Residential Property

Manchester City Council (Respondent) v Pinnock (Appellant) [2010] UKSC 45

Thu, 04 Nov 2010 22:29:50 GMT

This appeal concerns the question of whether article 8 of the European Convention on Human Rights (“article 8”) requires UK courts to consider the proportionality of evicting an occupier from his home in claims for possession by local authorities and, if so, whether the demoted tenancy regime in the Housing Acts 1985 and 1996 (the “1985 Act” and “1996 Act” respectively) can properly be interpreted so as to comply with the requirements of article 8.

Mr Pinnock’s main contention is that the possession order violates his right to respect for his home under article 8 as it is disproportionate. In view of the previous line of the House of Lords authorities, both the Manchester County Court and the Court of Appeal rejected Mr Pinnock’s article 8 arguments on the basis that it was not open to them to review the Council’s decision on the ground that it was disproportionate. Approaching the matter on a domestic law basis, both courts concluded that the Council’s decision to seek possession was rational.

In a judgment of the Court delivered by Lord Neuberger, the Supreme Court unanimously dismissed the appeal (but for different reasons from those of the County Court and the Court of Appeal).

Hanoman (FC) (Respondent) v London Borough of Southwark (Appellants), [2009] UKHL 29

Wed, 10 Jun 2009 12:43:00 GMT

This case concerned the right-to-buy under Part V of the Housing Act 1985. The respondent, Mr Hanoman, was the tenant of a flat in London. His landlord was the appellant Council. It is not in dispute that Mr Hanoman was entitled under s.118 of the 1985 Act to the statutory right-to-buy in respect of his flat.

A right-to-buy is triggered by the service on the landlord of a notice that the tenant is claiming the right-to-buy (s.122). Mr Hanoman served a s.122 notice in October 1999. However a dispute then arose between the Council and Mr Hanoman as to whether Mr Hanoman had withdrawn his notice. The Council said that he had; Mr Hanoman said that he had not. The High Court decided in June 2004 that Mr Hanoman’s application to exercise his right-to-buy was still subsisting and that the Council was under a duty to deal with it.

As the Council’s position had been that the notice had been withdrawn, the Council had not served the appropriate notices upon Mr Hanoman under the right-to-buy. Accordingly, in March 2003 Mr Hanoman served a notice of delay upon the Council and in May 2003 he served a subsequent operative notice of delay. Consequently, s. 153B of the 1985 Act came into play which provided that where a secure tenant had served on his landlord an operative notice of delay, until certain other events happened, payment of rent should be treated not only as a payment of rent but also as a payment on account by the tenant which was to be taken into account in calculating the purchase price.

The issue in this appeal was what constituted a “payment of rent” for the purposes of s.153B, or, more particularly, whether the crediting to a tenant’s rent account of housing benefit constituted a “payment of rent” for those purposes.

The House unanimously held that it would reject the literal construction of “payment of rent” that was contended for and concluded that the crediting of housing benefit to the rent account of a local authority tenant as required by s.134(1A) of the Social Security Administration Act 1992 was a payment of rent for the purposes of s.153B of the 1985 Act. Accordingly, the appeal was dismissed.

R (on the application of G) (FC) (Appellant) v London Borough of Southwark (Respondents), [2009] UKHL 26

Wed, 20 May 2009 14:13:00 GMT

The issue in this case is, if a child of 16 or 17 who has been thrown out of the family home presents himself to a local children’s services authority and asks to be accommodated by them under s.20 of the Children Act 1989, is it open to that authority instead to arrange for him to be accommodated by the local housing authority under the homelessness provisions of Part VII of the Housing Act 1996?

The House unanimously allowed the appeal. The result was that A was accommodated under s.20(1) of the 1989 Act on 11 September 2007, became an “eligible child” within the meaning of paragraph 19B(2) of Schedule 2, and thereafter a “ former relevant child” within the meaning of section 23C(1) of that Act.

R (on the application of Ahmad) (Respondent) v Mayor and Burgesses of London Borough of Newham (Appellants), [2009] UKHL 14

Wed, 04 Mar 2009 11:45:00 GMT

This is an appeal brought against a decision of the Court of Appeal which upheld the first instance decision in the Administrative Court. By that decision, the Deputy Judge declared that the policy adopted by the London Borough of Newham pursuant to s.167 of the Housing Act 1996 for determining priorities in allocating their social housing accommodation was unlawful.

