Alamo Housing Co-Operative Ltd v Meredith & Ors

This is the judgment of the court. Before the court are appeals by 7 persons who live in properties the freehold of which is owned by Islington Council [“the Council”]. The Council had entered into a lease [“the Lease”] whereby it granted to the respondent claimant [“Alamo”], which is a fully mutual housing association, a tenancy of a whole series of properties which were scheduled to the Lease. Alamo had in turn granted a series of subleases in similar form [the Subleases”] to each of the appellant defendants each of whom rented one of these properties.

They each appeal from a decision of District Judge Armon Jones with his leave. All the appeals are concerned with the same issue, namely, the interest required of a claimant in possession proceedings.

The background to the dispute is identical in each case and is as follows and can be gathered from the terms of the Lease, the Sublease and the Notices to Quit served by the Council and the claimant.

The Lease was dated 19^th November 2001 and was made between the Council as landlord and Alamo as tenant. It replaced an earlier lease between the same parties which commenced on 3rd October 1994.

The current Lease recites:

“(i)

The Council hold the reversion immediately expectant upon the term hereby granted of the premises referred [sc. to] in the First Schedule hereunder which the Council do not require at the present time and which the Council is willing to make available to the Tenant on a short term basis

(ii)

It is intended that the Tenant shall use the premises to provide temporary housing and accommodation for the persons in housing need for whom the Council would not itself normally be able to provide permanent housing …

(iii)

As the Council’s programme for estate development progresses the Council will require that the premises are handed back to enable the Council to redevelop the same

(iv)

In view of the foregoing it is necessary that temporary occupants of the premises should not enjoy security of tenure and had the Council been unable to make the premises available on a temporary basis, the premises would have remained empty

(v)

Any member or tenant of Alamo Co-Operative limited or it’s managing agents who occupies the premises or any part thereof as a result of an agreement with Alamo Housing Co-Operative Limited shall not become a secure tenant of the Council”

The Lease is for a term of two years. However it contains the following power to determine in clause 2(1):

“If at any time prior to the end of the Term of Years the Council shall desire to take possession of the demised premises or any portion thereof for any reason the Council may serve upon the tenant a notice in writing stating that possession is required expiring on any date but being not less than 28 days after the date of service of the said notice upon which the Council requires possession of the demised premises or any part thereof and on the expiration of the said notice the tenant’s interest granted in respect of the demised premises or such part (as the case may be) shall forthwith cease and determine except for the purpose of enabling eviction if required by the Council [italics supplied] but without prejudice to:

(a)

the respective accrued rights of the Council and the tenant hereunder and

(b)

in the case of a notice concerning part only of the demised premises, to the tenant’s rights, covenants and obligations concerning the remainder of the demised premises.”

We shall refer to the part italicised as “the Exception”. It is crucial to this appeal. The earlier 1994 lease did not have an equivalent to the Exception.

Clause 3 contains various tenant’s covenants of which only the following are of arguable significance:

“(1)

To pay to the Council rent and service charges at the rate of £41,50 per dwelling per week and £20.75 per bedsit per week or as varied from time to time in accordance with Clause 1 above No rent or service charges to be payable in respect of any part of the Demised Premises in respect of which notice has taken effect under Clause 2(1) hereof

(5)

At the expiration or sooner determination of the Term of Years quietly to yield up unto the Council the Demised Premises in such repair and condition as is hereby provided and with vacant possession

(7)

Not to assign or sub-let the whole or any part of the Demised Premises or to share occupation thereof save that the Tenant may sub-let individual parts of the Demised Premises on a temporary basis to its members in housing need on the terms and conditions set out in the occupation agreement contained in the Second Schedule hereto, and immediately upon completion of any such agreement to give the Council notice thereof, and a copy of such agreement

(15)

To use its best endeavours to provide alternative accommodation to persons living in the Demised Premises at the date of termination of this Lease (however determined) who have no other accommodation available to them and to advise all prospective occupiers of the terms of this covenant

(16)(4) At the end of the tenancy howsoever determined to:-

(1)

leave the Demised Premises and the Council’s fixtures and fittings in as good a state of repair as they were at the beginning of the tenancy except for deterioration caused by fair wear and tear or the Council’s failure to carry out its obligations

