London Borough of Islington v Uckac and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Dyson,Sir Charles Mantell,Lord Justice Mummery |
| Judgment Date | 30 March 2006 |
| Neutral Citation | [2006] EWCA Civ 340 |
| Docket Number | Case No: B2/2005/1531 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 March 2006 |
[2006] EWCA Civ 340
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MAYOR'S AND CITY OF LONDON COUNTY COURT
HH JUDGE SIMPSON
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Mummery
Lord Justice Dyson and
Sir Charles Mantell
Case No: B2/2005/1531
Andrew Arden QC & Terry Gallivan (instructed by Director of Law and Public Services) for the Appellant
Jonathan Seitler QC & Nicholas Nicol (instructed by Messrs Lewis Nedas & Co) for the Respondent
Introduction
These proceedings relate to 9 Selkirk House, Bemerton Estate, London N1 OAB ("the property") . The first and second defendants are wife and husband. The London Borough of Islington ("the council") seeks rescission of the secure tenancy granted by it to the second defendant and assigned by him to the first defendant on the grounds of fraudulent misrepresentation and an order for possession consequent upon the rescission, alternatively an order for possession under ground 5 of schedule 2 to the Housing Act 1985 ("the 1985 Act") . By her defence, the first defendant denies that the council was induced into granting the tenancy by any false statement made by her or that, if she made such a statement, she did so knowingly or recklessly.
His Honour Judge Simpson decided to deal with the question whether the council was entitled to possession under ground 5 or rescission for fraudulent misrepresentation as preliminary issues. For this purpose, he assumed that all the material facts pleaded by the council were true. By a judgment given on 11 July 2005, the judge decided that the council was not entitled to succeed either under ground 5 or in its claim for rescission of the tenancy. He ordered that the claim be dismissed and that the council pay the second defendant's costs to be assessed if not agreed. He gave permission to appeal to this court on the grounds that there was no binding authority under the 1985 Act which determined the points at issue. The appeal raises issues as to whether (a) ground 5 is available where the secure tenancy has been the subject of a valid assignment and (b) rescission is available where a landlord has been induced to grant a secure tenancy by a fraudulent misrepresentation made by or on behalf of the tenant.
The assumed facts
On or about 20 June 2000, the first and second defendants applied to the council as homeless persons under Part VII of the Housing Act 1996 ("the 1996 Act") . In their application, they represented that the address at which they were both living on the date of the application was 122 Girdlestone Walk, London N19, that the first defendant had lived at that address since October 1997 and the second defendant since June 1996. They further represented that their reason for leaving that address was that the premises were overcrowded and they had been given 7 days' notice to leave. They also stated in the application form that the information given to the council in connection with the application was correct to the best of their knowledge and that, in making the application, they had not withheld any information which had any bearing on the application. At paragraph 3 of the Particulars of Claim, it is alleged that these representations "were made fraudulently in that they were false and at all material times the defendants knew them to be false or were reckless as to whether they were true or false". The pleaded particulars of these allegations are that between January and October 1999, the first and/or second defendants were living at 29 Knights Road, Braintree, Essex; between October 1999 and April 2000, the first and or second defendants were living at 32a Manor Street, Braintree; and that on 20 June 2000, the first and or second defendants were not living at 122 Girdlestone Walk. As I have said, however, the judge proceeded on the basis of assumed facts.
On 14 August 2000, the council accepted that the defendants were homeless, eligible for assistance, in priority need, not intentionally homeless and that there was no suitable accommodation available for their occupation. They, therefore, accepted that they were under a duty to make accommodation available to them pursuant to Part VII of the 1996 Act. Pursuant to this duty, on 2 October 2000 the council granted the second defendant a tenancy of a 2 bedroom flat at the property. By an assignment in writing dated 12 November 2001, the second defendant assigned his tenancy of the property to the first defendant. It is accepted by the council that, subject to its arguments in relation to rescission and ground 5, the assignment was valid and permitted by sections 87, 91(1) and (3) (c) of the 1985 Act.
