Kay v Lambeth City Council; Leeds City Council v Price

JurisdictionEngland & Wales
JudgeLord Justice Auld
Judgment Date16 March 2005
Neutral Citation[2004] EWCA Civ 926,[2005] EWCA Civ 289
CourtCourt of Appeal (Civil Division)
Docket NumberCase No: B2/2003/0300/D, B2/2003/0606/B, B2/2004/0043 & B2/2003/0300,Case No: B2/2004/2353
Date16 March 2005

[2004] EWCA Civ 926





Royal Courts of Justice


London, WC2A 2LL


The Right Honourable Lord Justice Auld

The Right Honourable Lord Justice Latham and

The Right Honourable Lady Justice Arden

Case No: B2/2003/0300/D, B2/2003/0606/B,

B2/2004/0043/A, B2/2003/0606, B2/2004/0042,

B2/2004/0043 & B2/2003/0300

1. Gavin Kay
2. William Gorman
3. Ian Peter Constantine
4. Cherry Barnett
5. Rory Hyde-Smyth
6. Christopher Cole
7. Mieczyslaw Dymny
8. Thomas Greenhalgh
1. London Borough of Lambeth
2. London & Quadrant Housing Trust

Mr Jan Luba QC (instructed by Thomas & Co) for the First Appellant

Mr Jan Luba QC, Mr Kelvin Rutledge and Mr David Watkinson (instructed by Nicholas & Co) for the 2 nd-8 th Appellants

Mr Andrew Arden QC, Mr Terry Gallivan and Mr John McCafferty (instructed by Devonshires) for the Respondents

Lord Justice Auld

Lord Justice Auld



This is the judgment of the Court, to which we have all contributed. The case concerns "secure tenancies" under Part IV of the Housing Act 1985. Until the Housing Act 1980 tenants of local authorities had no statutory protection. That Act introduced security of tenure for such tenants and for those of some other public or quasi public bodies in the form of "secure tenancies" and a right to buy their homes. Those provisions were consolidated in Parts IV and V of the 1985 Act. The case has raised a number of issues of law prompted by the decision of the House of Lords, given on 24 th June 1999 in Bruton v. London & Quadrant Housing Trust [2000] 1 AC 406, that what purported to be a licence of residential property granting exclusive possession in return for periodic payment in money amounted to the grant of a tenancy. The two main issues in the appeal are whether, on the facts, there was a relationship of principal and agent between a head-lessor and its lessee so as to render the latter the head-lessor's agent in the grant of what became Bruton tenancies to the lessee's former licensees and, whether or not that was so, whether on the head-lessor's termination of the head-lease, the sub-tenants of the former intermediate lessee remained or became secure tenants under Part IV.


Mr Gavin Kay, Mr William Gorman and others appeal against two rulings by His Honour Judge Cooke in the Central London County Court on 13th December 2002 and 19th December 2003 respectively, in claims against them by the London Borough of Lambeth ("Lambeth") for possession of residential properties owned by Lambeth and occupied by the appellants.


The properties in question are, and have all material times been, owned by Lambeth. But it was London & Quadrant Housing Trust ["LQHT"], a charitable housing trust, that let the appellants into possession of them under the authority of a licence granted to it by Lambeth, later replaced by individual leases, to LQHT. Those leases were subject to a break-clause providing for termination by Lambeth, on which, in 2000, it relied to terminate them. The Judge:

a) held, by way of rulings on a number of preliminary issues, that the appellants are not tenants of Lambeth and, therefore, have no security of tenure under Part IV of the 1985 Act; and

b) on an application by Lambeth and LQHT, struck out the appellants' alternative defence that an order for possession against them would infringe their rights under the European Convention of Human Rights ("ECHR") .


On the preliminary issues the appellants, by this appeal, seek declarations that they are the secure tenants of Lambeth from such date as the Court may determine. On the strike-out they seek in the alternative, that is, on the assumption that they are trespassers against Lambeth, that Lambeth's determination of the LQHT leases was unlawful and, therefore, void because Lambeth did not carry out, when considering whether to seek possession, a balancing exercise required under Article 8 ECHR on the right to respect for private and family life, and/or was in breach of Article 1 of the First Protocol.


