|[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]|
England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Martin v Medina Housing Association Ltd.  EWCA Civ 367 (31 March 2006)
Cite as:  1 All ER 813,  1 WLR 1965,  EWCA Civ 367,  WLR 1965
[New search] [View without highlighting] [Printable RTF version] [Buy ICLR report:  1 WLR 1965] [Help]
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR RECORDER BARRIE
NEWPORT (I.O.W.) COUNTY COURT
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE WILSON
SIR MARTIN NOURSE
| RAYMOND MARTIN
|- and -
|MEDINA HOUSING ASSOCIATION LTD
Smith Bernal WordWave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7421 4040 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr. Jeremy Burns (instructed by Dutton Gregory, Bournemouth) for the Respondent
Crown Copyright ©
Lord Justice Wilson:
1. If (a) a secure tenant of a dwelling-house makes a claim to exercise a right to buy it under Part V of the Housing Act 1985;
(b) the landlord then admits the tenant's right to buy it and notifies to her (or him) the price at which, in its opinion, she is entitled to do so; and
(c) she then notifies the landlord, albeit not in writing, that she does not intend to proceed with the purchase,
does her right to buy it at that price endure for the following twelve years?
I thus distil the question raised in this appeal.
(a) The appellant and his parents began to occupy the property in 1969 under a secure tenancy granted by its then owner, Ryde Borough Council, solely to the appellant's father.
(b) Since then the appellant has occupied the property, together with, until their deaths, his parents.
(c) In 1976 the appellant's parents became joint tenants of the property.
(d) In 1978 the appellant's father died.
(e) In April 1989 the appellant's mother served on Medina Borough Council (which had replaced Ryde Borough Council and to which I will refer as "the local authority") a written notice pursuant to s. 122 of the Act in which she claimed to exercise the right to buy the property. She exercised the power conferred by s. 123 of the Act to require in the notice that the appellant, who fulfilled the criteria set by the section, should share with her the right to buy; and, by virtue of s. 123(3), the result was that the right to buy thus belonged to her and the appellant jointly and that, for the purpose only of Part V of the Act, entitled "THE RIGHT TO BUY", they should be treated as joint tenants.
(f) In order to fund their proposed purchase the appellant and his mother intended to exercise their right under s. 132 of the Act, later repealed, to require the local authority to make a mortgage advance to them. In the light of their subsistence on state benefits, they would have been unable to obtain a commercial mortgage; but, by virtue of s. 133 of the Act, later repealed, they would have been entitled to a mortgage advance from the local authority equal to the entire price payable for the property.
(g) In August 1989 the local authority served on the appellant and his mother two written notices. By the first notice, dated 3 August and served pursuant to s. 124 of the Act, it admitted their right to buy the property. By the second notice, dated 29 August and served pursuant to s. 125 of the Act, it stated that, in its opinion, the price at which they were entitled to buy it was £27,000. It contended that its market value in April 1989 was £54,000 and that, by virtue of their occupation of it for 20 years, the appellant and his mother were entitled to buy it at a discount of 50% from market value. It informed them that, if they wished to exercise their right to a mortgage, they should, in accordance with s. 134(2) of the Act, later repealed, claim to exercise it by written notice served within three months. With the second notice the local authority enclosed a suggested draft conveyance.
(h) The appellant and his mother never claimed to exercise their right to a mortgage, whether within three months or otherwise.
(i) In February 1990 Miss Bradley, an officer of the local authority who administered claims to buy its properties under Part V of the Act, circulated an internal memorandum, signed by her, to three other officers of the local authority, in which she said "Kindly note that the tenant of [the property] no longer wishes to proceed with her purchase". Thereupon one of the recipients of the memorandum wrote to others in the housing department that the claim to buy the property had been "cancelled".
(j) From February 1990 the appellant's mother continued to be the tenant of the property; and rent was paid by her or on her behalf.
(k) In July 1990 the local authority transferred its housing stock, including the freehold interest in the property subject to the tenancy, to the respondent.
(l) In March 2001 the appellant's mother died. So any right to buy pursuant to the notice served in 1989 vested in him alone.
(m) In December 2001 the respondent granted to the appellant an assured shorthold tenancy of the property; but the respondent no longer contends that the grant of this tenancy is relevant to the present issue.
(n) In January 2002 the appellant, by solicitors, indicated to the respondent that he proposed to exercise the right to buy the property for £27,000 pursuant to the notice served in 1989. The respondent thereupon denied that it remained open to him to do so.
(o) In February 2004 the appellant served on the respondent an "initial notice of delay" pursuant to s. 153A(1)(e) of the Act. By his notice he alleged that, by its delay, the respondent was preventing him from exercising his right to buy the property pursuant to the local authority's notice dated 29 August 1989, i.e. at the price of £27,000 identified therein and on the terms of the draft conveyance enclosed therewith. [It should be noted that the appellant and his mother had in any event not elected in 1989 to challenge the identified price of £27,000 by, for example, requiring the district valuer to determine the value of the property.] By his notice the appellant also made clear that he had no aspiration to acquire the property on "rent to mortgage terms"; and the clear implication of his notice, which had no doubt been expressed on his behalf in the prior correspondence and from which since then he has never resiled, was that he had by then made arrangements to fund the entire purchase without any form of assistance from the respondent. By his notice the appellant therefore sought to maintain that all matters relating to the purchase had, at any rate by then, been settled and that it remained only for the respondent to join with him in concluding it.