(2)

leave the Demised Premises in a clean condition and remove all rubbish …

(3)

secure the Demised Premises

(4)

immediately hand in to the Council the keys of the Demised Premises”

Clause 4 contains various covenants by the Council of which only (1) and (3) are of possible significance:

“(1)

That the Tenant paying the rent and services hereby reserved and observing and performing the several covenants and stipulations on the tenant’s part herein contained shall peaceably hold and enjoy the Demised Premises during the Term of years without interruption by the Council …

(3)

To inform the Tenant as soon as the Demised Premises are required by the Council for a Redevelopment Programme without prejudice to clause 2(1) hereof and to notify the Tenant as soon as reasonably practicable of the date by which vacant possession of the Demised Premises will be required for inclusion in the programme ”

The Second Schedule exhibits the Sublease

The Sublease starts with the following recitals:

“RECITALS

WHEREAS:-

(i)

The Co-operative has been granted a tenancy of the premises by London Borough of Islington. … from 3^rd October 1994 and thereafter from week to week for the purposes of providing temporary housing accommodation and

(ii)

By virtue of the terms of the aforementioned tenancy, the Co-operative does not enjoy security of tenure under either the Landlord and Tenant Act 1954, the Housing Act 1985 or the Housing Act 1988 and

(iii)

The Co-operative is a fully mutual Housing Association within the definition of Part 1 of the Housing Associations Act 1985 and is accordingly incapable of granting an assured tenancy within the meaning of Section 1 of the Housing Act 1988 and

(iv)

It is the intention of the Co-operative and the Tenant that the Co-operative should allow the Tenant to occupy the premises temporarily pending such time as the London Borough Of Islington (hereafter referred to as The Owners) shall wish to recover possession”

Clause 3 sets out the subtenant’s obligations which include those in clause 3(16)

“Moving Out

(16)

To give the Co-operative vacant possession and to return the keys of the premises at the end of the tenancy and to remove all furniture, personal possessions and rubbish and to leave the premises and the fixtures and fittings belonging to the Co-operative or to the Owners in good condition and repair. … ”

Clause 4 is headed TERMINATION OF THE TENANCY and includes

“[21] …

(b)

The Co-operative may bring the tenancy to an end by giving the Tenant 4 weeks written notice to quit. Such notice shall only be given in the following circumstances:-

…

[v] If the Owner has informed the Co-operative that it requires vacant possession of the premises and has given the Co-operative Notice to Quit

(c)

The Tenant can only be required to give the Co-operative possession of the property by order of the County Court such order to be obtained by the Co-operative or The Owner. Proceedings cannot begin until expiration of the Notice to Quit.”

Shortly thereafter the Council served Notices to Quit on Alamo in respect of each of the properties occupied by the defendant sub-tenants. Nothing turns on the terms of those notices.

Shortly after receipt of the Council’s Notices to Quit Alamo itself served Notices to Quit on each of the Defendant subtenants. Those notices each required the subtenant to quit his premises some four weeks or so later.

These possession claims were launched by Alamo after the date of expiry of Alamo’s Notices to Quit, which date was itself after the expiry of the Council’s Notices to Quit.

The possession claims were brought under C.P.R.55 and, in accordance with Paragraph 55.4 of the practice Direction subparagraph 2.6 the particulars of claim stated the basis of the claimants right to claim possession.

The Particulars contain the following:-

“1.

The Claimant has a right to possession of [the property]

2.

To the best of the Claimant’s knowledge the following persons are in possession of the property [Defendant named].

4.

The reason the claimant is asking for possession is … because … London Borough of Islington Council has asked Alamo Housing Cooperative to return the property to them.

10.

The claimant asks the court to order that the defendant give the claimant possession of the property.”

The Defence was that at the date when proceedings were commenced Alamo did not have a sufficient interest in the property to entitle it to possession as against the tenants and had not acquired such an interest since then.

The District Judge gave judgment for Alamo. Because points of legal complexity were raised and because the decision was important to many other persons who had been or were about to be served with notices by Alamo in similar circumstances the District Judge gave permission to appeal.

