Forbes v London Borough of Lambeth

This case raises issues relating to an introductory tenancy granted under Part V of the Housing Act 1996 on 20 March 2000 by the London Borough of Lambeth ("the Council") to Mr.Alan Forbes ("the Tenant").

There are before the court two matters. The first is an appeal and cross-appeal from a decision of Mr.Recorder Atkins at Bow County Court to adjourn proceedings by the Council for possession of the premises. The second is an application for judicial review of the Council's decision to seek possession of the premises.

The Act introduced in Part V (entitled "Conduct of Tenants") an option for a local housing authority to operate an introductory tenancy scheme: section 124(1). The Council so opted. By section 125(1) a tenancy remains an introductory tenancy until the end of a trial period of one year, subject to certain provisions not relevant here and also subject to section 130. Under section 130, if the landlord begins proceedings for possession, the tenancy remains an introductory tenancy, in the absence of certain events not relevant here, until the date on which the court orders possession or until the proceedings are otherwise finally determined.

Section 127 reads

Section 128 is crucial for present purposes:

Section 129 deals with the review of a decision:

The regulations made under section 129(3) are The Introductory Tenants (Review) Regulations 1997. The tenant has a right to a hearing: regulation 2. By regulation 3 a review is to be carried out by a person not involved in the decision to apply for an order for possession and if a decision of an officer is to be reviewed by another officer, the latter must be senior to the former. Provision is made in regulations 8 and 9 for the postponement or adjournment of a hearing.

Section 129(5) refers to a decision on the review to confirm the original decision. Obviously the review may not result in such a decision. However, neither the Act nor the Regulations specify in terms how any other outcome is to be described.

Section 130 makes it clear that the serving of the notice and the taking of proceedings are separate stages.

Neither the Act nor the Regulations provide in terms for an outcome in which the decision is confirmed, but the implementation of the decision is suspended or deferred. Circular No.2/97 "Part V of the Housing Act 1996 - Conduct of Tenants" in paragraph 20 points out that suspended possession orders are not appropriate for introductory tenancies. It continues:

It is now clear from the decision of the Court of Appeal in Stone v. Cardiff City Council [2002] EWCA Civ 298, to which I shall return, that a decision may be confirmed on review, but the taking of further action be suspended or deferred.

The Council by a tenancy agreement dated 3 March 2000 granted an introductory tenancy to the Tenant, the tenancy to commence on 20 March 2000. I am informed that the Tenant was a vulnerable homeless person for the purposes of Part VII of the Act and was 62 years old.

On 13 October 2000 the Council served a notice dated 10 October on the Tenant. The relevant parts read as follows:

The notice indicated that proceedings would not be begun until after 13th November 2000. It duly informed the Tenant of his right to request a review and about taking advice, as required by section 128(6) and (7). It was accompanied by a letter dated 12 October giving further information. It is conceded by Mr.Burton on behalf of the Tenant that the notice complied with section 128. Had no review been requested and had proceedings been taken, the court would have been obliged to grant possession.

However, the Tenant did request a review. Although it is not entirely clear to me precisely how the review was conducted, no point is taken about that. The Council wrote to the Tenant as follows on 23 October ("the review letter"):

It is accepted by Miss Bretherton on behalf of the Council that the letter was a standard letter. It was wrong in law in saying that the Tenant would continue as an introductory tenant for a period of 12 months, since it could not continue beyond the trial period (unless the period was extended by the taking of proceedings). Parts were not relevant to this Tenant. However, those particular defects are not important. What is highly material is its interpretation.

The next development was the Council's letter dated 9 March 2001 ("the March letter"):

On 14 March 2001 proceedings were issued in the Lambeth County Court. After several adjournments, they were heard by Mr.Recorder Atkins at Bow County Court on 18 February 2002. He gave judgment on 22 February, having received written submissions about the decision in Stone, which had just been reported in The Times. Thus he did not have the opportunity of considering a full report of the judgment in Stone. He rejected the Tenant's primary argument, that the court had no jurisdiction to grant an order for possession. However, he agreed to adjourn the proceedings to allow the Tenant an opportunity to apply for judicial review.

The Tenant applied for permission to apply for judicial review on the ground that the relevant decision was taken on 9 March 2001. Permission was granted on the papers on 12 July 2002. The Tenant also applied for permission to appeal from the decision of Mr.Recorder Atkins. At some stage the Council cross-appealed. Directions were given to bring the two matters together. When the matter was before Goldring J. on 12 November 2002 a transcript of the judgment was not available, but he gave permission to appeal. By consent I have transferred the appeal from the Chancery Division to the Queen's Bench Division.

