Martin v Medina Housing Association Ltd.

A statutory right to buy is withdrawn under section 122(3) only by written notice, but Part V of the Housing Act 1985 does not exclude common-law and equitable doctrines. A tenant may therefore lose the benefit of a claim through abandonment, waiver or estoppel. Abandonment requires conduct establishing mutual release, express or inferred; lengthy inactivity alone is insufficient. An express representation that the purchase will not proceed, followed by the landlord’s implied release, can discharge the right. An injunction to compel completion under section 138 is available only after the right is established and all matters relating to the grant and any mortgage advance have been agreed or determined.

In 1989, a secure tenant and her son served a notice claiming the right to buy their home under Part V of the Housing Act 1985. The local authority admitted the right, stated a purchase price of £27,000, and supplied a draft conveyance. In 1990, the recorder found that the tenant or her son had orally notified the authority that they did not intend to proceed, after which the claim was recorded as cancelled.

The housing stock was later transferred to the respondent. After the mother’s death, the appellant sought to proceed with the purchase at the 1989 price. The respondent denied that the right remained available. The County Court dismissed his claim for an injunction compelling conveyance. The appeal concerned whether the right had endured despite the oral communication and whether the appellant had acquired an equitable interest in the property.

1. Disposition. The appeal was dismissed unanimously. Lord Justice Wilson gave the leading judgment; Sir Martin Nourse agreed. Lord Justice Ward agreed in the result, relying independently on the failure to satisfy the statutory threshold for completion.
2. Withdrawal and abandonment. Wilson LJ construed section 122(3) of the Housing Act 1985 as requiring withdrawal of a notice claiming the right to buy to be effected by written notice served on the landlord. The approach in Hanoman v Southwark London Borough Council [2005] 1 ALL ER 795, which treated oral withdrawal as legally possible, was not adopted. The written-notice requirement did not, however, exclude common-law and equitable principles concerning abandonment, waiver and estoppel. Part V was not a comprehensive code preventing their application.
3. In ordinary contractual principles, abandonment requires mutual release rather than a unilateral decision. Collin v Duke of Westminster [1985] 1 QB 581 supported applying that principle to a statutory right. Here there was an express representation that the purchase would not proceed and an implied release by the local authority, which recorded the claim as cancelled, took no further action, and continued accepting rent. The recorder’s finding that the communication had occurred orally was not open to challenge on appeal. The right had therefore been discharged.
4. Completion and equitable interest. Under section 138(1), enforceable by injunction under section 138(3), the duty to convey arises only when the right to buy has been established and all matters relating to the grant and to any amount left outstanding or advanced on the security of the dwelling-house have been agreed or determined. Dance v Welwyn Hatfield D.C. [1990] 1 WLR 1097 illustrated when that threshold could generate an equitable interest. It was not met here: the mortgage arrangements, price and conveyance terms had not been agreed or determined. The appellant therefore had no equitable interest engaging section 53(1)(c) of the Law of Property Act 1925. The possible constructive-trust issue under section 53(2) was expressly left conditional.
5. Ward LJ added that the absence of agreement on the price, mortgage arrangements and conveyance terms independently defeated the claim under section 138. The appellant was also too late to seek to revive or complete the transaction nearly 15 years after the original offer.

• Court of Appeal (Civil Division) — in [2006] EWCA Civ 367, dismissed the appeal from the County Court’s dismissal of the injunction claim.
• County Court (Isle of Wight) — on 1 July 2005, Mr Recorder Barrie dismissed the claim for an injunction requiring conveyance of the freehold.