———— Pioneering ———— London ———— Construction ———— Public sector ———— Energy ———— Real estate ———— Bahrain ———— Tax ———— IT ———— Dubai ———— M Connecting ———— Knowledge ———— Pragmatic ———— Malaysia ———— Exeter ———— Thought leadership ———— Housing ———— Agile ———— Creative ———— Connecting — — Local government ———— Manchester ———— Environment ———— Focused ———— Islamic finance ———— Projects ———— Abu Dhabi ———— Corporate finance ———— Passio —— Employment ———— Regulation ———— Procurement ———— Expertise ———— Specialist ———— Planning ———— Investment ———— Committed ———— Delivery ———— IT ——— IP ———— Corporate ———— Infrastructure ———— Value ———— Development ———— Private wealth ———— Oman ———— Governance ———— Birmingham ———— Corpo —— Dynamic ———— Pensions ———— Dispute resolution ———— Insight ———— Banking and finance ———— Arbitration ———— Diverse ———— Regeneration ———— Care ———— Publications � Spring 2015 Housing Litigation Update
Transcript
———— Pioneering ———— London ———— Construction ———— Public sector ———— Energy ———— Real estate ———— Bahrain ———— Tax ———— IT ———— Dubai ———— Manchester ———— Infrastructure ———— Diverse ———— Regeneration ———— Spirited ————Connecting ———— Knowledge ———— Pragmatic ———— Malaysia ———— Exeter ———— Thought leadership ———— Housing ———— Agile ———— Creative ———— Connecting ———— Private equity ———— Funding ———— Housing ———— Islamic finance ———— Charities ———— — Local government ———— Manchester ———— Environment ———— Focused ———— Islamic finance ———— Projects ———— Abu Dhabi ———— Corporate finance ———— Passionate ———— Team work ———— Technology ———— Development ———— Oman ———— Innovative—— Employment ———— Regulation ———— Procurement ———— Expertise ———— Specialist ———— Planning ———— Investment ———— Committed ———— Delivery ———— IT ———— Governance ———— Experience ———— Pensions ———— Focused ———— Care ——————— IP ———— Corporate ———— Infrastructure ———— Value ———— Development ———— Private wealth ———— Oman ———— Governance ———— Birmingham ———— Corporate finance ———— Connecting ———— Pragmatic ———— Charities ———— Dispute resolution ———— Tax —————— Dynamic ———— Pensions ———— Dispute resolution ———— Insight ———— Banking and finance ———— Arbitration ———— Diverse ———— Regeneration ———— Care ———— Commuication ———— Public sector ———— Specialist ———— Projects ———— Talented ————
Publications � Spring 2015
Housing Litigation Update
Housing Litigation Update
Contents
1 ———— Foreword2 ———— Recent developments in relation to committal proceedings4 ———— Landlord's dilemma: Unlawful eviction – AA v London Borough of Southwark [2014] EWHC 500 (QB)6 ———— Retaliatory evictions – the debate concludes with Section 33 of the Deregulation Act 2015 7 ———— Harrassment - who can claim8 ———— The First Tier Tribunal - FAQs10 ———— To attend or not to attend, that is the question?12 ———— Law Society may challenge recent hike in Court fees14 ———— Landlord's liability for disrepair extended further16 ———— Service charges and improvements18 ———— Akerman-Livingstone (Appellant) v Aster Communities Limited (formerly Flourish Homes Limited) (Respondent) [2015] UKSC 15 20 ———— Capacity and the allocation of housing21 ———— Meet the team
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ForewordSince our last edition of Housing Litigation Update, the first signs of spring have begun to appear outside and interesting legal developments have started to sprout.
In this edition, we look at the increasing obligations on Applicants in committal proceedings and the clarification on who can apply for protection under the Protection from Harassment Act 1997.
We then move onto consider what "not to do" when trying to avoid claims of unlawful eviction and abuse of process when seeking possession of a dwelling, along with the changes proposed by the Deregulation Act 2014 to prevent retaliatory evictions of assured shorthold tenants.
This edition also looks to examine the issue of "improvements" to properties and how these can be reflected in service charges as well as answering some "frequently asked questions" about the First Tier Tribunal.
We also look at the recent decisions in Akerman v Aster Communities and Edwards v Kumarasamy which consider the extent of a landlord's liability when dealing with repairs to communal areas and the approach of the Court when defences alleging a breach of the Equality Act 2010 are raised.
Finally, we consider the recent hike in court fees and reflect on the Law Society's potential challenge to the same as well as the Court's stance on the allocation of housing to those lacking mental capacity.
We hope you find this edition both of interest and of use but, as always, if you would like us to write an article on a specific subject matter, then please email us at [email protected]
Recent developments in relation to committal proceedingsThere have been two recent cases in relation to committal proceedings, each of which deal with very different points.
The first, PJSC Vseukrainskyi Aktsionernyi Bank v Maksimov [2014] EWHC 4370 (Comm) concerned a substantial commercial claim but that judgment should serve as a warning to Registered Providers who issue committal proceedings.
The Claimant bank applied to commit the Defendant to prison for contempt of court, for breaching worldwide "freezing" orders. Of the seven grounds for contempt, the Defendant admitted one and another, although proven was described as a "technical" contempt. The other grounds were rejected.
