London Borough of Newham v Ria & Anor

J U D G M E N T

Thursday, 15th January 2004

1. SIR MARTIN NOURSE: The argument on this appeal has left me with an uneasy feeling that a large amount of time and public money has been expended on these proceedings to no good purpose.

2. By an order of the Bow County Court made on 31st March 2003, in proceedings between the London Borough of Newham ("the Council") as claimant and Sharmin Ria and Masuda Hossain as defendants, His Honour Judge Marr-Johnson, sitting at the Mayor's and City County Court, made the following declarations:

"(i) declaration that, upon the death of Khaleda Fancy Khanam on or about 8th February 2001, Sharmin Ria succeeded in equity to the tenancy of 22 Rawstone Walk, London, E13 pursuant to section 89 of the Housing Act 1985.

(ii) A declaration that upon the death of Khaleda Fancy Khanam on or about 8th February 2001, Masuda Hossain became the trustee of the tenancy of 22 Rawstone Walk, London, E13 in whom the legal tenancy of 22 Rawstone Walk, London, E13 vested."

3. The circumstances giving rise to that order can be briefly stated. On 15th March 1988 the Council granted to Khaleda Fancy Khanam ("the deceased") a secure periodic tenancy of 22 Rawstone Walk, London, E13 ("the premises"). Some 15 months earlier, on 2nd December 1986, a daughter, Sharmin Ria, had been born to the deceased, and that no doubt was an influential factor in the Council's decision to grant the tenancy. Miss Ria is the first defendant. It will be noted that she is still under age, though she will be 18 on 2nd December of this year. Sadly, on or about 8th February 2001, when Miss Ria was just 15, the deceased died. At all material times the two of them had occupied the premises under the deceased's secure tenancy as their only or principal home. That meant that Miss Ria was a person qualified to succeed the deceased within section 87 of the Housing Act 1985.

4. The deceased left a will dated 14th June 2000, by which she appointed her sister, the second defendant Masuda Hossain, to be the sole executrix and trustee thereof and Miss Ria's legal guardian. She directed that the whole of her net estate should be held upon trust for Miss Ria absolutely. It is not clear whether probate of the will has been granted, but for present purposes that is not a material point because the authority of an executor or executrix dates back to the death, so that he or she can act before the grant of probate.

5. After the deceased's death Mrs Hossain passed the guardianship of Miss Ria to her brother, Miss Ria's uncle, Zahidul Khan. He was already living at the premises and was granted a residence order in regard to Miss Ria in December 2001.

6. There appears to have been considerable confusion as to the legal position in regard to the deceased's secure tenancy on her death, Miss Ria being still under age. Everybody seems to have agreed, first, that under section 89 of the 1985 Act the tenancy vested in Miss Ria as the only person qualified to succeed the deceased; secondly, that by virtue of section 1(6) of the Law of Property Act 1925, which provides that a legal estate is not capable of being held by a minor, and the decision of this court in Kingston-upon-Thames RBC v Prince (1998) 31 HLR 794, it was only the equitable tenancy which vested in her.

7. What was not agreed was in whom, if anyone, the legal estate in the tenancy was vested. It has even been suggested that it might be in abeyance. The final position adopted by those acting for Miss Ria was that the legal estate was vested in the Council in trust for Miss Ria, alternatively that it was in suspension; both of which were, in the circumstances of this case and as I shall hope to demonstrate, very curious notions.

8. On or about 23rd August 2001, some six months after the deceased's death, the Council served a notice to quit at the premises, the notice being dated 13th August and addressed to the personal representatives of the deceased, and expressed to expire on 24th September 2001. That notice was never proceeded upon, although there were further demands for rent. On 2nd August 2002 the Council commenced these proceedings, which did not claim arrears of rent or possession, but simply declarations in the form later granted by the judge, together with further or other relief including relief under the legislation relating to trustees.

9. The first serious question which arises is why the Council thought it necessary to start any proceedings at all. They were not seeking possession of the premises and they seem to have accepted, as I believe they still do, that on Miss Ria's attaining her majority, which was then only two years and four months away, she would be entitled to have the legal estate vested in her.

10. We have put this point to Mr Davies, who has appeared for the Council both here and below. He has said that there were great difficulties in the case, and to an extent that is certainly true. The family, though apparently happy with the idea that Mrs Hossain should be the trustee, later took a different view. Mr Davies has said that the real problem was to try and arrive at a position which would satisfy the Housing Benefits Agency, so that the housing benefit, to which it would appear that Miss Ria is clearly entitled, could be paid. Even now the difficulties with the Housing Benefits Agency have not been resolved. The position they have been taking, which I suppose was understandable once contested proceedings were in progress, is that they cannot do anything about it until the matter had been finally settled.

