Southward Housing Co-Operative Ltd v Miss Vicky Walker and Another Secretary of State for Communities and Local Government (Interested Party)
Jurisdiction | England & Wales |
Judge | The Hon. Mr Justice Hildyard |
Judgment Date | 08 June 2015 |
Neutral Citation | [2015] EWHC 1615 (Ch) |
Docket Number | Case No: HC-2013000266 |
Court | Chancery Division |
Date | 08 June 2015 |
[2015] EWHC 1615 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Hildyard
Case No: HC-2013000266
and
Brynmor Adams (instructed by Glazer Delmar) for the Claimant
Toby Vanhegan and Tobias Eaton (instructed by South West London Law Centre) for the Defendants
Oliver Jones (instructed by Treasury Solicitor) for the Interested Party
Hearing dates: 19 & 20 January 2015
Introduction
This case concerns the nature and effect of tenancies granted by fully mutual housing co-operatives and in particular how they can lawfully be brought to an end and a possession order obtained.
The Defendants have also applied for a declaration of incompatibility in relation to section 80 of the Housing Act 1985 ("HA 1985") and paragraph 12(1)(h) of Schedule 1 to the Housing Act 1988 ("HA 1988") pursuant to section 4 of the Human Rights Act 1998 ("the HRA").
Thus, there are issues of both private and public law involved and, given the number of tenancies potentially affected, these are of general importance.
In these circumstances, the Secretary of State for Communities and Local Government ("the SoS") was added as an interested party by order of Chief Master Marsh on 20 November 2014.
The facts are not substantially in issue and the trial was conducted on the basis of witness statements standing as evidence without cross-examination.
Each party was represented by Counsel: Mr Brynmor Adams in the case of the Claimant; Mr Toby Vanhegan with Mr Tobias Eaton in the case of the Defendants; and Mr Oliver Jones in the case of the SoS. I am grateful to them all for their helpful and efficient submissions in a case of some legal complexity.
Background Facts
The parties
As further elaborated below, the Claimant is a fully mutual housing association. It is a non-profit-seeking housing co-operative registered under the Industrial and Provident Societies Act 1965 and under section 5 of the Housing Associations Act 1985.
The Defendants are members of the Claimant co-operative and have acquired a share in it.
Their agreement
The Claimant granted to the Defendants a tenancy of a property at 8 Kimber Road, Wandsworth ("the Property") on the terms of a tenancy agreement ("the Agreement") dated 4 April 2011.
The Agreement is headed "Tenancy Agreement" and is stated to be a weekly tenancy. The recitals set out the characteristics of the Claimant which make it a fully mutual co-operative and why the tenancy granted by the Agreement is not an assured tenancy.
By clause 1 of the Agreement, the Defendants are required to pay the rent (set at £106.28 per week) due weekly in advance on Monday.
By clause 4(2) of the Agreement it is provided that the Defendants shall have "the security [which I take to mean the right to occupy the property without interruption or interference as provided for in clause 4(1) of the Agreement] so long as he/she occupies the property as his/her only or principal home and abides by the terms of this agreement".
Clause 4(2) of the Agreement further provides that the Claimant "will only end this tenancy with a Notice to Quit on one of the grounds set out in clause 7 of this agreement".
By clause 7(1) of the Agreement, the Claimant agreed to give the Defendants at least one month's notice in writing when it wished to terminate the Agreement.
By clause 7(3) of the Agreement, the Claimant agreed that before commencing proceedings for possession it would end the tenancy by serving a written notice to quit giving at least one calendar month's notice (not having to end on the last day of a month) and that it would not begin proceedings until the expiration of the notice to quit.
Also by clause 7(3) of the Agreement, the Claimant agreed that the Defendants could only be required to give the Claimant possession by order of the County Court and that it would not seek an order for possession except on specified grounds.
The specified grounds include non-payment of rent which is due, and/or persistent delay in the payment of rent lawfully due.
The Agreement, unsurprisingly in view of its stated nature, did not include any provision for forfeiture.
Accumulating rent arrears
Over the course of the period from September 2011 to December 2013 significant rent arrears accumulated on the Defendants' rent account.