The key findings of the court were that:
● where a court find that there has merely been a technical contempt, rather than one serious enough to justify a serious penalty, an Applicant may well be ordered to pay the Respondent's costs;
● the Defendant was substantially the successful party in relation to the allegations made; and
● as such, it was appropriate to make a costs order in favour of the Defendant requiring the Claimant to pay 80% of the Defendant's costs.
The Judge went on to comment that an increasing amount of the court's time was being taken up with contempt applications. The Judge warned that Claimants should give careful consideration to proportionality in relation to the bringing and continuing of such proceedings. In appropriate cases, the Judge urged Respondents to
give consideration to applying to strike out such applications for abuse of process. He further stated that "the court should be astute to detect when contempt proceedings are not being pursued for legitimate aims. Adverse costs orders may follow where Claimants bring disproportionate contempt applications".
This case should serve as a reminder for Registered Providers that using committal applications for technical breaches may be met with the same criticism in the County Court where Judges are often reluctant to make committal orders in the first instance in any event. Faced with a technical breach, such as a Defendant being present in the outer perimeters of an exclusion zone but having done nothing else to breach an injunction order, the court could well not impose a punishment even though there has been an actual breach and could, more importantly, also make a costs order against the Registered Provider.
The second case, Evelyn Rojas Sanchez v Oboz & Oboz, was heard in the High Court and was a family law case but shows the approach courts will take when a Defendant fails to attend a hearing.
The Applicant, Evelyn Rojas Sanchez was the mother of Isabella who was the subject matter of the proceedings. She was seeking to commit Pawel Oboz (the First Respondent and the father of Isabella) as well as Jolanta Oboz (the Second Respondent and the grandmother of Isabella). The application was made for breaching various orders made in wardship proceedings to which a penal notice had been attached, which had required the Respondents to return Isabella to England having taken her to Poland.
Both of the Respondents failed to attend the committal hearing. The Judge stated that it would be unusual but not exceptional to determine a committal application in the absence of a Respondent. This is because committal proceedings are essentially criminal in nature and therefore Article 6 of
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the Human Rights Act applies which gives a Defendant the right to a fair and public hearing and the right to defend him or herself.
As neither Respondent attended, the court considered the following specific issues:
● whether the Respondents had been served with the relevant documents including the notice of the hearing;
● whether the Respondents had had sufficient notice to enable them to prepare for the hearing;
● whether any reason had been given for their non-appearance;
● whether due to their behaviour the Respondents had waived their right to be present (i.e. was it reasonable to conclude that they knew of, or were indifferent to, the consequences of the case proceeding in their absence);
● whether an adjournment would be likely to secure their attendance;
● the disadvantage to the Respondents in not being able to present their accounts of events;
● whether undue prejudice would be caused to the Applicant by any delay;
● whether undue prejudice would be caused to the court process if the application was to proceed in the absence of the Respondents; and
● the terms of the overriding objective including the obligation on the court to deal with cases justly as well as expeditiously and fairly.
The Judge commented that the list he had given would be a useful checklist to use in all such committal cases. It would therefore be advisable to have this list in mind when faced with a Defendant who has failed to attend a committal hearing and to consider what the response to each point may be.
In this particular case, the Judge went through the notice that each Respondent
had been given of the hearing very carefully before deciding that he would proceed in relation to the First Respondent (who he found had breached the order) but he adjourned the committal application against the Second Respondent.
It is also interesting to note that whilst not being actual methods of service, it appears that the solicitors for the Applicant had brought the First Respondent's attention to the fact that a hearing was taking place not only by email but also by contacting him via his Facebook page.
Landlord's dilemma: Unlawful eviction – AA v London Borough of Southwark [2014] EWHC 500 (QB)The High Court's judgment against the London Borough of Southwark (the Council) not only held that the Council had unlawfully evicted the tenant (referred to as AA) and was liable to pay "substantial damages", but its actions were also heavily criticised. This case offers a useful lesson for landlords.
Background
AA was a secure tenant of the Council for 23 years and a tenant of the flat in issue since 2001. To cut a very long story short, by the date of his eviction arrears had reached £2,353.26. In November 2006, a possession order was made which was subsequently suspended by a succession of 4 orders. These required AA to meet his current weekly rent liability and pay off the arrears in small weekly instalments. Nothing was paid following the last of these orders and, understandably, the Council applied for the execution of a warrant for possession. AA unsuccessfully applied for that warrant to be suspended and it was executed on 23 April 2013. The entire contents of AA's flat, including his passport and other personal belongings, were removed from the flat by the Council and destroyed.
AA made repeated, unsuccessful, attempts in the High Court and County Court to regain possession and to regain his belongings culminating in this claim. The Council admitted that it had unlawfully destroyed AA's belongings but maintained that the eviction was lawful. Unfortunately for the Council, the High Court disagreed and held that the eviction was unlawful.
The claim
AA's claims were for reinstatement and for substantial damages for his unlawful eviction, unlawful homelessness and for the unlawful destruction of his possessions based on the torts of conspiracy, interference with goods, negligence and misfeasance in public office, breaches of the terms of his contractual tenancy and pursuant to the Human Rights Act 1998 under Article 8 of the ECHR. AA claimed he was due at least £2.4 million!
