B.B Bakampa’s Notes: bsaint3@gmail.com; www.bbbakampa.blogspot.

com
HOUSE OF LORDS

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

Birmingham City Council::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::Appellants

v.

Walker (FC)::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::Respondent

[2007] UKHL 22

LORD HOFFMANN

My Lords,

    1.  This appeal raises a short point on the construction of a provision of Part IV of the Housing Act
1985, which consolidates the law on secure tenancies originally introduced by Chapter II of Part I of the
Housing Act 1980. Mrs Betty Walker was a secure tenant of a house in Birmingham belonging to the
local authority. When she died in February 2004, her son Paul was living with her in the house. Section
89 of the 1985 Act provides that where a secure tenant dies and there is a person "qualified to succeed"
her, "the tenancy vests by virtue of this section in that person". By section 87, a member of the tenant's
family occupying the house at the time of her death is qualified to succeed. But there is a proviso which
excludes any succession to a tenant who was herself a "successor" as defined in section 88(1). That
definition includes the case (paragraph (b)) in which the tenant "was a joint tenant and has become the
sole tenant". In this case, Mrs Betty Walker was once a joint tenant. She and her husband were granted a
joint tenancy of the house in 1965. When he died in 1969, she became the sole tenant. But that was long
before the 1980 Act came into force and her tenancy became a secure tenancy. So the question is
whether "has become the sole tenant" refers to any time in the past or is limited to a case in which she
became the sole tenant under a secure tenancy, that is to say, after the 1980 Act came into force. Judge
Hamilton thought it meant the former but the Court of Appeal (Mummery and Rix LJJ, Peter Smith J)
said it meant the latter ([2006] 1 WLR 2641).

    2.  Until the passing of the 1980 Act, tenants of local authorities and similar public sector landlords
had no security of tenure. They were excluded from protection under the Rent Act 1977: see sections 14-
16. Part I of the 1980 Act conferred two benefits upon public sector tenants. Chapter I gave them the
right to buy the freehold (if it was a house) or a long lease (if it was a flat) of their dwelling at a
discounted price to be left outstanding on mortgage. Chapter II introduced the concept of a secure
tenancy for public sector tenants.

    3.  The secure tenancy, like the statutory tenancy in the private sector, can be terminated only by an
order of a county court made on one of a list of specified grounds. But the technique by which secure
tenancies are integrated into the ordinary law of landlord and tenant is very different from that which
was used in the Rent Acts more than 60 years earlier. The old legislation had left untouched the
landlord's right to determine a contractual tenancy by notice or otherwise in accordance with its terms
and the general law. It provided that, on such termination, the tenant acquired a new interest which is
now called a statutory tenancy. The 1980 Act, on the other hand, preserved the contractual tenancy. It
merely added statutory incidents to that tenancy which overrode some of the contractual terms. These
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overriding provisions include the provisions which prevent it from being terminated except by an order
of the court on the statutory grounds.

    4.  From their earliest days, the Rent Acts provided that when a tenant died, his security of tenure
could be transmitted to his widow or another member of his family: see the definition of "tenant" in
section 12(1)(g) of the Increase of Rent and Mortgage Interest (Restrictions) Act 1920. The original
provision for transmission could operate only once: see Whitmore v Lambert [1955] 1 WLR 495, 498-
499. But section 13 of the Rent Act 1965, passed immediately after the election of a Labour government,
provided for a second transmission and that remains the position today: see Part I, Schedule I of the Rent
Act 1977. A person to whom the tenancy is transmitted becomes a statutory tenant. Under this system,
the provisions which limit the number of times which the mechanism of transmission can operate are
extremely simple. The 1977 Act says that they shall only operate twice. This obviously makes it
irrelevant to consider anything which happened before the provisions for transmission came into force.

    5.  The method adopted by the 1980 Act to deal with transmissions is different. It reflects the fact that
a secure tenancy is different in nature from a statutory tenancy. Whereas the statutory tenancy is
unassignable, not an estate in land but a mere "personal right of occupation" (see Lord Greene MR in
Carter v SU Carburetter Co [1942] 2 KB 288, 291), a secure tenancy is an orthodox estate in land
which, subject to specific restrictions in the 1980 Act, can be assigned, held in joint names, pass by
survivorship and be disposed of by will on death. Thus, while a statutory tenancy can pass from one
person to another only in very limited circumstances (such as the statutory transmission on death or by a
court order on divorce) a secure tenancy can in principle pass in any way permissible at common law.

    6.  The 1980 Act was introduced by a newly elected Conservative government and its policy was to
allow transmissions of secure tenancies only once. But this policy could not be given effect, as in the
case of the Rent Act, simply by providing that the transmission mechanism could operate only once. The
fact that a secure tenancy is an estate in land means that such a restriction could be easily avoided by
using other methods of passing the tenancy from one person to another. For example, section 91 of the
1985 Act provides that, with certain exceptions, a secure tenancy may not be assigned. But one of the
exceptions, in subsection (3)(c), is an assignment to a person "who would be qualified to succeed the
tenant if the tenant died immediately before the assignment". Unless such an assignment also counted as
a transmission, a rule that one could have only one transmission could be avoided by assigning the
tenancy to a resident member of the family while the tenant is alive rather than waiting for a statutory
transmission on death.

