Cooper's Executors v Edinburgh District Council
| Jurisdiction | England & Wales |
| Judge | Lord Keith of Kinkel,Lord Brandon of Oakbrook,Lord Ackner,Lord Oliver of Aylmerton,Lord Jauncey of Tullichettle |
| Judgment Date | 21 March 1991 |
| Judgment citation (vLex) | [1991] UKHL J0321-1 |
| Court | House of Lords |
| Docket Number | No. 2. |
| Date | 21 March 1991 |
[1991] UKHL J0321-1
House of Lords
Lord Keith of Kinkel
Lord Brandon of Oakbrook
Lord Ackner
Lord Oliver of Aylmerton
Lord Jauncey of Tullichettle
My Lords,
This appeal is concerned with the situation which arises where a person who is, under section 44 of the Housing (Scotland) Act 1987, the secure tenant of a district council, has exercised the right to purchase his dwelling house given him by section 61 of that Act, and where, after the conclusion of missives of sale but before the settlement of the transaction by delivery of a disposition and payment of the price, that person has died. The question in dispute is whether, as the respondents contend, the benefit of the missives passes to the executors of the deceased tenant so that they can enforce the contract against the council, or whether, as the appellants contend, the contract must be treated as personal to the deceased tenant, so as not to be enforceable by his executors.
In 1988 the late George Cooper was the tenant of a house at 2 Loganlea Gardens, Edinburgh, where he had resided since 1935. The landlords were Edinburgh District Council, the appellants in this appeal ("the council"), and his tenancy was a secure one under section 44 of the Act of 1987. Section 61(1) of the Act provides:
"Notwithstanding anything contained in any agreement, a tenant of a house to which this section applies (or such one or more of joint tenants as may be agreed between them) shall, subject to this Part, have the right to purchase the house at a price fixed under section 62."
George Cooper's house being one to which section 61 applied, he decided to exercise this right, and on 12 January 1987 duly served on the council an application to purchase as provided for by section 63(1) of the Act. This resulted in missives of sale being entered into dated 15 and 25 March 1987 whereby the council contracted to sell the house to him at a price of £6,900 with entry on the first Wednesday occurring six months after the conclusion of the missives or such other date as might be mutually agreed. The price was arrived at, as provided for in section 62 of the Act, by subtracting from the market value of the house a discount calculated by reference to the number of years of the tenant's period of residence.
George Cooper died on 17 July 1988. No disposition of the house had yet been executed and delivered to him by the council. He left a will and the respondents are his executors nominate under it. They called upon the council to implement the missives of sale by delivery to them of a disposition of the house in exchange for the purchase price. The council refused to do so on the ground that the contract embodied in the missives was personal to the deceased so that his death relieved them of the obligation to give effect to it. So on 4 November 1988 the respondents raised an action against the council in the Court of Session concluding for implementation of their part of the missives of sale, with an alternative conclusion for damages. The council took a plea to the relevancy of the action and the respondents took a plea to the relevancy of the defences. Following a Procedure Roll debate the Lord Ordinary (Lord Sutherland) on 26 July 1989 sustained the respondents' plea, repelled the defences, and granted decree de piano for implement as concluded for. Upon a reclaiming motion by the council the First Division (Lord President Hope, Lord Cowie and Lord Grieve) on 26 January 1990 affirmed the interlocuter of the Lord Ordinary. The council now appeals to your Lordships' House.
It is common ground between the council and the respondents that in the ordinary case the mutual obligations contained in a contract for the sale of heritable property in Scotland are enforeceable, after the death of one party to the contract, by and against his representation: Gardiners v. Stewart's Trustees 1908 S.C. 985. The council, however, argues that the ordinary rule does not prevail in this case because certain provisions of the Act of 1987 exclude it by necessary implication. The provisions particularly founded on are section 44, which creates the concept of a secure tenancy, section 46(1), section 52, and section 61(1).