Newham’s current allocation scheme (“the Scheme”) involves two different methods of offering properties - choice based letting arrangement (“CBL”) and direct offer arrangement (“Direct Offers”). Applicants subject to Direct Offers take priority over those subject to CBL.

Applicants admitted to the CBL are placed in one of three categories – (1) “Priority Homeseekers”, being those whose households contain at least one person who satisfies one or more of the criteria in s.167(2); (2) “Tenants Seeking a Transfer” being those who are already Newham tenants, and are applying for a transfer, but do not fall within category (1); and (3) “Homeseekers", being those who do not fall within category (1) or (2).

Once a property is available to be let on the CBL, it is offered to those registered on that part of the Scheme, and they are free to bid. The CBL provides that no more than 5% of lettings can be to Tenants seeking a Transfer. Around 95% of the CBL properties are allocated to applicants who are Priority Homeseekers. When more than one applicant in the Priority Homeseekers group bids for a property, the property is awarded to the applicant who has been a Priority Homeseeker for the longest.

Direct Offers include a number of categories of applicant - “Additional Preference”, “Multiple Needs”, “Under Occupation Transfers”, “Decants” and “Special Schemes”. The first two categories are intended to include applicants who would be Priority Homeseekers under the CBL, but who have especially pressing needs for rehousing. The Additional Preference group consist of those who are judged by Newham’s housing officers to represent particularly acute cases under some of the paragraphs of s.67(2). Its criteria are very stringent. The Multiple Needs group includes those who can attain a specified score, by reference to the number of people in the applicant’s household requiring to move on the ground of statutory overcrowding, or Environmental Health abatement action or medical grounds. The criteria for qualifying for Multiple Needs are also very tight.

There were two reasons why the courts below considered that the Scheme was unlawful. The first, and principal, reason was that the CBL “places all those who qualify for reasonable preference under s.167(2) in a single group, that of Priority Homeseeker, and … their relative priority in bidding for available accommodation is determined not by relative need, but by the length of time they have been registered on the housing list”. It was “plainly an insufficient mechanism for identifying those in greatest need and giving them priority”. The Court of Appeal rejected the argument that the existence of the Additional Preference and Multiple Needs groups within the Direct Offers “ma[d]e good the deficiency of the [CBL]”, because of the “highly restrictive” criteria which have to be satisfied in order to qualify for those groups.

The second reason why the Scheme was held to be unlawful was due to the fact that the CBL involved allocating a significant (if small) proportion of housing to a class of applicants who did not satisfy any of the requirements in paras (a) to (e) of s.167(2), namely the Tenants Seeking a Transfer.

The House of Lords unanimously allowed Newham’s appeal and dismissed the claim for judicial review insofar as it challenged the legality of Newham’s housing allocation scheme. Particularly in light of the discretion accorded to housing authorities under s.159(7) of the 1996 Act, it was impossible to argue that an authority’s allocation scheme was unlawful unless the basis on which it accorded priority as between those applicants who satisfied one or more of paras (a) to (e) of s.167(2) was irrational. Given the factors in this case, it was very difficult to accept that the Scheme could be characterised as irrational - the Scheme plainly satisfied, and in some instances exceeded, the express statutory requirements.

Craig McCreight v. West Lothian Council [2009] CSIH 04

Wed, 28 Jan 2009 12:36:00 GMT

On 8 April 2002 the appellant was convicted of having murdered the tenant of 5 Fairinsfell, Broxburn, West Lothian whom he lived with. The appellant thereafter sought to purchase the property. This was an appeal against a decision of the Lands Tribunal dated 13 December 2004 on a preliminary issue arising from an application by the appellant to purchase the subjects. The parties had asked the Tribunal to decide whether the forfeiture rule should defeat the application following the conviction of the appellant. In a decision of a single member it determined that it had such a jurisdiction as the Tribunal considered that since an application under section 71 of Housing (Scotland) Act 1987 had to be made by the tenant, it was open to the respondent to plead that the forfeiture rule should be applied.That was the decision appealed against here. There were two issues in the appeal:- (1) whether, regardless of the forfeiture rule, the Tribunal was bound to grant the appellant's application simply because the respondent had failed to serve an offer to sell or a notice of refusal; and (2) if not, whether the Tribunal had jurisdiction to decide whether the rule should be applied.