    7.  That, I think, is the reason for the inclusion, in the definition of a "successor", of various common
law methods for the passing of a leasehold interest in addition to the statutory transmission:

"88. - (1)  The tenant is himself a successor if —

(a)  the tenancy vested in him by virtue of section 89 (succession to a periodic tenancy), or
(b)  he was a joint tenant and has become the sole tenant, or
(c)  the tenancy arose by virtue of section 86 (periodic tenancy arising on the ending of term
certain) and the first tenancy there mentioned was granted to another person or jointly to him and
another person, or
(d)  he became the tenant on the tenancy being assigned to him (but subject to subsections (2)
and (3)) or
(e)  he became the tenant on the tenancy being vested in him on the death of the previous tenant
or
(f)  the tenancy was previously an introductory tenancy and he was a successor to the
introductory tenancy."

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    8.  For the reasons which I have explained, it is easy to see why the legislature thought it necessary to
add paragraphs (b) to (f) to the straightforward statutory transmission falling within (a). They are to
close possible loopholes in the single succession rule, preventing it from being avoided by the use of
other methods of transmission.

    9.  But this policy does not in my opinion require that these paragraphs should apply to events which
occurred before the 1980 Act came into force. If the policy is to allow only one succession to a secure
tenancy, it can hardly be relevant to consider the history of the tenancy before it became a secure
tenancy. Take, for example, a case in which, say in 1969, someone bought the unexpired residue of a 20
year lease of a house granted in 1966. In 1975 the reversion was acquired by a local authority. When the
1980 Act came into force it became a secure tenancy. When the lease expired in1986, the effect of
section 86(1) of the 1985 Act was that a periodic tenancy of the same house came into existence:

"Where a secure tenancy ('the first tenancy') is a tenancy for a term certain and comes to an
end…by effluxion of time…a periodic tenancy of the same dwelling-house arises by virtue of
this section…"

    10.  Suppose the original 1969 purchaser, now a secure tenant under a periodic tenancy, died in 2004.
Was his widow qualified to succeed him? If there is no temporal limit on the operation of section 88(1)
(c), she was not, because her husband was himself a successor. His periodic tenancy arose under section
86(1) and the "first tenancy" there mentioned was granted to another person, namely the purchaser who
bought the original long lease in 1966. But this would be a very arbitrary result. Why should it make a
difference to rights of succession in 2004 to ask whether the tenant took an assignment of an existing
lease in 1969 or was the original grantee of a new lease? Why does it matter how someone acquired the
lease in 1969? No sensible policy seems to be served by making such a distinction. Mr Underwood QC,
who appeared for the local authority, said that it might seem a bit hard but was balanced by the
advantages of the right to buy in Chapter I of Part I of the 1980 Act, which (for the purposes of
calculating the discount) took into account past occupation before the tenancy became a secure tenancy.
I can quite see that Parliament might adopt a scheme which balanced advantages and disadvantages. It is
also true that Parliament in 1980 did not particularly want public sector tenants to rely on security of
tenure. Mrs Thatcher's policy was to encourage them to exercise the right to buy and become home
owners. But I would expect both the advantages and disadvantages to each serve some purpose. It is
easy to see why length of occupation should be considered relevant to the discount, even if it was before
the Act came into force. But distinctions based on the past conveyancing history of the tenancy seem to
me quite irrational.

    11.  In my opinion, therefore, the events to which section 88(1) refers are events in relation to
tenancies which have become secure tenancies and not to events which happened earlier. In support of
this construction, I would rely on three indications. First, the general presumption against retrospectivity.
One does not expect rights conferred by the statute to be destroyed by events which took place before it
was passed. Secondly, the word "successor" most naturally means successor to a secure tenancy.
Although successor is a defined expression, the ordinary meaning of the word is part of the material
which can be used to construe the definition. Thirdly, as I have said, there is the absence of any rational
purpose in giving the definitions a retrospective effect. It follows that "he was a joint tenant and has
become the sole tenant" in section 88(1)(b) means that he was a joint tenant under a secure tenancy and
has become the sole tenant under a secure tenancy. When Mrs Betty Walker became sole tenant, it was
not of a secure tenancy and she was therefore not a successor. I would therefore dismiss the appeal.

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LORD HOPE OF CRAIGHEAD

My Lords,

    12.  I have had the advantage of reading in draft the speech of my noble and learned friend Lord
Hoffmann. I agree with it, and for the reasons he gives I too would dismiss the appeal.

LORD SCOTT OF FOSCOTE

My Lords,

    13.  I have had the advantage of reading in advance the opinion of my noble and learned friend Lord
Hoffmann and am in full agreement with the reasons he has given for dismissing this appeal.

LORD WALKER OF GESTINGTHORPE

My Lords,

    14.  For the reasons given by my noble and learned friend Lord Hoffmann, whose opinion I have had
the advantage of reading in draft, I too would dismiss this appeal.

LORD MANCE

My Lords,

15. For the reasons given by my noble and learned friend Lord Hoffmann, whose opinion I have had
the advantage of reading in draft, I too would dismiss this appeal.

 Counsel  

 Appellants:

    Ashley Underwood QC

    Catherine Rowlands

    (Instructed by Birmingham City Council)

Respondents:

    Jan Luba QC

    John Beckley

    (Instructed by Aston Legal Centre, Birmingham)