Housing Law Update 2010

Andrew Brookes, Partner
These are the notes from a talk Andrew Brookes gave at the November 2010 meeting of the Housing Law Practitioners Association, held at the University of Westminster.
Email Andrew

Possession hearings

Is a possession hearing a trial?

Forcelux Ltd v Binnie [2009] EWCA Civ 854

This was the Court of Appeal hearing of an appeal from a decision by a Circuit judge on an appeal from an order to set aside a possession order and grant of relief from forfeiture. It is potentially an important case for anyone looking to apply for set aside of a possession order made at first hearing of a possession claim, as it gives the Court a broader discretion to make a set aside order under CPR 3.1(2) than the strict requirements of CPR 39.3.

In July 2007, Forcelux began County Court possession proceedings. The claim form gave the flat as Mr Binnie’s address. A hearing was set for September 2007. Mr Binnie was unaware of proceedings as he was not living at the flat. At the September 2007 hearing, in the absence of Mr Binnie, a possession order was made. It was not until February 2008 that Mr Binnie made an application to set aside the possession order.

Forcelux contended that Mr Binnie had not ‘acted promptly’ once he found out the possession order had been made, as required by CPR Rule 39.3(5)(a). CPR 39.3(5) states that the Court may only grant a set aside application if the applicant:

1. acted promptly when he found out that the court had exercised its power to……enter judgment or make an order against him;
2. had a good reason for not attending the trial; and
3. has a reasonable prospect of success at trial.

So acting promptly is a requirement before a set aside can be granted. Forcelux argued that the DJ had therefore been wrong to make the set aside order.

But Rule 39.3 is expressly concerned with ‘trial’. Was the hearing of September 2007 a trial? Rule 55, dealing with possession proceedings states at 55.1 that once the claim has been issued, the Court is to fix a date for ‘the hearing’.

The Court of Appeal was not persuaded that the hearing of September 2007, the first listed hearing after issue, was a trial:

“ The more usual sort of case, in a busy possession list with perhaps 5 to 10 minutes allowed for each case, will be an undefended case where the defendant, if he attends at all, has nothing to say. The judge will look at the evidence from the claimant – probably all the evidence there is – and make a determination and decision: he will satisfy himself that the case is made out on the claimant’s evidence and satisfy himself that any necessary statutory requirements are fulfilled; he will make a possession order (suspended or not as the case may be).
[...]
I do not consider that such a process of determination and decision can sensibly be called a trial”.

As 39.3 was not at issue, ‘acting promptly’ was not a requirement, but simply a factor to be taken into account. The rule that covered the situation was Rule 3.1(2) (m) “take any other step or make any other order for the purpose of managing the case and furthering the overriding objective”, which gave ample power to set aside an order if the interests of justice demand it. Further, Rule 3.1(7), providing a power of the court under these Rules to make an order, includes a power to vary or revoke the order, shows that there is a power to do so under Rule 31.2(m).

In considering the exercise of the power under Rule 3.1(2) as the Circuit Judge had done, the checklist in Rule 3.9(1) is a useful guide, although not directly applicable. In this case:

1. The interests of the administration of justice; there is nothing which suggests that the interest of the administration of justice would be prejudiced or compromised if the application for relief were granted;
2. Whether the application for relief has been made promptly; I doubt very much that it was and proceed on the footing that it was not;
3. Whether there is a good explanation for the failure; none has been provided. HH Judge Hampton herself observed that there was no explanation (but see paragraph 65 below);
4. Whether the failure was caused by the party or his legal representative; the failure appears to have been entirely that of Mr Binnie’s solicitors;
5. The effect which the failure to comply had on each party; Mr Binnie will lose a valuable asset for want of payment of a comparatively modest sum which he attempted to pay by cheque in December 2007, his cheque being returned.
6. The effect which the granting of relief would have on each party; the Lease would be reinstated. Forcelux would lose what I think can fairly be described as a windfall.

Islington LBC v Cecil and Grace Markland, Clerkenwell and Shoreditch County Court, 17/07/2010

This County Court appeal case is interesting as it raises the question of where the boundaries of the exceptions in Forcelux v Binnie may be.