The High Court criticised the behaviour of three officers, saying that the housing officer failed to place the full facts of the case to the court at the hearing of AA's application for a further suspension. The Court reached the following conclusions:
● The Court held that since the possession order had initially been suspended more than 6 years before the Council executed the warrant, it was not entitled to apply for a warrant without first obtaining permission from a judge. As such, the eviction was unlawful.
● The Council's actions was due to a conspiracy of three housing officers who short-circuited the council's own standard procedures that should have been followed, before and during, the execution of the warrant, and the taking of a dispossessed tenant's possessions into storage for safe-keeping. The judgment stated that this conspiracy continued as the officers attempted to "cover-up" the unlawful nature of the original conspiracy and of the unlawful consequences of that conspiracy that had led to AA's unlawful eviction, the destruction of his possessions and his homelessness without financial resources for a lengthy period.
● The three housing officers exercised their powers with the intention of harming AA by having him evicted when there were no reasonable grounds for his eviction and by arranging for his possessions to be seized and destroyed unlawfully.
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● AA had, as a result of these facts, also been caused loss by the negligence of the three housing officers, suffered a breach of his right to the quiet enjoyment of his tenancy and as a result of the lack of respect shown to AA's private life.
Accordingly, although the parties reached an out of court settlement on the damages to be awarded, AA was entitled to substantial damages for breach of contract and for the various torts he had been subject to as well as a remedy for the loss of his tenancy.
What not to do
In summary, the judgment serves as a useful warning that landlords need to ensure staff follow policies and procedures. If not these landlords will be held responsible.
Following this case, landlords should be aware that tenants legal representatives will be expecting more disclosure of tenancy files and documentation. It is possible that many unlawful eviction claims will include other claims, such as those based on conspiracy and/or negligence.
What is clear is that where a possession order was made over 6 years ago landlords should make sure that they do not apply for a warrant without first obtaining permission from a judge. Such action will at least prevent some claims being brought or being successful.
Retaliatory evictions – the debate concludes with Section 33 of the Deregulation Act 2015 Following on from the 'revenge eviction' bill defeat in November 2014, proposed amendments to the Deregulation Bill revived the idea that the government should legislate to curtail evictions in retaliation for housing disrepair being alleged. The proposals are only applicable to private rented sector assured shorthold tenancies. It is however interesting to note the enthusiasm with which some have taken up this issue and it has very recently become law, albeit in the diluted form contained within the Deregulation Act 2015.
In 2010 the Tenancies (Reform) Bill was tabled by Liberal Democrat back-bencher Sarah Teather who sought to introduce legislation preventing eviction within six months of a tenant requesting a repair job. Being a private members bill, backbench MPs had a morning in which to conclude their debate on the matter failing which it would fail on a procedural technicality. On 28 November 2014 the so-called 'revenge eviction' bill was defeated on this basis.
Notwithstanding the above, this does not herald the end of the proposal in its entirety. Amendments were proposed to the Deregulation Bill, a discrete instrument to the Tenancies (Reform) Bill but from a practical perspective serving to re-package (to some extent) the earlier proposal. The amendment (tabled by four Liberal Democrat peers) was to essentially invalidate any Section 21 notice served within 6 months of the landlord having been issued with an Improvement Notice or Notice of Emergency Remedial Action by
the Local Authority. It essentially introduces a defence against Section 21 possession claims on the basis of a failure to repair or maintain a property.
Following agreement by both Houses of Parliament on the text of the Bill it received Royal Assent on 26 March 2015. 'Preventing retaliatory eviction' is dealt with at Section 33 of the Deregulation Act 2015.
Few will deny that a minority of rogue landlords seek to avoid their repairing obligations, and evictions may in some cases have been pursued as an (easier and cheaper) alternative. On the other hand, there is also a justifiable concern that if the prohibition on eviction is drawn too widely then it could also be used by tenants to frustrate or hold up legitimate evictions.
The problem then becomes distinguishing between rogue landlords seeking to evict tenants for pursuing their rights, and tenants who seek to avoid justifiable eviction by requesting spurious repairs. While Sarah Teather's bill may have stretched the notion slightly too far in that it broadly prevented eviction in any case where a complaint of disrepair had been made, the final wording used in the Deregulation Act seems more balanced in that disrepair and a landlord's inaction would effectively have to be proved (through local authority inspection and subsequent issue of a notice) before the protection kicks in. The problem then becomes the capacity of environmental health to deal with the anticipated rise in complaints.
Housing Associations are exempted as the provision is currently drafted. The reason for this is somewhat unclear but the possibility of such legislation being extended in the future cannot completely be ruled out.
Harrassment - who can claimThe Court of Appeal has found that harassment claims under the Protection from Harassment Act 1997 can be extended to persons who were NOT the individual targeted by the course of conduct.
In the case of Melvyn Levi and Carole Levi v (1) Kenneth Bates (2) Leeds United Football Club Limited and (3) Yorkshire Radio Ltd (2015) EWCA 6206, the Court of Appeal considered if an individual could bring an harassment claim, under the Protection from Harassment Act 1997 (the "Act") when they were not the individual targeted by the course of conduct complained of.
