him on 15 October 1981 and the document entitled "Conditions of Tenancy" which, it is not disputed, was given to and accepted by the appellant on the same date. Reading these unambiguous documents in the light of the express statutory provision in schedule 3, paragraph 5 of the Act of 1980 that "a tenancy granted in pursuance of section 3(4) [of the Act of 1977] ... is not a secure tenancy" I can see no ground for any finding that the "nature of the occupancy" of the house by the appellant was as licensee and not as tenant.

[17]Mr. Lester, for the authority, recognising the difficulty he faces in supporting the ground on which the Court of Appeal found in the authority's favour, has advanced an ingenious argument which leads, he submits, to the conclusion that a local authority purporting to grant a tenancy pursuant to their duty under section 3(4) of the Act of 1977, "pending any decision" which may result from their inquiries under section 3, acts ultra vires; their only power, he contends, is to grant a licence. I hope 1 shall be acquitted of discourtesy if I summarise the argument briefly. It has two limbs. The first limb depends on section 6(1) of the Act of 1977, which provides, so far as material:

"(1) A housing authority may perform any duty under section 4 or 5 above to secure that accommodation becomes available for the occupation of a person -(a) by making available accommodation held by them • under Part V of the Housing Act of 1957 ...(b) by securing that he obtains accommodation from some other person."

[18]The argument is that the omission in this provision of any reference to section 3 of the Act of 1977 means that a housing authority may not let accommodation which they hold under Part V of the Housing Act 1957 to a claimant for whom temporary accommodation is to be provided under section 3(4). The second limb of the argument depends on section 48(1) of the Act of 1980 which provides:

"Where a person who is not the tenant of a dwelling-house has a licence (whether or not granted for a consideration) to occupy the dwelling-house and the circumstances are such that, if the licence were a tenancy, it would be a secure tenancy, then, subject to subsection (2) below, this Part of this Act applies to the licence as it applies to a secure tenancy and, as so applying, has effect as if expressions appropriate to a licence were substituted for 'landlord', 'tenant', 'tenancy' and 'secure tenancy'."

[19]The effect of this provision, so runs the argument, is that the reference in Schedule 3, paragraph 5 to a tenancy granted in pursuance of section 3(4) must be interpreted as a reference to a licence.

[20]It is hardly necessary to do more than state the two limbs of this argument to see that it is misconceived.

[21]Section 6(1) of the Act of 1977 is, it seems to me, concerned primarily with the different modes in which a local authority may perform its obligations under sections 4 and 5 to provide permanent accommodation for those entitled to it. It certainly cannot in any way restrict the power of a housing authority to dispose of its own residential property held under Part V of the Housing Act 1957; in particular, it cannot be read as qualifying the language of the new section 104(3) introduced into Part V of the Housing Act 1957 by the Act of 1980, which confers power on a housing authority to let its property, inter alia, under what would be a secure tenancy but for paragraph 5 of Schedule 3 to the Act of 1980.

[22]As for section 48 of the Act of 1980, this applies only to licences granted in circumstances "such that, if the licence were a tenancy, it would be a secure tenancy." Accordingly, it has no relevance to the tenancies to which Schedule 3, paragraph 5 applies, which are not secure tenancies when first granted. They only become secure tenancies after a specified lapse of time.

[23]I would, therefore, allow this appeal and order the authority to pay the appellant's costs in this House and in the courts below. LORD BRIGHTMAN My Lords,

[24]I also would allow this appeal for the reasons given by my noble and learned friend, Lord Bridge of Harwich. LORD TEMPLEMAN My Lords,

[25]For the reasons advanced by my noble and learned friend Lord Bridge of Harwich I have reluctantly come to the conclusion that this appeal must be allowed. Eastleigh Borough Council (Respondents) v. Walsh (A.P.) (Appellant) (England) JUDGMENT Die Jovis 28° Martii 1985 Upon Report from the Appellate Committee to whom was referred the Cause Eastleigh Borough Council against Walsh (Assisted Person), That the Committee had heard Counsel as well on Wednesday the 6th as on Thursday the 7th days of this instant March upon the Petition and Appeal of Ralph Joseph Walsh of 97 Falcon Square, Eastleigh, Hampshire, praying that the matter of the Order set forth in the Schedule thereto, namely an Order of Her Majesty's Court of Appeal of the 19th day of November 1984, might be reviewed before Her Majesty the Queen in Her Court of Parliament and that the said Order might be reversed, varied or altered or that the Petitioner might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament might seem meet; as also upon the Case of Eastleigh Borough Council lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause: It is Ordered and Adjudged , by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 19th day of November 1984 complained of in the said Appeal be, and the same is hereby, Reversed: and that the Order of the Southampton County Court of 17th May 1984 be Set Aside: And it is further Ordered , That the Respondent do pay or cause to be paid to the said Appellant the Costs incurred by him in the Courts below and also the Costs incurred by him in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments if not agreed between the parties; And it is further Ordered, That the costs of the Appellant in this House be taxed in accordance with the provisions of Schedule 2 to the Legal Aid Act 1974; And it is also further Ordered , That the Cause be, and the same is hereby, remitted back to the Southampton County Court to do therein as shall be just and consistent with this Judgment. Cler: Parliamentor: