HOUSING LAW PRACTITIONER’S ASSOCIATION

(16th MAY 2007)

“DEFENDING POSSESSION CASES”

ROBERT LATHAM

Introduction

1. This paper addresses three issues:

(i) White v Knowsley Housing Trust [2007] EWCA Civ 404 (“White”). The Court of Appeal gave judgment on 2nd May. We now know that the regime of tolerated trespassers applies to assured tenancies.

(ii) “Tolerated Trespassers” twelve months after Harlow D.C. v Hall [2006] EWCA Civ 156; [2006] 1 WLR 2116 and Bristol C.C. V Hassan [2006] EWCA Civ 656; [2006] 1 WLR 2582. The Court of Appeal’s most recent contribution to the maize is London & Quadrant H.T. v Ansell [2007] EWCA Civ 326 (9th April).

(iii) The impact of the Disability Discrimination Act 1995 on possession proceedings. Two cases, L.B.Lewisham v Malcolm (B2/2006/1199) and Floyd v Scott (B5/2006/1199) are currently before the Court of Appeal.

2. Members are reminded that the last presentation on Rent Arrears and Possession (“Life after Hall, Hassan and Kay”) was given by HHJ Platt on 20th September 2006. He outlined the introduction of the new Form N28A (the new “postponed possession order” with no date for possession specified). He provided a particular insight as to how a Circuit Judge approaches possession proceedings. His notes remain on the HLPA web-site.

White v Knowsley Housing Trust [2007] EWCA Civ 404 (“White”)

3. On 2nd May, the Court of Appeal finally decided (19 years after assured tenancies were introduced by the Housing Act 1988) that the regime of tolerated trespassers applies to assured tenancies. It is understood that some 250,000 “tenancies” are affected by the judgment. The Court reached this conclusion despite the nine reasons why the status of “tolerated trespasser” was unsatisfactory for both landlord and tenant (see Hassan at [34] and White at [18] where Buxton LJ commented that these objections had been noted in Hassan “with apparent approval”). Whether a tenancy subsists will be relevant in the following situations: (i) whether the occupant retains a Right to Buy (the issue in White); (ii) eligibility for succession to a deceased tenant; (iii) the effect of bankruptcy (the issue in Harlow v Hall) and (iv) whether the tenancy remains part of the matrimonial property.

4. The Court of Appeal rejected the tenant’s contention that an assured tenancy only comes to an end on the date when possession is given up by the tenant. The Court also rejected the contention of the Secretary of State that the date upon which the tenancy came to an end depended upon the specific terms of the order in each case, and that on the facts of the current case Ms White’s tenancy had subsisted. The Court of Appeal held that an assured tenancy in respect of which a possession order had been made using the template in Form N28 (2001) came to an end on the date on which the tenant is to give up possession in pursuance to the order.

5. Jan Luba QC raised three arguments on behalf of the tenant:

(i) the decision of Sherrin v Brand [1956] 1 QB 403 in respect of “protected tenancies”. The Court rejected this on the ground that there was nothing equivalent to a Rent Act “statutory tenancy” under the HA 1988.

(ii) The absence of a provision equivalent to s.82(2) HA 1985 in HA 1988. The Court held that in Harlow v Hall and Hassan, s.82(2) was used as a convenient statement of a binding statutory rule as to the date of termination. Where the tenancy would have ended in the absence of that provision was not in issue.

(iii) Policy reasons. Buxton LJ held that such arguments could not withstand contrary indications from the statutory language.

6. The Appellant also sought to appeal out of time against the possession original order which had been made on 8th June 2004. The argument was that the District Judge had not intended to suspend the execution of the order under s.9(2)(a), but rather to postpone the date of possession under s.9(2)(b). This contention could not be sustained in the light of the transcript of the hearing. This aspect of the case is a cautionary tale for those who want to use CPR PD 40B 4.1 (“the slip rule”) to amend orders which were made in the template of N28 (2001) (see [50] of the judgment and “Tolerated Trespassers: The Interim Solution”, Robert Latham, Legal Action, August 2006 at p.32).

