Scottish Court of Session Decisions

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2017] CSIH 24

XA87/16

 

Lord Drummond Young

Lady Clark of Calton

Lord Malcolm

OPINION OF LORD DRUMMOND YOUNG

in the appeal to the Court of Session under section 11 of the Tribunals and Inquiries Act 1992

by

MALCOLM McCALLUM

Appellant

against

THE CITY OF EDINBURGH COUNCIL

Respondent

in respect of a decision of the Lands Tribunal for Scotland dated 14 July 2016

 

Appellant:  Party

Respondent:  D Anderson;  City of Edinburgh Council

21 March 2017

[1]        I have had the advantage of reading in advance the opinion of Lord Malcolm.  I agree, for the reasons stated by him, that this appeal should be refused.

[2]        I am conscious that the consequences of our decision might appear harsh for the appellant.  Nevertheless, I consider that our decision follows inevitably from the wording and structure of the Housing (Scotland) Act 2001 (Scottish Secure Tenancy Etc) Order 2002, in particular the provisions of Article 4 of the Order, taken together with section 61 of the Housing (Scotland) Act 1987.  The effect of the Order was to preserve rights in existence as at its operative date, 30 September 2002; it did not provide for the creation of new rights thereafter.  The appellant did not on that date have any rights in respect of his present house, as he was still living in Army accommodation.  Consequently any right that he claims in respect of his present house must be a right that came into existence after the critical date for the preservation of existing rights to buy.  Thus it is inevitably subject to the modernized regime rather than the preserved regime.

[3]        The appellant claims that his occupation of Army property on 30 September 2002 was sufficient for him to obtain the benefit of the preserved right to buy.  That is not what the legislation provides, however.  The occupation of Army property counts towards the residence requirement if the former occupier of such property subsequently seeks to purchase property under the right to buy legislation.  Nevertheless, the right to purchase provided in section 61 of the Housing (Scotland) Act 1987, as amended, only comes into existence if the landlord of the relevant property is a local authority or one of the other categories of landlord specified in section 61(2)(a).  These do not include the Crown in respect of Army property.  Consequently the appellant could have had no right to purchase the Army accommodation in which he was living in 2002, and he could only have a preserved right to purchase his present accommodation if he had been living there at the transitional date, 30 September of that year.

[4]        Finally, I would emphasize that the foregoing reasoning is based on the substance and underlying purpose of the legislation, in particular section 61 of the 1987 Act and Article 4 of the 2002 Order; it is not based on particular aspects of the wording or form of the statutory provisions.  The purpose of the 2002 Order, so far as relevant to the present case, was to preserve specified rights that were in existence on 30 September 2002, the date when it came into effect, and not to create new rights for the future.  The rights that the appellant had in 2002 were not among those preserved, and the tenancy that he has now did not exist in 2002.  While I acknowledge that this might be considered a regrettable result, I am clearly of opinion that no alternative construction is possible.  For that reason I consider that we must refuse the appeal.

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2017] CSIH 24

XA87/16

 

Lord Drummond Young

Lady Clark of Calton

Lord Malcolm

 

OPINION OF LADY CLARK OF CALTON

in the appeal to the Court of Session under section 11 of the Tribunals and Inquiries Act 1992

by

MALCOLM McCALLUM

Appellant

against

THE CITY OF EDINBURGH COUNCIL

Respondent

in respect of a decision of the Lands Tribunal for Scotland dated 14 July 2016

 

Appellant:  Party

Respondent:  D Anderson; City of Edinburgh Council

21 March 2017

[5]        Lord Malcolm in his Opinion has set out the history of the case and analysed the statutory provisions which are somewhat complex after repeated amendments and changes to the legislative structure introduced by the Housing (Scotland) Act 1987 (the 1987 Act).  I agree with his reasoning and conclusion that the appeal falls to be refused.

[6]        There are a few additional comments which I wish to make.  In the 1987 Act, the UK Parliament plainly took account of the unusual circumstances of Crown accommodation provided to members of the regular armed forces and made specific provision for that in section 61(11)(n) of the 1987 Act.  Although a person in such accommodation was not entitled to purchase the army accommodation for obvious reasons, there was a recognition in the 1987 Act that such a person should not be disadvantaged if and when he became a tenant of a specified landlord.  The Scottish Parliament adopted different policy considerations when exercising their devolved powers and, for example, changed the qualifying time periods, the discounts available and introduced a new form of tenancy. 

