Rochdale Borough Council v Dixon

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Rix,Lord Justice Rimer,Lord Justice Elias
Judgment Date20 October 2011
Neutral Citation[2011] EWCA Civ 1173
Docket NumberCase No: B5/2010/2199

[2011] EWCA Civ 1173

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM OLDHAM COUNTY COURT

HIS HONOUR JUDGE PLATTS

9PA59605

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Rix

Lord Justice Rimer

Lord Justice Elias

Case No: B5/2010/2199

Between:
Rochdale Borough Council
Claimant/Respondent
and
Dixon
Defendant/Appellant

Mr Martin Westgate QC and Mr Lindsay Johnson (instructed by Rochdale Law Centre) for the Appellant

Mr Andrew Arden QC and Mr Andrew Dymond (instructed by Legal Services & Enforcement Team) for the Respondent

Hearing dates : Tuesday 21 st June 2011

Lord Justice Rix
1

This appeal arises out of a claim for possession of a dwelling-house at 28 Kirklee Road, Castleton in Rochdale. It is the home of Mr Frank Dixon, the defendant in these proceedings, and in this court the appellant. He has lived there as its tenant since 1972. His landlord is Rochdale Metropolitan Borough Council ("Rochdale"), the claimant, and in this court the respondent. After trial in the Oldham county court, HHJ Platts made a possession order in favour of Rochdale, but suspended it provided that Mr Dixon paid his current rent and other charges and in addition paid £5 per week towards the arrears of £1,451 in respect of water charges which have accumulated, unpaid, since Mr Dixon deliberately, and as a matter of principle, stopped paying them in 2007. Thus Mr Dixon was given nearly six years to pay off his arrears. At the beginning of this appeal we were told by Mr Martin Westgate QC on behalf of Mr Dixon that the suspended order was being performed, but also by Mr Andrew Arden QC on behalf of Rochdale that that was disputed.

2

However, we are not concerned with that dispute now. What we are concerned with is Mr Dixon's appeal against the making of any order for possession. He has four grounds of appeal, although several other grounds were advanced to the judge but are not pursued here. His four grounds are (i) that Rochdale's purported agreement with United Utilities to collect its water charges on its behalf from council tenants, pursuant to the Water Consolidation (Consequential Provisions) Act 1991, was ineffective as being ultra vires; (ii) that Rochdale's purported variation of its tenancy agreements so as to incorporate the payment to Rochdale of United Utilities' water charges as an obligation of those tenancies was ineffective because Rochdale had not properly complied with the statutory requirements for the making of such a variation laid down by section 103 of the Housing Act 1985; (iii) that that variation was ineffective as being unfair in terms of the Unfair Terms in Consumer Contracts Regulations 1999; and (iv) that it was in any event unreasonable for the judge to make an order for possession. I shall refer to those four grounds as respectively the ultra vires ([a-z]+); the ineffective variation issue; the unfair term issue; and the unreasonable order issue.

The statutory background

3

The following statutory provisions are relevant.

4

The Housing Act 1985 ("HA 1985") provides by section 84 for the grounds on which orders for possession of a secure tenancy may be made. Thus–

"84.–(1) The court shall not make an order for 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 I of that Schedule (grounds 1 to 8), unless it considers it reasonable to make the order."

The first ground under Schedule 2 Part 1 is–"Rent lawfully due from the tenant or an obligation of the tenancy has been broken or not performed."

5

In the present case the judge exercised his discretion to make a possession order against Mr Dixon, on the basis that he considered it reasonable to do so, on the ground that Mr Dixon had not complied with the obligation of his tenancy to pay water charges to the council, viz under ground 1 of Part I of Schedule 2.

6

Sections 102/103 of HA 1985 make provision for the variation of the terms of a secure tenancy:

"102.–(1) The terms of a secure tenancy may be varied in the following ways, and not otherwise–

(c) in accordance with section 103 (notice of variation of periodic tenancy)…

103.–(1) The terms of a secure tenancy which is a periodic tenancy may be varied by the landlord by a notice of variation served on the tenant.

(2) Before serving a notice of variation on the tenant the landlord shall serve on him a preliminary notice–

(a) informing the tenant of the landlord's intention to serve a notice of variation,

(b) specifying the proposed variation and its effect, and

(c) inviting the tenant to comment on the proposed variation within such time, specified in the notice, as the landlord considers reasonable;

and the landlord shall consider any comments made by the tenant within the specified time.