7. The Court of Appeal noted that it is open to a court to use the template Form N28A in respect of assured tenancies (see Buxton LJ at [18] and [48] and Longmore LJ at [59]). Hassan applies equally to “assured” as to “secure” tenancies. There is no requirement on a Court to specify a date for giving up possession. Possession may be postponed under s.9(2)(b) to a “date to be fixed on an application by the landlord” (see Hassan at [37]). However, the procedure for fixing a date for possession in Part IV of CPR 55 PD is restricted “secure tenancies”. There is no reason why a possession order should not make express provision to incorporate this procedure. However, strictly a court should exclude paragraph 10.8 - whilst a Practice Direction may disapply other rules in the CPR, it is not open to a Court to do so. HHJ Platt has indicated that PRP 55 PD is to be amended to incorporate assured tenancies. The current timescale for this is October 2007.

“Tolerated Trespassers” - Twelve Months On

8. London & Quadrant H.T. v Ansell [2007] EWCA Civ 326 is the most recent example of the problems created by the regime of tolerated trespassers.

The tenancy had been granted in September 1987 and was therefore a secure tenancy. On 19th February 2001, a SPO had been made using N28 (1993). The tenant had been ordered to pay costs of £120 in addition to arrears of £1,049. The Order had included the standard clause: “when you have paid the total amount mentioned, the claimant will not be able to take any steps to evict you as a result of this order”. The tenant had breached the order almost immediately and had therefore become a tolerated trespasser on 19th March (the date specified in the Order). On 26th October 2004, both the arrears and costs were cleared by an injection of housing benefit. On 10th February 2006, the claimant issued a 2nd claim for possession, motivated by allegations of nuisance. However, the claimant sought possession as of right: (a) the defendant was a tolerated trespasser; (b) alternatively, if any new tenancy had been granted (see Swindon B.C. v Aston [2002] EWCA Civ 1850; [2003] HLR 42), this was an AST. The defence contained an express denial that the grant of a new tenancy could be inferred. HHJ Birtles held that the defendant was a trespasser and made a possession order. The defendant declined an invitation from the Court of Appeal to apply for permission to amend to assert the grant of a new tenancy. The Court of Appeal held that the claimant had been quite entitled to seek a possession order.

9. The following points should be noted:

(i) The possession order used the template in Form N28 (1993). The SPO had been breached within the 28 period specified in the order (see [24(1)] of the judgment of Chadwick LJ). Different considerations may have applied had any breach arisen after 19th March 2001 (see 11 below).

(ii) The order had only ceased to be unenforceable on 26th October 2004, because the landlord had appropriate the surplus of £120 from the rent account to discharge the liability for costs. The tenant did not seek to argue that the landlord was not entitled to appropriate this sum from the rent account to discharge the liability for costs (see [29] [30], [44] & [45]). Had the costs liability been outstanding, the s.85(2) jurisdiction would have subsisted.

(iii) The problem faced by the Defendant was the decision in Swindon B.C. v Aston in which Pumfrey LJ haled that the s.85(2) jurisdiction ceased to be exercisable when the judgment debt was cleared. This decision bound the Court of Appeal. It is an issue which merits the consideration of the House of Lords.

(iv) The Defendant did not seek to argue that there had been the grant of a new tenancy. It is apparent that there had been an increase in rent after the SPO had ceased to be enforceable. Whilst any new tenancy would have been an AST, it is arguable that any eviction would have been disproportionate (see Housing Corporation Regulatory Circular No.07/04 and Article 8 of the European Convention). Indeed, it would seem that the tenant made no reference to Article 8.

10. The original SPO made on 19th February 2001 used the template in Form N28 (1993) and provided (emphasis added):

“1. The court has decided that unless you make the payments as set out in paragraph 3 you must give the claimant possession of 39 Hannay Lane, Crouch End, London N8 9QQ on 19th March 2001.

2. You must also pay the claimant £1,049.15 for unpaid rent, use and occupation of the property and £120 for the claimant’s costs of making the application of possession.

3. You must pay the claimant the total amount of £1,169.15 by instalments of £2.65 per week in addition to the current rent. The current rent is £84.00 per week. The first payment of both these amounts be made on or before 5 March 2001. When you have paid the total amount mentioned, the claimant will not be able to take any steps to evict you as a result of this order.

4. If you do not pay the money owed and costs by the dates given and the current rent, the claimant can ask the court bailiff to evict you and remove your goods to obtain payment. This is called ‘enforcing the order and money judgment’.”