The facts of the case are as follows:
● Carole Levi (CL) appealed against a decision, to dismiss her harassment claim against the First Defendant (KB). KB harboured grievances against Melvyn Levi (ML), CL's husband, which said grievances arose from his business dealings with the Second Defendant, and which was currently controlled by KB. ML had bought harassment proceedings against KB following statements that KB made in the Club's match programme, and on its radio station. A judge subsequently found these constituted a "course of conduct amounting to harassment".
● CL's complaint of harassment included two match programme articles in which KB; - had suggested readers put questions to ML about the dispute between the parties, (including the Club) and published ML's and CL's home address. - made further accusations against ML and printed ML's and CL's telephone number. Following this, the Police advised ML and CL to take safety precautions.
At first instance the Judge held that the articles could not support CL's claim for harassment as ML, and not herself, had been
the target of KB's conduct. He refused CL's claim for damages and also for an injunction restraining further harassment by KB.
On appeal, the Court of Appeal found that whilst alarm or distress suffered out of nothing more than sympathy for a targeted victim would not be sufficient to found a claim under the Act, liability could be imposed for conduct to which the complainant was "foreseeably likely to be directly alarmed or distressed by" even where it had been aimed at someone else.
The Court found that the Judge at first instance had erred in excluding CL from a claim based on the match programme articles. These constituted harassment of CL as they defamed her husband, and also invited thousands of club supporters to intervene, in a hostile manner, at CL's home and in respect of a business dispute that existed between her husband and KB and not her. The articles amounted to a "sufficient course of conduct", were separate publications and each pursued the same objective of inciting action upon the family home. As such, they shared the same characteristics and were closely connected in time.
CL was entitled to damages because of the steps she and her husband had had to take to protect themselves at home and because of the anxiety that the situation had caused her. On a broad brush approach, she was awarded £6,000. The question of whether CL should have been granted an injunction, however, was academic. At the date of the Trial, the relevant harassment had occurred five years previously and the court had granted an injunction restraining further harassment of ML. This had afforded CL practical protection against further harassment which was as a result of any such behaviour aimed at her husband.
Elizabeth HargreavesSenior Associate � Property Litigation
The First Tier Tribunal - FAQsThere has been a significant increase in the number of service charge challenge applications made to the First-tier Tribunal ("Tribunal"). Whilst is quite possible that a RP may issue such a challenge if it is a lessee, more often than not it will be on the receiving end. In this question and answer article Yetunde Dania are answers some common questions.
What are the three common mistakes that RPs make when dealing with such applications?
Firstly, the failure to have a procedure in place. If a RP has little experience of such applications and there is no procedure in place there is a real risk of an application being overlooked or vital time being lost whilst paperwork spends time on the wrong person's desk.
To avoid this, RPs should devise a simple procedure so that an application is brought to the attention of a key member of staff as soon as it is received.
Secondly, the failure to appoint a lead person as the coordinator of the matter. This can result in either nothing being done or the duplication of work. As soon as an application
is received it should be decided who will act in the capacity of coordinator and that person should be the contact person for solicitors, if instructed, the Applicant and the Tribunal.
Finally, the failure to diarise directions and hearing dates. Often a registered provider will be notified of the initial case management conference hearing when the Tribunal serves the application.
What happens at a Case Management Conference?
The Procedural Chairman will consider the application and advise the parties of the steps they must take to prepare for a final hearing. These steps are called "Directions".
It is unusual for an initial case management conference to last more than an hour.
What if I need more time to comply with a direction?
It is essential the Tribunal and the Applicant are informed as soon as you realise you require additional time. You should be aware that the Tribunal, as a forum, is more relaxed than a Court however it does have the power to impose sanctions for non compliance so do not just a assume that it will not be a problem if you take an additional few days to comply with a direction.
How should I correspond with the Tribunal?
When an application is issued it will be given a reference number and will be allocated to a Case Officer at the Tribunal.
Any correspondence, whether hard copy or email, should quote the reference number and be marked for the attention of the Case Officer in question. All correspondence about the matter should be copied to the Applicant.
The directions given by the Tribunal will generally specify what should be included in the Hearing Bundle and you should bear in mind the following in relation to the documents which are included:
1. Any copies should be clear, one sided and straight;
2. In chronological order.
3. Paginated and indexed
4. Photographs should be clear and in colour wherever possible;
5. Dividers should be used where the Hearing Bundle is large, say over 300 pages;
Three copies should be delivered to the Tribunal and a copy served on each Applicant in the event that there are numerous Applicants unless one is named as the Lead Applicant in which case it only needs to be served on them.
What will happen at the final hearing?
Hearings before a Tribunal are less formal than a Court however, they still need to be
treated with respect, so ensure you arrive promptly to any pre-hearing site visit and to the hearing itself.
At the start the Judge will direct how they wish the case to be presented. How this is done very much depends on whether both parties are legally represented, in which case the hearing itself may be more formal, or whether one or neither of the parties is legally represented in which case the hearing is likely to be less formal and may take the form of the Applicant asking questions and you responding to the same.
To attend or not to attend, that is the question?Due to the demands on legal budgets it is not unusual for parties to legal proceedings to try and avoid the need to physically attend Directions Hearings, regardless of whether such attendance is by themselves or Counsel, and instead agree directions in advance and send them to the Court for approval.