Notwithstanding various letters (dated 9 November 2011, 12 January and 16 May 2012) sent to them reminding them of accruing arrears, the Defendants repeatedly failed to pay rent on time or at all.
The Defendants, who have four young children, have explained in their evidence (by witness statements) that (a) except for some temporary employment in the case of the Second Defendant in July 2013, both are unemployed; (b) their household income has consisted of jobseeker's allowance (" JSA"), child benefit, child tax credit and housing benefit; (c) they have fallen into arrears because of occasional breaks in the payment to them of JSA, further to steps taken by the Job Centre to sanction it during four periods over the course of September 2011 to September 2013, after which its restoration was delayed; and (d) there have also been corresponding interruptions in the payment to them of housing benefit.
The Second Defendant has associated the breaks in payment of JSA and housing benefit with "changes of circumstances such as JSA sanctions/returning to work". He has explained the resulting difficulties as follows:
"Where my JSA and housing benefit have been stopped this has often left my family to meet our essential living expenses from our child benefit and child tax credit alone. Despite our best efforts to pay all essential bills there was no way we could pay our rent/rent arrears without both JSA and housing benefit being in payment."
By the end of October 2013, the Defendants' arrears of rent stood at some £3,644.35.
Nevertheless, in response to notice to quit and the issue of proceedings for possession (as elaborated below) the Defendants' evidence is that they have now been able to organise themselves better. The Second Defendant has stated that it is now his intention to return to work and to keep both the Claimant and the Housing Benefit Department better informed of "my changes of circumstances".
After restoration of payment of housing benefit and JSA in October 2013, the Defendants had by September 2014 reduced their arrears to approximately £1,000 and have promised to repay arrears still outstanding at £20.00 per month.
Notice to Quit
In the meantime, however, on 1 August 2013 (when the arrears of rent which had accumulated over the previous year stood at about £2,608.63, and after repeated warnings of the Claimant's concern about the level of rent arrears over the course of some two years) the Claimant served a notice to quit on the Defendants.
This required them to deliver up possession of the Property on 2 September 2013 or "the day on which a complete period of your Tenancy expires next after the end of four weeks from the service of this notice".
After a brief email to the Claimant from the Second Defendant on 10 August 2013, stating that he had made an appointment to see a council officer "regarding our claim for benefit", and a further email on 30 August 2013 advising the Claimant that there had been a problem with his application, the Claimant received no substantive further response from the Defendants.
By letter dated 17 September 2013, which started by noting that the Claimant had not received a reply to a specific request by letter dated 30 August 2013 for an update, the Claimant notified the Defendants that it had received its management committee's approval to proceed to court unless payment of the arrears (by then standing at £3,380.59) was made within 14 days.
Possession proceedings
On 25 October 2013 the Claimant commenced proceedings in the Wandsworth County Court for possession, arrears of rent, charges for use and occupation and costs. The proceedings were thereafter transferred to the High Court, first to the Queen's Bench Division and then to the Chancery Division.
In about February 2014 housing benefit paid £2,708.48, which reduced the arrears substantially. The arrears had been reduced to £1,043.51 on 2 June 2014.
Further to directions given by Chief Master Marsh in March 2014, the matter came on for trial on 19 January 2015.
Outline of Claimant's position
The Claimant contends that it has validly terminated the Agreement in accordance with its express terms, that the Agreement conferred or gave rise to no security of tenure, and that it is therefore absolutely entitled to a possession order.
It is necessary to explain further the basis on which the Claimant contends that the Agreement gave rise to no security of tenure. That has to do with the Claimant's particular statutory status, and the nature of a fully mutual housing co-operative. I start with the relevant legislative framework.
A "co-operative housing association" is currently defined by section 5 of HA 1985 as follows:
(1) A "co-operative housing association" is a "fully mutual housing association" registered under the Co-operative and Community Benefit Societies Act 2014. 1
(2) A "fully mutual housing association" is an association that restricts membership to persons who are tenants or prospective tenants of the association and precludes the granting or assignment of tenancies to persons other than members.
(3) A "housing association" means – broadly – a society, body of trustees or company which...
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