Leeds City Council v Stephen Broadley
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Edis |
| Judgment Date | 26 July 2016 |
| Neutral Citation | [2016] EWHC 1839 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/933/2016 |
| Date | 26 July 2016 |
[2016] EWHC 1839 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Leeds Combined Court Centre
The Court House
1 Oxford Row
Leeds LS1 3BG
Mr Justice Edis
Case No: CO/933/2016
Kerry Bretherton QC and Justin Crossley (instructed by Leeds City Council Legal Services) for the Claimant
The Respondent in person
Hearing dates: 26 th May 2016
This is a statutory appeal on a question of law from a decision of the Vice President of the Valuation Tribunal for England ("the Tribunal") brought under Regulation 43 of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009 (the Regulations). The decision in issue was made on 27 th January 2016 and related to 5 properties. Each property involved a separate appeal, but the issues were such that all appeals were heard at the same time and dealt with in the same decision. The common issue was identified by the Vice President as follows:-
"Whether the appellant [Mr. Broadley] or his tenants was or were the owner of the appeal dwelling, within the meaning of section 6 of the Local Government Finance Act 1992 when the appeal dwellings had no resident for the periods in dispute."
The issue is of importance because it determines whether the landlord is liable to pay Council Tax or whether the tenant (or former tenant) is liable to pay Council Tax after vacating the premises.
This issue depends upon the construction of the terms of a standard form tenancy agreement used by Mr. Broadley (and others) when granting residential tenancies in respect of properties which he owns. That form, so far as relevant, provides as follows
"Whereas the landlord agrees to let the premises known as…..for a term of [ 6 or 12] months and thereafter continuing on a monthly basis unless terminated by either party under the provisions of Clause 3
Paying therefor the rent of ….per calendar month….
1. The landlord lets and the tenant takes the property for the term at the rent payable as above.
2. This agreement is intended to create an assured shorthold tenancy under the provisions of the Housing Act 1988.
3. This agreement may be terminated by either party giving to the other one full calendar month's written notice provided that no such notice may be served during the first [ 6 or 12 as above] months of the term.
TENANT'S OBLIGATIONS
….
(b) To pay….Council Tax…charged in respect of the property during the tenancy……"
Liability to pay Council Tax is to be determined having regard to the provisions of section 6 of the Local Government Finance Act 1992 ("the 1992 Act"). So far as material, these provide as follows:
"(1) The person who is liable to pay Council Tax in respect of any chargeable dwelling and any day is the person who falls within the first paragraph of subsection (2) below to apply, taking paragraph (a) of that subsection first, paragraph (b) next, and so on.
(2) A person falls within this subsection in relation to any chargeable dwelling and any day if, on that day—
(a) he is a resident of the dwelling and has a freehold interest in the whole or any part of it;
(b) he is such a resident and has a leasehold interest in the whole or any part of the dwelling which is not inferior to another such interest held by another such resident;
(c) he is both such a resident and a statutory or secure or introductory tenant of the whole or any part of the dwelling;
(d) he is such a resident and has a contractual licence to occupy the whole or any part of the dwelling;
(e) he is such a resident; or.
(f) he is the owner of the dwelling.
…
(5) In this Part, unless the context otherwise requires—
'owner', in relation to any dwelling, means the person as regards whom the following conditions are fulfilled—
(a) he has a material interest in the whole or any part of the dwelling; and.
(b) at least part of the dwelling or, as the case may be, of the part concerned is not subject to a material interest inferior to his interest;
"resident", in relation to any dwelling, means an individual who has attained the age of 18 years and has his sole or main residence in the dwelling.
(6) In this section—…
'material interest' means a freehold interest or a leasehold interest which was granted for a term of six months or more."
Fundamentally, the issue is whether the tenancy agreement I have set out above creates a leasehold interest for a term of six months or more. The rival contentions are, in summary:-
i) Mr. Broadley submits that the contract created a single tenancy whose term was 6 months and thereafter continuing as a monthly tenancy. This would have the same effect as a fixed term assured shorthold tenancy, but would be the result of the contract rather than the effect of statute at the conclusion of the fixed term.
ii) Ms. Bretherton QC submits that a single tenancy cannot be both a fixed term and a periodic tenancy as this would offend the principle of uncertainty. Therefore she contends either
a) the words used must be construed against the legal context in which they were chosen and that the contractual term is a fixed term of 6 months at the conclusion of which a new statutory tenancy was created by statute and the conduct of the parties in continuing to pay and accept rent; or
b) the lease created a periodic monthly tenancy with a fetter on the giving of notice to terminate before the expiry of 6 months; or
c) Finally, and only in reply and somewhat faintly, she suggests that the parties created a contractual licence.
