Recovery of possession - Order for possession

Francis v Southwark London Borough Council: Court of Appeal, Civil Division (Lord Justices Carnwath, Lloyd and Toulson): 1 December 2011

The Housing Act 1985, so far a material, provides: '118(1) A secure tenant has the right to buy... in the circumstances and subject to the conditions and exceptions stated in the following provisions of this part - (a)… (b) if the landlord does not own the freehold, or if the dwelling-house is a flat (whether or not the landlord owns the freehold), to be granted a lease of the dwelling-house... 124(1) Where a notice under section 122 (...) has been served by the tenant, the landlord shall, unless the notice is withdrawn, serve on the tenant... a written notice either - (a) admitting his right, or (b) denying it and stating the reasons why, in the opinion of the landlord, the tenant does not have the right to buy... 138(1) Where a secure tenant has claimed to exercise the right to buy and that right has been established, then, as soon as all matters relating to the grant... have been agreed or determined, the landlord shall make to the tenant - (a) ... (b) if the landlord does not own the freehold or if the dwelling-house is a flat (whether or not the landlord owns the freehold), a grant of a lease of the dwelling-house (3) The duty imposed on the landlord by subsection (1) is enforceable by injunction.'

The claimant, F, had a secure tenancy of a property owned by the local authority (the first property). He had a history of rent arrears, which had led to various claims for possession during the life of the tenancy, but he had been able to avoid eviction by reducing or clearing the arrears. On 26 March 2003, he submitted a Right to Buy (RTB) application for the first property. The application was made under section 118 of the Housing Act 1985. The landlord's corresponding obligation to give effect to the tenant's RTB was set out in section 138 of the act.

The process was initiated by a notice by the tenant pursuant to section 122 of the act. On receipt of a tenant's notice, the landlord's duty was set out in section 124 of the act. At the time of submitting the RTB application, F's maximum discount would have been £38,000. That was later reduced to £16,000 by the Housing (Right to Buy) (Limits on Discount) (Amendment) Order 2003, SI 2004/498.

The RTB application was rejected on the basis that he had 'breached the terms of a possession order'. On the same date, he also applied in existing possession proceedings for the revival of his secure tenancy, and for an order that he had been a secure tenant from 1 September 1999 onwards.

On 23 March 2004, a judge found against him, but granted permission to appeal. On 8 July 2004, he was granted an introductory tenancy of a another property (the second property). That tenancy commenced on 19 July 2004. On 15 October 2004 he made an application for the RTB of the second property which was accepted but he never proceeded to completion.

His appeal against the revival of the secure tenancy was allowed the court declaring that F had been a secure tenant of the first property from April 2000 to 19 July 2004.

Mounting rent arrears on the second property led to possession proceedings against him on 14 February 2006. He counterclaimed for damages for breach of statutory duty for the previous failure by the authority to grant him the RTB of the first property (which, by the time of the claim, had been demolished). The basis of the claim was that he had been deprived of his RTB of the second property contrary to section 118 of the act and consequently had been deprived of the maximum discount and the opportunity to sell the premises at full market value.

The authority’s claim for possession and F's claim for damages were heard in the county court. The issue for the judge was whether F had a substantial damages claim in respect of the refusal of the RTB application for the first property. The judge decided the issue in favour of the authority and also made a possession order in respect of the second property. In so doing, the judge rejected the contention that the authority had acted unlawfully merely because its decision was shown later to have been wrong.

The test under section 124 of the act was one of reasonableness and at the time of the decision the authority had acted reasonably. He rejected the submission that the act created a remedy in damages for breach of section 118 or section 124.

Any remedy was under section 181, and that was for a declaration as to his rights in the county court. F appealed. F's case was, primarily, that section 118 of the act imposed on the landlord an absolute and strict duty to give effect to the tenant’s RTB if he was entitled to it. Alternatively, the duty was said to arise under section 124 of the act when responding to the tenant’s notice, again as a strict liability duty. Consideration was given to section 138 of the act. The appeal would be dismissed.

Section 118, as such, did not impose any duty, express or implied, on the authority. It merely had stated the right of the tenant, which was to be established by the procedures under the act, could lead eventually to a duty to convey under section 138 of the act. Section 124(1) imposed a duty but it was qualified: the duty was to state an opinion. These was nothing in either of those sections to suggest that parliament had intended to create a remedy in damages.

The remedy for the tenant was provided by section 181 of the act. However, the mere fact that, in some circumstances the remedy created by the act was not complete, was not a justification for reading into it words which were not there (see [22], [23] of the judgment). The judge had been right to reject the claim (see [24] of the judgment).

Michael Collard (instructed by Pollecoff Solicitors) for F; Nicholas Grundy (instructed by Southwark Council) for the authority.