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Queens Cross Housing Association, Re Decision by the Lands Tribunal Scotland [2003] ScotCS 144 (16 May 2003)

SECOND DIVISION, INNER HOUSE, COURT OF SESSION
Lord Justice Clerk Lord Kirkwood Lord Weir	XA194/01 OPINION of THE LORD JUSTICE CLERK in APPEAL TO THE COURT OF SESSION under section 11(1) of the Tribunals and Inquiries Act 1992 by QUEENS CROSS HOUSING ASSOCIATION LIMITED Appellant; against A decision of the Lands Tribunal for Scotland dated 22 November 2001 and communicated to the Appellant on the same date _______

 

 

Appellant: L McNeill; Brechin Tindall Oatts

Respondent: R D Sutherland; Drummond Miller, WS

16 May 2003

Introduction and history

1. This is an appeal against a decision of the Lands Tribunal for Scotland on a question arising under the "right to buy" provisions of the Housing (Scotland) Acts 1987 (the 1987 Act) and 1988 (the 1988 Act). It relates to the tenancy of flat 1/2, 14 Clarendon Place, Glasgow, of which the appellant is the landlord and the respondent is the tenant. The appellant is a registered housing association within the meaning of the 1987 and 1988 Acts.
2. The respondent was tenant of the appellant of flat 3/2 in the same building from 12 September 1986 until 26 November 1991. Her tenancy was a secure tenancy under the Tenants' Rights, Etc (Scotland) Act 1980 (the 1980 Act) and, after 15 August 1987, the 1987 Act. On 2 January 1989, the 1988 Act came into force. On 26 November 1991 the respondent became tenant of flat 1/2 and has continued in that tenancy ever since. The respondent has occupied flat 3/2 and flat 1/2 in each case as her only or principal home.
3. After the respondent became tenant of flat 1/2 she applied to the appellant to purchase the flat. The appellant refused her application on the ground that she did not qualify for the right of purchase under section 61 of the 1987 Act. The respondent thereupon applied to the Lands Tribunal for Scotland for a finding under section 68(4) of the 1987 Act that she had the right to purchase. In the decision appealed against the Tribunal determined that preliminary question in her favour.
4. The issue in this appeal arises in the following way. Before the 1988 Act came into force, tenancies held from registered housing associations were one of the categories of secure tenancies which carried the right to purchase. The 1988 Act provided that after 2 January 1989 tenancies granted by registered housing associations would no longer be secure tenancies (1988 Act, s. 43). Such tenancies became assured tenancies and did not carry with them the right to purchase (cf. Knowes Housing Association Limited v Millar, 2002 SC 58). This change did not affect tenancies that were already in existence on that date. From that date therefore the respondent retained her secure tenancy and her right to purchase. That remained the position until 26 November 1991 when she became tenant of flat 1/2. The short question is whether the tenancy of flat 1/2, being a new tenancy of different subjects, nonetheless remained a secure tenancy.

The legislation

5. The question turns on the interpretation of section 43(3)(c) of the 1988 Act and, in the submission of counsel for the appellant, section 43(3)(d). So far as relevant to this appeal, these provide as follows:

"(3) A tenancy which is entered into on or after the commencement of this section [sc. 2 January 1989] cannot be a secure tenancy unless - ...

(c) it is granted to a person ... who, immediately before it was entered into, was the secure tenant ... of the same landlord ...

(d) it is granted to a person ... in the following circumstances-

(i) prior to the grant of the tenancy, an order for possession of a house was made against him ... on the court being satisfied as mentioned in paragraph (b) or paragraph (c) of subsection (2) of section 48 of the Housing (Scotland) Act 1987; and

(ii) the tenancy is of premises which constitute the suitable accommodation as to which the court was so satisfied; and

(iii) in the proceedings for possession referred to in sub-paragraph (i) above the court directed that it would be a secure tenancy."

6. The difference between the parties is on the question whether, for the secure tenancy to survive, the succeeding tenancy must merely be held by the same tenant or must also relate to the same dwellinghouse.
7. The Tribunal concluded that the more natural interpretation of section 43(3)(c) was that it was only a short way of expressing the requirement that the preceding tenancy should have been held from the same landlord, whether or not it related to the same dwellinghouse. The Tribunal considered that the appellant's interpretation added an extra limitation that could easily have been expressed if that had been the intention behind the provision.