Briefly, Islington brought a claim for possession against Mr M. He and Mrs M had been joint secure tenants. The relationship broke down and after leaving the property, Ms M served a Notice to Quit in May 2009. She applied to Islington for rehousing. There were disputed allegations of domestic violence.

At first hearing, Mr M handed in a pro-forma defence which said, in effect, that he had not been given a fair hearing by Islington and that he had a public law defence. The District Judge did not ask Mr M to elaborate on his defence, but held that there was no defence, the joint tenancy having been lawfully determined by Mrs M. A possession order was made, together with a judgment on supposed rent arrears, asserted without evidence by Islington (and the amount of which was later conceded to be substantially wrong).

Mr M applied to set aside the possession order on the basis of Forcelux v Binnie, and filed a full public law defence. A different DJ heard the application, held that he had no power to set aside and the appropriate route was an appeal via CPR 52. Permission to appeal granted.

On appeal, the Circuit Judge refused to set aside the Order. Using CPR3 was not appropriate in this case. Mr Markland had attended and produced a defence. However, he granted the appeal against the possession order.

What does it mean for you?

• More scope to set aside possession orders
• Difficult decision over whether to apply to set aside or appeal.

2. Nuisance and Anti-social behaviour

Can a landlord be liable to tenant A for the anti-social behaviour of tenant B or others?

Octavia Hill Housing Trust v Terri Brumby [2010] EWHC 1793 (QB)

Ms Brumby was the assured tenant of Octavia Hill Housing Trust, living in a flat in a block. She alleged that visitors to a tenant in another flat in the block were responsible for nuisance in the common parts (the approach to the flats, the communal stairs and stairwell, etc). Those common parts were retained by the landlord. The landlord had notice of the nuisance and had failed to take steps to abate it within a reasonable time. Accordingly, she argued that the landlord had adopted the nuisance.

The landlord applied to strike the claim out, arguing (a) that Mowan, Hussain et al made clear that it was only in exceptional circumstances that a claim for nuisance could be maintained against a landlord in respect of acts by third parties and (b) Southwark LBC v Tanner [2001] 1 AC 1 prevented the court from imposing obligations on the landlord that went above and beyond the terms of the contract or statutory obligations. In the County Court, the claim for breach of the covenant for quiet enjoyment was struck out, but the claim in nuisance was allowed to proceed; the case was entirely factual and would have to be determined at trial and the rule in Sedleigh-Denfield was not affected by Mowan et al.

In the High Court Mackay J agreed with HHJ Gibson. Whether or not the landlord had adopted the nuisance was a question of fact that had to be determined at trial. Whether or not the nuisance had been adopted was governed by the Sedleigh-Denfield decision, which had not been affected by Mowan et al. The case would have to proceed to trial.

What does it mean for you?

• “where land is let by a landlord to a tenant the landlord is not liable for acts of nuisance permitted by his tenant unless he has specifically authorized them”
• Passive inaction by a landlord may fix them with liability
• Landlord may be liable for anti-social behaviour perpetrated by tenants and others in common parts.

3. Tolerated Trespassers

Representatives of a deceased tolerated trespasser can apply to revive the tenancy

Austin (FC) (Appellant) v Southwark London Borough Council (Respondent) [2010] UKSC 28

Alan Austin was the original tenant. A suspended possession order was made. The order was breached and Alan Austin was a tolerated trespasser from 1987. Southwark did not enforce the order. In 2003, on his account, Barry Austin moved in with his brother to care for him as he was by then seriously ill. In February 2005, Alan Austin died. In September 2006 Southwark served Notice to Quit on Barry Austin and then began possession proceedings in January 2007. It came as a complete surprise to Barry that there had been a possession order and certainly that his late brother was a tolerated trespasser.

Barry Austin applied to the County Court to be appointed to represent Alan’s estate in the 1986 possession proceedings under CPR 19.8 and, if appointed, to apply for an order under s.85(2)(b) Housing Act 1985 postponing the date of possession such that Alan’s tenancy would have existed at the date of his death and Barry would have, on his account, succeeded to the tenancy.

Overturning Brent London Borough Council v Knightley (1997) 29 HLR 857 and the decisions of all the lower courts, the Supreme Court decided that the right to apply for a postponement of an order for possession was an interest in land capable of being inherited, and that Alan’s estate could apply under s.85(2)(b) to apply to postpone the date of possession, and thus revive the secure tenancy.