Mr. Broadley relies on what he contends is the natural meaning of the words used, and the actual intention of the parties. Ms. Bretherton says that this construction offends against the rule which requires a tenancy to be for a certain term and that it is a species of interest in land which it is beyond the power of the landlord to create. Therefore another meaning must be given to the words used. The significance of the arguments is that if she is right the landlord is obliged to pay Council Tax for the disputed period whereas if Mr. Broadley is right the tenant continues to be liable until the contractual tenancy is terminated by notice or otherwise.
The facts
The findings of the Vice President may be shortly summarised for the purpose of this appeal on a question of law in the Table set out below. In each case Mr. Broadley granted an assured shorthold tenancy in relation to a dwelling to a tenant. The tenant left after a period of time, and the Council ceased to regard the tenant as liable for Council Tax when notified of his/her departure. The tenant was no longer resident, but the landlord, Mr. Broadley, asserted that the tenancy continued with the result that there was, until the tenancy was terminated under Clause 3, a material interest inferior to his and he was therefore not "the owner" during that period. In each case, the "period in dispute" is the time between the date when the departing tenant gave up possession and the date when the tenancy was terminated by notice under Clause 3 or, if later, the date when the property was re-let.
| Property | Date Of Grant Of Tenancy | Period In Dispute | Term Of Tenancy | End of tenant's liability for Council Tax |
| Flat 2 44 Victoria Park Avenue LS5 3DG | 14/6/ 2013 | 14/12/13–1/2/14 | For a term of six months, and thereafter continuing on a monthly basis unless terminated by either party under the provisions of Clause 3 | 28/11/13 |
| Flat 2, 51 Boroughgate, Otley LS21 1AG | 13/7/13 | 19/3/14–6/5/14 | As above | 19/3/14 |
| Flat 6, Kirkstall Mount, Leeds LS5 3DT | 15/8/11 | 1/1/14–31/1/14 | As above | 1/1/14 |
| Flat 1, 24 North Grange Rd, Leeds LS6 2BR | 15/11/12 | 4/1/14–28/2/14 | As above | 4/1/14 |
| Flat 2, 22 North Grange Rd, Leeds LS6 2BR | 10/9/13 | 10/9/14–1/10/14 | For a term of twelve months, and thereafter continuing on a monthly basis unless terminated by either party under the provisions of Clause 3 | 9/9/14 |
The Vice President resolved some issues of fact and I have summarised the result of his findings in the Table above only to give context to the pure legal issue which I have to resolve. There is no appeal against those findings and it is not necessary to address them further. The law as I hold it to be will apply to the facts as found by the Vice President.
The decision of the Valuation Tribunal on the legal issue
The Vice President followed a decision of the Valuation Tribunal to which he had been party in Trustees of Berwick Settlement v. Shropshire Council (Billing Authority) dated 22 nd July 2014. That was a case in which an identical point arose. He was not addressed on behalf of the Billing Authority in either case in quite the same way in which Ms. Bretherton has addressed me, taking me back to the fundamental character of a tenancy. He decided that Mr. Broadley was right and that the tenancy agreement created a single term which was a fixed period of 6 months, followed by a further period of time which was identical to a periodical monthly tenancy.
The submissions in more detail
The Appellant
The Housing Act 1988 by s.1 defines an assured tenancy which is, as is obvious, a type of tenancy. s.5 provides for a new statutory periodic tenancy to come into existence at the conclusion of a fixed term assured tenancy. Where the rent is payable monthly during the fixed term the new periodic tenancy is a monthly tenancy. By s.19A an assured tenancy is an assured shorthold tenancy unless stipulated to the contrary. This means that a landlord can obtain possession after the end of a fixed term assured shorthold...
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Leeds City Council v Broadley
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