Earl Cadogan (Appellant) v Pitts and another (Respondents) and one other action, Earl Cadogan and others (Appellants) v Sportelli and another (Respondents) and two other actions, [2008] UKHL 71

Wed, 10 Dec 2008 13:29:00 GMT

These five appeals arise out of legislation enabling residential tenants to acquire new leases or to buy their freeholds. The specific issue raised on each appeal is whether the price payable for the new lease or the freehold, as the case may be, should include what is called “hope value".

The Leasehold Reform Act 1967 provides in s.9 that the price payable for the house should be the amount which it would be expected to realise if sold on the open market. Among these potential purchasers there may be “special purchasers” – those to whom the property is worth more than it would be to others. The additional value to a special purchaser must be taken into account in estimating what the property would fetch in the open market. What effect it will have depends not only upon its estimated value to the special purchaser but also upon the likelihood that he would actually buy on the valuation date. However, even if he cannot be assumed to be the actual purchaser on that date, his presence in the market (if generally known) may cast a shadow because the value of the property to other purchasers may include some prospect of later selling at an enhanced price to the special purchaser. This additional value to purchasers generally is sometimes called “hope value” because it is based upon the hope of a further advantageous transaction.

The Court of Appeal agreed with the tenants in each case that the price should not include the hope value. The landlords appealed to the House of Lords.

All 5 judges agreed that the appeal in Sportelli should be dismissed as the landlord had no right to claim hope value under para 3 of Sched.13 of the Leasehold Reform, Housing and Urban Development Act 1993. Further, all 5 judges agreed that the appeals in Pitts and Wang and Atlantic Telecasters should similarly be dismissed as the landlord had no right to claim hope value under s.9(1A) of The Leasehold Reform Act 1967.

By a majority of 4:1 (Lord Hoffmann dissenting) the House held that the appeals in Grandeden and in 27/29 Sloane Gardens should be allowed as the landlord was entitled to claim hope value under para 3 of Sched.6 of the Leasehold Reform, Housing and Urban Development Act 1993 Act in relation to non-participating tenants’ flats, albeit not in relation to participating tenants’ flats.

Knowsley Housing Trust (Respondents) v White (FC) (Appellant), Honeygan-Green (Respondent) v London Borough of Islington (Appellants), Porter (FC) (Appellant) v Shepherds Bush Housing Association (Respondents), [2008] UKHL 70

Wed, 10 Dec 2008 12:03:00 GMT

These 3 appeals raise questions about the effect of suspended possession orders on the status and rights of secure tenants under the Housing Act 1985 and assured tenants under the Housing Act 1988.

Knowsley
Mrs White was granted a weekly tenancy of a house in Liverpool by Knowsley Borough Council. This was a secure tenancy within the 1985 Act. Knowsley Housing Trust acquired the whole of the Council’s housing stock, whereupon Mrs W became an assured tenant under the 1988 Act. However, her right to buy was preserved by ss.171A to H of the 1985 Act.

Mrs W fell into arrears and a court ordered possession and payment, with the provision that the order was not to be enforced if payment was made in terms of an instalment program. Mrs W failed to pay and following a suspended warrant to enforce the possession order, a further payment program was put in place. Mrs W failed to observe this second order but did make significant payments from time to time.

Mrs W then served notice under s.122 of the 1985 Act claiming the right to buy the property. Knowsley admitted her right to buy, however, they then contended that Mrs W had ceased to have the right to buy, as she was no longer an assured tenant following her failure to comply with the terms of the court orders. Mrs W applied for a declaration that, notwithstanding that failure, she remained an assured tenant. That application was dismissed by His Honour Judge Mackay and his decision was upheld by the Court of Appeal. Mrs W appealed to the House of Lords.

Porter
Shepherds Bush Housing Association granted Mr Porter a tenancy of a flat in London. It was a secure tenancy, which, at all material times, was within the ambit of Part IV of the 1985 Act. Mr P fell into arrears with his rent and the Association claimed possession. The court ordered that Mr P give possession unless payments were made in terms of a payment program.