[7]        The Housing (Scotland) Act 2001 (Scottish Secure Tenancy Etc) Order 2002 (the Order) was drafted inter alia to give a “preserved” right to buy to some tenants who at the effective date (30 September 2002) had no right to buy at that date as they lacked the qualifying period of residence.  The Order did this by disapplying the residential qualification required under section 61(2)(c) of the 1987 Act.  This disapplication provision is to be found in the interpretation section, paragraph 2(2) of the Order.  The result of this is that a tenant who happened to have a tenancy as at 30 September 2002 of the type specified in terms of section 61(2)(a) and (b) but who had no right to buy at said date, because the tenant did not satisfy the residential qualification in section 61(2)(c), nevertheless obtained the protection of the Order.  As Lord Malcolm pointed out, the Order does not make any special provision to protect the discount of persons such as the appellant who had occupied section 61(11)(n) accommodation.  The appellant had for many years paid for army accommodation charges and had built up a large discount to which he would have been entitled if there had been no relevant changes to the 1987 Act.  But policy choices made in the legislation are the responsibility of the Scottish Parliament.  The court is bound by the term of the Order.

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2017] CSIH 24

XA87/16

 

Lord Drummond Young

Lady Clark of Calton

Lord Malcolm

OPINION OF LORD MALCOLM

in the appeal to the Court of Session under section 11 of the Tribunals and Inquiries Act 1992

by

MALCOLM McCALLUM

Appellant

against

THE CITY OF EDINBURGH COUNCIL

Respondent

in respect of a decision of the Lands Tribunal for Scotland dated 14 July 2016

 

Appellant:  Party

Respondent:  D Anderson;  City of Edinburgh Council

21 March 2017

[8]        In October 2015 Mr McCallum (the appellant) applied to purchase his rented property from his landlord, the City of Edinburgh Council, all under what was called the “right to buy” legislation (recently repealed).  It is accepted that the residence requirement is met (thanks to the exercise of certain discretionary powers by the landlord) and that the appellant has the right to purchase, but the parties are in dispute as to the appropriate statutory discount upon the purchase price.  The appellant has been offered a discount of £15,000 on what is termed the “modernised” basis, whereas the appellant considers that he is entitled to a larger discount under the “preserved” right to buy.  The Lands Tribunal has rejected the appellant’s contention and he now appeals to this court. 

[9]        The right to buy certain rented properties was introduced in the Housing (Scotland) Act 1987.  Section 62 contained the provisions for calculating the discount on the market price.  The discount was lowered by the Housing (Scotland) Act 2001, applicable to all relevant tenancies created after 30 September 2002, unless the tenant could take advantage of the provisions which preserved the old regime.  It is not in dispute that the appellant’s tenancy commenced after 2002.  Nonetheless he claims that because of his occupation of army property as a member of the forces between 1983 and 2005, he remains entitled to the higher discount. 

[10]      Section 61(1) and (2) of the 1987 Act conferred the power of purchase to the tenant of every house let under a secure tenancy where

(2)(a) the landlord is one of the specified landlords (the list does not include the Crown)

(2)(b) the landlord owns the property, and

(2)(c) for at least two years the tenant has occupied a house or succession of houses provided by any of those narrated in section 61(11) (a broader list than in (a)).

Section 61(11)(n) mentions the Crown in respect of accommodation provided to a member of the regular armed forces.  However the Crown is not and never has been a specified landlord from whom a property can be purchased.  The effect is that, while a soldier could not purchase his army property, his occupation of it could count towards the residence duration requirement if and when he left the army and gained a tenancy from one of the specified landlords, for example a local authority.  Occupation of an army house could also be taken into account when quantifying the appropriate level of discount (section 62(3)(b)).

[11]      The 2001 Act introduced the Scottish secure tenancy (SST).  On its implementation secure tenancies were “converted” into SSTs, and any new agreements would be SSTs.  The introduction of the new right to buy regime by the Housing (Scotland) Act 2001 (Scottish Secure Tenancy Etc) Order 2002 (the Order) preserved rights to purchase in existence at the time (30 September 2002) in respect of a particular tenancy – a “preserved” right to buy.  However subsequent tenancies, unless they fell into certain limited exemptions, which do not apply in the present case, were subject to a longer residence requirement (five years) and lower levels of discount – a “modernised” right to buy.  Article 4 of the Order provides that where immediately before the conversion date the tenant had a right to purchase under the 1987 Act as originally enacted, that right would remain unaffected up to the termination or assignation of the tenancy, or until its passing by succession to certain persons.  In practical terms, the overall result was as follows:  if an applicant enjoyed a right to purchase a particular property when the new regime came into force (or a prospective right to purchase the subjects when the residence requirements were met) then, for so long as the tenancy persisted, not only would that right continue, but the discount entitlement would be unchanged.  However, once any such tenancy was at an end, any new tenancy would be subject to the less generous terms.  Examples of this in operation can be found in Rizza v Glasgow Housing Association 2008 SLT (Lands Tribunal) 13 and Boyle v South Lanarkshire Council 2015 SLT (Lands Tribunal) 189.  Anyone entering into a tenancy with a specified landlord after 2002 would enjoy only the rights available under the 2001 Act.