The parties were agreed that in all the circumstances the appropriate court to hear such an appeal was the Court of Appeal. This was, apparently, considered to present a procedural difficulty because the claims had each been allocated to the fast track rather than to the multi-track. 52PD.2A indicates that fast track appeals are to go to a circuit judge whereas multi-track appeals in respect of final decisions are to go to this court. With the encouragement of the parties the District Judge thereupon reallocated these cases to the multi-track so as to enable an appeal to be made to this court.

We take this opportunity of expressing our disapproval of this method of proceeding. We accept that the cases could have been allocated to the multi-track at an earlier stage – see Pt 26.8. We accept that it was appropriate for the judge to send these appeals to this court. However, allocation to a different track after judgment is not the appropriate way of ensuring that an appeal is heard by this court. The appropriate procedure is set out in section 57 of the Access to Justice Act 1999 and Pt 52.14 – the district judge had power to transfer the appeal to this court, although, as is pointed out in Paragraph 9 of the judgment of this court in Clark v Perks [2001] 1 WLR 17, this power should be sparingly used. However, nothing turns on this procedural point.

The parties drew our attention to two cases decided in this court.

The first of these was Manchester Airport Plc v Dutton and Others [2000] 1 Q.B. 133. The Claimant wished to construct a new runway on its own land. In order to be able to operate the proposed new runway as a runway it was necessary that some works should be carried out, namely, that trees on nearby land owned by the National Trust should be lopped or felled so that they would not constitute an obstruction to the flight path. The Claimant had been granted a licence by the National Trust

“1.

… to enter and occupy [the land on which the trees stood] for the purpose set out in this agreement.

2.

The purpose for which the licence is granted is to enable the works agreed between the parties …to be carried out.”

The Defendants objected to what was proposed and, without any licence from anyone, set up encampments on the land so as to make it difficult or impossible to lop and fell the trees. The Claimants started possession proceedings under R.S.C. Order 113.

Chadwick LJ was in a minority. He was of the view that in order to bring an action for possession it was necessary for the licensee not in occupation to have the right to exclusive possession of the land in question.

Laws LJ, with whose reasoning Kennedy LJ agreed, stated:

“… I think it is clear that if the airport company had been in actual occupation under the licence and the trespasser had then entered upon the site, the airport company could have obtained an order for possession; at least if it was in effective control of the land. … But if the airport company, were it in actual occupation and control of the site, could obtain an order for possession against the trespassers, why may it not obtain such an order before it enters into occupation, so as to evict the trespassers and enjoy the licence granted to it? As I understand it, the principal objection to the grant of such relief is that it would amount to an ejectment, and ejectment is a remedy available only to a party with a title to or estate in the land; which as a mere licensee the airport company plainly lacks.” (page 147)

“… the true principle is that a licensee not in occupation may claim possession against a trespasser if that is a necessary remedy to vindicate and give effect to such rights of occupation as by contract with his licensor he enjoys. This is the same principle as allows a licensee who is in de facto possession to evict a trespasser. There is no respectable distinction, in law or logic, between the two situations. An estate owner may seek an order whether he is in possession or not. So in my judgment, may a licensee if other things are equal. In both cases the plaintiff’s remedy is strictly limited to what is required to make good his legal right. The principle applies although the licensee has no right to exclude the licensor himself. Elementarily he cannot exclude any occupier who, by contract or estate, has a claim to possession equal or superior to his own. Obviously, however, that will not avail a bare trespasser.” (page 150)

Kennedy LJ, to whose judgment Laws LJ made no reference, said that, on the facts of that case, the requirement of the law that in order to succeed in an action for possession a plaintiff must show that he had the right to possession of the land were met. He said at page 151:

“The plaintiff does have a right to possession of the land granted to it by the licence. It is entitled “ to enter and occupy” (Kennedy LJ’s emphasis)the land in question. The fact that it has only been granted the right to enter and occupy for a limited purpose (specified in clause 2 of the licence) and that, as I would accept, the grant does not create an estate in land giving the plaintiff a right to exclusive possession does not seem to me to be critical.”

