Property law update

Polarpark Enterprises v Allason [2007] EWHC 1088 (Ch), [2007] All ER (D) 118 (Apr)

This case concerned Rupert Allason, the former Tory MP and author of numerous books about espionage (many as Nigel West), and no stranger to litigation. Mr Allason was the defendant to proceedings which sought a possession order in respect of his home. The freehold of the house was owned by Polarpark, a family-owned company, whose shares were held by trustees on certain discretionary family trusts. The settlor had been Mr Allason’s then wife, and a clause in the settlement gave the trustees power to permit her to reside in the property on such terms as they should think fit, provided that she kept the property insured and in repair during her occupation. The trustees and directors of Polarpark duly granted her oral permission to occupy the property with Mr Allason and their children.
In 1996, Mr Allason and his wife divorced. His wife left the property, but Mr Allason continued to live there. In 2006, Polarpark issued proceedings in the High Court, claiming an order for possession against Mr Allason on the basis that Polarpark’s directors had permitted his wife to live in the property, that she had lived there with him and their children until 1996, but that since their divorce he had continued to occupy the property without any express consent or permission.

The main reason for issuing in the High Court was that Polarpark also claimed a declaration, given claims previously asserted by Mr Allason that he had no beneficial interest in the property. The master made a possession order on 7 July 2006. Mr Allason appealed, but his appeal was dismissed by Mr Justice Briggs on 22 January 2007. Briggs J confirmed the order for possession, and also ordered that Polarpark could issue a writ of possession. Possession was taken by bailiffs on 22 March 2007 by executing a writ of possession.

Mr Allason then claimed that the order permitting the issue of the writ of possession had been made without jurisdiction, and applied for it to be revoked. Briggs J reluctantly allowed his application, and set aside the order.
The licence granted to Mr Allason’s wife, although informal, had been for money’s worth: as a quid pro quo for her occupation under the licence, she was liable under the terms of the settlement to keep the property repaired and insured, and to pay all relevant taxes. The licence was therefore not an excluded licence for the purposes of the Protection from Eviction Act 1977 (PEA 1977). The licence came to an end in or about 1996, when Mr Allason’s wife left the property. At that time Mr Allason was a lawful occupier of the property. Under the provisions of PEA 1977, Polarpark could only enforce its order for possession in the county court. Briggs J held, however, that the proceedings could be transferred to the county court for the purpose of executing the possession order, and so ordered.

Rehman v Benfield [2006] EWCA Civ 1392, [2006] All ER (D) 319 (Oct)

The Court of Appeal considered whether or not there had been an acknowledgment of title by a squatter, so as to have stopped time running for the purposes of the squatter’s adverse possession claim.
Mr Rehman, a Pakistani living in Pakistan, owned a house in London. Mrs Benfield and her late husband began occupying it as squatters in March 1991, with a view to acquiring title to it by adverse possession. Mr Rehman issued possession proceedings against her in October 2004, and Mrs Benfield counterclaimed that she had been in adverse possession for more than 12 years, and had thereby acquired title to the property.

In December 1991, entirely unbeknown to Mr Rehman, Mrs Benfield’s husband had arranged for a firm of solicitors to draw up a lease to be ostensibly between Mr Rehman as landlord and Mrs Benfield as tenant. Mrs Benfield’s husband arranged for a friend to disguise himself as a Pakistani, to impersonate Mr Rehman, and instruct another firm of solicitors to act for him on the execution of the “lease” to Mrs Benfield.

The “lease” and the “counterpart” recited that Mr Rehman was the landlord, registered with absolute title of the property, and had agreed to grant Mrs Benfield a lease of the property. Mrs Benfield signed the counterpart on 19 December 1991. The firms of solicitors acting for Mrs Benfield then sent the signed counterpart to the firm of solicitors who were purporting to act for Mr Rehman.

The purpose of this extraordinary charade was to give Mrs Benfield an “official document” which she could produce to anyone who challenged her right to occupy the property. In 1992 a firm of solicitors genuinely acting for Mr Rehman asked the firm which had believed it had been acting for Mr Rehman to send them a copy of the counterpart so they could obtain instructions about it from Mr Rehman. It was received by them, as agents for Mr Rehman, in April 1992.

The Court of Appeal held that although the lease and counterpart were not effective to create a valid and binding lease of the property, that did not prevent the statements made in the counterpart, and signed by Mrs Benfield, from being an acknowledgement of Mr Rehman’s title for the purposes of the Limitation Act 1980, s 30. It was not necessary to decide whether or not it was the signature of the counterpart on 19 December 1991, or the sending of the counterpart to Mr Rehman’s solicitors in April 1992, which had stopped time running. Less than 12 years had elapsed between either date and the coming into force of the Land Registration Act 2002 in 13 October 2003, and hence the adverse possession claim failed.

Lewisham London Borough Council v Malcolm [2007] EWCA Civ 763, [2007] All ER (D) 401 (Jul)

The Court of Appeal tackled the effect of recent disability discrimination legislation on possession proceedings brought against a person under a disability.
 

