Whitehouse v Lee

Under section 98 of the Rent Act 1977, the availability of suitable alternative accommodation does not make possession automatically reasonable. The court must decide whether it is reasonable to make the order, considering all relevant circumstances and the effect on both parties if the order is made and if it is refused. A landlord’s wish to maximise a property investment is relevant, but it must be assessed against the landlord’s actual need, any hardship caused by refusal, the possibility of a delayed or lesser gain, and the tenant’s loss. Appellate intervention is ordinarily limited to error of principle or a plainly wrong evaluation.

Patricia Whitehouse appealed against a possession order made by His Honour Judge Mitchell in the Central London County Court on 8 July 2008. The order required her and her late husband to leave their long-standing protected tenancy under the Rent Act 1977. The landlord relied on the availability of suitable alternative accommodation under section 98(1)(a), offering a flat approximately one mile away. The judge found that accommodation suitable and considered it reasonable to make the order. Mr Whitehouse died after trial, but Mrs Whitehouse pursued the appeal without amending the grounds. The central issue was whether the judge had applied the correct approach to the statutory question of reasonableness.

The Court of Appeal allowed the appeal, set aside the possession order and dismissed the landlord’s claim for possession. Lord Justice Aikens and Lord Justice Waller agreed with Lord Justice Rimer.

1. Under section 98 of the Rent Act 1977, reasonableness is a question of fact entrusted to the trial judge. The judge must consider all relevant facts, matters and circumstances and form an overall factual judgment.
2. Appellate review is limited. The court may ordinarily interfere only for an error of principle or where the decision is plainly wrong. This approach is akin to review of an exercise of discretion, as explained in Bracknell Forest Borough Council v Green and Another [2009] EWCA Civ 238, Assicurazioni Generali SpA v Arab Insurance Group [2003] 1 WLR 577 and Datec Electronics Holdings Ltd and others v United Parcels Service Ltd [2007] 1 WLR 1325.
3. The statutory question is whether it is reasonable to make the order, not merely whether it is reasonable for the landlord to seek possession. The judge must consider the effect on landlord and tenant both if the order is made and if it is refused. This guidance was supported by Cumming v Danson [1942] 2 All ER 653, Shreeve v Hallam [1950] WN 140, Brown v Davies [1958] 1 QB 117 and Cresswell v Hodgson [1951] 2 KB 92.
4. A landlord’s desire to realise or maximise an investment may be taken into account. Here, however, refusal would cause the siblings no financial hardship. They did not need to sell with vacant possession, could sell subject to the tenancy for a lesser return, and would eventually obtain the opportunity to realise the flat with vacant possession.
5. The tenants’ loss was substantial. Their home, long-established local relationships and social and emotional connection with the neighbourhood could not be replicated by moving one mile away. Once the competing interests were assessed from all the required angles, the conclusion that possession was reasonable was both the product of a misdirection and obviously wrong.
6. The Court of Appeal was sufficiently equipped to perform the evaluation itself and therefore did not remit the issue for retrial.

1. Court of Appeal (Civil Division): Allowed the appeal, set aside the possession order and dismissed the landlord’s claim for possession.
2. Central London County Court: On 8 July 2008, His Honour Judge Mitchell made a possession order after finding suitable alternative accommodation available and concluding that possession was reasonable.