Burton v Camden London Borough Council

A statutory prohibition making a periodic secure tenancy incapable of assignment prevents one joint tenant from transferring or releasing her interest to the other joint tenant. The ordinary meaning of assignment encompasses a transaction which changes the legal estate from joint ownership to ownership by one tenant alone.

The transaction remains prohibited whatever conveyancing form or terminology the parties employ. The prohibition is not confined to transfers which introduce a new tenant or prejudice the landlord. Only the exceptions expressly permitted by Housing Act 1985, section 91(3), can displace it.

The respondent and another person were joint secure tenants of a local authority flat. After the other tenant left, they executed a deed purporting to release her legal and beneficial interest to the respondent, who sought recognition as sole tenant. The local authority refused.

A recorder dismissed the respondent's claim for a declaration, holding that the deed was in substance an ineffective assignment. The Court of Appeal reversed that decision and declared the respondent sole tenant. The local authority appealed.

The principal issue was whether the deed was rendered ineffective by section 91(1) of the Housing Act 1985. A second issue, arising only if the deed was effective, concerned the departing tenant's continuing liability for rent.

1. Appeal allowed by a majority of four to one. Lord Nicholls of Birkenhead delivered the leading speech. Lord Browne-Wilkinson, Lord Steyn and Lord Hobhouse of Woodborough agreed that the appeal should be allowed. Lord Millett dissented.

2. Per Lord Nicholls, section 91(1) of the Housing Act 1985 made the deed ineffective. In the context of a lease, assignment ordinarily connotes a transfer which changes the identity of the tenants. The transfer of the legal estate from two joint tenants to one of them alone therefore amounted to an assignment for statutory purposes. The result could not rationally depend upon whether the parties employed a deed of assignment or the conveyancing form of a release.

3. Section 91(1) imposed the primary and fundamental restriction within the statutory scheme regulating dealings with secure tenancies. Subject to its tightly drawn exceptions, it prohibited every assignment. It was immaterial that the transaction introduced no new tenant or caused no apparent prejudice to the landlord. The court could not add an unexpressed exception for the release of a non-occupying joint tenant's interest.

4. Per Lord Hobhouse, there was an additional contractual obstacle. The departing tenant had undertaken joint and several liability for rent. She could not terminate her obligations through a bilateral transaction with the remaining tenant to which the landlord had neither assented nor become a party. The contract permitted her to end those obligations by terminating the joint tenancy through notice to quit, but not while preserving the tenancy.

5. Lord Millett dissented. In his view, a joint tenant already owns the whole and has no separate interest capable of assignment to the other joint tenant. A release extinguishes the releasor's interest and does not transfer the tenancy. Neither the language nor policy of section 91(1) justified extending the prohibition to such a release.

6. Since the deed was ineffective, the majority did not decide the second issue concerning continuing liability for rent or the related housing-benefit questions. The Court of Appeal's order was set aside and the recorder's order dismissing the claim was restored.

1. House of Lords: By a majority of four to one, allowed the local authority's appeal, set aside the Court of Appeal's order and restored the recorder's order dismissing the claim: [2000] UKHL 8; [2000] 2 AC 399.

2. Court of Appeal: Reversed the recorder and declared that the respondent was the sole tenant. No citation is stated in the judgment.

3. Central London County Court: Mr Recorder Keane dismissed the application, holding that the deed of release was in substance an ineffective assignment.