Resident Upheaval

After persuading the Supreme Court to lay the “zombie-like creature” to rest, Charlotte Collins and Giles Peaker pick over the bones of the tolerated trespasser.

In Lord Walker’s words, the tolerated trespasser is a "zombie-like" creature which has been living a “sort of half-life” at the heart of housing law practice for the past 20 years.

The occupant of a local authority property whose tenancy had been ended by possession order but against whom enforcement had been stayed by the court, or not sought by the landlord, lived outside the usual rules of landlord and tenant. There was no obligation on either party to fulfil their covenants, but there was still a requirement on the occupant to pay use and occupation charges at the same level as the rent.

Like many legal limbos it was created by judicial interpretation, in this case, of the Housing Act 1985 by the Court of Appeal in Thompson v Elmbridge Borough Council [1987] 1 WLR 1425, later confirmed by the House of Lords in Burrows v Brent London Borough Council [1996] 1 WLR 144.

So when the Housing and Regeneration Act 2008 finally came into force, it was assumed, with considerable relief on the part of both local authorities and tenants’ advisors, that this zombie had been finally put to rest. The Act gave all the existing tolerated trespassers with a common landlord a ‘replacement tenancy’ on the same terms as the one that had been ended by possession order.

Certainly this belief was shared by the House of Lords in Knowsley Housing Trust v White [2008] UKHL 70.

In that case, Lord Neuberger ventured the view that, had he been so invited, he would have been prepared to consider Thompson and Burrows wrongly decided. But, given the imminent solution of the Housing and Regeneration Bill as it then was, no party sought that step.

Instead, Knowsley was restricted to finding that assured tenants were not capable of being tolerated trespassers as the tenancy did not end until enforcement of possession, the date of eviction.

The case of Barry Austin v LB Southwark, which was still proceeding through the lower courts at that time, was overlooked in this general sense that the problem had been wrapped up.

Barry Austin was the brother of the late Alan Austin, who was a secure tenant in the London Borough of Southwark. In 1987 a suspended possession order was made against Alan Austin, ‘not to be enforced’ if rent arrears of £3,192.96 were paid within 28 days. The order was breached, so Alan Austin was a tolerated trespasser from 1987.

The elephant in the room

Southwark did not enforce the order and there was no indication that Alan had been informed that he was a tolerated trespasser then or subsequently. 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.

The borough council insisted that as there was no tenancy in existence at the date of Alan’s death, Barry could not succeed to the tenancy as he would otherwise have been entitled to do under Housing Act 1985.

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 then to apply for an order under section 85(2)(b) Housing Act 1985 postponing the date of possession so that Alan’s tenancy would have retrospectively existed at the date of his death and Barry would have, on his account, succeeded to the tenancy. The application failed at first instance, on appeal to the High Court and on appeal to the Court of Appeal. The principal issue on each appeal was the Court of Appeal judgment in Brent London Borough Council v Knightley (1997) 29 HLR 857, that the right to apply for a postponement of an order for possession was not an interest in land capable of being inherited, and was therefore a personal right that ended with the death of the tenant/tolerated trespasser. Although Barry Austin had not alleged direct inheritance, but instead sought appointment for the estate of Alan Austin, Knightley was held to be fatal for that application and any arguments on the right to apply being a ‘property’ under Article 1 Protocol 1 ECHR raised in its support.

This was a situation that fell outside the provisions of the Housing and Regeneration Act 2008. The position of a potential successor to a deceased tolerated trespasser was simply not addressed. Barry Austin was given permission to appeal to the Supreme Court, which ruled on two issues: 1) Whether a secure tenancy ends at the moment when a tenant is in breach of the terms of a conditional suspended possession order so that the former tenant who continues in occupation becomes a tolerated trespasser; and 2) If a secure tenancy does end in this way does the former tenant’s statutory right to apply to postpone the date for possession and thus revive a secure tenancy under section 85(2) of the Housing Act 1985 survive death and pass to the estate of the deceased’s former tenant?

If the Supreme Court found for Mr Austin on the first issue, the entire 20 year history of the tolerated trespasser would have beenretrospectively reversed and those of the estimated 250,000 who remained in their properties would have been tenants throughout. If they found for him on the second issue, Mr Austin and many others in his situation would be able to apply to retrospectively revive the tenancy and thereby succeed to it.

A definitive obituary

A five-judge panel, Lords Hope, Walker, Brown, Kerr and Lady Hale, handed down judgment on 23 June 2010 in Austin v LB Southwark [2010] UKSC 28. There were two main judgments, by Lord Hope and Lady Hale.