11. The Court did not consider what would have been the effect had Ms Ansell paid the requisite sums of £86.65 on or before 5th, 12th and 19th March 2001, but defaulted thereafter. This issue has never been addressed by the Court of Appeal. It is arguable that had the tenant complied the required payments up to 19th March, she was no longer obliged to give up possession, and that thereafter there was only an instalment order for the judgement. Upon a subsequent breach, it would have been open to the landlord to apply to vary the order pursuant to s.85(2) HA 1985.

12. In all cases involving secure or assured tenancies, where the court is satisfied that it is reasonable to make an order for possession on ground of rent arrears, the Court should be asked to postpone the date of possession (under s.82(2)(b) HA 1985 or s.9(2)(b) HA 1988) using the template in Form N28A). Be prepared! Remember the nine reasons why the status of tolerated trespasser in unsatisfactory for both landlord and tenant (see 3 above). The landlord may seek to argue that the Court should suspend the execution of the order (s.82(2)(a) or s.9(2)(a)) – see “Rethinking Possession order, Jon Holbrook and Nick Billingham, NLJ 13 April 2007 at p.506). The landlord may even seek to argue that it should be a condition of the suspension that the tolerated trespasser should comply with the terms of the former tenancy, whilst the landlord will be under no contractual obligations towards the occupant.

13. There are now tens of thousands of “innocent tolerated trespassers” against whom possession order have been made using Form N28 (2001) prior to the judgments in Harlow v Hall and White. HHJ Platt has advocated a group litigation order under CPR 19.11 to amend all such orders into the template of Form N28A. No one has yet to identify the procedure whereby this desirable outcome could be achieved. It would be open to a Local Housing Authority or a Registered Social Landlord to seek a group litigation order in respect of all the possession orders that they have obtained. No landlord has shown the inclination to do so, despite their proactive duties as public authorities under the Human Rights Act 1998.

14. Before you can advise a tenant who has breached the terms of a suspended/conditional possession order, you must identify the template which was used. The legal consequences will be the same regardless as to whether the tenant occupies under a secure tenancy (HA 1985) or an assured tenancy (HA 1988).

1. Form N28 (2001) – introduced with effect from 15th October 2001

1.1 The tenant would have become a tolerated trespasser on the date specified in paragraph 1 of the Order, regardless as to whether the required payments have been made (see Harlow v Hall). Hence the concept of the “blameless tolerated trespasser”.

1.2 In order to reinstate the tenancy, an application should be made pursuant to s.85(2) HA 1985 or s.9(2) HA 1988 to postpone the date of possession. The Court should be asked to adopt the format of Form N28A. If the application relates to a blameless tolerated trespasser, it may be useful to rely on “New Procedures for Postponed Possession orders: Avoiding the Unintended Creation of Tolerated Trespassers” ( DCLG, July 2006)

1.3 Whilst an alternative may be to amend the original order under the slip rule, the door has now been partially closed to this option (see 2.4 above). It would be necessary to obtain a transcript of the judgement leading to the making of the original possession order.

1.4 The template does not include the express provision that the order will cease to be enforceable when the judgment debt is cleared. Therefore, it is arguable that the extended discretion under s.85 HA 1985 and s.9 HA 1988 will continue to apply.

2. Form N28 (1993) – County Court (Forms) (Amendment No.2) Rules 1993

2.1 Check the terms of the order and the rent account. Did the tenant make the payments specified in paragraph 3 of the Order up to (and including) the date specified in paragraph 1?

2.2 If the answer is “no”, the tenant became a tolerated trespasser on the date specified in paragraph 1 of the order. See 1.2 above.

2.3 If the answer is “yes”, it is arguable that the tenancy subsists. If the landlord disputes this, make an application in the original possession proceedings (a) for a declaration that the tenancy subsists; (b) in the alternative for an order postponing the date of possession.

2.4 The template includes the express provision that the order will cease to be enforceable when the judgment debt is cleared. If the arrears are cleared and if there is material from which the court infers the grant of a new tenancy, it will be a secure tenancy under HA 1985, but an AST under HA 1988 (if the new tenancy arose after 28th February 1997).

