North British Housing Association Ltd. v Matthews

Before a court is satisfied that a landlord is entitled to possession under ground 8, it retains a power to adjourn. It must not ordinarily use that power solely to allow a tenant to alter future facts by paying arrears below the statutory threshold and so defeat a mandatory claim. Such an adjournment is permissible only in exceptional circumstances where refusal would be outrageously unjust.

Delay or maladministration in housing-benefit payments, without more, is not exceptional. An adjournment may, however, be appropriate to investigate an arguable defence already available at the hearing. Once judgment has been given and embodied in a perfected possession order, section 9(6) of the Housing Act 1988 removes any power to adjourn.

Four assured tenants of housing associations were in rent arrears exceeding eight weeks’ rent both when notices seeking possession were served and when their claims came before district judges. Each sought an adjournment so that anticipated or disputed housing-benefit payments could clear, or reduce, the arrears below the ground 8 threshold.

District Judge Saffman, at Manchester County Court, made possession orders against Matthews, Snaith and Masood. District Judge Silverman, at Edmonton County Court, made a possession order against Morgan. The tenants appealed, principally contending that the county court could adjourn to allow them time to obtain housing benefit. Morgan also advanced an alleged agreement with his landlord and proposed late public-law and article 8 arguments.

The common issue was whether, and in what circumstances, the court may adjourn a ground 8 possession claim to enable a tenant to obtain funds that would defeat the claim.

1. All four appeals were dismissed. The court held that the general power to adjourn survives until the court is satisfied that the landlord is entitled to possession. It cannot ordinarily be exercised solely to allow a tenant to change the future factual position by reducing rent arrears below ground 8’s threshold. That would undermine the mandatory statutory scheme.

2. An adjournment may properly enable a tenant to establish a defence that was already arguable at the hearing, such as a set-off, estoppel, accord and satisfaction, an abuse-of-power challenge, or whether a cheque already accepted will clear. The purpose is then to establish an existing defence, not to create one through later events. An adjournment to investigate an asserted defence requires material showing that the defence has a real prospect of success.

3. The court recognised a narrow exception. An adjournment solely to permit payment below the threshold may be granted only in exceptional circumstances, where refusal would be outrageously unjust. Examples might include the theft of cash being taken to court to discharge the arrears, or an admitted payment prevented only by a computer failure. Housing-benefit maladministration or delay, though widespread and potentially harsh in effect, is not exceptional without more.

4. Section 9(6) of the Housing Act 1988 removes the power to adjourn once the court is satisfied that the landlord is entitled to possession. Satisfaction is not reached merely when the judge announces a provisional view at the hearing. It is reached when judgment has been given and given effect in a sealed or otherwise perfected order.

5. Morgan’s evidence did not show an arguable agreement that the landlord would forgo possession proceedings. His proposed article 8 and public-law grounds were introduced too late, depended on untested facts, and would have denied the landlord a proper opportunity to respond. Permission to amend was refused.

• Court of Appeal (Civil Division) — dismissed all four appeals in [2004] EWCA Civ 1736.
• Manchester County Court — District Judge Saffman refused adjournments and made possession orders in the Matthews, Snaith and Masood claims.
• Edmonton County Court — District Judge Silverman refused an adjournment and made a possession order in the Morgan claim.