Newport City Council v Charles

A representation estoppel cannot establish a landlord’s cause of action for statutory possession. A proprietary estoppel may found a cause of action, but it must concern a proprietary right or benefit. A landlord which already has its freehold interest and seeks only to enforce a statutory possession ground does not obtain that interest through estoppel.

Accordingly, an estoppel by representation cannot cure failure to satisfy the 12-month condition in ground 16 of Schedule 2 to the Housing Act 1980. That estoppel is defensive only and cannot be used as a sword to found the possession claim.

The council sought possession of a family-sized secure tenancy after the original tenant’s death. Her son had succeeded to the tenancy but deliberately concealed her death and continued to pay rent in her name. The council therefore neither served a notice nor began proceedings within the period required by ground 16 of Schedule 2 to the Housing Act 1980.

The district judge made a possession order. On the first appeal, HHJ Jarman QC accepted that the son’s conduct gave rise to an estoppel, held that it allowed the statutory time limit to run from the council’s discovery of the death, and remitted the claim on the separate issue of suitable alternative accommodation. The second appeal concerned whether an estoppel could cure the statutory defect and, if so, whether it was a proprietary estoppel capable of founding the possession claim.

1. Appeal allowed. Laws LJ, with whom Longmore and Richards LJJ agreed on the decisive point, held that the council could not maintain its possession claim.
2. The factual findings justified an estoppel by representation. The tenant had persistently and dishonestly represented, by paying rent in his deceased mother’s name and by positive deception, that she remained alive. The council relied on that representation to its detriment by not taking possession steps within the statutory period.
3. However, the estoppel was not proprietary. The classic proprietary-estoppel analysis in Taylors Fashions Ltd v Liverpool Victoria Trustee Company Ltd [1982] QB 123 concerns an expectation of a proprietary interest or benefit, induced by the other party and acted on to detriment. Here the council was not seeking to acquire or protect an interest through estoppel: it already held the freehold and sought only to enforce a statutory claim for possession. The tenant’s conduct did not create the requisite expectation of a proprietary interest.
4. The true estoppel was therefore an estoppel by representation. Such an estoppel is a shield only and cannot found a cause of action. It could not extend or avoid the 12-month condition, which was a constituent element of ground 16 of Schedule 2 to the Housing Act 1980. The statutory claim was consequently outside the permitted period.
5. Laws LJ considered that estoppel might, in principle, prevent a party from relying on statutory provisions where that party’s unilateral conduct would frustrate the statute’s policy rather than permit contracting out. Richards LJ found that analysis persuasive. Longmore LJ expressed reservations, and the point was not necessary to the result because proprietary estoppel was unavailable.

• Court of Appeal (Civil Division) — allowed the second appeal: [2008] EWCA Civ 1541.
• Cardiff County Court (HHJ Jarman QC) — on 22 February 2008 rejected the substance of the tenant’s appeal, holding that an estoppel could operate, but set aside the possession order and remitted the claim for determination of suitable alternative accommodation.
• Cardiff County Court (District Judge Fraser) — made a possession order on 4 October 2007.