Beech & Anor v Birmingham City Council

Presumed undue influence requires proof of both a relationship of trust and confidence concerning the complainant’s affairs and a transaction calling for explanation. A contractual landlord-and-tenant relationship is not inherently such a relationship.

The transaction must be assessed objectively in context. A notice to quit given by a tenant who had permanently moved into residential care was not unusual or unexplained where the tenancy had ceased to be secure and possession was predictably available to the landlord.

A late, unpleaded public-law defence may be rejected where no evidence or fair opportunity to respond was provided. Even assuming the Mental Capacity Act 2005 Code applied, failure to obtain a formal capacity assessment did not make reliance on the notice Wednesbury unreasonable.

The appellants occupied a council property after moving there to care for Mrs Warren, the secure tenant and mother of the first appellant. Mrs Warren later moved permanently into residential care and signed a notice to quit after a council housing officer visited her. The appellants remained in occupation and sought a tenancy from the Council.

Keith J gave judgment for the Council on its possession claim and dismissed the defences and counterclaim. The appeal concerned whether the notice to quit was procured by presumed undue influence and whether the Council acted unlawfully by relying on it without a formal assessment of Mrs Warren’s mental capacity.

1. Appeal dismissed. The Chancellor, with Lord Justice Underhill and Lord Justice Briggs agreeing, dismissed the appeal from Keith J’s possession judgment.
2. Presumed undue influence requires the person alleging it to prove a relationship in which the complainant placed sufficient trust and confidence in the other concerning the management of the complainant’s affairs, together with a transaction calling for explanation. If those elements are established, the evidential burden shifts to the alleged influencer. The Court applied the principles stated in Royal Bank of Scotland Plc v Etridge (No. 2) [2001] UKHL 44 and Allcard v Skinner [1887] 35 Ch D 145.
3. The relationship between a council housing officer and tenant was contractual and property-based. It was not inherently one of trust and confidence. Mrs Warren’s age, physical frailty and possible capacity concerns did not establish the necessary relationship. Nor did the notice to quit call for explanation. She had permanently left the property, the tenancy was no longer secure because the property was no longer her home, and the Council was entitled and predictably likely to seek possession. The appeal on undue influence therefore failed without any need to consider rebuttal.
4. The public-law defence was raised too late. The Mental Capacity Act 2005 and the Code had not been pleaded or properly explored in evidence. The new argument appeared for the first time in written closing submissions, without permission, cross-examination or a fair opportunity for the Council to respond. The judge was entitled to disregard it.
5. In any event, even assuming that the Code and section 42(5) of the Mental Capacity Act 2005 applied, the failure to obtain a formal assessment would not make the Council’s decision Wednesbury unreasonable. Mrs Warren had capacity, there was no evidential basis that a formal assessment would have produced a different conclusion, and reliance on the notice and recovery of an over-sized social-housing property were proportionate in the circumstances. The appellants had no right to succeed to or be assigned the tenancy and were trespassers as against the Council.

• Court of Appeal (Civil Division): On 17 June 2014, dismissed the appeal.
• High Court of Justice, Queen’s Bench Division: Keith J, on 15 March 2013, gave judgment for Birmingham City Council on its possession claim and dismissed the appellants’ defences and counterclaim.