Bruton v London & Quadrant Housing Trust

I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Hoffmann in which he has referred to the facts, the statutory provisions and the relevant authorities.

Although the agreement between Mr. Bruton and the Housing Trust is described as a licence and, since the Trust itself had only a licence it may have been intended to be only a licence, on the basis of Street v. Mountford [1985] A.C. 809 and Westminster City Council v. Clarke [1992] A.C. 288, it is clear that the agreement gives a right to exclusive possession and prima facie is a tenancy.

The only doubt I have had is as to whether, as Street v. Mountford contemplated to be possible, this prima facie conclusion is displaced by other relevant factors, what in Street v. Mountford are called "surrounding circumstances." The surrounding circumstances relied on here spring from the essential function of the Housing Trust in providing accommodation for the homeless and to that end to maintain a stock of housing over which it has maximum control, which a licence rather than a tenancy might be more likely to give.

I am, however, satisfied that the judgment of Slade L.J. in Family Association v. Jones [1990] 1 W.L.R. 779 was correct although I share his anxiety about the impact of such a result on the Housing Trust. There were, it follows, in this case no special circumstances to displace the general rule.

Accordingly, for the reasons given by Lord Hoffmann, I agree that this appeal could be allowed.

The respondents are a charitable Housing Trust one of whose purposes is to provide short term accommodation for the homeless. The Trust has the use of a block of flats owned by Lambeth Borough Council pursuant to a license agreement with that council of 27 March 1986 which provided that no grant of an estate or other proprietary interest was thereby conferred and that the subjects should be used to provide temporary accommodation for homeless persons. It is not disputed that by reason of section 32(3) of the Housing Act 1985 the council would have had no power to make such a grant. The Trust's use of the subjects was accordingly in the capacity of licensees.

On 31 January 1989 the Trust entered into an agreement with the appellant which stated that occupation of a flat in theblock was being offered to him on a weekly license from 6 February 1989 and that the Trust had the property on license from the council. I need not condescend further on the relevant terms of the agreement which have been fully set out in the speech by my noble and learned friend Lord Hoffmann. I do not doubt that both parties to the agreement were under the impression and indeed intended that the legal consequences of the agreement should be those of a license. A not unreasonable intention given that the Trust's only interest in the subject was that of a licensee. However, the issue in this appeal is whether that professed intention was achieved or whether the legal consequences of the agreement amounted to a tenancy bringing into operation section 11 of The Landlord and Tenant Act 1985.

In Street v. Mountford [1985] A.C. 809 this House decided that where residential accommodation is granted for a term, at a rent with exclusive possession, the Landlord providing neither attention nor services, the grant is a tenancy notwithstanding the fact that the agreement professes an intention by both parties to create a mere licence. It is the legal consequences of the agreement which is determinative rather than the label which parties have chosen to attach to it. In this case the Trust granted exclusive possession to the appellant, a fact which is fortified rather than detracted from by the reservation of rights of access by the Trust and the council for limited purposes ( Street v. Mountford, Lord Templeman at p. 818). Prima facie therefore the agreement constituted a tenancy. This notwithstanding the fact that the Trust had only a limited interest in the subjects.

However it remains to consider whether notwithstanding the apparent grant of a tenancy there exist special circumstances which are capable of negativing this result ( Street v. Mountford, Lord Templeman at p. 822). Mr. Henderson Q.C. argued that the fact that the Trust was a responsible charitable organisation performing important social functions and that it was merely a licensee of the subjects, inhibited by the terms of that licence from granting tenancies, amounted to such special circumstances. My Lords in Family Housing Association v. Jones [1990] 1 W.L.R. 779, where the facts were very similar to those in this case, the association as licensee of a local authority granted what was described as a licence to the defendant to occupy premises on a temporary basis. Following Street v. Mountford [1985] A.C. 809, the Court of Appeal held that the agreement constituted a tenancy and Slade L.J. at p. 793 rejected the argument that there existed special circumstances whereby the defendant, albeit in exclusive possession of the premises, was not a tenant. In my view Slade L.J's rejection was correct and his reasoning equally applicable to the present case. In the absence of any exceptional circumstances it follows that the agreement between the Trust and the appellant constituted a tenancy to which section 11 of the Landlord and Tenant Act 1985 applied and that the appeal should be allowed.

I have one further matter to mention. In Family Housing Association v. Jones, Slade L.J. at p. 793 observed in relation to the argument as to existence of special circumstances:

"The argument which we have heard suggests to me that, whatever their wishes or intentions, it may at least be difficult for bodies charged with responsibilities for the housing of the homeless to enter into any arrangement pursuant to section 65(2) of the Housing Act 1985 under which the person housed is to enjoy exclusive occupation of premises, however temporarily, without conferring on that person security of tenure by virtue of the Act….

"The result must be substantially to reduce the choice of methods available to bodies such as the housing association for dealing with their always limited supplies of housing stock. I am not sure that this result will necessarily inure to the benefit of the class of homeless persons in this country viewed as a whole. These are the reasons for the misgivings expressed at the start of this judgment."

In his dissenting judgment in the Court of Appeal in this case Sir Brian Neill expressed his regret at his inability to distinguish Family Housing Association v. Jones [1990] 1 W.L.R. 779. Regret, no doubt, stemming from Slade L.J.'s comments on the consequences of his rejection of the special circumstances argument. My Lords, I share Slade L.J.'s misgivings for the reasons he states and Sir Brian Neill's regrets.

The question in this appeal is whether Mr. Bruton has a tenancy of a flat in Brixton. He occupies the flat under an agreement dated 31 January 1989 with the London and Quadrant Housing Trust ("the Trust"). The Trust is a charitable housing trust which, among other things, provides short-term accommodation for the homeless and others in need of housing. The question arose because Mr. Bruton claims that the Trust is in breach of the implied repairing obligations contained in section 11 of the Landlord and Tenant Act 1985. Section 13 provides that these are to apply to "a lease of a dwelling house granted on or after October 1961 for a term of less than seven years." Section 36(1) provides that "lease" and "tenancy" are to have the same meaning. But the Trust denies that it granted a tenancy. It says that the agreement created only a licence to use the flat. When Mr. Bruton brought proceedings in the Lambeth County Court to enforce the implied covenants, it served a notice to quit and claimed a declaration that Mr. Bruton had no statutory security of tenure because he was only a licensee. His Honour Judge James directed the trial of a preliminary issue as to whether Mr. Bruton was a tenant or licensee. After hearing evidence he declared that he was a licensee. The Court of Appeal [1998] Q.B. 834 (Kennedy and Millett L.JJ, Sir Brian Neill dissenting) affirmed his judgment. Mr. Bruton appeals to your Lordships' House.

The flat is in a block belonging to the London Borough of Lambeth ("the council"). It acquired the block in 1975 for housing purposes by the use of compulsory powers contained in provisions which have now been consolidated in Part II (Provision of Housing Accommodation) of the Housing Act 1985. The council intended to demolish the block and build new houses or flats on the site. But the scheme was delayed. On 27 March 1986 it entered into an agreement with the Trust by which it permitted the Trust to use the premises in furtherance of its charitable housing objects. The agreement was called a Licence and it is agreed that it was not a grant of an estate or other proprietary interest in the premises. Section 32 of the Act of 1985 limits the powers of a local authority to dispose of land held for the purposes of Part II of the Act. By subsection (3) the local authority may let the land under a secure tenancy to a residential occupier but cannot otherwise dispose of any interest without the consent of the Secretary of State. It would therefore have been ultra vires for the council to have granted the Trust any estate or other proprietary interest in the premises.

The agreement between the Trust...