Secure tenancy — Variation — Local authority purporting to limit statutory power to vary tenancy agreement by giving tenants power to veto variations — Local authority proposing to vary agreement on grounds that limitation of statutory powers ultra vires — Whether such variation permissible — Whether tenant having legitimate expectation of limitation continuing — Housing Act 1985, ss 102, 103

R (Kilby) v Basildon District Council [2006] EWHC 1892 (Admin)

McCombe J: 26 July 2006

A local authority could not fetter its statutory power to vary a secure tenancy agreement: any variation had to be in accordance with the procedures set out in the Housing Act 1985.

McCombe J so held in the Queens Bench Division when refusing the application for judicial review by the claimant, Mr Maurice Kilby, of the decision of the defendant, Basildon District Council, to vary the terms of its secure tenancy agreement with Mr Kilby. Clause 11 of the agreement provided that the terms of the agreement could only be varied if a majority of the tenants’ representatives agreed to this at a special meeting where at least 25% of the tenants’ representatives were present. The local authority proposed unilaterally to remove this clause from the tenancy agreement on the grounds that it was ultra vires and therefore void since it was an unlawful fetter on its ability to vary a secure tenancy which it could only do in accordance with ss 102 and 103 of the Housing Act 1985.

McCOMBE J said that a secure tenancy could be varied in three ways and “not otherwise” under ss 102 and 103 of the Housing Act 1985. First, by agreement between the landlord and the tenant; second, to the extent the variation related to rent or payments in respect of rates, council tax or services, by the landlord or the tenant in accordance with a provision in the lease or agreement creating the tenancy or in an agreement varying it; and third, in accordance with s 103, namely in the case of periodic tenancies, by notice served by the landlord on the tenant. The purpose of the powers conferred in ss 102 and 103 were to aid the council in its statutory function to provide housing in its borough and to manage its housing stock accordingly. It discharged that function in part by the grant of secure tenancies with the important corollary power to vary the terms of such tenancies in the circumstances provided for by the 1985 Act. Clause 11 of Mr Kilby’s tenancy agreement provided new machinery for variation of any terms of the tenancy and this was different from the provisions for variation set out in ss 102 and 103. On its face the agreement required all variations to go through the new procedure, even a proposed variation of clause 11 itself. This offended against s 102(1) which provided for the variation of tenancy agreements in the three ways specified and “not otherwise”. Clause 11 was therefore an unlawful fetter of the statutory power of variation in the 1985 Act and was therefore void. Since the clause was void from the outset it could not give rise to a legitimate expectation on the part of the tenant that the limitation would be complied with by the authority.

Appearances: Nigel Giffin QC and Liz Davies (Sternberg Reed Taylor & Gill, Barking) for the claimant; Andrew Arden QC and Andrew Dymond (Lorraine Browne, Basildon) for the defendant.

Reported by: Jessica Giles, solicitor.