(3) Subsection (2) does not apply to a variation of the rent, or of payments in respect of services provided by the landlord or of payments in respect of rates.

(4) The notice of variation shall specify–

(a) the variation effected by it, and

(b) the date on which it takes effect;

and the period between the date on which it is served and the date on which it takes effect must be at least four weeks or the rental period, whichever is the longer.

(5) The notice of variation, when served, shall be accompanied by such information as the landlord considers necessary to inform the tenant of the nature and effect of the variation…"

7

Thus the landlord must serve on the tenant a preliminary notice, giving time for consultation, and that preliminary notice must specify "the proposed variation and its effect". The essence of the ineffective variation point depends on whether Rochdale's preliminary notice in this case succeeded in specifying "the effect" of the proposed variation, which was to include the local water undertaker's water charges in the weekly amount that the council would collect together with the rent from each of its tenants as an obligation of the tenancy.

8

As for Rochdale's agreement to collect the water charges for United Utilities, the relevant statutory provisions are as follows.

9

First, there is the general power for local authorities to provide administrative services under contract to a "public body" as set out in the Local Authorities (Goods and Services) Act 1970 ("LA(GS)A 1970") at section 1:

"1.–(1) Subject to the provisions of this section, a local authority and any public body within the meaning of this section may enter into an agreement for all or any of the following purposes, that is to say–

(a) the supply by the authority to the body of any goods or materials;

(b) the provision by the authority of any administrative, professional or technical services…"

10

When the water undertakers were privatised, the Water Consolidation (Consequential Provisions) Act 1991 ("WC(CP)A 1991"), by para 20 of its Schedule 1, which listed consequential amendments, provided as follows:

"The powers conferred by section 1 of the Local Authorities (Goods and Services) Act 1970 (supply of goods and services by local authorities to public bodies) shall be exercisable by a local authority, within the meaning of that section, as if the NRA was a public body within the meaning of that section; and the powers of a local authority under that Act shall be deemed to include power to enter into an agreement for the collection and recovery by the authority, on behalf of any water undertaker or sewerage undertaker, of any charges fixed by the undertaker under Chapter I of Part V of the Water Industry Act 1991."

Thus "an agreement for the collection and recovery by the authority, on behalf of any water undertaker or sewerage undertaker, of any charges fixed by the undertaker…" was deemed to be an agreement within section 1 of LA(GS)A 1970. The ultra vires issue arises under this last cited paragraph. Various points are or have been made under this issue, for instance as to whether the agreement made between Rochdale and United Utilities (see below) is an agreement for the "collection and recovery…of…charges" or is for the collection of charges "on behalf of" United Utilities, or (perhaps) concerns "charges fixed" by it.

11

The powers of water undertakers to charge are contained in the contemporaneous Water Industry Act 1991 ("WA 1991"), sections 142ff. Section 142 provides:

"142.–(1) Subject to the following provisions of this Chapter, the

powers of every relevant undertaker shall include power–

(a) to fix charges for any services provided in the course of carrying out its functions and, in the case of a sewerage undertaker, charges to be paid in connection with the carrying out of its trade effluent functions;

(b) to demand and recover charges fixed under this section from any persons to whom the undertaker provides services or in relation to whom it carries out trade effluent functions."

Section 144 set out the corresponding liability of occupiers for the time being of premises supplied.

The agreement between Rochdale and United Utilities

12

On 16 May 2005 Rochdale (described as the "Council") and United Utilities (UU, described as the "Company") made an agreement for the collection and recovery by Rochdale on behalf of UU of water charges fixed by UU for the supply of water and sewerage services (the "agreement").

13

The preamble ("Background") contained the following:

"C. The Council is empowered by the Water Consolidation (Consequential Provisions) Act 1991 to enter into an agreement for the collection and recovery by the Council on behalf of the Company of Charges fixed by the Company for the supply of water and...

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    ...were considered on two occasions by the Court of Appeal. The cases are Lambeth LBC v Thomas (1998) 30 HLR 89 and Rochdale MBC v Dixon [2012] HLR 6, [2012] PTSR 1336. I will need to consider those cases in more detail later in this judgment but, at this stage, I will consider what assistance......
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    ...56 (Chadwick LJ); R(S) v Social Security Commissioner [2010] PTSR 1785, at paras 27–28; Rochdale Metropolitan Borough Council v Dixon [2012] PTSR 1336, at paras 49–50 (Rix J). But there is nothing in the present statutory context to suggest any of these wider meanings, and much that is inc......
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