| HOUSING — Secure tenancy — Right to buy — Tenant in receipt of housing benefit exercising right to buy long lease of council flat — Tenant serving operative notice of delay on council — Whether housing benefit “payment of rent” — Whether purchase price to be reduced — Whether jurisdiction to hear dispute following execution of lease — Housing Act 1985 (as amended by Housing Act 1988, s 124), ss 153A(5), 153B, 181
Hanoman v Southwark London Borough Council (No 2) [2008] EWCA Civ 624; [2008] WLR (D) 192
CA: Sir Anthony Clarke MR, Arden and Jacob LJJ: 12 June 2008
Where a council tenant exercising his right to buy had served an operative notice of delay on the council, the housing benefit which he received counted as the payment of rent so as to reduce the purchase price for the purposes of ss 153A(5), 153B and 155(3A) of the 1985 Act, as amended.
The county court had jurisdiction to hear the dispute after the execution of the lease by virtue of a collateral contract entered into by the parties prior to completion under which the claimant reserved the right to dispute the amount of discount to which he was entitled.
The Court of Appeal so held when allowing an appeal by the claimant, Colin Hanoman, from the order of Judge Simpson sitting in the Mayor’s and City of London County Court on 27 February 2007, in which he dismissed the claimant’s claim against Southwark London Borough Council for damages arising out of his acquisition, under the statutory right to buy scheme in Part V of the Housing Act 1985, of a lease of his council flat.
The claimant sought to exercise his right to buy from the defendant council a long lease of the council flat where he was a secure tenant, at the discounted premium of £17,000. At all material times he was in receipt of housing benefit, so that his rent was in whole or substantial part paid out of housing benefit and not by him personally. Before the lease was eventually executed he served on the council several notices of delay and alleged that the premium payable on the grant of the lease should be reduced to nil under ss 153A(5) and 153B of the 1985, as amended, by virtue of that delay. The council disputed the claimant’s entitlement to the further discount but he proceeded to completion at the original price of £17,000, purportedly reserving the right to raise the issue subsequently in the county court under the terms of an asserted collateral contract.
On the claimant’s claim in the county court for damages for overpayment of the purchase price, the judge accepted the council’s submission that housing benefit was not rent paid under s 153A(5) and 153B, and that, in any event, the county court had no jurisdiction over right to buy disputes following the execution of the lease by virtue of s 181 of the 1985 Act.
ARDEN LJ said that the wording of s 153A(5) did not exclude the payment of rent by third parties on behalf of the tenant. There was no material difference in legal terms between the payment of rent by a third party and the credit by the housing authority of rent from its housing benefit account to the tenant’s rent account. The effect so far as the tenant was concerned was the same. By contrast with ss 153A(5) and 153B, s 143A specifically provided that a right to acquire on rent to mortgage terms did not apply if a tenant was entitled to housing benefit. Parliament thus specifically considered the matters that ought to be excluded and did not specifically mention rent paid by housing benefit. Accordingly the natural meaning of ss 153A and 153B was that rent paid encompassed all rent duly paid, whatever the source of payment. There was in fact and in law a collateral contract that the claimant would proceed to completion on the basis that he would be able to enforce any rights that he might have to have any dispute about the exercise of his right to buy determined by the county court after completion. As long as rectification was not sought, the collateral contract was not rendered unenforceable by s 2 of the Law of Property (Miscellaneous Provisions) Act 1989. S 181(1) of the 1985 Act, as now in force, provided that a county court had jurisdiction “(a) to entertain any proceedings brought under this Part, and (b) to determine any question arising under this Part …” The council submitted that the county court did not have jurisdiction to hear the issues raised by the claimant once the lease had been granted: see Sheffield City Council v Jackson [1998] 1 WLR 1591. The starting point was that the dispute as to whether housing benefit fell to be taken into account under s 153A(5) clearly fell within the words “to determine any question arising under this Part” appearing in s 181. The ratio of the Sheffield case was that a party could not ask the county court to determine after completion a question on which the parties had previously come to a binding agreement. The object of s 181 was to allocate jurisdiction to the county court and not to take away any rights or to confer any new rights. That analysis was consistent with the Sheffield case, which did not therefore prevent the court from holding that the present dispute fell within s 181 of the 1985 Act.
SIR ANTHONY CLARKE MR and JACOB LJ agreed. |
