R v Tower Hamlets London Borough Council, ex parte Goetz

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date08 October 1998
Judgment citation (vLex)[1998] EWCA Civ J1008-11
Date08 October 1998
Docket NumberQBCOF 98/1247/4

[1998] EWCA Civ J1008-11




(Mr. Justice Carnwath)

Royal Courts of Justice


London WC2


Lord Justice Peter Gibson

Lord Justice Pill

Lord Justice Mummery

QBCOF 98/1247/4

The Queen
The Mayor and Burgesses Of The London Borough Of Tower Hamlets
ex parte emily von goetz

MR. A. UNDERWOOD (instructed by Messrs Russell Power, London, E14) appeared on behalf of the Appellant/Respondent.

MISS T. BLOOM (instructed by Messrs McMillen Hamilton, London, E1) appeared on behalf of the Respondent/Applicant.


On 11th December 1997 Carnwath J quashed the decision of the London Borough of Tower Hamlets ("the Council") of 24th March 1997, that Miss Emily Von Goetz, ("the applicant"), was not eligible for a grant under Part V111 of the Local Government and Housing Act 1989 ("the 1989 Act").


This appeal, brought with the leave of this court, turns on a short point of construction of section 104(2)(b) of Part V111 of the 1989 Act, which has now been repealed and re-enacted with modifications in the context of the discretionary regime provided for in the Housing Act 1996.


The facts


On 5th July 1994 the applicant obtained a 10 year assured shorthold tenancy of a three-storey Victorian house at 24, Shipton Road, Shoreditch, London E.2 ("the property"). The tenancy was granted under an agreement for a term longer than three years. There was no deed executed under seal and so the tenancy could not take effect as a legal estate in the property (section 52(1) and section 54(2) of the Law of Property Act 1925). It is, however, accepted by the Council that the applicant has a specifically enforceable contract for a term of years exceeding three years, and that she has an equitable interest in the property.


In July 1996 the applicant sent to the Council an application for a renovation grant under Part V111 of the 1989 Act. Part V111 governs grants towards the cost of improvements and repairs. The application was rejected on 24th March 1997, as the Council concluded that the applicant did not have "an owner's interest" in the property within the meaning of section 104(2), and that for that reason she was not eligible for the grant applied for.


The decision letter to the applicant contains the following passage:

"Under the terms of the Local Government and Housing Act 1989 grant can only be awarded if a valid interest in the property exists. Your application was as an owner and therefore subject to the conditions in S.104 of Part V111 of the 1989 Act requiring an owners interest to be established without which grant cannot be paid. In this instance, counsel's opinion states that as your lease was not executed under deed this means that you have not established a valid interest in the property and are therefore not in a position to be considered for a grant.

You are of course free to amend your lease to have it executed under deed and re-apply for grant, however your application would need to be considered afresh under the current legislation."


Provisions of 1989 Act


Section 104, which has the side heading "The interest of the applicant in the property", provides as follows. Subsection


"Subject to subsection (4) and 136 below, a local housing authority may not entertain an application for a grant, other than a common parts grant, unless they are satisfied that -

(a) the applicant has, or proposes to acquire, an owner's interest in every parcel of land on which the relevant works are to be carried out."


Subsection (2) contains a definition:

"In this Part 'owner's interest' means an interest which -

(a) is held by the applicant alone or jointly with others and

(b) is either an estate in fee simple absolute in possession or a term of years absolute of which not less than five years remain unexpired at the date of the application."


On those provisions the question for decision is whether the applicant's interest in the property is a "term of years absolute" within the meaning of section 104(2)(b). It is common ground that if it is, not less than five years remained unexpired at the date of the application. Section 104(3) reads:

"Where a local housing authority entertain an owner's application made by a person who proposes to acquire the necessary interest, they shall not approve the application until they are satisfied that he has done so."

To put these provisions in context, we were also referred to other provisions of Part V111, including in particular section 109 and section 122.


The 1989 Act does not further define the expressions "estate in fee simple absolute in possession" and "term of years absolute" contained in section 104(2)(b). The obvious place to find definitions of those expressions is in the Law of Property Act 1925. A definition of "term of years absolute" is contained in the interpretation section of the 1925 Act. Section 205(1) provides:

"In this Act unless the context otherwise requires, the following expressions have the meanings hereby assigned to them respectively, that is to say

(xxvii): 'Term of years absolute' means a term of years (taking effect either in possession or in reversion whether or not at a rent) with or without impeachment for waste, subject or not to another legal estate, and either certain or liable to determination by notice, re-entry, operation of law, or by a provision for cesser on redemption, or in any other event (other than the dropping of a life, or the determination of a determinable life interest); but does not include any term of years determinable with life or lives or with the cesser of a determinable life interest, nor, if created after the commencement of this Act, a term of years which is not expressed to take effect in possession within twenty-one years after the creation thereof where required by this Act to take effect within that period; and in this definition the expression 'term of years' includes a term for less than a year, or for a year or years and a fraction of a year or from year to year."


That definition does not require that a "term of years absolute" should be a legal estate. As Carnwath J noted, the editorial comments on this provision in Woestenholme & Cherry (13th Edition) state as follows:

"There can be an equitable term of years absolute [and refers to sections 1(4) and section 149(2)]. The words 'subject or not to another legal estate' do not restrict the definition to legal terms but apply when the term is a legal term, subject to a prior legal estate'."


The possibility of an equitable estate in a term of years absolute is contemplated by section 149(2) which deals with the abolition of interesse termini and contains provisions as to reversionary leases and leases for lives. Subsection (2) provides:

"As from the commencement of this Act all terms of years absolute shall, whether the interest is created before or after such commencement, be capable of taking effect at law or in equity, according to the estate interest or powers of the grantor, from the date fixed for commencement of the term, without actual entry."


Finally, I turn to the provisions of section 1 on which the Council has placed particular reliance for the construction of section 104(2)(b). Section 1 of the Law of Property Act provides:

"(1) The only estates in land which are capable of subsisting or of being conveyed or created at law are -

(a) An estate in fee simple absolute in possession;

(b) A term of years absolute."


Subsection (3) provides:

"All other estates, interests, and charges in or over land take effect as equitable interests."


Subsection (2) refers to other interests or charges in or over land which are capable of subsisting or as being conveyed or created at law. Subsection (4) reads:

"The estates, interests, and charges which under this section are authorised to subsist or to be conveyed or created at law are (when subsisting or conveyed or created at law) in this Act referred to as 'legal estates', and have the same incidents as legal estates subsisting at the commencement of this Act; and the owner of a legal estate is referred to as 'an estate owner' and his legal estate is referred to as his estate."


Subsection (8) reads:

"Estates, interests, and charges in or over land which are not legal estates are in this Act referred to as 'equitable interests', and powers which by this Act are to operate in equity only are in this Act referred to as 'equitable powers'."


The judgment


The judge granted the application for judicial review of the Council's decision on the ground that the Council had misconstrued the provisions of section 104(2)(b). He held that the reference in section 104(2)(b) to a "term of years absolute" was apt to apply to an equitable interest as well as to a legal interest. He added that the purpose of the 1989 Act favoured the construction proposed by the applicant....

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