Mr P failed to make the payments and the Association obtained a warrant for possession. The District Judge ordered that the warrant be suspended provided Mr P paid in terms of a second payment program. He did not do so.

Mr P then issued proceedings against the Association for damages for disrepair. The Association defended the claim on the basis that, in the light of his failure to comply with the terms imposed by the two orders, Mr P had ceased to be a tenant, and therefore could not claim damages for disrepair. Mr P made a payment which put his rent account into credit, thereby discharging all the arrears. In anticipation of the arrears being cleared, Mr P made an application for the discharge of the suspended possession order made against him. That application was dismissed by the District Judge and Mr P’s appeal was dismissed by His Honour Judge Simpson. The Court of Appeal dismissed a further appeal by Mr P. Mr P appealed to the House of Lords.

Islington
Islington London Borough Council granted Mrs Honeygan-Green a secure tenancy of a property in London. Mrs H-G exercised her right to buy by serving a notice under s.122 of the 1985 Act. Although Islington accepted that she had the right to buy, completion of the transaction was delayed through no fault of hers. Meanwhile, Mrs H-G fell into arrears twice. The first time she eventually paid all arrears and the possession order which had been granted was discharged. The second time Islington issued fresh possession proceedings against her. Mrs H-G served a defence and counter-claim seeking a declaration that, subject to her paying off any arrears which had accrued, she was entitled to buy the property pursuant to her s.122 notice. Having paid off the arrears, she then sought summary judgment on her counter-claim, in the form of an injunction requiring Islington to transfer the property to her. His Honour Judge Marr-Johnson acceded to her application, but Islington’s appeal was allowed by Nelson J. Mrs H-G’s appeal was allowed by the Court of Appeal. Islington appealed to the House of Lords.

These 3 appeals give rise to several principal issues – (1) where a suspended order for possession is made under the 1988 Act, when does the tenancy come to an end?; (2) can the court, when making a suspended possession order under the 1985 Act, proleptically direct that the order be discharged once the terms have been complied with? If so, can the court proleptically direct that the order be discharged even if the terms of the suspension have not been strictly complied with?; (3) in the case of a suspended order under the 1985 Act, without a proleptic discharge provision, can a tenant who has not complied with the terms of suspension, but has paid off the arrears and costs, seek a discharge or variation of the order? (4) if a tenant who has served notice exercising the right to buy is then made subject to a suspended possession order, does the right to buy pursuant to the notice revive if and when the order is discharged?

The House of Lords held that (1) an assured tenancy subject to a suspended possession order does not come to an end until possession is delivered up; (2) and (3) it is open to the court to include a proleptic discharge provision in a suspended order for possession. The court can also then decide the extent to which compliance with the strict terms of the conditions will not be required in order for the order to be discharged. If a tenant fails to comply strictly with any of the terms of suspension, the landlord can apply for a warrant. However, if the tenant then applies to the court for relief, the court may suspend or discharge the warrant (and may vary the order); (4) a tenant’s right to buy is suspended when the order for possession takes effect. However, that right is revived retrospectively and with immediate effect when the order for possession is discharged.

Accordingly, the House unanimously allowed the appeals in Knowsley and Porter and dismissed the appeal in Islington.

Fife Council v Buchan – Kirkcaldy Sheriff Court, 11 June 2008

Thu, 07 Aug 2008 11:36:00 GMT

The Pursuer, a local housing authority, was the landlord of a property occupied by the Defender. The Pursuer sought recovery of possession and payment of arrears of rent after the Defender received a custodial sentence for having a prohibited weapon, a revolver, and counterfeit currency in his possession at the property. There was little dispute over the material facts. Schedule 2 of the Housing (Scotland) Act 2001 sets out grounds on which the court may order recovery of possession. Paragraph 2(b) refers to the tenant having been convicted of an offence punishable by imprisonment committed in, or in the locality of, the house. Section 16(2)(a) provides that the court must make an order for recovery of possession if it appeared that the landlord had a ground for recovery as set out in the relevant part of Schedule 2 and that it was reasonable to make the order. The Defender opposed the order for recovery of possession and argued inter alia that paragraph 2(b) of Part 1 of Schedule 2 was limited to cases of drug dealing only; that, if evicted, he would lose contact with his 6 year old son; and that he would be homeless. The Sheriff heard evidence and considered the relevant statutory factors and also other factors which the parties set out and concluded that the provisions of paragraph 2(b) had been satisfied. He did not accept that paragraph 2(b) was limited to cases of drug dealing only. The offences of which the Defender had been convicted lay at the high end of seriousness and the Defender was solely responsible for the offences. The nature of the area in which the tenant lived was relevant. The Pursuer had gone to some lengths to improve the area and the Sheriff considered that the Pursuer being seen to take action in a case such as this was a relevant consideration. Termination of the tenancy would not mean an end to contact between the Defender and his son, although contact may become more difficult. Balancing all these factors, the Sheriff concluded that the Pursuer had shown that it was reasonable that an order should be granted, together with decree for payment of the rent arrears.

