Knowsley Housing Trust v White

This House held that an assured tenancy under the Housing Act 1988 does not end merely because the tenant breaches the terms of a suspended possession order; the tenancy continues until the possession order is executed. The court may make a suspended possession order which contains a "proleptic" provision for discharge under section 85 of the Housing Act 1985 (and comparable provisions), and it is permissible for the terms of proleptic discharge to differ from the terms of suspension provided the court retains power to revisit the order. Section 85(4) permits discharge if the conditions are complied with, but the practical operation of proleptic discharge and the power to vary orders means the court can foreseeably direct discharge once the landlord's monetary claim is satisfied. The Court rejected the binding effect of Marshall v Bradford and Swindon Borough Council v Aston in so far as they produced results inconsistent with these conclusions for the appeals before the House.

On the related questions: (a) where an assured tenancy under the 1988 Act is subject to a possession order it continues until possession is delivered; (b) the court can make proleptic discharge directions when making a suspended order under the 1985 Act; (c) strict compliance with the precise terms of suspension is required to avoid execution of the order, but the court can proleptically or subsequently vary terms under its statutory and procedural powers; and (d) a tenant's right to buy (Part V, Housing Act 1985) is suspended, not permanently lost, by a possession order and is revived if the order is discharged.

The House considered three consolidated appeals concerned with suspended possession orders and their effect on secure and assured tenancies and on the "right to buy". The principal facts were: Knowsley Housing Trust v White (assured tenant under the 1988 Act alleged to have lost tenancy and so right to buy after breach of a suspended possession order); Porter v Shepherds Bush Housing Association (secure tenant paid off arrears after breach; application to discharge suspended order refused in lower courts); and Islington v Honeygan-Green (secure tenant whose right to buy was suspended by a possession order and later litigated).

Nature of the applications:

• Declarations and appeals concerning whether tenancies terminate on breach of suspended possession orders and whether the right to buy is lost or suspended;
• Applications to discharge or vary possession orders under statutory provisions (notably sections 85 and 9) and to determine whether proleptic discharge provisions are lawful.

Issues framed: (i) When does an assured tenancy subject to a suspended possession order end (1988 Act)? (ii) Whether a court may include a proleptic discharge provision in a suspended possession order under section 85 of the Housing Act 1985 and whether the terms of discharge must mirror the terms of suspension. (iii) Whether a tenant who has not strictly complied with suspension terms but has paid arrears may apply to discharge or vary the order. (iv) Whether a tenant's right to buy is lost or merely suspended when the tenancy is subject to a possession order.

Court reasoning (concise):

• The 1988 Act contains no provision equivalent to section 82(2) of the 1985 Act; on a fair reading an assured tenancy does not terminate until possession is given up. Treating such tenants as "tolerated trespassers" upon breach would create conceptual and practical difficulties and was avoided.
• Section 85(4) should be read to permit a court, where appropriate, to make an order which provides proleptically for discharge on compliance with stated conditions; earlier authorities (Payne v Cooper and Sherrin v Brand) support this. The court retains power to revisit and vary orders.
• The terms of suspension should be interpreted strictly so that failure to comply permits enforcement; but a proleptic discharge may sensibly be framed so that strict punctual compliance with each instalment need not be a bar to discharge once the arrears are paid in full, and the court may, on application, vary terms under its powers.
• The right to buy under Part V of the 1985 Act is suspended while a possession order is operative but is not permanently lost; discharge of the possession order revives the right and in practice restores the tenancy retrospectively for relevant purposes.

Disposition: The House allowed the appeal in Knowsley (White) and Porter and dismissed the appeal by the local authority in Honeygan-Green. The Court remitted Porter's discharge application to the County Court and declared that Mrs White remained an assured tenant for the purposes of the right to buy.

This is an appellate decision. The House allowed the appeal in Knowsley Housing Trust v White and allowed the appeal in Porter v Shepherds Bush Housing Association, but dismissed the appeal in Islington v Honeygan-Green. The court held (i) an assured tenancy under the Housing Act 1988 subject to a suspended possession order continues until possession is actually delivered, (ii) a court may make a proleptic discharge provision in a suspended possession order under section 85 of the Housing Act 1985 and may frame discharge terms that differ from the suspension terms so long as the court can revisit the order, (iii) strict compliance with suspension terms is required to preclude the court having to exercise its discretion, and (iv) a secure tenant's right to buy is suspended while a possession order is operative and is revived when the order is discharged.

[2007] EWCA Civ 404 (Court of Appeal) in Knowsley; Porter appealed from [2008] EWCA Civ 196; Honeygan-Green travelled to the Court of Appeal at [2008] EWCA Civ 363. The appeals were thereafter heard by the House of Lords ([2008] UKHL 70).