Zaman v Portsmouth City Council

A local authority operating a housing assistance scheme may make payment conditional on completion of a specified form where that requirement is consistent with the governing policy and forms part of the contractual arrangements. The court must distinguish the statutory power to operate the scheme from the contractual rights created when assistance is offered and accepted. An appellate court should not overturn factual findings unless the trial judge was plainly wrong. A defectively backdated charge may amount to a material alteration, but the court will not grant unclaimed rectification or declaratory relief. Where the parties intended a loan to be secured on property, an equitable charge may arise even if the form of legal security is defective.

Dr Munir Zaman appealed against the dismissal of his County Court claim concerning grant and loan assistance provided by Portsmouth City Council for building works at his property. The principal dispute was whether completion of a form of authority was a condition precedent to payment of the outstanding balance. Other issues concerned alleged breach arising from the Council’s withdrawal from supervision of the works, the validity of a backdated legal charge securing the loan, and the existence of an equitable charge.

The appeal was from the judgment of District Judge Ball, exercising the jurisdiction of a Circuit Judge, dated 3 November 2017.

1. Appeal dismissed. The trial judge was entitled to find that completion of a form of authority was required before payment. Appellate courts must be cautious before interfering with factual findings. The principles in McGraddie v McGraddie [2013] UKSC 58, Henderson v Foxworth Investments Ltd [2014] UKSC 41 and Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 applied.
2. The relevant scheme was established under the Regulatory Reform (Housing Assistance)(England and Wales) Order 2002, not the earlier statutory scheme. The Council had to act in accordance with its policy, but the policy did not need to state every contractual term. A contractual requirement for a form of authority was consistent with the policy, which contemplated such a form for payment and permitted payment to the applicant in appropriate cases.
3. The letter approving assistance, together with the parties’ subsequent conduct, supported the conclusion that the form was a contractual precondition to payment. The claim was properly treated as one for breach of contract. Recasting it as a claim under the Order, restitution or public law could not avoid the factual finding that the form was required.
4. The claim based on the Council’s withdrawal from supervising the works failed. It was unpleaded and the evidence indicated that the parties had varied their arrangements so that Dr Zaman managed the works.
5. The legal charge had been materially altered by being backdated, since the date affected when interest became payable. The court made no order because rectification, removal of the charge or a declaration had not been sought. The parties’ common intention nevertheless established that any loan was to be secured on the property, capable of supporting an equitable charge.

• High Court (Queen’s Bench Division): appeal from the judgment of District Judge Ball, exercising the jurisdiction of a Circuit Judge, at Portsmouth County Court dated 3 November 2017. Appeal dismissed.