Yeoman’s Row Management Limited (Appellants) and another v Cobbe (Respondent), [2008] UKHL 55

Wed, 30 Jul 2008 10:44:00 GMT

The essence of the problem to be resolved in this case is - A (in this case the appellant, Yeoman’s Row, with Mrs Lisle-Mainwaring as a director and shareholder) is the owner of land with potential for residential development and enters into negotiations with B (in this case the respondent, Mr Cobbe) for the sale of the land to B. They reach an oral “agreement in principle” on the core terms of the sale but no written contract, or even a draft contract for discussion, is produced. There remain some terms still to be agreed. The structure of the agreement in principle that A and B have reached is that B, at his own expense, will make and prosecute an application for the desired residential development and that, if the desired planning permission is obtained, A will sell the land to B, or more probably to a company nominated by B, for an agreed up-front price, £x. B will then, again at his own expense, develop the land in accordance with the planning permission, sell off the residential units, and, when the gross proceeds of sale received by B equals £2x, any further gross proceeds of sale will be divided equally between A and B.

Pursuant to this agreement in principle B makes and prosecutes an application for planning permission for the residential development that A and he have agreed upon. B is encouraged by A to do so. In doing so B spends a considerable sum of money as well, of course, as a considerable amount of time. The application is successful and the desired planning permission is obtained. A then seeks to re-negotiate the core financial terms of the sale, asking, in particular, for a substantial increase in the sum of money that would represent £x. B is unwilling to commit himself to the proposed new financial terms and A is unwilling to proceed on the basis of the originally agreed financial terms. So B commences legal proceedings.

The question before the House is what relief, in the circumstances described, B should be granted.

A number of bases of relief could be considered - proprietary estoppel; constructive trust; unjust enrichment; quantum meruit; the tort of deceit.

The House of Lords stated that the critical issue in this case was whether there was, on the judge’s findings, a common expectation of the type capable of raising equitable estoppel.

The judge at first instance held that the conditions for proprietary estoppel were satisfied and that the minimum equity to do justice to Mr Cobbe required that he be awarded one-half of the increase in value of the property brought about by the grant of planning permission and that he be granted a lien over the property to secure that interest. The judge held, also, that Mr Cobbe would have been entitled to relief on his constructive trust claim but that relief on the basis of proprietary estoppel was the more satisfactory way of satisfying the equity to which the facts of the case entitled him. The judge did not, therefore find it necessary to deal with Mr Cobbe’s alternative claim in restitution.

The Court of Appeal unanimously dismissed Mrs Lisle-Mainwaring’s appeal from the judge’s main judgement. The Court of Appeal agreed with the judge that, “proprietary estoppel could be established even where the parties anticipated that a legal binding contract would not come into existence until after planning permission had been obtained, further terms discussed and agreed and formal written contracts exchanged.”

The House of Lords unanimously allowed Yeoman’s Row’s appeal.

Proprietary estoppel
The House of Lords did not agree that the relief granted was justified on the basis of proprietary estoppel. It noted that the judge and then the Court of Appeal had regarded their finding that Mrs Lisle-Mainwaring’s behaviour in repudiating, and seeking an improvement on, the core financial terms of the agreement was unconscionable, as sufficient to justify the creation of a “proprietary estoppel equity”. She took unconscionable advantage of Mr Cobbe. The advantage taken was the benefit of his services, his time and his money, in obtaining planning permission for the property. The advantage was unconscionable because immediately following the grant of planning permission, she repudiated the financial terms on which Mr Cobbe had been expecting to be able to purchase the property. However, the House held that to leap from there to the conclusion that a proprietary estoppel case was made out, was not justified.