Submissions for the appellant

8. Counsel for the appellant renewed the submissions made to the Tribunal. He accepted that paragraph (c) was capable of being read in the sense adopted by the Tribunal; but he submitted that the better interpretation of section 43(3)(c) was that the protection that it conferred applied only where the successive tenancies related to the same dwellinghouse.
9. His first argument was that his proposed construction of paragraph (c), when read on its own, was indicated by the use of the expression "the secure tenant" rather than the expression "a secure tenant." The use of the definite article implied that there was only one dwellinghouse to which the provision applied. This was supported by a dictum of the Inner House in Knowes Housing Association Limited v Millar (supra, at para. [16]) to the effect that paragraph 12 of Schedule 4 to the 1988 Act preserves existing secure tenancies, that is to say tenancies existing at the time of the commencement of the 1988 Act.
10. The second argument was that a comparison of paragraph (c) with paragraph (d) led to the same conclusion. Paragraph (d) relates to the case where the sheriff grants an order to the landlord under section 48 of the 1987 Act for possession of premises held on a secure tenancy, being satisfied that a tenancy of suitable alternative accommodation is available, and directs that that tenancy shall be a secure tenancy. Since a third party landlord of alternative accommodation would not be conjoined in such proceedings, the direction contemplated by paragraph (d) could be made only in the case where the landlord to whom the order was granted was also the landlord of the proposed alternative accommodation. The new secure tenancy created under paragraph (d) would therefore be a tenancy from the same landlord, but of different premises. If the Tribunal's interpretation of paragraph (c) was correct, paragraph (d) would be superfluous. There would be no need for the sheriff to make a direction that the new tenancy would be a secure tenancy since paragraph (c) would already have that effect.
11. Similar submissions on the corresponding English legislation had been rejected by the Court of Appeal in Laimond Properties Ltd v Al-Shakarchi ((1998) 30 HLR 1099) and Arogol Co Ltd v Rajah ([2002] HLR 21). These cases were wrongly decided on the point.

Submissions for the respondent

12. Counsel for the respondent adhered to the reasoning of the Tribunal. He submitted that each of the paragraphs of section 43(3) could be satisfactorily interpreted without reference to the others. If Parliament had intended that paragraph (c) should be restricted as counsel for the appellant proposed, it could have said so expressly. The Tribunal's interpretation was supported by the Court of Appeal in Laimond Properties Ltd v Al-Shakarchi (supra) and Arogol Co Ltd v Rajah (supra).

Conclusions

13. If the appellant's submission is sound, the seemingly unremarkable event of the respondent's transfer from flat 3/2 to flat 1/2 has had a drastic result which, we may be sure, she never foresaw. The implications of the appellant's submission extend beyond the present case. Other cases will arise where a secure tenant of a housing association will wish to be transferred to other accommodation let by the same association: for example, where, by reason of infirmity, the tenant wishes to be in a ground floor flat or, by reason of changes in family circumstances, wishes to have a smaller flat. Such a change may be convenient to both landlord and tenant. It would be unfortunate if it had the result contended for by the appellant, particularly since the tenant in such a case is unlikely to have legal advice and since the landlord would have no obligation to advise the tenant of the consequences. On the appellant's construction of the legislation, a tenant whose right to buy had been preserved by the transitional provisions of the 1988 Act could lose that right in circumstances in which that possibility would not have occurred to him. On the other hand, a tenant who was aware of that consequence might resolve to remain in accommodation that was no longer suitable for him even though a transfer to one of the landlord's other flats would be beneficial to him and would make his present accommodation available to meet a genuine need. Such a consequence is undesirable in the field of social housing.
14. In my opinion, the appellant's construction of the legislation is unsound. This case raises a straightforward question of statutory interpretation that can be resolved on the wording of section 43(3)(c). There is no need to resort to a comparison between section 43(3)(c) and section 43(3)(d); but if such a comparison is made, the result is the same.

(i) The interpretation of section 43(3)(c)

15. There is nothing in section 43(3), read on its own, to suggest that the successive tenancies must relate to the same premises. It occurs to me that if the tenant already has a secure tenancy of the premises, there is no obvious reason why he should wish to enter into a new tenancy of the same premises. He might perhaps wish to have the terms of his tenancy modified in some respect; but in that event the same tenancy would continue. In my opinion, the more likely interpretation of paragraph (c) is that the successive tenancies to which it refers are tenancies of different dwellinghouses.
16. Paragraph (c) is plainly for the protection of the existing secure tenant of a registered housing association. The protection is that if an existing holder of a secure tenancy enters into a new tenancy with the same landlord after 2 January 1989, that tenancy too will be secure. That, in my view, is the result whether or not the new tenancy is over the same premises. In short, paragraph (c) is concerned with the person to whom the succeeding tenancy is granted rather than with the premises over which it is granted.
17. If Parliament had intended that the scope of this provision should be restricted in the way contended for by counsel for the appellant, it could have made express provision to that effect. I cannot see why such a restriction arises by necessary implication.
18. Furthermore, the use of the expression "the secure tenant" does not, in my view, suggest that the succeeding tenancy must be of the same premises. The same interpretation would result whether the subsection referred to "the secure tenant" or "a secure tenant." I am confirmed in this view by section 42(1)(b) which extends a similar protection to a person who is a protected or statutory tenant in relation to a succeeding tenancy granted after the relevant date. That provision refers to the granting of the succeeding tenancy to a person who, immediately before the tenancy was granted, was "the" protected tenant or "a" statutory tenant of the same landlord.
19. I am confirmed in this view by two decisions of the Court of Appeal. In Laimond Properties Ltd v Al-Shakarchi (supra) the court rejected a similar argument on a similar English provision (Housing Act 1988, s. 34(1)(b)). That provision gave the same protection after the commencement of the Housing Act 1988 to a person who immediately before the succeeding tenancy was granted was "a protected or statutory tenant" of the same landlord. In that case the Court of Appeal held that the protection existed where the succeeding tenancy related to different premises. In the text of Woodfall on Landlord and Tenant that was current at the date of that case it had been suggested that section 34(1)(b) (supra) ought to be read subject to an implied limitation that the new tenancy must be a tenancy of the same premises as the old. Referring to that statement, Roch LJ said "I can see no reason why section 34(1)(b) ought to be read subject to the suggested limitation" (at p. 1107). In Arogol Co Ltd v Rajah (supra), the Court of Appeal took the same view (at para 19).
20. In my opinion, there is no support for the appellant's contention in the judgment of this court in Knowes Housing Association Limited v Millar (supra). Paragraph [16] of that judgment, on which counsel for the appellant relied, has to be read in the context of the issue in that case. The issue related to the scope of section 45 of the 1988 Act. I fail to see how the reference in that paragraph to section 45 and to paragraph 12 of Schedule 4 to the 1980 Act has any material bearing on the construction of paragraph (c) in this appeal.

