Islington v UCKAC & Anor

Ground 5 in Schedule 2 to the Housing Act 1985 applies only where the current tenant is the person to whom the tenancy was granted. It does not extend to an assignee or predecessor in title, even where the assignee participated in the original fraud.

Sections 82 and 84 create an exhaustive statutory code for ending a secure tenancy. A landlord cannot circumvent that code by rescinding a voidable tenancy for fraudulent misrepresentation and then seeking possession. The distinction between a void agreement and a voidable agreement remains decisive. Any gap created by a valid assignment following fraud is for Parliament, not the court, to remedy.

The London Borough of Islington alleged that the defendants fraudulently misrepresented their housing circumstances when applying for homelessness assistance. The council subsequently granted the second defendant a secure tenancy, which he validly assigned to the first defendant.

HH Judge Simpson determined preliminary issues on assumed facts. He dismissed the council’s claim for possession under Ground 5 of Schedule 2 to the Housing Act 1985 and its alternative claim to rescind the tenancy for fraudulent misrepresentation. The council appealed, contending that Ground 5 survived the assignment and that rescission remained available at common law. It also sought permission to re-amend its particulars to allege that the grant was void.

1. The appeal was dismissed on the two substantive issues. Ground 5 applies only where the person from whom possession is sought is also the person to whom the secure tenancy was granted. Its present-tense language refers to the current tenant. It cannot be read to include a predecessor in title or to refer instead to the tenant at the date of grant. The express references to predecessors in title in other grounds reinforced that construction. An assignee takes subject to a subsisting possession order, but not to an unexercised ground for possession.
2. Rescission was unavailable. A tenancy induced by misrepresentation is voidable, rather than void. Until rescinded, it has full legal effect; an order of rescission brings it to an end even though its effect is retrospective. Sections 82 and 84 of the Housing Act 1985 therefore prevent a landlord from ending a secure tenancy by rescission. They require a possession order on one of the exhaustive statutory grounds in Schedule 2. This conclusion did not apply to a genuinely void agreement, which never existed and cannot be brought to an end.
3. The statutory scheme deliberately includes fraudulent misrepresentation as a possession ground and imposes a reasonableness safeguard. It would be inconsistent with that scheme to permit rescission for fraudulent, negligent or innocent misrepresentation outside the statutory grounds. The resulting inability to recover possession from an assignee who participated in the fraud was an evident statutory lacuna, but one for Parliament to address.
4. The same conclusion was not displaced by the provisions governing fixed-term secure tenancies and forfeiture. A fixed-term tenancy could include an appropriate re-entry or forfeiture provision, and any apparent gap did not justify departing from the plain statutory scheme.
5. Permission to re-amend was granted. The proposed alternative allegation that the grant was void was arguable. Requiring fresh proceedings would create unnecessary cost and delay after preliminary issues had been tried on assumed facts. The council was to bear the costs caused by the amendment.

1. Court of Appeal (Civil Division) — In [2006] EWCA Civ 340, the court dismissed the council’s appeal against the preliminary rulings on Ground 5 and rescission, but allowed its application to re-amend the particulars of claim.
2. Mayor's and City of London County Court (HH Judge Simpson) — On 11 July 2005, the judge determined preliminary issues on assumed facts, dismissed the claim for possession and rescission, and gave permission to appeal.