Truro Diocesan Board of Finance Ltd v Foley

For section 34(1)(b) of the Housing Act 1988, “tenancy” does not include an agreement for a tenancy where the statutory context requires the distinction. “Immediately before the tenancy was granted” refers to when the new tenancy becomes effective and the tenant becomes entitled to possession, not when the instrument is executed. A gap after surrender of the former protected tenancy therefore prevents the condition being satisfied. An instrument containing all essential terms may operate as a lease, but its effect depends on the parties’ intention shown by the document and circumstances. Clear future-tense language may make it only an agreement for a future grant. Section 3 of the Human Rights Act 1998 does not permit “immediately before” to be rewritten as a reasonable period.

The Board sought possession of a house occupied by Mr Foley. The parties had compromised earlier proceedings by providing for surrender of his existing tenancy, a 24-hour period out of possession, and the later grant of a five-year assured shorthold tenancy. The formal grant was never executed.

The County Court held that the agreement did not preserve protected-tenancy status under section 34(1)(b) of the Housing Act 1988, following Dibbs v Campbell and Bolnore Properties Ltd v Cobb. The appeal concerned whether the agreement itself was a tenancy or merely an agreement for a tenancy, when the new tenancy was granted, and whether section 3 of the Human Rights Act 1998 required a Convention-compatible construction.

The appeal was dismissed by a majority comprising Moore-Bick LJ and May LJ. Chadwick LJ dissented and would have allowed it.

1. Meaning of “tenancy”. Section 45(1) of the Housing Act 1988 includes an agreement for a tenancy unless the context otherwise requires. The structure and language of section 34(1) draw a distinction between a tenancy, its grant, and a contract for a future tenancy. Applying the extended meaning would make section 34(1)(b) incoherent and extend protection beyond the statutory purpose. In this context, “tenancy” excludes an agreement for a tenancy.
2. Meaning of “immediately before”. The phrase refers to the time when the new tenancy became effective and the tenant became entitled to possession. It covers a new tenancy taking effect immediately on expiry of the old one. Mr Foley surrendered his former tenancy on 26 September 2001. The new tenancy arose at noon on 27 September, after the intervening period, so he was not protected immediately before it was granted.
3. Construction of the agreement. An instrument may operate as a lease despite providing for a later formal grant, but the question depends on the parties’ intention gathered from the instrument and relevant circumstances. The agreement contained no words of present demise and used future language, especially in providing that the tenancy “shall” be granted on 27 September and commence on the date of grant. It was therefore an agreement for a future tenancy. The failure to execute the formal grant did not backdate the grant to 20 September; the agreement provided the legal basis for the new relationship from 27 September.
4. Convention argument. Section 3 of the Human Rights Act 1998 did not justify reading “immediately before” as “a reasonable time before”. That would fundamentally alter the subsection. The balance between landlord and tenant protection was for Parliament. Following Kay v Lambeth London Borough Council, and the approach reaffirmed in Doherty v Birmingham City Council, compliance with statutory possession provisions will ordinarily justify the interference with article 8 rights, subject to exceptional cases.
5. Dissent. Chadwick LJ considered that the deed, its endorsement, and the circumstances of execution showed that the parties intended it itself to operate as the grant of a tenancy on 20 September. On that view section 34(1)(b) was satisfied. The majority rejected that construction.

• Court of Appeal (Civil Division): [2008] EWCA Civ 1162. Appeal dismissed by Moore-Bick LJ and May LJ; Chadwick LJ would have allowed the appeal.
• Truro County Court: His Honour Judge Neligan decided preliminary issues against Mr Foley on the effect of section 34(1)(b) of the Housing Act 1988. The separate declaration issue was not appealed.