(ii) The comparison of section 43(3)(c) with section 43(3)(d)

21. In my opinion, the appellant's argument on this point is fallacious. It rests on the proposition that if section 43(3)(c) applies to a succeeding tenancy held over different premises, it deprives section 43(3)(d) of any content. That would be so if in every case to which paragraph (d) applies, the same result followed. But it does not. Paragraph (c) applies to all cases in which the succeeding lease is "entered into." I take that to mean cases where the lease is created consensually, as in this case. Paragraph (d), however, refers to the special case where the succeeding tenancy is created by direction of the sheriff in the circumstances to which I have referred. That, in my opinion, is a materially different situation from that contemplated by paragraph (c). In my opinion, both paragraphs can be given sensible content if paragraph (c) is construed in accordance with the Tribunal's decision.
22. On this point too I have come to the same conclusion as the Court of Appeal in Laimond Properties Ltd v Al-Shakarchi (supra). In that case the argument was put forward that if section 34(1)(b) of the Housing Act 1988 applied to a succeeding tenancy of different premises, section 34(1)(c) would lack any content. I have already referred to section 34(1)(b). Section 34(1)(c) relates to the case where, in similar circumstances to those set out in section 48 of the 1987 Act, the dispossessed tenant is given a protected tenancy of suitable alternative accommodation by direction of the court. The Court of Appeal rejected that argument. Roch LJ said:

"Sub-paragraph (b) of section 34(1) is clearly designed to shield the tenant who had security of tenure under the 1977 Act and who has been persuaded by his landlord to enter into a new tenancy after January 15, 1989 so as to prevent him from losing the 1977 Act protection. It is designed to defeat an argument that the tenant has lost his 1977 Act protection because he has voluntarily surrendered the tenancy entered into prior to January 15, 1989 which attracted the provisions of the 1977 Act in exchange for a new tenancy which, being post January 15, 1989, did not qualify for that security. Section 34(1)(b) has in my opinion no application in a case such as the present where the landlord has gone to the court and obtained an order for possession (at p. 1106)

... Section 34(1)(b) applies where the landlord has not gone to the court and obtained an order for possession. Once the landlord goes to the court and obtains an order for possession section 34(1)(b) has no further application. The wording and the layout of section 34(1) shows this to be the correct reading of the provision" (at p. 1107).

 

Disposal

23. I propose that we should refuse the appeal and remit the case to the Lands Tribunal to proceed as accords.
Queens Cross Housing Association, Re Decision by the Lands Tribunal Scotland [2003] ScotCS 144 (16 May 2003)

SECOND DIVISION, INNER HOUSE, COURT OF SESSION
Lord Justice Clerk Lord Kirkwood Lord Weir	XA194/01 OPINION of LORD KIRKWOOD in APPEAL TO THE COURT OF SESSION under section 11(1) of the Tribunals and Inquiries Act 1992 by QUEENS CROSS HOUSING ASSOCIATION LIMITED Appellant; against A decision of the Lands Tribunal for Scotland dated 22 November 2001 and communicated to the Appellant on the same date _______

 

 

Appellant: L McNeill; Brechin Tindall Oatts

Respondent: R D Sutherland; Drummond Miller, WS

16 May 2003

24. I am in full agreement with the Opinion of your Lordship in the chair and there is nothing I can usefully add.
Queens Cross Housing Association, Re Decision by the Lands Tribunal Scotland [2003] ScotCS 144 (16 May 2003)

SECOND DIVISION, INNER HOUSE, COURT OF SESSION
Lord Justice Clerk Lord Kirkwood Lord Weir	XA194/01 OPINION of LORD WEIR in APPEAL TO THE COURT OF SESSION under section 11(1) of the Tribunals and Inquiries Act 1992 by QUEENS CROSS HOUSING ASSOCIATION LIMITED Appellant; against A decision of the Lands Tribunal for Scotland dated 22 November 2001 and communicated to the Appellant on the same date _______

 

 

Appellant: L McNeill; Brechin Tindall Oatts

Respondent: R D Sutherland; Drummond Miller, WS

16 May 2003

25. I entirely agree with the opinion of your Lordship in the chair and have nothing useful to add.