11. In any event, Mr Davies has failed to satisfy me that the steps taken by the Council were the best way of seeking to resolve the position. What was needed was a round table meeting between the Council's representatives and those representing Miss Ria and Mrs Hossain in order to arrive at an agreement which would enable the Housing Benefits Agency to be satisfied. However, that is not what happened. The proceedings for the declarations went ahead. They were opposed. When the matter came before the learned judge he dealt with it quite briefly, proceeding on the footing that the decision was not a difficult one. I too propose to deal with the matter as briefly as I can.

12. The judge gave both defendants permission to appeal to this court. An appeal was entered by Miss Ria but not by Mrs Hossain, who had taken no effective part in the hearing below. An appeal lay not to this court but to the High Court. However, on 31st March 2003 Lawrence Collins J directed that the appeal should be referred to this court because it raised an important point of principle concerning the succession of a minor to a secure tenancy. For my part, having heard the case argued, I doubt whether it raises any point of principle at all.

13. All the material statutory provisions are set out or referred to in the very careful judgment of Hale J in Prince and it is unnecessary to refer to them again. In my view the present case is a fortiori to the decision in Prince in two respects. First and more important, the legal estate in the tenancy vested in Mrs Hossain under the express provisions of the deceased's will. On behalf of Miss Ria Mr Feldman's principal submission has been that on a correct construction of Part IV of the 1985 Act, where a statutory succession takes place, the common law rules of succession are displaced or suspended and the statutory scheme prevails. No authority has been cited for that proposition, which is contrary to the decision in Prince , where it was held in effect that the rules of the common law and the statutory scheme are complementary to each other.

14. Moreover, Mr Feldman has failed to advance any good reason for the view that the legal estate vested in the Council on the deceased's death. That has been his primary submission, at least in this court. Why should that have been so when the will expressly provided for a recipient of the legal estate in the shape of Mrs Hossain? Further, the notion of a landlord's being a trustee of a tenancy of the demised premises for the benefit of the tenant is a very curious one, to which effect should not be given without express provision. Nor can the court accept any argument that the vesting of the legal estate is in some way suspended or in limbo until Miss Ria attains her majority.

15. The second and less important respect in which the present case is a fortiori to the decision in Prince is the subsequent enactment of the Trusts of Land and Appointment of Trustees Act 1996, of which the provisions of paragraph 2 of schedule 1 are material. Paragraphs 1 and 2 of that schedule are headed "Minors". Paragraph 1(1) and (2) deal with purported conveyances to minors which, by virtue of the incorporation (see section 23(2) of the 1996 Act) of the definitions in section 205(1)(ii) of the Law of Property Act 1925, do not include purported dispositions by will. However, that case is covered by paragraph 2 of the schedule, which reads:

"Where after the commencement of this Act a legal estate in land would, by reason of intestacy or in any other circumstances not dealt with in paragraph 1, vest in a person who is a minor if he were a person of full age, the land is held in trust for the minor."

It is clear in that context that the words "in any other circumstances" include purported dispositions by will. It can therefore be said that the 1996 Act expressly supports, as indeed Hale J evidently thought that it would, the decision of this court in Prince .

16. Mr Feldman has submitted that the judge's decision made no reference to what he calls the far reaching, problematic and unworkable consequences of deciding that the legal estate is vested in Mrs Hossain. He has referred to a number of supposed such consequences, most of which seem to be more apparent than real. A greater objection is that he has been unable to point to any such consequences which have taken practical effect. Indeed, if Mr Feldman's primary submission was correct, there might well be other consequences which would be equally problematic. Whether that be right or wrong, the arguments advanced by Mr Feldman, either individually or cumulatively, do not go anywhere near to demonstrating that the decision of the learned judge was wrong. In my view it was clearly right. In the end I have been unable to emulate the brevity of his reasoning, but I agree with his judgment entirely and would affirm it accordingly.

17. It remains for me to raise the second serious question, which is why, the judge having made the decision he did, it was ever thought necessary for this appeal to be brought. Again, no ground has been shown which could be said to have made it necessary. It is now only ten and a half months until Miss Ria attains the age of 18, at which point she will unquestionably be entitled to an assent of the legal estate in her favour by Mrs Hossain. It has not been suggested that Mrs Hossain will be unwilling to give it. Indeed, her attitude, as I understand it, has been to involve herself in the matter as little as possible.

18. Mr Feldman has been subjected to some close questioning by my Lord and myself. In my view once the matter had been decided by the judge, it could be said to have been resolved. It would then have been possible to go to the Housing Benefits Agency without having to trouble this court or incur any more expense or waste of time. They could have been asked to do what they clearly ought to do, which is to pay Miss Ria the housing benefit. Instead, a very unsatisfactory state of affairs has ensued. At this point all we can do is to dismiss the appeal.

19. LORD JUSTICE TUCKEY: I agree.

Order: Appeal dismissed with costs. The question of the extent of the first defendant's liability to be adjourned generally. Community Legal Services Detailed Assessment of the first defendant's costs. Permission to appeal refused.