Section 46(1) provides:
"Notwithstanding any provision contained in the tenancy agreement, a secure tenancy may not be brought to an end except - ( a) by the death of the tenant (or, where there is more than one, of any of them), where there is no qualified person within the meaning of section 52; ( b) by operation of section 52( 4) or (5); ( c) by written agreement between the landlord and the tenant; ( d) by operation of section 50(2); ( e) by an order for recovery of possession under section 48(2); or ( f) by 4 weeks' notice given by the tenant to the landlord."
Section 52, so far as is relevant, provides:
"(1) On the death of a tenant under a secure tenancy, the tenancy shall pass by operation of law to a qualified person, unless: ( a) there is no qualified person, or the qualified person declines the tenancy under subsection (4); or ( b) the tenancy is terminated by operation of subsection (5).
(2) For the purposes of this section, a qualified person is ( a) a person whose only or principal home at the time of the tenant's death was the house and who was at that time either - (i) the tenant's spouse; or (ii) living with the tenant as husband and wife; and ( b) where the tenancy was held jointly by two or more individuals, a surviving tenant where the house was his only or principal home at the time of the tenant's death; ( c) where there is no person falling within paragraph (a) or (b), a member of the tenant's family who has attained the age of 16 years where the house was his only or principal home throughout the period of 12 months immediately preceding the tenant's death."
Section 61(1) has already been quoted.
In this particular case there was no qualified person to whom the secure tenancy of the deceased might have passed on his death by virtue of section 52(1), because he lived alone. But the possibility could exist in other cases where a secure tenant had concluded missives of sale but died before settlement of the transaction. The death of the secure tenant would not, having regard to the terms of section 46(1)( a), bring the secure tenancy to an end unless there were no qualified person. If there were a qualified person, the secure tenancy would necessarily pass to him under section 52(1), unless either of the exceptions provided for by subsections (4) and (5) existed (declinature by the qualified person and where the secure tenant was the successor to the original one). The fact that there was a contract of sale of the house in existence would not prevent the passing. It was argued that these matters must be taken into account in considering whether the secure tenant's contract of sale was by necessary implication personal to him. The next step in the argument was founded on the terms of section 61(1). By virtue of that provision the qualified person who succeeded to the deceased as secure tenant would have the right to purchase the house at the statutory price, and furthermore he would have that right "notwithstanding anything contained in any agreement". If the executors of the deceased were to be entitled to enforce the agreement contained in his contract of sale, that would have the effect of depriving the qualified person of his right under section 61(1), and it could not properly be inferred that this was in accordance with the statutory intention. So by necessary implication the executors would not be entitled to enforce the contract, which meant that it was personal to the deceased.
This argument is ingenious but it is not, in my opinion, well founded. The statutory procedure where a secure tenant wishes to exercise his right to purchase under section 61(1) is that he initiates matters by serving on his landlord an application to purchase under section 63(1). The landlord must within two months after such service serve on the tenant an offer to sell under section 63(2), stating, inter alia, the price and, by virtue of section 64(1), such conditions as are reasonable. Section 65 provides for the procedure to be followed if the tenant does not agree to any condition, including provision for reference to the Lands Tribunal in order to resolve disagreement. Section 66(1) provides for matters to be concluded by the tenant serving on the landlord a notice of acceptance within a certain limited time. Section 66(2) provides:
"Where an offer to sell (or an amended offer to sell) has been served on the tenant and a relative notice of acceptance has been duly served on the landlord, a contract of sale of the house shall be constituted between the landlord and the tenant on the terms contained in the offer (or amended offer) to sell."
It may be accepted that the constitution of a contract of sale does not by itself put an end to the secure tenancy, which will continue in being until the transaction is settled by the delivery of a disposition of the subjects. But the contract of sale necessarily amounts to a written agreement between landlord and tenant to bring the tenancy to an end, within the meaning of section 46(1)( c). So although a qualified person may succeed to the secure tenancy of one who has died after entering into a contract of sale, the secured tenancy to which he succeeds is one which will be brought to an end on the settlement of the transaction. He cannot have the right to buy a house which has previously been agreed to be sold to his predecessor. Counsel for the council founded on the opening words of section 61(1), "notwithstanding anything contained in any agreement"...
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