Leeds City Council v Broadley (Rev 1)

For council tax purposes, an agreement granting an initial fixed term and providing that the tenancy then continues periodically may create one contractual term, rather than two successive tenancies. Such a hybrid grant is valid at common law and is not invalidated by the Law of Property Act 1925. The tenant therefore holds a material interest granted for six months or more under the Local Government Finance Act 1992, and remains liable under section 6 while the contractual tenancy continues, including during the later periodic phase and when absent from the dwelling. The statutory periodic tenancy mechanism in section 5 of the Housing Act 1988 does not apply where the original agreement itself provides for continuation.

Leeds City Council sought council tax from Stephen Broadley in respect of dwellings let on assured shorthold tenancies during periods when no tenant was resident. The Valuation Tribunal for England allowed the appeals in part, and Edis J dismissed the Council’s appeal: [2016] EWHC 1839 (Admin).

The Court of Appeal considered whether the agreements created a single tenancy comprising an initial fixed term followed by a contractual periodic term, or separate fixed and statutory periodic tenancies. The central issue was whether the tenant had a material interest granted for six months or more under section 6 of the Local Government Finance Act 1992.

1. Appeal dismissed. McCombe LJ delivered the judgment, with Underhill LJ and Sir Stanley Burnton agreeing.
2. On their natural construction, the agreements created a single contractual grant for an initial fixed period and thereafter from month to month. The periodic phase formed part of the original term. Long-established authority, including Doe d. Chadbourn v Green (1839) 9 A & E 658, R v The Inhabitants of Chawton (1841) 1 QB 247 and Brown v Trumper (1858) 2 Beav. 11, supported that construction.
3. The hybrid tenancy was valid at common law. Sections 1(1) and 205(1)(xxvii) of the Law of Property Act 1925 did not make it void. The statutory description of a term of years absolute included terms liable to determination and terms for less than a year or from year to year. Prudential Assurance Co. ltd. v London Residuary Body & ors. [1992] 2 AC 386, Mexfield Housing Co-operative Ltd. v Berrisford [2011] UKSC 52 and Breams Property & Investment Co. Ltd. v Stroulger [1948] 2 KB 1 supported that conclusion.
4. Section 5(2) of the Housing Act 1988 applies where a fixed-term tenancy has ended and a statutory periodic tenancy arises. It did not apply here because the contractual term itself continued. Macattram v LB Camden [2012] EWHC 1033 (Admin) and Superstrike Ltd. v Rodriguez [2013] 1 WLR 3848 concerned genuinely new periodic tenancies arising by implication or statute and were distinguishable. Trustees of the Berwick Settlement v Shropshire CC (2014) VTE 3245M131738/176C was correctly decided. Addis v Burrows [1948] 1 KB 444 was not authority for treating the periodic phase of a single grant as a newly granted tenancy.
5. The tenant’s interest was therefore a material interest granted for six months or more under section 6(6) of the Local Government Finance Act 1992. The tenant’s council tax liability continued while the contractual tenancy subsisted, including after the fixed phase and during absence from the dwelling.

1. Court of Appeal (Civil Division): dismissed Leeds City Council’s appeal on 6 December 2016: [2016] EWCA Civ 1213.
2. High Court of Justice, Queen’s Bench Division, Administrative Court: Edis J dismissed the Council’s appeal from the Valuation Tribunal for England: [2016] EWHC 1839 (Admin).
3. Valuation Tribunal for England: allowed in part two appeals and allowed a third appeal concerning the Council’s council tax assessments.