Royal Borough Of Kensington & Chelsea v Khan & Anor

A local authority’s statutory charge for housing-repair expenses cannot be enforced to obtain possession until the statutory demand has been served and has become operative. Under the Housing Acts, the charge is then fully constituted for enforcement purposes. The limitation period for a money claim and the limitation period for possession may therefore begin on different dates. The principle that a procedural demand does not postpone accrual of a money claim does not govern proceedings to enforce the charge by possession where the statutory scheme makes the demand a condition of the charge taking effect.

The local authority carried out statutory works to a leasehold property after the owner failed to comply with notices served under the housing legislation. It later demanded reimbursement of the outstanding expenses and sought possession under the statutory charge. Master Price ordered delivery of possession. Lawrence Collins J dismissed the owner’s appeal, and the owner appealed to the Court of Appeal.

The appeal concerned whether the charge was governed by the earlier Housing Acts or by the Housing Act 1985, and whether the right to recover possession accrued when the works were completed or 21 days after service of the demand.

1. Appeal dismissed. The order for possession was upheld, with costs agreed at £3,500. Permission to appeal to the House of Lords was refused, subject to a 28-day stay.
2. The applicable statutory scheme was the Housing Act 1985. Although the notices and some work preceded its commencement, the works were completed after the consolidating legislation took effect. Under the transitional provisions, matters arising before commencement were generally governed by the consolidating Acts, and the charge arose only when the expenses were incurred.
3. The decision in Swansea City Council v Glass [1992] QB 844; [1992] 2 All ER 680 established that, for a money claim under the earlier statutory scheme, the demand was a procedural condition precedent and was not part of the cause of action. That analysis did not determine the accrual of a possession claim under the charge.
4. Under the Housing Act 1957, read with the statutory appeal provisions, it was implicit that the demand had to be served before the local authority could enforce the charge. The demand became effective 21 days after service, absent an appeal. It would be illogical to permit possession proceedings before that point while postponing only the appointment of a receiver.
5. Under the Housing Act 1961, the Housing Act 1964 and the Housing Act 1985, the statutory wording expressly provided that the charge did not take effect until the demand became operative. The words “takes effect” concerned the constitution and creation of the charge for enforcement, not merely procedural enforcement steps.
6. The decision in Hornsey Local Board v Monarch Investment Building Society (1890) 24 QBD 1 did not assist the owner. Its concern that a creditor should not indefinitely postpone limitation by delaying a statutory step had no application where the legislation clearly made the demand operative before the charge could be enforced.
7. The right to recover possession accrued on expiry of 21 days after service of the demand. The limitation periods for recovery of the expenses and recovery of possession consequently began at different times.

• Court of Appeal (Civil Division): Appeal from the order of Lawrence Collins J dated 4 May 2001 dismissed.
• Chancery Division: Lawrence Collins J dismissed an appeal from Master Price’s order requiring delivery of possession.
• Master Price: Ordered delivery of possession of the leasehold interest in the property.