3. Form N28 (1982) – County Court (Forms) Rules 1982

3.1 This is the template which was considered by the court of Appeal in Thompson v Elmbridge [1987] 1 WLR 1425. If the tenant fails to make the required payments, s/he will become a tolerated trespasser (see 1.2 above).

3.2 The template includes the express provision that the order will cease to be enforceable when the judgment debt is cleared (see 2.4 above).

4. The Impact of the Disability Discrimination Act 1995 (“DDA”) on Possession Proceedings

15. The impact of the Disability Discrimination Act 1995 (“DDA” ) on possession proceedings where the tenant has security of tenure has been considered in North Devon Homes Ltd v Brazier [2003] EWHC 574 (QB); [2003] HLR 59;Manchester CC v Romano [2004] EWCA Civ 535; [2005] 1 WLR 2775; and Liverpool City Council v Slavin (Legal Action, July 2005 p.28). In Romano, the following principles were established:

(i) The Act does not specifically provide a defence for a disabled person who wishes to assert that that the reason why his landlord brought possession proceedings related to his disability ([63]).

(ii) However, it is open to the disabled person to counterclaim for a declaration that he has been unlawfully discriminated against and/or for injunctive relief ([63]). It is also open to the disabled person to bring an application for judicial review ([62]).

(iii) Section 3 of the Human Rights Act 1998 constrains the Court to interpret s.24(3)(a) as requiring the Court to ask: “(1) did the landlord hold the opinion that it was necessary to serve a notice seeking possession and/or bring possession proceedings in order that the health of A (an identified person or persons) would not be put at risk?; (2) was that opinion objectively justified?” ([75]);

(iv) In a case involving a secure or an assured tenancy, the disabled person should assert that it is unreasonable to make a possession order “rather than to complicate the proceedings by adding a formalistic counterclaim for a declaration or an injunction” ([64]).

16. In Romano, the Court of Appeal left open the “the more formidable interpretive difficulties” where no question of reasonableness arises (see [67] – [68] and [119]). This has now been addressed by DJ Silverman in Community Housing Association v Wye (Edmonton County Court, 15th February 2007, Legal Action, May 2007 p.29 – a transcript of the judgment is available on the HLPA web-site).

The claimant had granted the defendant who suffered from a borderline disorder, an AST, together with one hour a week floating support. After receiving complaints of nuisance, the claimant convened a multi-agency meeting which agreed a range of options to manage the problem. Rather than follow through these options, the claimant served a s.21 notice and sought possession under the mandatory ground provided by s.21 of the Housing Act 1988. The District Judge accepted that the claimant had a mandatory right to possession, but was satisfied that the eviction constituted unlawful discrimination, no defence of justification having been established. In order to provide the defendant with an effective remedy in respect of the unlawful discrimination, an injunction was granted restraining the claimant from continuing with the proceedings. The claimant was granted permission to appeal, but no appeal has been pursued.

17. Two cases are now before the Court of Appeal:

(i) L.B.Lewisham v Malcolm (B2/2006/1199). This appeal, against a decision of HHJ Hanlon, was heard by the Court of Appeal (Arden, Longmore and Toulson LJJ) on 26th and 27th April. Judgement was reserved. The appeal had been brought by a secure tenant who is a schizophrenic and who unlawfully sublet his flat during a period when he was not taking his prescribed drugs. Four issues are raised: (i) Does the DDA provide a Defence to Possession proceedings where there is no issue of reasonableness? (ii) Was the judge entitled to conclude that the defendant was not a disabled person? (iii) Was there a causal link between the breach of tenancy and the disability? and (iv) Was it necessary for the claimant to have knowledge of the defendant’s disability?

(ii) Floyd v Scott (B5/2006/1199). The appeal has been brought by an assured tenancy who faced Ground 8 possession proceedings. The tenant is also a schizophrenic. The arrears arose through housing problems linked to the disability. Three issues are raised: (i) Was it appropriate for the judge to refuse an adjournment on the return date even though there was an issue of capacity? (ii) Was the defendant’s disability an exceptional circumstance justifying an adjournment (see North British H.A. v Matthews [2004] EWCA Civ 173; [2005] HLR 17 ); and (iii) Did the DDA provide any defence? The appeal has been adjourned pending judgment in Malcolm.