What does it mean for you?

• Individuals who would otherwise succeed to a tenancy, but find out that the deceased tenant was a tolerated trespasser, now may be able to succeed.
• Useful comments on tolerated trespassers generally, in particular on applications to revive under s85(2) “Even if some local authority landlords might have welcomed not being under a contractual obligation to repair properties for which the occupier was not paying the full rent, they would also have acknowledged that it could not be right for them to be able to charge the equivalent of the full rent which was calculated on the basis that they did have an obligation to repair.” Baroness Hale at (54)
• What about applicability to Schedule 11 applications? - ,Chase v Islington LBC Clerkenwell & Shoreditch County Court 30/07/2010

4. Homelessness

Refusing s188 temporary accommodation before completing s184 enquiries and making a decision unlawful

Policy of sending homeless applicants back to the accommodation they have come from until enquiries are complete unlawful

Kelly & Mehari v Birmingham City Council [2009] EWHC 3240

Mr Kelly applied as homeless after having to leave the family home. He approached Birmingham who accepted an application. They accepted an application but sent him away before having made a written decision. They claimed that it was an administrative error that no written s184 decision was made.

Mr Mehari and his family applied as homeless after having handed back the keys to their rented flat. They were told to go away and return the next day. Birmingham did not mention temporary accommodation at that stage.

The court said:

“I am satisfied that, far from the errors in these cases being of individuals who went outside the Council’s practice and procedures, the relevant officers were following the practice and procedure they were encouraged to follow by the Council themselves. “

Refusal to accept a homelessness application at all from certain groups of applicants.

Khazai & Ors, R (on the application of) v Birmingham City Council [2010] EWHC 2576 (Admin)

An internal email from a manager inside Birmingham CC said:

“Dear All
Please note with immediate effect all single homeless who are presenting as homeless/roofless and Domestic Violence victims requiring refuge must be referred to the appropriate funded support service. We should not be completing a homeless application.
For single person under 25 they should be referred to St Basils ….
For vulnerable singles over 25 they should be referred to Midland Heart ….
Victim of Domestic Violence requiring a place of refuge should be referred to Trident ….
Victims of Domestic Violence who are able to stay at home but require support should be referred to Birmingham & Solihull Women’s Aid
More detailed guidance notes are being produced and will be distributed in advance of the briefing session next week Wednesday, but the above arrangements above already should be in place.
Monitoring of the arrangement is in place and if there are any problems with referring to the agencies, please advice (sic) myself or Saeed Akram.”

In accordance with this email Mr Khazai’s homelessness application was not processed. This was unlawful but the manager’s actions were not misfeasance in public office because:

“it was not of the nature of the bad faith and reckless indifference to the illegality of what he was putting forward necessary to found the tort of misfeasance in a public office”.

In the cases of two other applicants, Mirghani & Azizi, the applicants argued there was a policy of making s184 decisions the same day as the application to avoid s188 duties. Such a policy, it was accepted, would be unlawful. Both cases involved former asylum seekers granted leave to remain and therefore facing the discharge of NASS accommodation and support. They both applied to Birmingham as homeless.

The court determined that there was no blanket policy in the cases of Mirghani and Azizi.

Formal application is not necessary to trigger an authority’s Part VII duties

An authority’s failure at earlier stage is relevant to s184 decisions and s202 reviews.

Bury Metropolitan Borough Council v Gibbons [2010] EWCA Civ 327

Mr Gibbons was in rent arrears in the private rented accommodation which he shared with his wife and daughter. He was given 2 months notice. A further letter told him to leave by 27 September 2008. Mr G did not know he was entitled to remain until a possession order was made. He approached Bury on 9 September 2008 and made a housing application for himself and his daughter, stating on the form and in person that he was to be imminently homeless. Bury did nothing at all at this point.

“If a person informs the local housing department that he is threatened with homelessness because he has received notice to quit for non-payment of rent, and if the Council does not give appropriate advice, it cannot automatically be assumed that this does not matter. In the present case, the Council’s omissions at a crucial time, namely when Mr Gibbons was about to move out of 5 Park View Court and become homeless, were relevant to the question whether Mr Gibbons became homeless intentionally. This was a matter of substance which, in accordance with the guidance in Holmes-Moorhouse at paragraphs 49 to 51, the reviewing officer should have taken into account.”