[12]      The difficulty for the appellant is that, until he obtained his present tenancy, he had no right , nor prospective right, to purchase any property.  The tenancy of the house he wishes to buy commenced well after the implementation of the new Act.  It is an SST in terms of the 2001 Act.  The appellant claims that his earlier lengthy occupation of army property, which straddled the old and new regimes, affords him the right to purchase at the old, higher level of discount.  However, in terms of the Order, that would apply only if he was seeking to purchase a property which he could have purchased under the original terms of the 1987 Act.  It is such a right which is “preserved” for the future.  The appellant does not fall into this category. 

[13]      The appellant pointed to the continuing mention of army property in section 61(2)(c), but this relates only to the residence requirement mentioned earlier;  it does not create a right to purchase a property from anyone other than a landlord specified in the list set out in section 61(2)(a), a list which does not include the Crown as supplier of accommodation to the armed forces.  The appellant also relied upon the terms of section 62(3)(b) of the 1987 Act as amended, but they concern the calculation of the discount under the new provisions.  

[14]      The reality is that the appellant never had a right to purchase any property upon the old basis, thus there was nothing to “preserve”.  The Crown was not subject to the right to buy legislation.  The appellant’s occupation of army property under the Crown from 1983 until 2005 only assists in respect of the enjoyment of certain rights in respect of his entitlement to purchase and the discount terms concerning his current local authority tenancy under the new Act – it does not create a right to purchase a property on the original 1987 Act terms.  It follows from all of the above that the appellant has been offered the correct entitlement by way of discount. 

[15]      One can conceive that in 2001 the Scottish Parliament might have enacted that, since persons in army service could not exercise a right to buy, and thus could not “give up” a tenancy, they should not be prejudiced by the change in the law, so long as they obtained a tenancy from a relevant landlord on leaving the armed forces.  However it is clear that it did not do this.  For the above reasons, which are essentially the same as those given by the Lands Tribunal, this appeal falls to be refused. 

 

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2017] CSIH 24

XA87/16

 

Lord Drummond Young

Lady Clark of Calton

Lord Malcolm

OPINION OF LORD DRUMMOND YOUNG

in the appeal to the Court of Session under section 11 of the Tribunals and Inquiries Act 1992

by

MALCOLM McCALLUM

Appellant

against

THE CITY OF EDINBURGH COUNCIL

Respondent

in respect of a decision of the Lands Tribunal for Scotland dated 14 July 2016

 

Appellant:  Party

Respondent:  D Anderson;  City of Edinburgh Council

21 March 2017

[1]        I have had the advantage of reading in advance the opinion of Lord Malcolm.  I agree, for the reasons stated by him, that this appeal should be refused.

[2]        I am conscious that the consequences of our decision might appear harsh for the appellant.  Nevertheless, I consider that our decision follows inevitably from the wording and structure of the Housing (Scotland) Act 2001 (Scottish Secure Tenancy Etc) Order 2002, in particular the provisions of Article 4 of the Order, taken together with section 61 of the Housing (Scotland) Act 1987.  The effect of the Order was to preserve rights in existence as at its operative date, 30 September 2002; it did not provide for the creation of new rights thereafter.  The appellant did not on that date have any rights in respect of his present house, as he was still living in Army accommodation.  Consequently any right that he claims in respect of his present house must be a right that came into existence after the critical date for the preservation of existing rights to buy.  Thus it is inevitably subject to the modernized regime rather than the preserved regime.

[3]        The appellant claims that his occupation of Army property on 30 September 2002 was sufficient for him to obtain the benefit of the preserved right to buy.  That is not what the legislation provides, however.  The occupation of Army property counts towards the residence requirement if the former occupier of such property subsequently seeks to purchase property under the right to buy legislation.  Nevertheless, the right to purchase provided in section 61 of the Housing (Scotland) Act 1987, as amended, only comes into existence if the landlord of the relevant property is a local authority or one of the other categories of landlord specified in section 61(2)(a).  These do not include the Crown in respect of Army property.  Consequently the appellant could have had no right to purchase the Army accommodation in which he was living in 2002, and he could only have a preserved right to purchase his present accommodation if he had been living there at the transitional date, 30 September of that year.