In Manchester City Council v. Cochrane [1999] 1 WLR 809 Sir John Knox (at 821B) in the Court of Appeal accepted that Part V of the Act

Although the Court remarked (at 818H) on the remarkable constriction of the court's powers, it was held that under sections 127 and 128 the county court had no power to entertain a defence based on a denial of allegations in the council's notice. The Court accepted that the county court would have the power to grant an adjournment to permit the tenant to apply for judicial review, while regarding such a procedure as cumbersome. However, despite the urging of the Court to the legislature to grant to the county court powers similar to those available under Part VII, no such amendment has been made.

After the Human Rights Act 1998 came into force, the Court of Appeal decided R. v. Bracknell Forest Borough Council and the Secretary of State for Transport, Local Government and the Regions, ex p. McLellan (2001) 33 HLR 989, [2001] EWCA Civ 1510. The Court held that Article 6 of the European Convention on Human Rights is engaged when a local housing authority is asked to review its decision to seek an order for possession. So also is Article 8. Although the review conducted by the local authority is not sufficiently independent or impartial to comply with Article 6 or to provide adequate protection against a breach of Article 8, the decision-making process must be considered as a whole. The review procedure itself is quasi-judicial and contains a number of safeguards. That procedure, combined with the availability of judicial review, renders the scheme "at the macro level" compatible with the ECHR.

Two aspects of the reasoning in McLellan require emphasis. First, the Court in considering Article 8 laid stress on the obligation on the local authority in the notice and in the review decision to give reasons. And the Court (at 101) stressed that it should be the norm for the local authority to spell out in affidavits how the review procedure was operated, something not done in this case, although no point has been taken about this. Secondly, Waller LJ (at 97) described the nature of the decision taken by the local authority:

He went on (at 101):

I turn to the decision in Stone, on which Miss Bretherton places reliance and which Mr.Burton seeks to distinguish. The council in that case served a notice of proceedings, giving rent arrears as the reason for deciding to apply for an order. A review took place. The precise outcome is important. At the hearing of the review the tenant was told

The arrears then fluctuated but by the commencement of proceedings were higher than at the time of the review. The tenant admitted that she was in breach of the condition as a result of which she was permitted to remain as tenant after the review hearing.

In her judgment (at 28) Arden LJ referred to the fact that the Act does not refer to the possibility of a series of notices. The basis of the council's decision to apply for an order for possession was clearly stated to be failure to make prompt payment of the full amount of rent. She went on

Arden LJ (at 37-38) rejected the submission that there should be a further review hearing on other decisions taken by the council. That would lead to the possibility of a local authority having to serve numerous notices. She feared that the procedure for terminating an introductory tenancy would become very formal. That might discourage landlords from allowing introductory tenants to remain as tenants while they were given a second chance. Judge LJ (at 40) feared that "housing authorities would almost inevitably be driven to adopt a less humane, more rigorous, unrelenting approach to introductory tenants who failed to pay rent when it was due". He described the council (at 41) as having "deferred proceedings to bring the tenancy immediately to an end".

Mr.Burton made submissions on the basis of the Parliamentary debates leading to the enactment of Part V of the Housing Act 1996. I do not consider that it is necessary to consider that material in order to construe the Act. Nor do I consider that the authorities cited by both counsel relating to other statutory provisions governing other kinds of tenancy are in the end of assistance.

Mr.Burton submits that the effect of the review letter was that the original decision to take proceedings was not confirmed, indeed was reversed. He submits that thereafter there was in existence no decision to take proceedings. Even if there was, he submits that there was a new decision contained in or leading to the March letter. He submits that section 128(3) requires that the notice of proceedings shall set out the reasons for "the landlord's decision to apply" for an order. The relevant decision was the March decision. No valid notice was served in relation to that decision.

Miss Bretherton submits that the original notice was never withdrawn. The review letter, however it is to be construed, did not quash or reverse the original decision. There never was a new decision. Hence the Council were entitled to rely on the original, valid notice when proceedings were in fact commenced in March 2001.

There is no doubt, in the light of Stone, that a council may uphold a notice but suspend or defer the actual taking of proceedings. In my view it is necessary to decide whether that is what the Council did in the present case.

In support of Miss Bretherton's submissions are the reference to future monitoring and a review of the situation, although that reference becomes confused by the reference to 12 months. She is also able to point to the words "further breaches". However, the decision the Council had to make was not, as Waller LJ pointed out, whether there were breaches, but whether to take proceedings. Mr.Burton is able to point to the words in the heading "DECISION NOT TO TERMINATE" and the next words "The Council has decided not to proceed with terminating your tenancy".

It was the Council's letter. They chose how to express it. The Tenant was entitled to be notified "of the decision on the review", with reasons. In my judgment the review letter did not have the effect of the letter in Stone, which made it very clear that the decision was being upheld. Here the original decision was not confirmed. I consider on the contrary that the natural meaning of the letter to a tenant receiving it was, as the heading in capital letters indicated, that there had been a decision not to terminate the tenancy after all. There was in reality a decision to reverse or quash the original decision, albeit with a warning about future conduct. This conclusion is supported by the absence of any reasons, which, if the decision had been confirmed, were required by section 129(5). I do not accept the submission that a notice remains valid unless expressly withdrawn or that a decision remains unless expressly quashed or reversed. No particular words are laid down and the natural meaning of the words must prevail.