Homeless applicants who were referred to private lettings scheme withdrew their homelessness application.

R (on the application of Colin Raw) v Lambeth London Borough Council [2010] EWHC 507 (Admin)

Mr Raw applied as homeless. Lambeth accepted an application from Mr Raw. They referred him to a private lettings scheme where they assisted with deposits. They then discontinued their homelessness enquiries. This was unlawful. However, by the time the case came to trial Lambeth had re-instated Mr Raw’s homelessness application. The court refused to deal with the policy as the claim was hypothetical in Mr Raw’s case.

What do these cases mean for you?

• Homelessness prevention is fine but must run in parallel with Part VII enquiries.
• Part VII must be followed.
• S188 accommodation should be provided pending decision.
• Challenges to whole policies are more difficult than challenges to individual decisions. 

5. Tenancy Deposits

A landlord can escape the x3 penalty by late compliance

Tiensia v Vision Enterprises Ltd (t/a Universal Estates) [2010] EWCA Civ 1224 (11 November 2010)

This was a conjoined appeal of Universal Estates v Tiensia and Honeysuckle Properties v Fletcher.

In both cases the landlord had issued proceedings for possession for arrears of rent. The tenants had in both cases counterclaimed on the basis that the deposit was unprotected and the landlords had then put the deposits into the scheme operated by Tenancy Deposit Solutions Ltd (trading as MyDeposits) prior to the hearing of the tenant’s claim in Court.

The deposits were obviously protected late (outside 14 days) and arguably failed to fulfill the initial requirement of the MyDeposits scheme to protect within 14 days of receipt. There was a further point as to what date the Court should consider compliance by the landlord, at the date of issue of claim, or at the date of hearing.

The Court of Appeal held that the case of Draycott v Hannells Lettings (see below) was correctly decided for much the same reasons that were given in that case. In short there is no penalty within the legislation for protection later than 14 days but rather the penalties apply for failure to protect at all.

The further point in Draycott that the 14-day rule within the DPS scheme could not be an ‘initial requirement’ of the scheme was also found to be correct and the Court of Appeal went further by stating that no scheme can impose a time limit on protection as an initial requirement or at least not one that bites in a legislative (as oppose to administrative) sense.

The Court of Appeal went further in that it held that the appropriate point where the Court should consider the protection status of the deposit is when it comes before the Court for a hearing and not at the date when the proceedings are issued. In other words the landlord has until the date of a hearing to correct his failure to protect the deposit properly.

In summary, a landlord can protect a tenant’s deposit at any stage right up until the hearing, serve them with the prescribed information and escape the relevant penalties.

The Court has not ruled on what the position is once the tenancy has ended and whether a landlord can protect the deposit at that stage and still escape liability. This issue remains one which needs a higher court decision.

Michelle Draycott (2) Paul Maxwell Draycott V Hennells Letting Ltd (T/A Hannells Letting Agents) (2010) [2010] EWHC 217 (QB)

This was an appeal by Hannells from a Circuit Judge decision. The Draycotts had entered into a 12-month AST with Derby Build Ltd (the landlords) on 28 February 2008. A deposit of £2,700 was paid to the agents, Hannells, who, according to the tenancy agreement, were to hold the deposit as stakeholder. The deposit was credited on 4 March 2008. The deposit was not registered with the DPS until 19 May 2008 and the Draycotts informed of the details on 21 May 2008. On 27 November 2008, the Draycotts brought a claim under s.214 Housing Act 2004 on the basis that the deposit had not been registered and prescribed information had not been given within 14 days of it being received. The claim was brought against the agents.

On appeal, the High Court decided:

1. That an agent can be pursued for the 3 x deposit penalty under s214 if the deposit is unregistered; and
2. The penalties under s214 take effect after a failure to comply with the 14 days requirement only if the deposit is unregistered when the claim comes to court.

You can’t make a claim for deposit x3 if the landlord has returned the deposit

Green v Sinclair Investments Limited Clerkenwell and Shoreditch County Court, 11 June 2010

This is a County Court and non-binding tenancy deposit case reported in September 2010 Legal Action ‘Recent Developments’.