Whilst this would seem a sensible approach in the current climate it does come with a warning that a party who does not attend may find that the Court imposes sanctions against them. This realistic possibility is demonstrated by the recent High Court decision in Home Group Limited v Marie Matrejek [23 February 2015]. The facts of this case are as follows:
Ms Matrejek ("M") was granted a tenancy in November 2002. In 2011, Home Group Limited ("HGL") applied for an injunction against M due to her anti-social behaviour. M gave an undertaking to the Court which remained in place until 31 December 2012.
HGL continued to receive complaints of serious antisocial behaviour. In August 2013 M was convicted of a racially aggravated public order offence and she pleaded guilty to a further public order offence in October 2013. HGL decided to serve a Notice Seeking Possession and proceedings were issued in October 2013. Directions were made, without a hearing, on 30 December 2013 which enabled the case to be progressed to listing questionnaire stage.
Due to ongoing complaints by M's neighbours about her behaviour, the father of M's two children, and the local authority, instigated Children Act proceedings against M.
Of its own motion, the Court made an Order
that both the possession and Children Act proceedings should be listed for a hearing on the same date, so that case management directions could be given. The Judge's intention was for both cases to be dealt with essentially at the same time as the outcome of the possession proceedings would have an impact on the Children Act proceedings. However, this was not communicated to the parties and a directions hearing was listed for 28 April 2014.
HGL's in-house solicitor, believing that the only outstanding issue was for the matter to be listed for trial, wrote to M's solicitors indicating that she did not feel the hearing was needed and suggested the parties write to the Court informing it of the same. M's solicitors were not agreeable to the suggested course of action.
On 16 April 2014 HGL wrote to the Court stating it did not feel the hearing was necessary and requested urgent confirmation that the parties did not need to attend.
M changed solicitors and on 24 April 2014 her new solicitor wrote to the Court stating they had just been instructed, the fee earner dealing with the matter was on annual leave and they had requested consent from HGL to the hearing being adjourned.
HGL responded by saying they did not feel there was a need for the hearing and they supplied a copy of their letter to the Court dated 16 April 2014.
Both HGL and M's solicitors proceeded to contact the Court to find out whether or not the hearing had been taken out of the list; either no response was received or they were advised that the matter was still in the list and the file was with a Judge.
HGL decided not to attend the hearing. However, they failed to inform the Court, or M's solicitor, that no-one would be attending on behalf of HGL. M's solicitors instructed Counsel to attend.
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Due to HGL's non-attendance HHJ Lochrane dismissed the claim for possession at the hearing on 28 April 2014 despite having read the file and being aware that both sides had tried to avoid the hearing. However, the Court gave permission to the parties to apply to vary or set aside his order within seven days of service.
HGL made a successful application for the possession proceedings to be reinstated and the matter was listed for trial. M decided to appeal the decision to reinstate the claim.
The High Court held that failure to attend a hearing is a "serious and significant default" but, it was recognised that HGL's solicitor had decided not to attend the hearing in an attempt to save costs which she was commended for. However, her mistake was not informing the Court, or M's solicitor, that she would not be attending. As the Court Order listing the matter for a hearing on 28 April 2014 was not as clear as it could have been, to enable the case to be justly dealt with, it was determined that HGL had "just about a reasonable excuse" for the relief sought and so M's appeal was dismissed.
This case demonstrates the need for parties to obtain clarification from the Court if it is not clear why a matter has been listed for a hearing and obtain verbal or written confirmation from the Court, rather than just assuming, and no matter how overwhelming the facts surrounding the case are, that it is acceptable not to attend.
Law Society may challenge recent hike in Court feesEarlier on in the year you may have seen the recent notifications from the Court Service that Court fees, as usual, were going to be increased in April 2015. As it is, the fees for money claims were increased on 9 March 2015. What may have come as a shock for many of you was the scale of the increases. It appears that the Law Society (the "Society") were just as shocked as they sent a pre-action protocol letter for Judicial Review, challenging the Government's decision to increase the Court fees by as much as 600%.
Additional signatories to the pre-action protocol letter included the Bar Council, Chartered Institute of Legal Executives, Form of Insurance Lawyers and the Association of Personal Injury Lawyers to name but a few.
The Society believes that higher fees will:
● Put people off going to Court even where they have genuine claims.
● Provide an incentive for larger companies to deny liability knowing the injured party may not be in a position to fund expensive Court fees.
● Lead to small business insolvency. Unpaid invoices of tens of thousands or hundreds of thousands of pounds will mean that cash flow and overdrafts are already stretched. For some companies, insolvency will be the only option.
The Government first consulted on the money claim fee increases in December 2014. The Society opposed the Government's policy of essentially looking to recover the cost of running the Civil Court system by way of Court fees. In 2015, it again responded to the consultation by arguing that "a substantial proportion of the costs of the civil justice system should be borne by the public purse".
However, with the increases, the Society believes that "the Government's policy ….. amounts to a flat tax on those seeking justice…the Government's hikes…will price the public out of the Courts and leave small businesses saddled with debts they are due but unable to afford to recover".
The Society has asked the Government to provide written information on how much money it believes it will raise through the enhanced Court fees and, in turn, what it will be spending this money on. There has also been a request for an explanation as to how the Court service will be modernised and how that will appear in the Government's accounts.