Constructive trust
Nor did the House of Lords consider that there existed grounds for a claim of constructive trust. The property was never joint venture property and the House could not see any justification for treating it as though it was.

Unjust enrichment
The House noted that there was no doubt that the value of the property would have been increased by the grant of planning permission and that the appellant had been enriched by the grant of planning permission for which it had had to pay nothing. But what was the extent of the unjust enrichment? The House held that it was not the difference in market value between the property without planning permission and the property with it. The planning permission did not create the development potential of the property – it unlocked it. Therefore the unjust enrichment was the value of Mr Cobbe’s services – the fashioning of the key to unlock the development potential.

Quantum meruit
The House held that it was clear that Mr Cobbe was entitled to a quantum meruit payment for his services in obtaining planning permission. The amount of the quantum meruit for Mr Cobbe’s services would represent the extent of the unjust enrichment for which the appellant should be held accountable to Mr Cobbe.

R (on the application of Heffernan) (FC) (Appellant) v The Rent Service (Respondents), [2008] UKHL 58

Wed, 30 Jul 2008 09:05:00 GMT

Mr Heffernan, who is 51 years old, blind and registered with various physical and medical complaints, does not work and is dependent on welfare benefits. In March 2004, he was granted an assured (private sector) tenancy of an apartment in Sheffield at a rent of £745 per month. In April 2004, he applied to Sheffield City Council for housing benefit in respect of the whole of the rent, and the Council referred the question of his maximum allowable housing benefit to the Rent Service. After four determinations, there were two subsequent re-determinations.

In December 2004, the Rent Service re-determined that the local reference rent (“LRR”) was £433.34 per month. A second re-determination was made in May 2005 by which time the contractual rent had been reduced to £695 per month, because the parking space had been consensually removed from the tenancy. This re-determination came to the conclusion that the LRR was £455 per month.

The two re-determinations were each carried out on the basis that the “neighbourhood” of the apartment was “Sheffield Central", and the “locality” for assessing the LRR was “the whole of the city of Sheffield and some of its surroundings” (“the Sheffield area”). In each of the two re-determinations, the rent officer stated that he was proceeding on the basis that the meaning of “locality” was:

“a broad geographical area made up of a number of neighbourhoods with a mix of property types and tenure where a tenant could, as an alternative to the property in question, reasonably be expected to live and benefit from similar amenities".

This formula was taken from a circular distributed by the Rent Service to rent officers nationally in June 2001.

The sole relevant ground upon which Mr Heffernan sought judicial review of the two re-determinations was that it was impermissible to have taken the whole of the Sheffield area as the “locality”.

The judge at first instance quashed the two re-determinations as he considered that the two rent officers had each wrongly followed the guidance in the circular that “locality” involved a “broad geographic area” and had not properly examined each of the twelve neighbourhoods. The Court of Appeal allowed the Rent Service’s appeal concluding that the view that the Sheffield area was the appropriate “locality” for the apartment was one which each of the rent officers was entitled to reach on the evidence.

The House, by a majority of 3:2 allowed Heffernan’s appeal and quashed the two re-determinations. The rent officers had simply adopted an approach which was generally taken by the Rent Service when assessing LRR for dwellings in that area, which in turn was based on the guidance in the circular. Whilst this guidance was helpful, it could not avoid the need for rent officers determining LRR in any particular case to consider the issues raised by the Rent Officers (Housing Benefit Functions) Order 1997 para 4(6)(a) to (c) by reference to the facts of that case. These sub-paras (a) to (c) defined what was meant by “locality”. In many cases, what might be the right locality for one dwelling may not be the right locality for a dwelling in an adjoining neighbourhood.

