Kilby, R (on the application of) v Basildon District Council

Sections 102 and 103 of the Housing Act 1985 form a complete code for varying secure tenancies. A local authority may vary terms by agreement, under limited existing contractual provisions, or by notice after consultation. A tenancy clause requiring tenants’ representatives to approve a variation before the notice procedure can be used unlawfully removes the statutory unilateral power and is ineffective.

The result does not mean every contractual restriction on a public body is invalid. A binding obligation may be lawful where it arises from overlapping statutory powers and advances the relevant statutory purpose, as in Beddowes [1987] 1 QB 1050. That reasoning does not apply where the clause directly conflicts with the statutory route itself.

Mr Kilby was a secure tenant of Basildon District Council. Clause 11 of the Council’s standard tenancy agreement provided that terms could be changed only with approval from a majority of tenants’ representatives at a properly quorate meeting.

The Council consulted tenants about proposed changes but did not obtain the approval required by clause 11. It resolved to adopt the changes and remove the clause. McCombe J held that clause 11 was ineffective because it conflicted with section 102(1) of the Housing Act 1985 and unlawfully fettered the Council’s statutory powers: [2006] EWHC 1892 (Admin). The appeal concerned whether the Council could contractually make its statutory power to vary secure periodic tenancies by notice subject to tenants’ representatives’ approval.

1. Appeal dismissed unanimously. Clause 11 was ineffective. Its quorum and majority-approval requirements gave tenants’ representatives an absolute veto over the Council’s proposed variations.
2. Rix LJ held that sections 102 and 103 of the Housing Act 1985 created a complete code. Section 102(1) provided three routes: agreement, limited variation under existing contractual provisions, and variation by notice under section 103. The section 103 route permitted unilateral variation after preliminary consultation. Clause 11 made that route dependent on further approval and therefore effectively abrogated it. The Council had no power to amend the statutory scheme by surrendering its unilateral power.
3. Beddowes [1987] 1 QB 1050 was distinguished. That case concerned overlapping or conflicting statutory powers, under which a lawful exercise of one power could create rights hindering another, provided the obligation advanced the statutory purpose. Here the Council was exercising one management function within a statutory code that expressly conferred a unilateral variation power. Blatt (1991) 24 HLR 319 was treated as consistent with the result, particularly its reasoning that a contractual term could not prevail over sections 102 and 103.
4. Rix LJ added that the public-law doctrines against fettering and delegation would produce the same answer. Clause 11 fettered the Council’s statutory power and delegated effective control of variation to tenants’ representatives. Buxton LJ disagreed with the judge’s principal characterisation of clause 11 as adding a prohibited method of variation. He regarded it instead as subtracting from the landlord’s statutory powers, but considered it an impermissible fetter in the public-law context. Moses LJ agreed with Rix LJ.

1. Court of Appeal (Civil Division) dismissed the appeal. Rix LJ held that clause 11 conflicted with the statutory scheme; Moses LJ agreed, and Buxton LJ concurred in the outcome on alternative reasoning.
2. Queen’s Bench Division, Administrative Court (McCombe J), [2006] EWHC 1892 (Admin), held that clause 11 was ineffective because it conflicted with section 102(1) of the Housing Act 1985 and unlawfully fettered the Council’s statutory powers.