Some of the grounds on which a Judicial Review challenge may be made, are:
● The proposals amount to "selling justice";
● The Government does not have the power to raise fees for the purposes it has stated in the consultation, namely the making of departmental savings;
● The Government is proceeding without evidence to justify the increases;
enhanced fees or why. This is a breach of the Government's own consultation principles which specifically states that sufficient reasons must be given for any proposal;
● When the Government tabled its second round of proposals on higher fees for possession claims (which are proposed to increase to £355) and general civil applications (proposed increases to £100 and £255 respectively for without notice/consent applications and those on notice and contested) it had already made up its mind about certain options, which by its own process is unfair; and
● The Government failed to allow a presentation on enhanced fees in combination with amendments to the remission scheme.
It will be interesting to see if a challenge for Judicial Review is made and if the Government will increase the remaining Court fees as proposed. Clearly anybody looking to take Court action, if faced with these costs,
will have to give a lot more consideration to doing so, not because of their case having little chance of success but purely because of how much more money it will be needed in order to both issue and pursue the claim as against the likelihood of ever recouping that money back.
Elizabeth HargreavesSenior Associate � Property Litigation
Landlord's liability for disrepair extended furtherIn Edwards v Kumarasamy [2015] EWCA Civ 20 Mr Edwards rented a second floor flat from Mr Kumarasamy under an Assured Shorthold tenancy. Mr Kumarasamy was not the owner of the block of flats but had a long lease of the flat which Mr Edwards rented. Mr Kumarasamy's lease allowed him:
● the right to use on foot the entrance hall, lift and staircases giving access to the flat; and
● the right to use an access road and parking space and the right to use the bin store (which was part of the communal areas) and other facilities provided by the landlord. Regulations forming part of the lease in fact require all domestic rubbish to be placed in the bin store.
The freeholders of the block of flats covenanted under Mr Kumarasamy's lease to "keep the communal areas in a good and substantial repair, and to keep passageways and footpaths forming part of the building in good order and condition". The lease also contained a clause limiting the freeholder's liability for any defects unless Mr Kumarasamy had given notice of it and the freeholder had a reasonable time to carry out repairs.
Mr Edwards was taking his rubbish out one day to the bin store when he tripped over an uneven paving stone in the pathway between the front door of the block and the communal bins in the car park and injured his knee. This paved path was the principle means of access to the whole block of flats. It was common ground that Mr Edwards had not given previous notice of the uneven slab to Mr Kumarasamy nor had Mr Kumarasamy given notice of this to the freeholder.
Mr Edwards subsequently brought a claim under Section 11 Landlord and Tenant Act 1985 ("the Act") against Mr Kumarasamy. In the first instance the Deputy District Judge found that the path was part of the structure and exterior of the flat so fell under Section 11(1) of the Act. The Deputy District Judge therefore awarded Mr Edwards damages of £3,750. This was overturned on appeal to a Circuit Judge who found that the path was not part of the structure and exterior. However, a new argument was then raised by Mr Edwards which was put before the Circuit Judge that Mr Kumarasamy's liability for the path fell under Section 11(1A) of the Act. The Circuit Judge found that this liability was not engaged because there had been no notice of the defect. Mr Edwards submitted that liability arose as soon as the disrepair existed and was not conditional on notice having been given.
The case was taken to the Court of Appeal which held that whether something formed part of the structure and exterior of a house depended on the facts. On the basis of the Deputy District Judge's findings of fact, the paved area was short and part of the essential means of access to the front hall in which Mr Kumarasamy had an estate or interest and could properly be described as the exterior of the front hall. In principle, the extended covenant applied. The general rule was that the covenant to keep premises in repair obliged the landlord to keep them in repair at all times, so that there was a breach of the obligation as soon as a defect occurred. There was an exception where the obligation was the landlord's and the defect occurred in the premises itself, in which case he was only in breach of his obligation when he had information about the existence of the defect such as would put him on notice as to whether repair works were needed and he had failed to carry out the necessary works with reasonable expedition thereafter [British Telecommunications Plc v Sun Life Assurance Society Plc [1996] Ch 69].
Where a defect occurred in the external part
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of the building that was not demised to the tenant, the landlord was liable even though he had no notice of the disrepair [Murphy v Hurly [1922] 1 A.C 369]. The critical distinction under common law was between that which was demised and that which was not. Where, as in the instant case, there had been an express grant of an easement the grant carried with it an ancillary right on the part of the dominant owner to carry out repairs on the servient owner's land in order to make the easement effective. A landlord's liability on his covenants to repair only required notice where the defect was within the demised property itself. Parliament had not included any requirement of notice. With implied terms, necessity rather than mere reasonableness was the touchstone.
The Court of Appeal disagreed with Dowding and Reynolds (Fifth Edition paragraphs 20-37) that notice was required even in the case of extended covenants (see paragraphs 7, 9-11, 18-20, 23-25 of the Judgment).
Service charges and improvementsIn the recent case of Waaler v The London Borough of Hounslow the Upper Tribunal (UT) gave key guidance on how to approach the recovery of the costs of improvements via a service charge. This decision is likely to have fundamental ramifications for how landlords approach improvements in the future.