Dr. Christopher Robert James Killen & Mrs. Alison Killen v. Dundee City Council [2008] CSIH 43

Thu, 24 Jul 2008 10:42:00 GMT

Appeal from Sheriff Court:- The appellants were the proprietors of residential premises at 30 Constitution Crescent, Dundee and the respondents were the licensing authority for the administration of licensing in relation to activities in connection with which licences are required in terms of section 2(2) of the Civic (Government) (Scotland) Act 1982. Around June 2006, the appellants submitted an application to the respondents seeking a licence for the premises at 30 Constitution Crescent, Dundee, as a house in multiple occupation for occupancy by four tenants. At a meeting on 14 June 2007, the Licensing Committee decided to refuse the appellants' application mainly due to the designation of the development area as a 'Home Zone' where the purpose of such developments is to provide a quiet, safe and stable environment for the likes of retired people and families and that could not be achieved if there were houses of multiple occupation in the midst of such an area. The appellants appealed to the sheriff against the decision of the Licensing Committee and sought the reversal of the decision taken on 14 June 2007 and also a finding that they were entitled to the licence sought. By interlocutor dated 17 October 2007, the sheriff refused the appeal. The appellants appealed to the Court of Session. It was submitted that the sheriff erred in holding that:- (1) the designation or otherwise of a road as a Home Zone was irrelevant to the issue of whether the premises were suitable for use as an HMO; (2) 'it was reasonable and responsible for the respondents to have the view that Home Zones are primarily for families and older people and that HMOs do not fall within the desired ethos or makeup of a Home Zone.' ; and (3) having held that there was no basis for a finding of lack of suitability due to possible problems with tenants, he should have held that there was no basis for refusal under paragraph 5(3)(c) of the first Schedule to the Civil Government (Scotland) Act 1982 and should have reversed the respondents' decision. On behalf of the respondents it was submitted that the court should refuse the appeal and affirm the decision of the sheriff. Here the court considered the nature of Home Zones under section 74 of the Transport (Scotland) Act 2001and whether the existence of such a designation could be seen as inconsistent with the grant of a licence for a house in multiple occupation.

Earl Cadogan and others (Respondents) v 26 Cadogan Square Limited (Appellants); Howard de Walden Estates Limited (Respondents) v Aggio and others (Appellants), [2008] UKHL 44

Wed, 25 Jun 2008 12:52:00 GMT

Chapter II of Part I of the Leasehold Reform, Housing and Urban Development Act 1993 confers a right on “a qualifying tenant of a flat” to acquire a new long lease of the flat from his landlord. The question raised on these two appeals was whether the lessee of premises (such as a block of flats), which included property other than flats, could be a qualifying tenant of any of the flats comprised in those premises. This issue turned upon the proper construction of the 1993 Act, as amended.

In each of these cases, the whole (or most) of a self-contained building converted into a number of self-contained units, was let under a lease (“the head lease”) for 60 years at a ground rent. In Cadogan, the building had six storeys – the lower three were used as offices and the upper three consisted of a maisonette. In Howard de Walden, the five storeys of a building had been converted into self-contained residential flats - the upper three were subject to long underleases, and the lower two were let by assured short-hold tenancies.

In each case, the head lessee served notice on the freeholder pursuant to Chapter II of Part I of the 1993 Act (“Chapter II”) to acquire, in Cadogan, a new lease of the maisonette, and, in Howard de Walden, a new lease of the ground floor flat, and, subsequently, a new lease of the basement flat. In each case, the freeholder served a counter-notice denying the head lessee’s claimed right, contending that the head lessee was not “a qualifying tenant” of the flat concerned.

The County Court held that the head lessee was “a qualifying tenant” of the relevant flat. The freeholders’ appeals were heard together by the Court of Appeal which allowed both appeals. The head lessee in each case then appealed to the House of Lords.

The House of Lords held (unanimously) that the appeals should be allowed and the decision of the first instance judge restored in each case.

The House of Lords found (as per Lord Neuberger of Abbotsbury) that (1) as a matter of statutory language, it appeared clear that a lessee under a lease of property which included a flat can be a “tenant” of that flat for the purposes of Chapter II of Part I of the 1993 Act, irrespective of the nature or extent of the other property included in the demise; (2) in particular, there was no reason to exclude a lessee under a lease of a block of flats, or a lease which included property other than flats, from being a “tenant of a flat” for the purposes of Chapter II of Part I of the 1993 Act; (3) there was no good argument to the contrary based on the policy of the 1993 Act; and (4) nor was there a good argument to the contrary based on the alleged practical difficulties, inconsistencies or oddities resulting from this conclusion.