So far as material, the 1985 Act provides:
"82. Security of tenure
(1) A secure tenancy which is..
(a) a weekly or other periodic tenancy, cannot be brought to an end by the landlord except by obtaining an order mentioned in subsection (1A)
(1A) These are the orders—
(a) an order of the court for possession of the dwelling-house.
(2) Where the landlord obtains an order for the possession of the dwelling-house, the tenancy ends on the date on which the tenant is to give up possession in pursuance of the order.
84. Grounds and orders for possession
(1) The court shall not make an order for the possession of a dwelling-house let under a secure tenancy except on one or more of the grounds set out in Schedule 2.
(2) The court shall not make an order for possession
(a) on the grounds set out in Part 1 of that Schedule (grounds 1 to 8), unless it considers it reasonable to make the order….
Schedule 2
Ground 5
The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by
(a) tenant, or
(b) a person acting at the tenant's instigation"
The Ground 5 argument
The judge held that ground 5 could not avail the council on the facts of this case. He said that this ground is only available where the defendant from whom possession is sought is the person to whom the tenancy was granted. He also considered that the absence of any reference to predecessors in title in ground 5 is significant. It is to be contrasted with grounds 6,7,8 and 12 which do refer to predecessors in title. Section 621 of the 1985 Act defines "tenancy" as including "a sub-lease or sub-tenancy" and section 621(3) provides that the expression "tenant" shall "be construed accordingly". The judge concluded that, if Parliament had intended that a defendant should be liable for the acts of a predecessor in title, it would have expressly so provided. In summary, he held that ground 5 should be construed "strictly" (para 21).
The council's case in relation to ground 5 has been argued succinctly by Mr Gallivan. He submits that the judge was wrong to adopt a literal interpretation, since this can produce results which are so unreasonable that they cannot have been intended by Parliament. On the judge's interpretation, no matter how blatant the fraud by the original tenant may be, or whether the assignee was a party to the fraud (as, on the assumed facts, the first defendant was in the present case), the landlord cannot recover possession under ground 5 once the tenancy has been assigned.
Mr Gallivan submits that there are three possible ways to avoid such a result. First, the expression "the tenant" should be read as including predecessors in title. The definition of "tenant" in section 621 is non-exhaustive. If a predecessor in title is not included, it is difficult to see who else is. Secondly, the relevant date for the purposes of identifying "the tenant" in ground 5 should be taken to be the date of the grant of the tenancy, not the date of the hearing. Thirdly, Mr Gallivan submits that the assignee takes subject to any subsisting order or ground for possession: the assignee steps into the shoes of the assignor and cannot be in any better position than the assignor.
I cannot accept these submissions essentially for the reasons advanced by Mr Nicol on behalf of the first defendant. The language of ground 5 is clear and unambiguous. The phrase "the tenant is…" is expressed in the present tense and can only refer to the current tenant, i.e. the person from whom possession is sought. If "the tenant" included any predecessor in title, the opening words of ground 5 would serve no purpose. If Parliament had intended to include misrepresentations by predecessors in title, the first 17 words would have been omitted. It would simply have provided: "the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by (a) the tenant or a predecessor in title or (b) a person acting at the instigation of the tenant or his predecessor in title". The 17 words were included because it was intended to limit this ground of possession to cases where the misrepresentation was made by the current tenant or at his instigation: they are not mere surplusage. In my judgment, the plain language of ground 5 makes it impossible to read "the tenant" as including predecessors in title. This conclusion is fortified by the express reference to predecessors in title in grounds 6,7, 8 and 12.
For the same reasons, it is impossible to read ground 5 as referring to the person who was the tenant at the date of the grant of the tenancy and not at the date of the hearing. The use of the present tense is fatal to Mr Gallivan's argument. The grounds are carefully drafted to distinguish between the past and the present. Thus, for example,...
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