Knowsley Housing Trust v White ; Porter v Shepherds Bush Housing Association

I have had the advantage of reading in draft the speech of my noble and learned friend Lord Neuberger of Abbotsbury. For the reasons he gives, with which I agree, I would allow the appeals in Knowsley Housing Trust v White and Porter v Shepherds Bush Housing Association, but dismiss the appeal in Honeygan-Green v Islington London Borough Council.

I have had the privilege of reading in draft the magisterial opinion of my noble and learned friend Lord Neuberger of Abbotsbury. I am in full agreement with it, and for the reasons that Lord Neuberger gives I would dispose of these three appeals as he proposes.

I venture to add one brief footnote, and I do so largely as a matter of respect for Lord Browne-Wilkinson, who gave the leading speech in this House in Burrows v Brent London Borough Council [1996] 1 WLR 1448. Lord Browne-Wilkinson did not, as I read the authorities, invent the rather unfortunate phrase "tolerated trespasser." It seems to have been coined by counsel for the local authority when that case was before the Court of Appeal: see Auld LJ (1995) 27 HLR 748, 752, quoted by Millett LJ in London Borough of Greenwich v Regan (1996) 72 P & CR 507, 517 (decided on 31 January 1996, while Burrows was on its way to this House). Both Auld LJ (in Burrows) and Millett LJ (in Regan) set out the expression "tolerated trespasser" in inverted commas, rather as if they were holding it at arm's length. Millett LJ went on to explain that it was not an appropriate expression because in Regan the Court of Appeal (for good reason, on the facts of that case) had not considered the effect of section 85 of the Housing Act 1985.

When Burrows reached this House Regan was approved and section 85 was given its proper significance. Lord Browne-Wilkinson quoted the expression "tolerated trespasser"—again, in inverted commas — at pp 1452E and 1455C, and in the latter passage he could be said to have tolerated it. He did not wholly-heartedly endorse it. But it has since then become too firmly embedded to be dislodged.

I have had the advantage of reading in draft the opinion of my noble and learned friend Lord Neuberger of Abbotsbury. I agree with everything he says and would dispose of these appeals exactly as he suggests.

I have had the benefit of reading in draft the speech of my noble and learned friend, Lord Neuberger of Abbotsbury. I agree with him that the appeals should be allowed in Knowsley Housing Trust v White and Porter v Shepherds Bush Housing Association, but dismissed in Honeygan-Green v Islington London Borough Council, in each case for the reasons he gives, subject to one qualification not critical to the outcome.

The qualification relates to the operation of sections 85(2) and (4) of the Housing Act 1985 and the Court of Appeal authorities of Marshall v Bradford Metropolitan District Council[2001] EWCA Civ 594; [2002] HLR 428 and Swindon Borough Council v Aston[2002] EWCA Civ 1850; [2003] HLR 610. These are areas covered in my noble and learned friend's speech at paras 94 to 113. They concern the interplay of sections 85(2), (3) and (4) in a situation where a possession order is made against a secure tenant but stayed or suspended on conditions relating (usually) to the payment of arrears, rent, mesne profits and/or costs. They are areas which were not, unfortunately, the subject of any full argument before the House.

Full argument and a decision on these areas would have been called for in Porter v Shepherds Bush Housing Association, if the parties in that case had not at an early stage during the hearing agreed that the tenant's appeal should be allowed (on the basis that Swindon Borough Council v Aston was wrong) and the case remitted for the County Court to exercise jurisdiction accordingly under section 85(2); after that the parties and their counsel withdrew, with permission, from the hearing before the House. While the House, in noting the parties' agreement, reserved the right to consider the case on a wider basis, the position remains that it heard no full argument in support of any such basis.

Section 85 provides inter alia:

"(2) On the making of an order for possession of such a dwelling-house on any of those grounds, or at any time before the execution of the order, the court may

• (a) stay or suspend the execution of the order, or

• (b) postpone the date of possession,

for such period or periods as the court thinks fit.

(3) On such an adjournment, stay, suspension or postponement the court

(a) shall impose conditions with respect to the payment by the tenant of arrears of rent (if any) and rent or payments in respect of occupation after the termination of the tenancy (mesne profits), unless it considers that to do so would cause exceptional hardship to the tenant or would otherwise be unreasonable, and

(b) may impose such other conditions as it thinks fit.

(4) If the conditions are complied with, the court may, if it thinks fit, discharge or rescind the order for possession."

Where the execution of an order is stayed or suspended on conditions with which the tenant complies, no problem arises. Assuming the order to be silent as to the position, the tenant can by application under section 85(4) apply for its discharge or rescission in the light of the compliance with the conditions.

In practice, possession orders also contain a provision, designed to avoid the necessity for a separate application under section 85(4), providing prospectively for their discharge or rescission (or for them to "cease to be enforceable") upon satisfaction of the conditions. In Payne v Cooper [1958] 1 QB 174 the Court of Appeal acknowledged that "As a matter of English, at first sight it might be said with force that it is only when the conditions have in fact been complied with that [the] power [to discharge or rescind] arises, and may be invoked", but, in the event and in the light of existing practice, took a pragmatic view. It held (in relation to similar statutory wording to section 85(4) contained in section 4(2) of the Rent and Mortgage Interest Restrictions Act 1923) that such a provision could be regarded as a "proleptic" exercise of the power of discharge which the statutory wording provides. A further, separate application by the tenant after compliance with the conditions was therefore unnecessary.Payne v Cooper was evidently overlooked by all involved in Marshall, where one issue was whether proleptic discharge was possible. As Lord Neuberger, indicates in paras 94 to 99, the third reason given by Chadwick LJ in para 37 in Marshall cannot stand in the light of Payne v Cooper.

Lord Neuberger concludes in paras 109-110 that compliance with the conditions in the context of section 85(4) and of the type of orders made in the cases before the House must mean strict compliance. While it is not critical to the conclusions that I reach, I am by no means confident that it does. Time is not normally of the essence in a non-commercial context, unless the wording makes clear expressly or by implication that it is; and Bennion on Statutory Interpretation (5 ^th ed) (2008) p 868 notes that "as with all enactments, expressions relating to time are to be construed with common sense. So a strictly literal meaning will not be applied if the purpose of the enactment requires otherwise". Here the wording of the order made in Islington London Borough Council v Honeygan-Green does not make clear that time is of the essence, and I fully understand the argument that Parliament may not have envisaged that minor failures to comply with the conditions set under section 85(3) would preclude the exercise of the court's power under section 85(4). So there may be a considerable case for saying that substantial compliance with such conditions suffices. It may be objected that this could involve a distinction between non-compliance which converts a tenant into a tolerated trespasser under section 85(2) and (3) and non-compliance which precludes use of section 85(4). But, I am not even sure that it would necessarily do that. Substantial performance could be regarded as the test both of compliance under paragraph 5 of the order in Honeygan-Green setting the conditions regarding payments and of compliance for the purposes of paragraph 6 proleptically discharging that order in the event of compliance with such conditions.

Whether this is so or not, however, a substantial case could be made for reading the word "substantially" into subsection (4) before the words...