Wragg & Ors v Surrey County Council

Under paragraph 2(1) of Schedule 1 to the Housing Act 1985, the tied-accommodation exception has two conditions: the contract must require occupation, and the requirement must be for the better performance of the employee’s duties. The first is determined from the contract. The second is an objective question. Occupation must be intended to promote, and reasonably capable of promoting, better performance. The court considers the reasons for the requirement and the factual history. It asks whether occupation improves performance compared with having no such requirement, not whether the employee actually used the property effectively. Necessity is not required for an express contractual term.

Four countryside rangers, or the widow of one, occupied council-owned homes under employment contracts requiring permanent full-time occupation of council accommodation for better performance of their duties. They served notices under s.122 claiming the right to buy under Part V of the Housing Act 1985. The council served notices under s.124 denying that they were secure tenants because paragraph 2(1) of Schedule 1 applied. Claims were brought under s.181.

His Honour Judge Reid QC granted declarations in favour of the four respondents. The council appealed. The central issue was whether the statutory exception depended solely on the contractual wording, or whether the requirement to occupy had objectively to be for the better performance of the employees’ duties.

1. Appeals allowed unanimously. The declarations below were set aside. The Court granted declarations that none of the respondents had a right to buy under the Housing Act 1985.
2. Paragraph 2(1) of Schedule 1 imposes two distinct conditions. The contract must require the employee to occupy the dwelling-house. The requirement must also be for the better performance of the employee’s duties. The first condition is determined from the contract. The second raises an objective issue of fact outside the contract. The contractual statement that occupation is for better performance is relevant but not conclusive.
3. The expression for the better performance requires an objective assessment. The required occupation must be intended to promote, and reasonably capable of promoting, better performance. The court considers all the circumstances, including the reasons for imposing the requirement, the considerations relied upon and the factual history. It is immaterial that the individual employee did not in practice use the property so as to produce better performance.
4. Better is a true comparative. The comparison is with the employee’s position if there were no requirement to occupy the property. The judge therefore erred in treating better as equivalent to proper or efficient. Necessity is relevant before a contractual term is implied, as discussed in Hughes v Greenwich London Borough Council [1994] 1 AC 170 and Surrey County Council v Lamond (16 December 1998). It is not required where the term is express.
5. The statutory condition is assessed when notice is given under the Act. A condition satisfied when the requirement was imposed will ordinarily continue absent a relevant contractual variation or fundamental change in circumstances. The employer bears the burden of establishing the exception.
6. The council’s considerations were objectively valid. They included proximity to work sites, safe storage of tools and equipment, the provision of a properly equipped home base, and a public interface. The public-interface consideration carried less weight, but was not irrelevant. The evidence did not show any relevant variation or change of circumstances. The exception therefore applied to each respondent. Arguments concerning estoppel and delay did not need to be determined.

Moore-Bick and Pill LJJ agreed with Richards LJ.

• Court of Appeal (Civil Division): In [2008] EWCA Civ 19 , the council’s appeals were allowed and declarations were granted that the four respondents had no right to buy.
• Guildford County Court: His Honour Judge Reid QC granted declarations that the respondents were entitled to purchase their homes under Part V of the Housing Act 1985. Permission to appeal was granted.