Hounslow had undertaken a scheme of major works on one of its estates covering almost 1000 properties. 850 of those properties were occupied under secure tenancies. The remaining 140 properties were occupied under long leases obtained via the Right to Buy. The estate, the subject of the works, consisted of 4 tower blocks, 23 four and five storey blocks of flats, 13 houses and a block of sheltered accommodation. The works involved amongst other things, replacement of flat roofs with pitched roofs, replacement of wooden window frames suffering from inherent defects with metal frames, and stemming from the window replacements, the need to replace external cladding and attend to the removal of asbestos exposed by such works.
Whilst Hounslow had funded the works on the properties occupied by its secure tenants via a Decent Homes loan it had sought to recover the costs of the works to the long leaseholders via the service charge. In the circumstances Miss Waaler received a demand in the sum of £55,195.95, to be paid over a one year period. Miss Waaler and two other leaseholders applied under Section 27A of the Landlord and Tenant Act 1985 to the First Tier Tribunal (FtT) in November 2012 for a determination of the payability of the service charges. That application was unsuccessful and the FtT made a finding that the service charges were substantially payable.
On appeal the UT noted that Hounslow had covenanted under the lease to keep in
repair and redecorate when necessary the structure and exterior of the flat and building. Furthermore, had covenanted to keep in good repair and condition all other property over or in respect of which Miss Waaler had rights – namely the common parts. By contrast Miss Waaler had covenanted under the lease to pay for repairs on account of the service charge by way of a proportionate amount of the costs (for services, repairs, maintenance and management costs) attributable to the flat by way of monthly instalments. Miss Waaler had also covenanted to pay (via the service charge) to the costs of improvements based upon a fair proportion on a comparison of the rateable value of the flat.
Whilst the lease contained an obligation on Hounslow to keep the building (including the exterior of Miss Waaler's flat) and common parts in repair, there was no express obligation or power for Hounslow to undertake improvements. Miss Waaler sought to argue that as there was no obligation or power for Hounslow to undertake improvements it could not seek to recover the costs via the service charge of improvements where they were in excess of the cost of dealing with specific works by way of a repair. Unsurprisingly she also sought to argue that substantial amounts of the works were improvements rather that repairs. Miss Waaler also argued that the costs were not reasonably incurred because it was unreasonable to expect payment over a single service charge account year; instead the costs should have been spread over a longer timescale.
In its decision the UT found, notwithstanding the absence in the lease of any express obligation or power to undertake improvements, that Hounslow had a discretion to carry out improvements – and that it was entitled to seek a contribution to the costs of improvements via the service charge. It then went on to consider whether the costs were reasonably incurred, directing that the test for assessing the reasonableness of incurring the costs should be different if the costs relate to repairs or improvements. The UT confirmed
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that a landlord is usually discharging a contractual obligation when undertaking repairs – and will be in breach (with the concomitant consequences) for failure to repair. By contrast, improvements may simply be a matter of choice - albeit was accepted that sometimes works might be a mixture of repair and improvement, and so not always clear. Accordingly, where the works go beyond what is required to effect a repair, and the leaseholder will be called upon to contribute to the costs, the landlord must 'take particular account of the extent of the interests of the lessees, their views on the proposals and the financial impact…'. Furthermore, 'in deciding whether to proceed a landlord must consider a number of matters...First, the availability of alternative and [a] less expensive remedy should be explored. Secondly, greater weight should be given to the views and the financial means of the lessees…' Conversely the lessee's means are usually irrelevant to whether costs were reasonably incurred in the context of repairs.
As Hounslow had not taken such an approach to the costs, the UT concluded that the appeal had partially succeeded – acknowledging that some costs (repairs) would have in any event
been incurred, but not to the extent that they were. The matter was remitted back to the FtT to decide upon how much the service charge should be reduced.
Comment
As a result of this case landlords are likely to find many more leaseholders challenging works of improvements. A future battleground may therefore be around the distinction between repairs and improvements. To minimise such challenges however landlords may wish to consider providing much more detailed information (aimed at justifying why an improvement is more favourable) at consultation stage; and looking at less expensive options and ways of easing the burden for leaseholders.
Akerman-Livingstone (Appellant) v Aster Communities Limited (formerly Flourish Homes Limited) (Respondent) [2015] UKSC 15 In this appeal, the Supreme Court ("SC") confirmed the proper approach to take when a defence of unlawful discrimination contrary to the Equality Act 2010 (the "Act") is raised in a claim for possession and whether the courts are permitted to take the same summary approach (where the Claimant is a Registered Provider ("RP")) as they do to a defence based on Article 8 of the European Convention on Human Rights (ECHR).
When a defence is raised under Article 8 of the ECHR (alleged breach of the right to respect for the home), the general rule is that the defence should be considered summarily and only proceed if it crosses the high threshold of being "seriously arguable", as laid down by the SC in Manchester City Council v Pinnock [2010] UKSC 45, [2011] 2 AC 104 and Hounslow London Borough Council v Powell [2011] UKSC 8, [2011] 2 AC 186. In this appeal, the County Court had applied the same approach to a defence raised on the basis of unlawful discrimination contrary to the Act before determining that the defence was not arguable and should not be permitted to proceed.