This case involved a one year assured shorthold tenancy, with a deposit of £2100. The deposit was not protected. The tenancy ended after 7 months by surrender, in July 2009. The former tenant sent a letter of claim in September for the return of the deposit and the 3x deposit penalty. The former Landlord sent a cheque for the full deposit only to the former tenant’s solicitors, which was received just after the claim was issued. The solicitors returned the cheque. In February 2010, the former landlords paid the deposit amount directly into the former tenant’s bank account. The former tenant did not reject or return the money.

At hearing of the claim, the former Landlords argued that the Court could not make an order under s.214(3) either for the return of the deposit or its protection, because the tenancy had ended and the deposit had been repaid in full. The Court could not make an order for 3 x the deposit penalty because the ‘must also’ in s.214(4) meant that such an order could only be in addition to an order under s.214(3), not in isolation.

DJ Manners accepted this argument, apparently on the basis that if breaches of s.213 can be remedied by late protection and compliance with information provisions then breach could also be remedied by repayment of the whole of the deposit. On such repayment no s.214(3) order could be made and consequently no s.214(4) penalty order. Claim dismissed.

The court cannot waive compliance with the “initial requirements” of the scheme where compliance is only partial

Baafi v Mapp, Central London County Court, 24 June 2010

A landlord had sought a possession order on the basis of a section 21 notice. The tenant defended the claim on the basis that the landlord had not properly complied with the requirements of the Housing (Tenancy Deposits) (Prescribed Information) Order 2007. He also counter-claimed for the now-customary penalties. The landlord had registered the deposit with the MyDeposits scheme and provided the tenant with their standard form of certificate. This certificate contains a paragraph making clear that the MyDeposits certificate does not, on its own, supply all the information required by the Order. Specifically, it fails to notify the tenant of the procedure to be followed where the landlord or agent cannot be contacted after the end of the tenancy and also fails to inform the tenant of the circumstances under which the landlord will make deductions from the tenancy deposit. Normally, MyDeposits would expect these matters to be dealt with in the tenancy agreement.

The landlord was using an agreement which was described as “archaic” and which failed to address the items missing from the certificate. Surprisingly at first instance DJ Gerlis applied something he described as a ‘purposive approach’. He took the view that as the deposit had been protected the lack of all the prescribed information was not that important. He therefore awarded possession and dismissed the tenant’s claim.

On appeal HHJ McMullen QC held that a purposive approach was not required as the statutory framework was clear. He also found that had a purposive approach been required he would have found that the purpose of the regulations was the proper protection of the tenant’s deposit which was not going to occur when the tenant had not been provided with information as to what would happen if the landlord disappeared. Possession order set aside and counter-claim allowed.

A tenancy deposit taken prior to the introduction of the tenancy deposit protection scheme must be placed into protection on the renewal of a tenancy.

Qurat Ul-Ain Zia v Mourtada Central London County Court 09/02/2010

A number of consecutive tenancies had been entered into between Q and M, the most recent commencing on 6 December 2008. The tenancy agreement for this tenancy made reference to a deposit of £1400 described in the agreement with the words “Deposit £1,400 (already held)”. A further clause in the agreement made provision for the payment of a deposit by M to Q to hold for the term. This clause apparently was a reference to the deposit already held by Q. M fell into arrears of rent and Q issued a notice under section 8 of the Housing Act 1988 for possession. M counter-claimed for the usual penalties for an unprotected deposit to be offset against the arrears of rent.

The argument revolves around the wording of s213(4) of Housing Act 2004 which states that a tenancy deposit taken in relation to an AST must be dealt with in accordance with the legislation “as from the time it is received”. For M it was contended that the money was received anew each time the tenancy was renewed. Q argued that the word ‘received’ should be given its natural meaning and the deposit monies were not received in December 2008 but much earlier, prior to the introduction of the requirement to protect in April 2007.

The Court was not prepared to follow the arguments advanced for Q. It was held that the deposit, while not physically repaid and paid again at each tenancy renewal was, nonetheless, received anew each time. The Court drew a distinction between the “nature and function” of the monies and the manner in which they had physically been held. Accordingly, it was held that the deposit had been ‘received’ in December 2008, had not been properly protected, and therefore judgment was given for M for the usual penalty of three times the deposit.

Tenant can take a claim for x3 deposit even after the lifetime of the tenancy?

