Francis v London Borough of Southwark

A tenant’s right to buy under Housing Act 1985, section 118 does not itself impose a duty on the landlord. The duty to make the grant arises under section 138 only after the right has been established, and the Act supplies an injunction to enforce that duty.

Section 124 requires the landlord to state its opinion admitting or denying the right. It does not impose a strict duty to decide entitlement correctly, nor a private duty of reasonable care. A denial leaves the tenant’s substantive right unaffected and may be challenged by a county court declaration under section 181. Parliament did not intend a damages action for a refusal under sections 118 or 124, even if the statutory remedy proves incomplete on particular facts.

Mr Francis was a secure tenant of a council flat. In 2003 he applied to exercise the right to buy. The Council denied the application on the basis that he had breached a possession order.

In later county court proceedings, HHJ Behar declared that he had been a secure tenant from April 2000 until July 2004. By then the original flat had been demolished. In possession proceedings concerning a later tenancy, Mr Francis counterclaimed for damages, alleging that the earlier refusal had breached statutory duties under the Housing Act 1985.

HHJ Gibson dismissed the damages claim and made a possession order. The appeal concerned whether sections 118 or 124 imposed a privately actionable duty, and whether damages were available for the refusal of the right to buy.

1. Appeal dismissed unanimously. Carnwath LJ held, with whom Lloyd LJ and Toulson LJ agreed, that the statutory scheme did not give Mr Francis a damages claim for the Council’s refusal of his right-to-buy application.

2. Section 118 of the Housing Act 1985 states the secure tenant’s right to buy. It does not impose an express or implied duty on the landlord. The operative duty to make a grant is in section 138, once the right has been established. Section 138(3) provides enforcement by injunction, and the Act also contains express remedies for particular delay.

3. Section 124(1) imposes a qualified duty. The landlord must serve a notice stating whether, in its opinion, the tenant has the right and, if denying it, its reasons. It is not a strict obligation to reach the legally correct answer and does not impose a duty to exercise reasonable care in deciding whether to admit the claim. A landlord may properly act cautiously where it has grounds to doubt entitlement.

4. A refusal under section 124 does not alter the tenant’s substantive entitlement. If the landlord does not admit the right, the tenant must establish it in the county court under section 181. Section 125(1), which refers to a right established by admission or otherwise, confirms that position. The reasoning in Hanoman v LB Southwark [2004] EWHC 2039 (Ch) was applied on that point.

5. The unqualified duty to disclose known structural defects in section 125(4A) was materially different. The damages remedy accepted in Rushton v Worcester City Council [2002] HLR 9 therefore did not assist. Even if a declaration under section 181 did not fully compensate a tenant after demolition of the property, that did not justify implying a damages remedy which Parliament had not created. The claim was dismissed.

• Court of Appeal (Civil Division) Dismissed Mr Francis’s appeal from the Lambeth County Court and upheld the dismissal of his damages claim.
• Lambeth County Court (HHJ Gibson) On 12 January 2010, dismissed the claim for damages for alleged breach of statutory duty arising from the refusal of the right-to-buy application, and made a possession order.
• Lambeth County Court (HHJ Behar) In earlier proceedings, allowed an appeal from DJ Wilding and declared that Mr Francis had been a secure tenant of the original property from April 2000 until July 2004.