The second case to which our attention was drawn was Countryside Residential (North Thames) Limited v (1) A Child; (2) Persons unknown (2001) 81 P&C.R.10 (Aldous and Waller LJJ and Rougier J) in which Waller LJ gave the leading judgment allowing an appeal by trespassers against a licensee with which the other members of the Court concurred.

The Claimant developers had secured options to buy over land. They had been granted licences which enabled them to enter on the land with a view to carrying out investigatory works on that land to see whether it was suitable for development. The licence read, so far as presently relevant,:

“The owners will at any time on … notice … allow Countryside … access to the property to carry out surveys and technical investigations (including soil pollution and archaeological investigations) of the site …”

The Claimants brought proceedings under R.S.C.Order 113 and succeeded at first instance. Having been given permission to appeal by Chadwick LJ, they appealed to this court and sought to distinguish Dutton. They submittedthat not every licensee who had some right of access to the land had the right to possession required to eject trespassers and that the only licensee who had that right was the licensee who had the right of “effective control” of the land.

Waller LJ said this at paragraphs 12 and 13:

“In my view it is important not to confuse contractual rights, in relation to which the developers may well have rights against any person who seeks to interfere therewith, with the right of possession, which is the foundation of the Order 113 remedy. … The judgment of Kennedy LJ also supports the view that something beyond just the right to enter the land is required. …he places emphasis on the fact that the right is to enter and occupy. It seems to me that there is a clear difference between a licence granted for the purpose of access, which does not provide effective control over the land, and a license to occupy which does.”

At the time the possession proceedings were launched the Council’s Notice to Quit had expired and Alamo were in consequence no longer the appellants’ landlords. The only possible right which Alamo had to bring possession proceedings must stem from Clause 2(1) of the Lease. That is common ground.

It is common ground that the Council had required Alamo to evict the defendants.

It is common ground that the appellants had no right whatsoever to stay in their properties.

It is common ground that it is not necessary that the Claimant in a possession action is in actual occupation of the land.

The area of dispute concerns the nature of the right which Alamo had once the Council’s Notice to Quit expired and whether it was sufficient to enable Alamo to bring possession proceedings.

The appellants submit that a claimant in a possession action must have a right to enter and occupy and have effective control of the land and that the Lease does not give Alamo any such right after the Notice to Quit served by the Council has taken effect. They cite the passages in the judgments which we have set out in paragraphs 26, 27, and 31 above. They submit that the present case is closer to the Countryside case than to Dutton.

They submit that

In answer to a question by the court Mr Carter, who appeared for the Appellants, accepted that it would have been possible to frame the Lease in such terms as would have enabled Alamo to bring possession proceedings after the termination of the Lease. An example would be a notional Clause 2(1)(A) which read:

“Notwithstanding the other provisions of this Lease, on the expiration of the notice therein referred to in Clause 2(1), Alamo will continue to enjoy a right to possession of the premises for the purpose of evicting its tenants.”

He submitted however that, while such a clause might render the situation indistinguishable from that addressed in Dutton the present Clause did not have that effect.

It is clear that the Council wished, when it executed the Lease, to rid itself of the burden of managing these premises but, in effect temporarily to hand them over to Alamo. The Council wished to be able to recover possession of parts of the property bit by bit as expedient. Various clauses were inserted in the Lease and the Sublease appended to it to protect existing and potential subtenants.

The situation must be judged as at the time when the Council’s Notice to Quit had taken effect. At that time Alamo no longer had an estate in the land. However, since the Council had, as is conceded, required Alamo to take proceedings to evict the tenants so as to be able to hand over the properties with vacant possession, it seems to us that the effect of the Exception was to confer on Alamo a continuing right to possession for that purpose and therefore the situation is exactly as that described in paragraph 39 above. That was the evident intention behind its inclusion in the Lease, against the background of the decisions in Dutton and Countryside. Had the Council intended to grant Alamo any lesser right it would have been ineffective for the very purpose which the Council wished Alamo to achieve.

The Defendants do not claim any right themselves to occupy the premises and the Council, which is entitled to the premises, has asked Alamo to evict the Defendants so as to be able, as near as may be, to fulfil its covenant to hand over the premises with vacant possession. Possession proceedings seem eminently suitable for achieving this aim.

This appeal is dismissed.