[4]        Finally, I would emphasize that the foregoing reasoning is based on the substance and underlying purpose of the legislation, in particular section 61 of the 1987 Act and Article 4 of the 2002 Order; it is not based on particular aspects of the wording or form of the statutory provisions.  The purpose of the 2002 Order, so far as relevant to the present case, was to preserve specified rights that were in existence on 30 September 2002, the date when it came into effect, and not to create new rights for the future.  The rights that the appellant had in 2002 were not among those preserved, and the tenancy that he has now did not exist in 2002.  While I acknowledge that this might be considered a regrettable result, I am clearly of opinion that no alternative construction is possible.  For that reason I consider that we must refuse the appeal.

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2017] CSIH 24

XA87/16

 

Lord Drummond Young

Lady Clark of Calton

Lord Malcolm

 

OPINION OF LADY CLARK OF CALTON

in the appeal to the Court of Session under section 11 of the Tribunals and Inquiries Act 1992

by

MALCOLM McCALLUM

Appellant

against

THE CITY OF EDINBURGH COUNCIL

Respondent

in respect of a decision of the Lands Tribunal for Scotland dated 14 July 2016

 

Appellant:  Party

Respondent:  D Anderson; City of Edinburgh Council

21 March 2017

[5]        Lord Malcolm in his Opinion has set out the history of the case and analysed the statutory provisions which are somewhat complex after repeated amendments and changes to the legislative structure introduced by the Housing (Scotland) Act 1987 (the 1987 Act).  I agree with his reasoning and conclusion that the appeal falls to be refused.

[6]        There are a few additional comments which I wish to make.  In the 1987 Act, the UK Parliament plainly took account of the unusual circumstances of Crown accommodation provided to members of the regular armed forces and made specific provision for that in section 61(11)(n) of the 1987 Act.  Although a person in such accommodation was not entitled to purchase the army accommodation for obvious reasons, there was a recognition in the 1987 Act that such a person should not be disadvantaged if and when he became a tenant of a specified landlord.  The Scottish Parliament adopted different policy considerations when exercising their devolved powers and, for example, changed the qualifying time periods, the discounts available and introduced a new form of tenancy. 

[7]        The Housing (Scotland) Act 2001 (Scottish Secure Tenancy Etc) Order 2002 (the Order) was drafted inter alia to give a “preserved” right to buy to some tenants who at the effective date (30 September 2002) had no right to buy at that date as they lacked the qualifying period of residence.  The Order did this by disapplying the residential qualification required under section 61(2)(c) of the 1987 Act.  This disapplication provision is to be found in the interpretation section, paragraph 2(2) of the Order.  The result of this is that a tenant who happened to have a tenancy as at 30 September 2002 of the type specified in terms of section 61(2)(a) and (b) but who had no right to buy at said date, because the tenant did not satisfy the residential qualification in section 61(2)(c), nevertheless obtained the protection of the Order.  As Lord Malcolm pointed out, the Order does not make any special provision to protect the discount of persons such as the appellant who had occupied section 61(11)(n) accommodation.  The appellant had for many years paid for army accommodation charges and had built up a large discount to which he would have been entitled if there had been no relevant changes to the 1987 Act.  But policy choices made in the legislation are the responsibility of the Scottish Parliament.  The court is bound by the term of the Order.

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2017] CSIH 24

XA87/16

 

Lord Drummond Young

Lady Clark of Calton

Lord Malcolm

OPINION OF LORD MALCOLM

in the appeal to the Court of Session under section 11 of the Tribunals and Inquiries Act 1992

by

MALCOLM McCALLUM

Appellant

against

THE CITY OF EDINBURGH COUNCIL

Respondent

in respect of a decision of the Lands Tribunal for Scotland dated 14 July 2016

 

Appellant:  Party

Respondent:  D Anderson;  City of Edinburgh Council

21 March 2017

[8]        In October 2015 Mr McCallum (the appellant) applied to purchase his rented property from his landlord, the City of Edinburgh Council, all under what was called the “right to buy” legislation (recently repealed).  It is accepted that the residence requirement is met (thanks to the exercise of certain discretionary powers by the landlord) and that the appellant has the right to purchase, but the parties are in dispute as to the appropriate statutory discount upon the purchase price.  The appellant has been offered a discount of £15,000 on what is termed the “modernised” basis, whereas the appellant considers that he is entitled to a larger discount under the “preserved” right to buy.  The Lands Tribunal has rejected the appellant’s contention and he now appeals to this court. 