Hashemi & Johnson v Gladehurst Properties Ltd, HHJ Cryan, Clerkenwell & Shoreditch County Court, 9 December 2009, Unreported

The tenancy agreement had implied that the deposit would be registered but it required the Claimants to request this and pay an additional administrative fee. They did not do so and the deposit was never registered. The Claimants vacated the property in 2008 and after the Defendant made deductions from their deposit they commenced a claim for the return of the deducted money plus the normal three times the deposit figure.

This case is interesting in respect of the argument that the tenant can only claim during the lifetime of the tenancy, which was dismissed; the suggestion by DJ Stary that a tenant should not deliberately wait until after the end of the tenancy to ‘ambush’ the landlord with a claim, also dismissed; and finally the suggestion that where there are joint tenants they must make the claim together, a point which was not decided due to the involvement of the second tenant by the time of the appeal but one which has apparently swayed judges in other County Courts.

What do these cases mean for you?

• Include the agent as a party if they took the deposit
• No requirement within the 2004 Act that the deposit must be protected within 14 days of receipt. Late compliance up to the door of the court is possible.
• Even if protection within 14 days is an “initial requirement” of the scheme then there is still no x3 claim
• Tenancy Deposit legislation still effective to defeat a possession claim based on a s21 Notice if deposit not protected.
• Still to be decided if a x3 claim can be defeated by late protection after the tenancy has come to an end. Is a x3 claim possible where the prescribed information has not been served on “the tenant” and the tenancy has come to an end?
• Deposits for tenancies now caught by the new regulations increasing the assured tenancy limit to £100,000;
• Failure to comply with other “initial requirements” may still result in a successful claim if not rectified.
• Watch out for unregistered HMOs

6. Judicial Reviews of decisions by housing associations

McIntyre & Anor, R (on the application of) v Gentoo Group Ltd [2010] EWHC 5 (Admin)

This was the judicial review of North Sunderland Housing Company’s refusal to permit an exchange of homes by the Claimants, joint assured tenants, with another NSHC assured tenant. NSHC had refused to permit the exchange unless Mr McIntyre paid off an historic debt for rent arrears accrued when he lived at another property as a tenant of Sunderland City Council. Originally Mr & Mrs were joint tenants of Sunderland City Council in the property, prior to a stock transfer to what became NSHC in 2001. It is quite a complex and significant case, involving the disputed conjunction of private and public law and the first significant test of the application of the Court of Appeal Judgment in L&Q v Weaver [2009] EWCA Civ 587 on the status of RSLs as exercising a public function in their housing function.

The MacIntyres argued that:

1. the decision not to consent until payment of Mr McIntyre’s historic and unenforceable rent arrears in respect of another tenancy was amenable to JR
2. it was one no reasonable person could have taken in the circumstances
3. Gentoo had simply applied a blanket policy with no consideration of individual circumstances

Gentoo argued that:

1. the decision was not amenable to JR
2. if it was, the claim should be dismissed as there were alternative remedies available
3. the decision was not unreasonable

Although relief in this case was refused, the court found that the application of public law was not limited to judicial review or to cases where public law is raised as a defence. A case regarding the conditions imposed on an assignment was a case involving the contractual relationship between landlord & tenant which happened to have a public law element. So that:

1. Weaver will be taken broadly in terms of ‘housing function’.
2. Conditions on exchange will be taken broadly, save where they have no private law basis
3. The simple existence of an alternative private law claim will not invalidate bringing a public law claim, but…
4. Where there is a coterminous private law remedy, permission should be refused (or, under the discretion, at substantive hearing)
5. Conditions on exchange of tenancy, where they relate to the performance of the tenancy, will not usually be considered to be unreasonable, assuming they have private law validity (i.e. relate to the tenancy proposed to be exchanged).
6. Assertions of a blanket policy, and fettering of discretion, must be made at an early stage and evidenced if they are to be sustained.

What does this case mean for you?

• Don’t forget private law remedies for tenancy related matters, for example assignment, succession.
• Judicial Review of housing association decisions is still possible, for example, in allocation of housing, housing transfers.

Andrew Brookes
Anthony Gold
November 2010 


Andrew Brookes is a Partner and Head of the Housing, Public Law & Human Rights department at Anthony Gold. For further information email Andrew or call 020 7940 4000.