Lord Hope gave the leading judgment and favoured Lord Neuberger’s view in Knowsley that the tenancy ends only when the order for possession is executed, on the basis that the words “is to give up possession” within section 82(2) Housing Act 1985 can be read as contemplating the date when possession will actually be given up under a warrant for possession. Lord Hope stated that it was “a remarkable fact that a conclusion about the meaning of section 82(2) in Thompson v Elmbridge, which, admittedly with the benefit of hindsight is so obviously unsatisfactory and conceptually confusing, should have been made with such little reasoning.”

Despite this Lord Hope was aware that the effects of reversing the decision in Thompson are incalculable, as it has assumed to be right and acted upon in tens of thousands of cases. Further, he was concerned of the impact on social landlords in that they would be exposed to damages claims for failure to carry out repairs. This was one of the factors that led to the decision that the Housing and Regeneration Act 2008 should only amend the law prospectively.

Lady Hale gave what was described by Lord Walker as “the definitive obituary of the tolerated trespasser”. In her view, “had it not been for Parliament’s intervention, it would have been the duty of this court to set the matter right”.

She went on to describe a tolerated trespasser as “an oxymoron, a trespasser being someone who should not be there, but tolerated trespassers were allowed to be there.”

Righting the wrong

Lady Hale gave examples of the obvious problems of the tolerated trespasser regime, those who did not realise the order was breached, blameless tolerated trespassers due to the housing benefit system, neither landlord or former tenant able to enforce covenants under the tenancy agreement, the statutory scheme for determining rent did not apply, the trespasser could not exercise the right to buy even if arrears were cleared, and succession claims failed.

She went on to say: “All of this nonsense could have been avoided if a different construction had been put upon section 82(2) of the Housing Act 1985. The whole edifice was built upon the extempore judgment in a two judge Court of Appeal in Thompson.”

Was it not for the Housing and Regeneration Act 2008, Lady Hale considered that it would be right for the court to sort the matter out, adding: “The decisions in Thompson and the cases which proceeded on the unquestionable basis that Thompson was correct were not merely wrongly decided. They set the law on a course which was wrong in principle and wrong in practice.

“They produced a position with which no one was happy - neither the landlords nor the tenants - as is shown by the response to the government’s consultations.” However, the judge was persuaded that the Housing and Regeneration Act 2008 had righted the substantial problems and that overturning Thompson now would be a considerable risk.

Both Lord Hope and Lady Hale found for Mr Austin on the second issue and all five judges allowed the appeal on this ground, overturning Brent v Knightley. Lord Hope held that: “Section 85(2) states that the powers that it refers to are said to be exercisable at any time before the execution of the order. The possibility that the tenant may have died in the meantime is not mentioned.

“If it had been the intention of Parliament that the powers should not be exercisable on death it would have been easy to say so and when the act contemplates what is to happen on death it says so at sections 87 to 90.”

Regeneration

This case is remarkable for a number of reasons. It marks the Supreme Court’s adoption of the Practice Statement of 26 July 1966 of the House of Lords in respect of overturning its own previous judgments. The Supreme Court accepted that the Practice Direction also applied to it in its approach to overturning House of Lords judgments and indeed its own at some future date.

The judgment lays bare the lack of reasoning apparent in the establishment and approval of the concept of the tolerated trespasser in 1987 and 1996, such that, in Lady Hale’s words, the law had been on “a course which was wrong in principle and wrong in practice”. That course lasted 20 years.

Most importantly it enables potentially hundreds of people who would have been successors to a tenancy to apply to postpone the date of possession and revive the tenancy of the deceased tolerated trespasser, so that they can rightfully succeed to the tenancy. It is estimated that at least some 318 tolerated trespassers died each year, many of whom would have had potential successors.

Those potential successors will need to apply in the original possession proceedings under section 85 of the Housing Act 1985 to postpone the date of possession. Whether this will be successful is at the discretion of the county court judge, but if the arrears are low, or manageable, and there is a plan for the future, then the court is likely to respond favourably. Councils’ attitudes vary, but there will need to be a basis for any opposition.

If the date of possession is postponed, then succession is a matter of law, but occupation may need to be evidenced.


Charlotte Collins and Giles Peaker are solicitors in the housing and public law department at Anthony Gold Solicitors. Charlotte Collins acted for the applicant in Austin v LB Southwark, with the assistance of Giles Peaker. For further information email Charlotte or email Giles or call 020 7940 4000.