Trinity Housing Barrister Review of Clarion Housing Association Ltd v Carter [2021]

  • Wednesday, November 17, 2021
Trinity Housing Barrister Review of Clarion Housing Association Ltd v Carter [2021]

Contributing to the latest edition of Housing Law Week, Trinity Social Housing Law barrister Henry Percy- Raine has prepared the following review of the recent case of Clarion Housing Association Ltd v Carter [2021] EWHC 2890 (QB).

Background
The appellant housing association (Clarion) appealed against the decision of DCJ Holt in the County Court where he gave judgment dismissing the claim for possession against the respondent (Ms Louise Carter). He decided that Ms Carter was entitled to stay on at the property where she had been living with her late mother Monica Carter, as amongst other things, she became an assured tenant of the property in equity on her mother’s death.

Facts
Monica Carter became a secure tenant of the property in 1987. After a series of transfers and mergers, she became an assured tenant under the 1998 Act and the property was ultimately transferred to Clarion who became her landlord. In October 2004, due to health difficulties, Ms Louise Carter moved into the property to become her mother’s carer. It was undisputed at the time of the proceedings that the property had been Ms Louise Carter’s principal residence since late 2004.

In December 2015 Clarion adopted a policy whereby when a tenant died and a member of the deceased tenant's family wished to succeed to the tenancy; the general approach was to allow only one succession for each tenancy. On 13 June 2017, Monica Carter died intestate. Ms Louise Carter asked Clarion if she could buy the property. Clarion refused and served a notice to quit.

In August 2017, Ms Louise Carter put her request in writing to succeed the tenancy. In October 2017, Clarion refused the request to succeed to the tenancy on the ground that the property was not her main home. Ms Louise Carter then completed an application to succeed. In January 2018, Clarion refused the application without providing any reason and confirmed it required vacant possession on 28th February 2018. Ms Louise Carter did not deliver up possession.

In March 2018, Clarion wrote to Ms Louise Carter denying that she enjoyed succession rights and requested vacant possession which was followed up with a notice of seeking possession citing ground 7 in schedule 2 of the 1988 Act. In May 2018, letters of administration were granted to Ms Louise Carter in respect of her mother’s intestacy. A week later there was an express assent of the tenancy to Ms Louise Carter. Thereafter, Clarion issued a third notice to quit and served it on the personal representatives and the Public Trustee. It then issued the possession proceedings on 7 June 2018.

First Instance Decision
DCJ Holt decided that on her mother's death, Ms Louise Carter, being in occupation of the property, became an assured tenant of the property in equity under the law of intestacy. He also found that the notice to quit was "of no effect" and if it were necessary, that the notice to quit was "incorrectly served". He rejected Clarions’ case for possession on ground 7 and found in favour of Ms Louise Carter on the public law and article 8 defence points.

Decision on Appeal
The first issue considered on appeal was whether Ms Louise Carter became an assured tenant in equity on her mother’s death. Clarion argued that in the absence of any statutory succession, security of tenure was lost on Monica Carter's death, leaving Clarion free to serve a notice to quit and thereby end the tenancy. Further, that DCJ Holt was wrong to find that Ms Louise Carter became an assured tenant in place of her mother as a beneficiary under a trust arising from the law of intestacy. Ms Louise Carter argued she had a sufficient equitable interest to succeed to the assured tenancy; she had an inchoate right to establish title to the tenancy pending her appointment as a personal representative. Alternatively, her interest was sufficient to bring her within the wide definition of "tenant" in section 45(1) of the 1988 Act.

Mr Justice Kerr found this issue to be a difficult one but ultimately was not persuaded by the respondent’s arguments. He considered that Ms Louise Carter's interest, whether termed an inchoate right or a chose in action or a putative or nascent equitable interest, was too weak to count as a tenancy in equity and therefore by a narrow margin he could not agree with the decision that Ms Louise Carter was an assured tenant of property in equity under the law of intestacy.

The second issue on appeal was whether Ms Louise Carter became entitled on her mother’s death to enforce the contractual succession rights in the tenancy agreement. Clarion argued it benefited from the doctrine of privity of contract; the respondent was not a party to the tenancy agreement and it predated the effect of the Contracts (Rights of Third Parties) Act 1999. Ms Louise Carter contended that by an exception to the common law doctrine of privity of contact, she was the beneficiary of a trust of the promise made by Clarion to her mother not to terminate the tenancy where certain pre-conditions of entitlement in the tenancy agreement were met.

Mr Justice Kerr concluded that this was a case where the equitable exception to the doctrine of privity of contract was made out and, therefore, Ms Louise Carter was entitled to rely as against Clarion on the succession terms in the tenancy agreement.

A remaining point to be considered was whether Ms Louise Carter had sufficiently complied with the contractual pre-conditions of entitlement to be entitled to succeed her mother’s tenancy. The contractual conditions were set out in the judgment at [paras 89-91]. Mr Justice Kerr found the judge’s conclusion that the relevant requirements had been fulfilled was unassailable and correct. It followed that Ms Louise Carter was entitled to enforce and did effectively enforce the contractual succession provisions in the tenancy agreement. This had the ultimate effect that Clarion could not rely on ground 7 of Schedule 2 of the 1988 Act as it had covenanted not to rely on the ground in circumstances when the contractual succession provisions had been met.

Mr Justice Kerr also considered the remaining three issues raised on appeal namely; the service of notice to quit on the Public Trustee and the public law and article 8 defence points. As to the former, if it were necessary to do so, he would have found the notice was properly served prior to the expiry date. On public law defence point, Mr Justice Kerr was satisfied the judge’s reasoning and conclusions on this issue were correct; Clarion’s decision to serve the notice to quit and to commence possession proceedings were tainted by illegality and procedural unfairness, had it followed its policy, it would have recognised Ms Louise Carter’s right to succeed the tenancy. On the article 8 point, Mr Justice Kerr would have remitted this issue had it been necessary to do so as the first instance decision lacked any reasoning on this point although as a free-standing defence point, he considered unlikely to have been successful given the exceptional nature of the defence.

Ultimately, Clarion’s appeal was dismissed for the reasons outlined above.

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