The defendant, Mr Malcolm, suffered from schizophrenia, as a result of which he had been frequently admitted to hospital, on two occasions compulsorily. His condition had stabilised somewhat from 1990 when he began to be treated by slow-release injections.

In January 2002, Mr Malcolm had signed a tenancy agreement in respect of a flat. The tenancy was a secure tenancy for the purposes of the Housing Act 1985 (HA 1985), s 79. It is a fundamental feature of such a tenancy that the tenant should occupy it as his only or principle home. Indeed, HA 1985, s 93 specifically provides that an unapproved subletting will entail the permanent loss of secure status. The tenancy agreement also stated expressly that Lewisham’s consent would be required for any subletting and outlined the effect of s 93.

Losing secure status

Mr Malcolm exercised his right to buy the flat in March 2002. Completion was then delayed, and in May 2004 he instructed letting agents to find tenants, ultimately sub-letting it without permission in June 2004. At this time, therefore, Mr Malcolm’s tenancy ceased to enjoy its secure status, and could not afterwards regain it.

However, shortly before he had sub-let the flat, in October 2003, Mr Malcolm’s schizophrenia treatment had changed from injections to self-administered oral medication, and the evidence demonstrated that his behaviour had consequently altered. In March 2004 environmental health officers had visited the flat and issued a noise abatement notice, noting at the time that they smelt drugs, that Mr Malcolm was rude and aggressive, and that he repeatedly stated that he didn’t know who they were while rejecting the notice. Mr Malcolm subsequently lost his job, and it rapidly became clear that he had ceased to take his medication.

Meanwhile, upon their discovering that he had sublet his flat, Lewisham gave Mr Malcolm notice and subsequently issued possession proceedings against him. The county court, having no discretion to decline to award possession, accordingly made such an order.

On analysing the disability legislation, however, the Court of Appeal concluded that that order was incorrect. Having decided that Mr Malcolm’s condition did render him “disabled” within the meaning the Disability Discrimination Act 1995 (DDA 1995), s 1 it went on to conclude that, even though Lewisham had not known about Mr Malcolm’s condition when it brought proceedings against him, its reason for starting those proceedings, the subletting, was sufficiently causally related to that disability for the purposes of DDA 1995, s 24(1)(a). Importantly, Mr Malcolm did not need to demonstrate that his disability had actually caused him to sublet the flat. By DDA 1995, s 22(3), it is unlawful to discriminate against a disabled person, “by evicting him, or subjecting him to any other detriment”. Consequently, in spite of its ignorance of his condition, Lewisham had acted unlawfully not only in bringing proceedings against Mr Malcolm, but also by serving him with a notice to quit. Although he had lost his security of tenure (and with it his right to buy), he was allowed to remain in the premises as a contractual tenant.

White v Knowsley Housing Trust [2007] EWCA Civ 404, [2007] All ER (D) 38 (May)

The Court of Appeal considered the effect of the suspension of a possession order, in the context of another attempt to exercise the right to buy. The tenant in this case, Mrs White, had originally been a local authority tenant under the HA 1985, but her tenancy had converted to an assured tenancy under the Housing Act 1988 when Knowsley, which was not eligible to grant secure tenancies, has become her landlord in 2002. In spite of this change, Mrs White retained her right to buy, because she had originally been a secure tenant.

Mrs White rapidly fell into arrears of rent, and Knowsley brought a successful claim for possession against her in the Liverpool County Court. The order made at that hearing provided that she should give up possession on 6 July 2004, but with enforcement suspended on terms that she pay a weekly sum of the rent arrears in addition to the current rent.

Date of delivery

In 2005 Mrs White made an application to exercise her right to buy the premises. Knowsley contended that she was no longer entitled to do so because the effect of the suspended order was to render her a trespasser on the premises; she was no longer an assured tenant. She therefore applied for a declaration that she remained an assured tenant, and that her tenancy would not determine until the date on which she delivered up possession.

The court concluded, however, that the order for possession had a fundamental effect on her right to exclusive possession of the premises, that being the essence of a tenancy, because that right had become conditional. Her tenancy had terminated on 6 July 2004 and she remained in occupation only as a tolerated trespasser.

Mindful that this conclusion could create significant difficulties for both landlords and tenants in the context of suspended orders, the court recommended that the practice direction to the CPR, Pt 55 should be urgently altered to apply the suggestion made in Bristol City Council v Hassan; Bristol City Council v Glastonbury [2006] EWCA Civ 656, [2006] All ER (D) 321 (May) to assured tenants. In Hassan, the Court of Appeal accepted that the standard form of order where secure tenants were facing a suspended order should provide for the giving up of possession but postpone the date of delivery until a date to be fixed, in order to avoid the loss of secure status on any specified date. Similarly, a postponed order such as this would have protected Mrs White, an assured tenant, from losing her assured status too.