Truro Diocesan Board of Finance Ltd v Foley
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moore-Bick,Sir John Chadwick,Lord Justice May |
| Judgment Date | 22 October 2008 |
| Neutral Citation | [2008] EWCA Civ 1162 |
| Docket Number | Case No: B2/2007/2484 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 October 2008 |
[2008] EWCA Civ 1162
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE TRURO COUNTY COURT
His Honour Judge Neligan
Claim No. 6BJ01881
Lord Justice May
Lord Justice Moore-bick and
Sir John Chadwick
Case No: B2/2007/2484
Mr. David Watkinson (instructed by Cartridges) for the appellant
Mr. Andrew Arden Q.C. and Mr. Iain Colville (instructed by Michelmores LLP) for the respondent
Hearing dates : 9 th July 2008
This is an appeal against an order made by His Honour Judge Neligan in the Truro County Court on the trial of certain preliminary issues in proceedings between Truro Diocesan Board of Finance Limited (“the Board”) and Mr. Desmond Foley. The dispute concerns Mr. Foley's occupation of a house owned by the Board called The School House at South Petherwin near Launceston (“the property”).
The origin of these proceedings lies in an agreement made in March 1987 under which Mr. Foley was granted a tenancy of the property by the Board's predecessor in title, the trustees of the church school. The Board considered that Mr. Foley held the property under a protected shorthold tenancy and in May 2000 brought proceedings in the Bodmin County Court claiming possession under Case 19 of schedule 15 to the Ret Act 1977. Mr. Foley maintained that he was a weekly tenant who enjoyed the full protection of the Rent Act and contested the Board's claim on that basis.
On 20 th September 2001 the parties compromised their dispute on terms contained in a schedule to a consent order, the material parts of which provided as follows:
“1A The Claimant's claim for possession is stayed.
1B There be a declaration that the First Defendant was a tenant of the premises under a protected shorthold tenancy within the meaning of section 52 of the Housing Act 1980 and as at the date hereof there has been no grant of a further tenancy.”
The material parts of the schedule to the order provided as follows:
“1) The First Defendant's existing tenancy of the premises at the Church School House … (“the property”) shall be determined by the First Defendant delivering up possession of the property to the Claimant on or before 26 September 2001 on which date the Claimant shall arrange for the First Defendant's dinner bed and breakfast at the White Hart Hotel, Launceston.
2) The First Defendant shall deliver up possession of the property by vacating the property for a minimum period of 24 hours and by delivering all keys to the property to the Claimant at the commencement of that period by delivery of the keys to Messrs Kivells at 2 Broad Street Launceston at or before 11.30 am on 26 th September 2001 and collection of the keys on or after 12 noon 27 September 2001.
3) On 27 th September 2001 the Claimant shall grant to the First Defendant an assured shorthold tenancy of the property within the meaning of section 19A of the Housing Act 1988.
4) The terms of the said shorthold tenancy shall include the following:
(i) a fixed term of 5 years commencing on the date of the grant of the tenancy
(ii) An initial rent of £320 per month payable in advance on 4 th day of each month
(iii) ….
(iv) Clauses 3 to 5 contained in the Agreement date[d] 20 th March 1987 attached hereto.
The above tenancy being for a period in excess of 3 years is required to be by deed and now the parties to the agreement hereby sign this as a deed as witnessed below.”
Each party then signed and delivered the document as a deed in the presence of witnesses. Clauses 3–5 of the original tenancy agreement dated 20 th March 1987 contained the tenant's and landlord's covenants and the landlord's right to re-enter and take possession in the event of a breach by the tenant of his covenants.
As the judge below found, Mr. Foley duly handed the keys to the Board's agent on 26 th September 2001 and collected them again a little over 24 hours later on 27 th September. His furniture and belongings remained in the property throughout that period. Mr. Foley then continued in occupation but no formal grant of a tenancy was subsequently made.
In April 2006 the Board gave notice to Mr. Foley under section 21 of the Housing Act 1988 to surrender possession of the property, that notice expiring on the last day of the five year term, namely 26 th September 2006. Mr. Foley declined to do so on the grounds that he was still entitled to the full protection of the Rent Act 197Accordingly, in November 2006 the Board brought the present proceedings seeking an order for possession.
