Bristol City Council v Lovell

A court retains its ordinary procedural discretion to decide when and in what order competing possession and right-to-buy claims should be heard. Part V of the Housing Act 1985 does not give a tenant an immediate procedural right to have an application under section 138(3) determined before a landlord’s possession claim.

The discretion concerns case management, not the equitable discretion to refuse a final injunction. It must be exercised judicially and must not be used to defeat the statute’s policy or the tenant’s substantive rights. Until the freehold is actually granted, the tenant remains a secure tenant and the right to buy remains capable of being defeated under section 121.

The respondent was a secure council tenant who had completed the preliminary statutory steps for purchasing his home under Part V of the Housing Act 1985. The council had meanwhile commenced possession proceedings, alleging that the premises were being used for drug dealing and that the tenant’s conduct caused nuisance and annoyance within Ground 2 of Schedule 2.

The District Judge declined to determine the tenant’s application for an injunction under section 138(3) before the possession claim. Judge Batterbury reversed that decision and granted relief. The Court of Appeal dismissed the council’s appeal because it considered itself bound by earlier authority holding that there was no power to adjourn the right-to-buy claim.

The central issue was whether the court retained its ordinary procedural discretion to decide when and in what order the competing claims should be heard.

1. Appeal allowed unanimously and matter remitted. Lord Hoffmann delivered the leading speech, with which Lord Goff and Lord Hope agreed. Lord Clyde reached the same result by substantially similar reasoning. Lord Lloyd also allowed the appeal, although his conclusion depended on the tenant’s concession that possession proceedings could continue until the freehold was actually granted.

2. Per Lord Hoffmann, the relevant discretion was the court’s administrative or procedural power to regulate its business and determine the timing and order of related proceedings. It was distinct from the equitable discretion to grant or refuse a final injunction. Because an injunction is the statutory means of enforcing the right to buy, the traditional discretion associated with equitable remedies had little practical application once the tenant’s claim had to be determined on its merits.

3. Part V of the Housing Act 1985 did not expressly or impliedly exclude the court’s ordinary procedural discretion. The tenant had no statutory right to insist that the injunction claim be heard immediately or before the possession proceedings. Otherwise the substantive result could depend arbitrarily on court listings or a race to judgment and completion.

4. The procedural discretion had to be exercised judicially. It could not be used to defeat the policy of the legislation or the substantive rights conferred on a tenant. The court should examine the whole situation and hear the competing claims at the time and in the order which justice and convenience required.

5. Per Lord Hoffmann and Lord Clyde, the exercise of the right to buy continued until the freehold or leasehold interest was actually granted. Until then the tenant remained a secure tenant under section 139(2), and section 121 could still prevent exercise of the right. The creation of the landlord’s duty under section 138(1) therefore did not give the tenant an equitable or proprietary interest in the dwelling.

6. Dance v Welwyn Hatfield District Council [1990] 1 WLR 1097 was overruled. Its conclusion that there was no procedural power to adjourn, and its treatment of the tenant as having acquired an equitable interest, could not stand. Taylor v Newham London Borough Council [1993] 1 WLR 444 was not overruled because it had correctly answered the different question whether the court could refuse an injunction when the tenant’s claim was heard separately.

7. The appeal from the District Judge was remitted to Judge Batterbury, or another judge of the Bristol County Court, for rehearing in accordance with the House’s judgment.

1. House of Lords: The council’s appeal was allowed unanimously. The matter was remitted to Judge Batterbury, or another judge of the Bristol County Court, to rehear the appeal from the District Judge.

2. Court of Appeal: The council’s appeal was dismissed. The court regarded itself as bound by earlier authority holding that there was no discretion to refuse or adjourn the tenant’s application.

3. Bristol County Court, circuit judge: Judge Batterbury reversed the District Judge, granted relief to the tenant and dismissed the council’s claim.

4. Bristol County Court, District Judge: District Judge Bolton dismissed the applications for a stay and an injunction, considering that the council’s allegations should first be investigated.