As we have indicated, the proceedings leading to the appeal have their legal, though not factual, origin in the ruling of the House of Lords in Bruton, that LQHT's agreement with Mr Bruton to allow him to occupy residential property, entered into and with a similar history to that of the appellants, was a tenancy rather than a licence. However, the House left open two important consequential questions: first, whether such tenancies are secure under Part IV of the Housing Act 1985, which provides for secure tenancies and rights of secure tenants; and second, whether the appellants had any rights to security and/or to remain in possession as against LQHT. A further complication is, as just indicated, that following those rulings Lambeth determined the head-leases that it had previously granted LQHT by invoking the break-clauses in them, raising the further issue in this appeal whether the appellants are no longer tenants, but trespassers as against Lambeth.


Lambeth's case before the Judge, supported by LQHT, was that, as a result of the decision in Bruton, the appellants' tenancies had become binding on LQHT, but that once Lambeth determined the head-leases of LQHT, the appellants were no longer tenants but trespassers. The appellants' case was that they had become secure tenants of Lambeth: 1) on being let into occupation by LQHT, because LQHT, in granting what were to become " Bruton" tenancies had acted as Lambeth's agent; or 2) in about 1995 when Lambeth determined LQHT's licences and replaced them with head-leases; or 3) in 2000 when Lambeth determined those head-leases..

The facts


The premises occupied by the appellants comprise "short-life" property of Lambeth, namely that scheduled for demolition, redevelopment or works and which, in any event, are not in a condition suitable for normal housing use or capable of being rendered so suitable within finances available to Lambeth.


By the late 1970s and early 1980s Lambeth owned substantial blocks of property in such poor condition and not in use. It did not have the money to redevelop it for housing, either by way of demolition and rebuilding or with major refurbishment. The properties were also subject to aggressive squatting, which in turn exacerbated their already poor condition, and interfered with Lambeth's long-term policies or hopes for their better use. The Department of the Environment, by Circular DOE 18/74, had urged local housing authorities to make the best use they could of such properties. In 1975 Lambeth began to consider a scheme by which housing associations would take over short life properties, find tenants for them, and manage them until they were required for demolition and/or redevelopment.


Over the next year the Department of the Environment issued DOE Circular 76/77 advising local housing authorities to make arrangements with registered housing associations and like bodies for the repair, management and letting of short-life properties. At about the same time the Government announced that money spent by local housing authorities on short-life property would be deducted from their overall housing expenditure budget. In future, such expenditure would have to be met out of housing authorities' own funds and housing association grants ("Mini-HAGs") payable by the Housing Corporation direct to the housing associations concerned. All this coincided with the increase in responsibilities on local housing authorities imposed by the Housing (Homeless Persons) Act 1977 which led them to provide temporary bed and breakfast accommodation for the homeless with assistance from registered housing associations.


From about 1977 Lambeth informally licensed such property to LQHT, and a number of similar bodies, for them to make it available as temporary accommodation, in place of bed and breakfast accommodation, to homeless persons and their families for whom Lambeth owed a statutory duty under the 1977 Act to arrange housing—known in these proceedings as "the bed and breakfast scheme". Lambeth nominated such homeless persons for provision by LQHT of bed and breakfast accommodation; Lambeth set the rents and took eviction decisions. Lambeth permitted LQHT to retain, but required it to account to it for, the charges paid by the homeless person, and, in addition, paid LQHT a weekly fee to enable it to pay for works necessary to provide accommodation of an acceptable standard for such purpose. Mini-HAG was not regarded as available nor claimed for bed and breakfast accommodation.


In 1979 Lambeth, by a quite separate arrangement, also made provision through LQHT and other bodies to which it "passed" properties, for accommodating persons to whom it owed no statutory duty to arrange accommodation and to whom it would not normally have allocated or arranged housing under its general housing scheme. This became known as "the singles scheme". The financial arrangements for this scheme were that it would cost Lambeth nothing and that it received nothing. LQHT, in its own right, obtained central government assistance in the form of Mini-HAGs from the Housing Corporation, and it set, in agreement with the Corporation (not with Lambeth) a weekly unit rental sum for such occupation. Out of that sum it paid for necessary works to bring the property to sufficient standard, but to a lower standard than the property that it made available to the statutorily homeless under the bed and breakfast scheme. Lambeth did not in practice select occupiers for this scheme; anyone on its general housing list was...

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