Crown Estate Commissioners v The Peabody Trust & Anor

Section 38(5)(d) of the Housing Act 1988 includes interests belonging to the Crown, including interests managed by the Crown Estate Commissioners. On a transfer of an existing regulated tenancy from the Commissioners to a housing association, section 38 applies and the tenancy becomes an assured tenancy. The court declined to adopt a purposive construction excluding Crown Estate property. Parliamentary materials did not justify departing from the statutory wording. Nor did the Human Rights Act 1998 require a different interpretation: any difference in housing protection fell within Parliament’s margin of appreciation. Section 35 did not create a conflict because Chapter V of the 1988 Act did not generally bind the Crown.

The Crown Estate Commissioners transferred reversionary interests in residential tenancies to the Governors of the Peabody Trust, a housing association. The tenants had previously been regulated tenants under the Rent Act 1977 and were represented by the second defendant.

The parties agreed that the tenants ceased to be regulated tenants on the transfer. The dispute was whether they became secure and housing association tenants, as the claimant and representative defendant contended, or assured tenants under Part I of the Housing Act 1988, as Peabody contended. The central issue was the proper construction of section 38(5)(d), particularly whether “public body” included Crown interests managed by the Crown Estate Commissioners.

1. The declaration was granted. The tenants became assured tenants when the Crown Estate Commissioners transferred their interests to the Peabody Trust.
2. On the literal construction of section 38(5)(d) of the Housing Act 1988, an interest managed by the Crown Estate Commissioners remains an interest belonging to Her Majesty in right of the Crown. It therefore falls within “public body”. Sections 38(1) and 38(3) consequently apply when the interest ceases to be held by a public body.
3. Section 38(3) prevents the transferred tenancy from being a protected tenancy, housing association tenancy or secure tenancy, subject to the statutory conditions. It also disapplies paragraph 1 of Schedule 1. The tenancy therefore falls to be assessed under section 1 and becomes an assured tenancy.
4. The court rejected the argument that the statutory purpose of preserving existing tenants’ rights required a different construction. Before the 1988 Act, a change of landlord could alter the tenant’s statutory protection, because the tenant was entitled only to the form of protection available from the new landlord.
5. The parliamentary statements considered under Pepper v Hart [1993] AC 593 showed an intention generally to preserve existing tenancies, but did not establish the more specific construction advanced by the claimant.
6. Section 35 did not conflict with section 38. Section 44 expressly applied Chapters I to IV to the Crown but said nothing about Chapter V. Chapter V therefore applied to the Crown only to the limited extent expressly provided, including section 38(5)(d).
7. The arguments under section 3 of the Human Rights Act 1998, Articles 8 and 14 and Article 1 of Protocol 1 failed. The legislative scheme pursued legitimate housing-policy objectives and any difference in treatment fell within Parliament’s wide margin of appreciation.
8. The drafting difficulty in section 38(3)(a), including its omission of the words “or statutory tenancy”, did not justify reading regulated tenancies out of section 38(1) or treating section 38(5)(d) as excluding Crown Estate interests.