I do not accept Miss Bretherton's submission that the March letter simply recorded an "administrative act", namely the instructing of the legal section. If my construction of the review letter is correct, there must have been a new decision based on the continued complaints, although no doubt taking into account the past history as the Council saw it.

I prefer Mr.Burton's analysis to the effect that the focus must be first on what is the decision referred to in section 128(3) to Miss Bretherton's analysis to the effect that the focus should be on the notice.

It follows that if one turns back to section 128(3), the notice relied on did not set out the reasons - or certainly not all the reasons - for the relevant decision to apply for an order.

The learned Recorder considered that he was being asked effectively to add a substantial gloss on the wording in the Act. I do not consider that to look for the relevant decision - or, to put it another way, an extant decision - involves in a real sense inserting a word into the section. Section 128(3) in my view permits, indeed requires, the court to have regard to the decision to take the proceedings that are before the court. If there is a series of decisions of the local authority, that may in an appropriate case lead to the court considering which decision is relevant. Moreover if I am correct in holding that the original decision had been reversed or quashed on review, there was in truth no extant decision to take proceedings until March 2001.

Even if ordinary principles of interpretation did not lead to this result, in my view the Human Rights Act 1998, section 3, would lead to that result. Section 3 reads:

The basis on which the Court of Appeal held the scheme to be compatible with Articles 6 and 8 in McLellan was that there is both a review procedure and the availability of judicial review. However, if Miss Bretherton's submissions are correct, once a notice complying with section 128 was served, a council would have carte blanche (subject only to judicial review) to take proceedings at any time and on any grounds they wished, even after a review in which the tenant was successful.

On this reasoning it is not necessary to decide whether the reasons given in March 2001 were "substantially different" from those given in the original notice. That would, however, be relevant if the review letter were properly to be regarded as confirming the original decision but suspending or deferring its operation. I am inclined to think that the reasons are substantially, or at least significantly, different. I say "significantly" because although the words "substantial difference" were used, in effect twice, in Stone, Arden LJ in paragraph 31 ultimately reserved her view on what would happen "if a local authority's reasons" changed. I do not think that the words "substantially different" were necessarily being used to describe the precise test to be applied in all cases. If I am not bound by the wording used in Stone, I would apply the test "significantly" different. However, if the relevant decision were the original decision, a further notice would not be required by section 128 itself if the later action were merely an implementation of the original decision for different reasons.

McLellan emphasised the importance of reasons. The essence of the original reasons was the selling of drugs and the use of the premises for immoral purposes, the reference to people entering the property suggesting that this provided some further evidence. The essence of the reasons in the March letter was disturbance in and around the flat caused by visitors. It is true, as Miss Bretherton submitted, that both are examples of anti-social behaviour, contrary to the same term of the tenancy. However, the original reasons could have been true without the latter, and vice versa. It is not even as if the March letter clearly indicated that the original reasons were still relied on.

In such circumstances, would the Council's decision require a further notice and a further opportunity for a review in order to be compliant with Articles 6 and 8, even if section 128 did not so require? I consider that at least an opportunity for review would be required. The decision of the Court of Appeal in McLellan proceeded on the basis that the review procedure, combined with the availability of judicial review, rendered the scheme of the Act compliant with Articles 6 and 8. That necessarily involved an opportunity to the Tenant not only to question the alleged facts, but, crucially, to argue that on the available facts, that it was not reasonable to require possession. In my judgment, where the reasons for the decision have changed, as they did here, the scheme of the Act is compliant only if the Council provide some opportunity for a further review. It would not necessarily matter that the notice did not comply with section 128, if the substance of the allegations was conveyed and a review made available.

For these reasons the learned Recorder's decision was in my view wrong and the appeal must be allowed. I do not consider that my conclusion will lead to the consequences feared by Arden and Judge LJJ and by the learned Recorder. Stone established that a council has the option of suspending or postponing the implementation of a decision. Here the Council did not do that.

In these circumstances it is unnecessary to quash the Council's decision. However, I should indicate that if necessary I should have done so. I do not accept that such a decision would have been inappropriate because of delay. It was reasonable for the Tenant to pursue the proceedings in the way he did. The granting of permission to appeal indicated that there must have been a real prospect of success by that route.

I shall consider counsel's submission on the proper orders to make. My preliminary conclusion is that the learned Recorder's order should be varied to a refusal of possession and a dismissal of the proceedings. I realise that the consequence will be that the Tenant will not then be removable under the procedures of Part V. That appears to be the unavoidable conseqence of the course adopted by the Council.