Mr Akerman-Livingstone ("AL") was diagnosed with Prolonged Duress Stress Disorder/Complex Post Traumatic Stress Disorder. It was accepted that this constituted
a "Disability" as defined under S6 of the Act. He became homeless in 2010 and the local authority accepted a duty to house him under S193(2) of the Housing Act 1996. The local authority had an agreement with Flourish Homes Limited (now "Aster") and they granted AL temporary accommodation by way of a weekly periodic tenancy. Attempts to get AL to bid on various properties were unsuccessful and the local authority made a final offer in March 2011 which he declined. The local authority notified AL that it considered its duty under S193 discharged, which occurs if the homeless person refuses an offer of suitable accommodation elsewhere, particularly if they refuse a final offer of social housing. This decision was upheld on AL's S202 suitability review whereupon Flourish served a Notice to Quit and issued possession proceedings. At the adjourned first hearing, on 15 December 2011, AL raised Article 8 and the Act as a defence and directions were listed for a contested trial.
In December 2011 AL made a fresh homelessness application to the local authority. This was rejected on the basis he was intentionally homeless but overturned on review. By this time Flourish had merged with two other housing associations to form Aster. Given that the local authority had accepted a fresh duty to house AL, Aster vacated the listed trial and the matter was adjourned, by consent, with liberty to restore.
In September 2012 Aster offered AL a starter tenancy of a property in the same road as his current accommodation, but he declined. In October 2012 the local authority wrote to him stating that it, again, considered its duty under S193 discharged on the basis that he had refused an offer of suitable accommodation. He did not request a review and one month later Aster applied to reinstate the claim for possession.
The case was listed for a preliminary hearing to decide whether or not an Article 8 proportionality defence and/or a defence under the Act could be raised. Judge Denyer
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QC cited from Thurrock Borough Council v West [2012] EWCA Civ 1435; [2013] HLR 69 (which summarises the principles in Pinnock and Powell) that "the threshold for establishing an arguable case that a local authority is acting disproportionately and so in breach of article 8…is a high one" (para 10). Judge Denyer stated that both Article 8 and Section 15 of the Act, involved a consideration of proportionality and the basic presumption is in favour of proportionality when a public authority is exercising its housing functions. The actions of the local authority could "in no way be characterised as unreasonable or disproportionate….and certainly not actuated by any malevolent response to the defendant's disability" (para 16). He concluded that there was no arguable defence and Aster was entitled to possession but he granted permission to appeal.
AL's appeals were subsequently dismissed in the County Court and Court of Appeal but the SC held,that Judge Denyer misdirected himself in adopting the same approach to the defence of disability discrimination as to the alleged breach of Article 8. They held that the protection afforded by the Act is stronger than that under Article 8. Whilst it can generally be taken for granted that a Registered Provider is acting in pursuance of the twin aims of vindicating ownership of property and managing stock, and that this will usually make an eviction proportionate under Article 8, the same
cannot be assumed under the Act. The landlord must show that there was no lesser measure available and that the importance of the landlord's aims outweighs the impact on the tenant. Summary disposal may still be appropriate, but not where a claim is genuinely disputed on grounds which may require disclosure or expert evidence.
On the basis that the freeholder subsequently served a notice to quit on Aster, the Supreme Court unanimously dismissed the appeal because possession would now be inevitable and would make remittance to the County Court useless. However the importance of this case lies in the judgement given in relation to defences based on disability discrimination.
Capacity and the allocation of housingThe High Court has held that a Local Housing Authority was entitled to refuse the allocation of public housing to a mentally disabled man, under the Housing Act 1996 Part 7, due to his lack of capacity to enter into a tenancy agreement.
In the case of R (on the application of MT) –v- Oxford City Council (2015), the High Court dealt with an application for Judicial Review of Oxford City Council's housing authority (the "Council") decision to refuse the Claimant public housing on the basis that he lacked capacity to enter into a tenancy agreement.
The Claimant, represented by his father as his Litigation Friend, had a mental disability leaving him unable to manage his property and financial affairs. He had been living at home with his father. An application was made to place the Claimant on the Council's housing register and the Council informed him that his application could not be accepted under Part 7 of the Housing Act 1996 (the "Act") as:
● he lacked capacity to make such an application;
● that pursuant to R –v- Oldham MBC ex parte Garlick [1993] the Claimant had to be capable of accepting or rejecting accommodation if a place was offered; and
● assistance could possibly be provided to him under the National Assistance Act 1948.
The claim for Judicial Review was made on the basis that the Council's decision was inconsistent with the Claimant's rights pursuant to Article 14 of the European Convention and Human Rights (ECHR) and that the decision in Garlick could not be followed as it had been decided a long time
ago and had not taken Article 14 into account at that time.
The High Court found that the Act was concerned with the provision of buildings and "not with the provision of accommodation for the disabled". The Act clearly provided that accommodation was only available to those persons who had the capacity to accept an offer. In contrast, the National Assistance Act 1948 provided residential accommodation to a person in need of care and attention which was not otherwise available to them. The decision in Garlick was good law and had been applied in subsequent cases. The reality of the Claimant's circumstances was that he was not entitled to assistance under either Act as the pre-requisite under both was the "need" for accommodation. Parliament's decision to have two different schemes was entirely rational and could not be amenable to Judicial Review; it was not discriminatory to provide two different schemes.
The High Court also said that it was not satisfied that incompatibility with the Claimant's ECHR rights had been established on the case as it was made out.
Elizabeth HargreavesSenior Associate � Property Litigation
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