On 3 rd April 2007 District Judge Griggs directed that there be a hearing to determine as preliminary issues (a) whether the declaration contained in paragraph 1B of the consent order made on 20 th September 2001 was binding on Mr. Foley and (b) whether, if Mr. Foley was a protected or statutory tenant immediately following that order, he continued to have that status immediately before the tenancy referred to in paragraphs 3 and 4 of that order was granted within the meaning of section 34(1)(b) of the Housing Act 1988.
The matter came before His Honour Judge Neligan on the trial of those preliminary issues. He held that because it is not possible for parties to contract out of the Rent Act 1977 Mr. Foley was not bound by the declaration in paragraph 1B of the consent order, which was based entirely on the parties' agreement. There is no appeal against that part of his decision and it is therefore unnecessary to make any further reference to it. As to the effect of section 34(1)(b) of the Housing Act 1988, the judge came to the conclusion that he was bound by the decisions in Dibbs v Campbell (1988) 20H.L.R. 374 and Bolnore Properties Ltd v Cobb (1996) 29 H.L.R. 202 to hold that Mr. Foley could not bring himself within the scope of the section. He therefore answered each of the two preliminary issues in the negative.
Mr. Watkinson on behalf of Mr. Foley advanced two submissions in support of this appeal. The first was based on section 3 of the Human Rights Act 1998 and article 8 of the Convention. In essence, he submitted that the court should construe section 34(1)(b) of the Housing Act 1988 in a way that would not expose Mr. Foley to the risk of eviction from his home without having an opportunity to persuade a court that it would amount to a disproportionate interference with his rights under article 8. His second submission was that by virtue of section 45(1) of the Housing Act 1988 the word “tenancy” in subsection 34(1)(b) includes an agreement for a tenancy and that accordingly if (as must be assumed for present purposes) Mr. Foley was a fully protected tenant immediately before the parties entered into the agreement dated 20 th September 2001, he necessarily fell within that subsection.
It is convenient to consider the second of these arguments first.
Section 34(1)(b) of the Housing Act 1988
Section 34(1)(b) of the Housing Act 1988 provides as follows:
“(1) A tenancy which is entered into on or after the commencement of this Act cannot be a protected tenancy, unless—
(a) …
(b) it is granted to a person (alone or jointly with others) who, immediately before the tenancy was granted, was a protected or statutory tenant and is so granted by the person who at that time was the landlord (or one of the joint landlords) under the protected or statutory tenancy;”
The material part of section 45(1) provides:
“(1) In this Part of this Act, except where the context otherwise requires,—
“tenancy” includes … an agreement for a tenancy … ;”
It was common ground, rightly in my view, that an agreement for a tenancy in section 45(1) means a legally enforceable agreement. To comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 such an agreement must be in writing unless it is for a lease taking effect in possession for a period not exceeding three years. In this case, however, being mindful, perhaps, of the provisions of section 52 of the Law of Property Act 1925, the parties took particular care to ensure that the agreement was embodied in a deed. The agreement was clearly enforceable, therefore. Moreover, although it provided for the Board to grant an assured shorthold tenancy to Mr. Foley on 27 th September 2001, no such grant was in fact made. Mr. Foley went back into possession and both parties treated their relationship as being governed by the agreement.
The purpose of section 34(1)(b) appears to be to prevent those who are currently entitled to the full protection of the Rent Act 1977 from losing that protection as a result of being persuaded to enter into a new tenancy in respect of the same property, a course of action that would normally involve the surrender of the existing tenancy and a consequent loss of full protection. However, the decisions in Dibbs v Campbell and Bolnore Properties v Cobb, and indeed earlier cases, make it clear that there is nothing to prevent a contractual or statutory tenant from surrendering his tenancy, and with it his protection, if he chooses to do so, as he may if he perceives it offers him some advantage. One way of achieving that object, as the authorities demonstrate, is for the tenant to surrender possession for a short period of time before the new tenancy is granted, though as appears from Dibbs v Campbell, it is unnecessary for there to be an interruption of physical occupation for such an arrangement to be effective. That appears to have been what Mr. Foley and the Board had in mind in this...
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