CLARION HOUSING ASSOCIATION LIMITED v LOUISE MARY CARTER (as personal representative of Agnes Monica Carter (deceased) and personally)

An occupying family member who is not entitled to statutory succession does not acquire an assured tenancy in equity merely because the tenancy vests in the Public Trustee during administration of an intestate estate. However, pre-existing contractual succession provisions may be enforceable in equity by a qualifying third party under the trust of a promise exception to privity of contract.

Contractual time conditions must be construed according to their wording. A request to succeed to a tenancy may satisfy a requirement to seek vesting under a will or intestacy, without an application for letters of administration. A registered provider exercising a public function must follow its succession policy and consider relevant contractual rights. Failure to do so may render possession proceedings unlawful where proper compliance would probably have produced a different outcome.

Clarion Housing Association appealed against the dismissal by the King’s Lynn County Court of its possession claim concerning a property occupied by Louise Carter after the death of her mother, the former assured tenant.

The appeal concerned statutory and equitable succession, contractual succession provisions, service of a notice to quit on the Public Trustee, mandatory ground 7 in Part 1 of Schedule 2 to the Housing Act 1988, Clarion’s succession policy, and article 8 of the ECHR. The central issues were whether Ms Carter had become an assured tenant in equity, whether she could enforce the contractual succession provisions, and whether Clarion’s possession claim was unlawful because it had failed to follow its policy.

1. Equitable tenancy. The appeal court rejected the finding that Ms Carter became an assured tenant in equity immediately on her mother’s death. Section 9 of the Administration of Estates Act 1925 vested the estate in the Public Trustee, but the general rule remained that a person entitled on intestacy did not acquire an immediate equitable interest in estate property. The statutory amendments introducing section 17(1A) of the Housing Act 1988 did not retrospectively create that result.

2. Trust of a promise. Ms Carter could nevertheless enforce the contractual succession provisions. The terms were intended to benefit a defined class of family members, not the deceased tenant personally. The benefit was not revocable outside the contractual scheme, the beneficiaries and terms were sufficiently certain, and the benefit constituted a chose in action. The equitable exception to privity of contract therefore applied, notwithstanding that the tenancy pre-dated the Contracts (Rights of Third Parties) Act 1999.

3. Contractual conditions. The requirement that a qualifying successor seek to have the tenancy vested under the will or intestacy was not confined to applying for probate or letters of administration. Ms Carter’s application for succession within six months satisfied the condition. Clarion could not withdraw its concession that the relevant entitlement condition was met.

4. Notice to quit. Applying [2021] 1 WLR 289, a copy notice had to be served on the Public Trustee before expiry of the operative notice. The evidence made it highly likely that this had occurred. The notice therefore was not invalid for want of timely service.

5. Public law defence. Clarion’s policy treated contractual succession rights as equivalent to statutory rights. Clarion had failed to follow its policy, ignored relevant contractual rights, and failed properly to consider the application. Applying the highly likely test in [2020] 1 WLR 584, proper compliance would probably have produced a different outcome. The notice to quit and ground 7 proceedings were consequently unlawful because of illegality and procedural unfairness.

6. The article 8 issue required no determination because the appeal failed on other grounds. The judge below had given no reasoning for his article 8 conclusion, and the court indicated that such a defence would be wholly exceptional on the facts.

The appeal was dismissed. A declaration was made that Ms Carter was entitled to rely against Clarion on the contractual succession provisions.

• High Court (Queen’s Bench Division): The appeal from the King’s Lynn County Court was dismissed.
• King’s Lynn County Court: His Honour Deputy Circuit Judge Holt dismissed Clarion’s possession claim on 11 March 2020.