[9]        The right to buy certain rented properties was introduced in the Housing (Scotland) Act 1987.  Section 62 contained the provisions for calculating the discount on the market price.  The discount was lowered by the Housing (Scotland) Act 2001, applicable to all relevant tenancies created after 30 September 2002, unless the tenant could take advantage of the provisions which preserved the old regime.  It is not in dispute that the appellant’s tenancy commenced after 2002.  Nonetheless he claims that because of his occupation of army property as a member of the forces between 1983 and 2005, he remains entitled to the higher discount. 

[10]      Section 61(1) and (2) of the 1987 Act conferred the power of purchase to the tenant of every house let under a secure tenancy where

(2)(a) the landlord is one of the specified landlords (the list does not include the Crown)

(2)(b) the landlord owns the property, and

(2)(c) for at least two years the tenant has occupied a house or succession of houses provided by any of those narrated in section 61(11) (a broader list than in (a)).

Section 61(11)(n) mentions the Crown in respect of accommodation provided to a member of the regular armed forces.  However the Crown is not and never has been a specified landlord from whom a property can be purchased.  The effect is that, while a soldier could not purchase his army property, his occupation of it could count towards the residence duration requirement if and when he left the army and gained a tenancy from one of the specified landlords, for example a local authority.  Occupation of an army house could also be taken into account when quantifying the appropriate level of discount (section 62(3)(b)).

[11]      The 2001 Act introduced the Scottish secure tenancy (SST).  On its implementation secure tenancies were “converted” into SSTs, and any new agreements would be SSTs.  The introduction of the new right to buy regime by the Housing (Scotland) Act 2001 (Scottish Secure Tenancy Etc) Order 2002 (the Order) preserved rights to purchase in existence at the time (30 September 2002) in respect of a particular tenancy – a “preserved” right to buy.  However subsequent tenancies, unless they fell into certain limited exemptions, which do not apply in the present case, were subject to a longer residence requirement (five years) and lower levels of discount – a “modernised” right to buy.  Article 4 of the Order provides that where immediately before the conversion date the tenant had a right to purchase under the 1987 Act as originally enacted, that right would remain unaffected up to the termination or assignation of the tenancy, or until its passing by succession to certain persons.  In practical terms, the overall result was as follows:  if an applicant enjoyed a right to purchase a particular property when the new regime came into force (or a prospective right to purchase the subjects when the residence requirements were met) then, for so long as the tenancy persisted, not only would that right continue, but the discount entitlement would be unchanged.  However, once any such tenancy was at an end, any new tenancy would be subject to the less generous terms.  Examples of this in operation can be found in Rizza v Glasgow Housing Association 2008 SLT (Lands Tribunal) 13 and Boyle v South Lanarkshire Council 2015 SLT (Lands Tribunal) 189.  Anyone entering into a tenancy with a specified landlord after 2002 would enjoy only the rights available under the 2001 Act.

[12]      The difficulty for the appellant is that, until he obtained his present tenancy, he had no right , nor prospective right, to purchase any property.  The tenancy of the house he wishes to buy commenced well after the implementation of the new Act.  It is an SST in terms of the 2001 Act.  The appellant claims that his earlier lengthy occupation of army property, which straddled the old and new regimes, affords him the right to purchase at the old, higher level of discount.  However, in terms of the Order, that would apply only if he was seeking to purchase a property which he could have purchased under the original terms of the 1987 Act.  It is such a right which is “preserved” for the future.  The appellant does not fall into this category. 

[13]      The appellant pointed to the continuing mention of army property in section 61(2)(c), but this relates only to the residence requirement mentioned earlier;  it does not create a right to purchase a property from anyone other than a landlord specified in the list set out in section 61(2)(a), a list which does not include the Crown as supplier of accommodation to the armed forces.  The appellant also relied upon the terms of section 62(3)(b) of the 1987 Act as amended, but they concern the calculation of the discount under the new provisions.  

[14]      The reality is that the appellant never had a right to purchase any property upon the old basis, thus there was nothing to “preserve”.  The Crown was not subject to the right to buy legislation.  The appellant’s occupation of army property under the Crown from 1983 until 2005 only assists in respect of the enjoyment of certain rights in respect of his entitlement to purchase and the discount terms concerning his current local authority tenancy under the new Act – it does not create a right to purchase a property on the original 1987 Act terms.  It follows from all of the above that the appellant has been offered the correct entitlement by way of discount. 

[15]      One can conceive that in 2001 the Scottish Parliament might have enacted that, since persons in army service could not exercise a right to buy, and thus could not “give up” a tenancy, they should not be prejudiced by the change in the law, so long as they obtained a tenancy from a relevant landlord on leaving the armed forces.  However it is clear that it did not do this.  For the above reasons, which are essentially the same as those given by the Lands Tribunal, this appeal falls to be refused.