(p) In March 2004 the respondent served on the appellant a counter notice pursuant to s. 153A(3)(b) of the Act, in which it disputed his right to buy the property.
(q) At the time of the hearing before the recorder the market value of the property was £135,000.
4. (a) The one fact in dispute before the recorder was whether, prior to the circulation in February 1990 of Miss Bradley's memorandum, either the appellant or his mother had notified the local authority that they did not intend to proceed with the purchase; and, if so, by what means.
(b) In this regard the appellant's case was that there had been no such notification. In his written statement he conceded that his mother, who was ill in 1990, had not wanted to proceed there and then with the purchase because she was worried that, if left on her own for any reason, she might find it difficult to service the proposed mortgage. But, particularly in his oral evidence, the appellant stressed that he always intended that at some stage they should proceed with the purchase; that his mother was aware of his intention and would have done nothing to thwart it; that she allowed him to conduct all dealings with the local authority on her behalf; that his dealings with it were by telephone rather than by letter; and that there had been no notification, even oral, by either of them to the local authority that they did not intend to proceed with the purchase.
(c) The respondent's case, by contrast, was that there had been such notification and indeed that it had been in writing. In this regard it relied on the evidence of Miss Bradley to the effect first that she would not have circulated the memorandum in February 1990 in the absence of such notification and second that, in that she was well aware that the withdrawal of a claim to exercise the right to buy should be in writing, she would not have so acted unless and until the notification was in writing. The respondent conceded before the recorder that it still had possession of the local authority's file in relation to the claim made by the appellant and his mother in 1989 and that no such written notification could be located within it; but, from the foot of Miss Bradley's evidence, it argued that there must have been such written notification and that at some stage it must have been mislaid.
(d) The recorder's finding was in accordance with the case of neither party. He found that in February 1990 the appellant or his mother had, on behalf of both of them, communicated to the local authority that they did not intend to proceed with the purchase; but that the communication had been oral, indeed probably by telephone, rather than in writing.
(e) The recorder's reasons for so finding were, first, that Miss Bradley would not have circulated the memorandum unless the appellant or his mother had notified the local authority that they did not intend to proceed with the purchase; second, that such notification would be consistent with the plain fact that they did not proceed with it; third, that such notification would also be consistent with the appellant's written statement about his mother's intentions at the time; and fourth, that, had the communication been in writing, it would be likely to have been placed on the file and to have remained there.
(f) In his Appellant's Notice the appellant contended that this court should set aside the recorder's finding that there had been any such oral communication to the local authority and should determine his arguments of law on the basis that there had been no such communication, whether written or oral. Wisely, however, Mr Garrood on his behalf abandons that contention. Although it is unusual for a court to make a finding of fact for which neither party has contended, the recorder's reasoning seems to me to be entirely convincing; and his finding is impregnable in this court.
"(3) The notice may be withdrawn at any time by notice in writing served on the landlord."
Thus, so the argument runs, only a notice in writing effects withdrawal of a notice of claim.
" Now, it is necessary … to deal first with the primary submission of the appellant that an application can only be withdrawn in writing. It is correct, as he says, that s. 122(3) says that the application may be withdrawn in writing. It does not say the application can only be withdrawn in writing, nor does it say the application must be withdrawn in writing. The judge rejected the appellant's submissions that s. 122(3) provided a sole and exhaustive method of withdrawing of applications. I reject the appellant's submissions in that regard although it is a point that is by no means easy and is not, in my view, clearly established on authorities."
"74. For my part I see no reason why abandonment should not, on the appropriate facts be a unilateral decision by a party not to pursue his right. Once such a decision has been made and communicated, or can be properly inferred, the right has been lost and should not be capable of being revived. If however prejudice to the victim of the delay has to be established, substantial delay may in itself give rise to an inference of prejudice.
76. I am satisfied that this conduct amounts to a clear abandonment of the 1991 claim or alternatively an implied withdrawal of their 1991 notice. I do not consider that on these particular facts it is necessary for the Defendant to prove prejudice as the intention to abandon or withdraw is so clearly evinced. Nevertheless if I am wrong in that conclusion I am equally satisfied that prejudice is clear."
In relation to the broad point Latham LJ, who gave the only substantive judgment upon the appeal to this court, said:
"24…because of the way in which I consider that this appeal should be determined, it would not be helpful to examine the extent to which this decision affects the arguments on abandonment, waiver and estoppel which occupied much of the time before Nelson J.
25. [Counsel for the tenants'] further point that since a notice has by section 122 to be withdrawn in writing, and provision is made expressly for withdrawal elsewhere, the Act must clearly have envisaged that if a claim under section 122 is denied, but not withdrawn in writing, it should remain effective is unattractive. It seems to me to ignore reality. Section 122 (3) is really directed to ensuring that the tenant can bring the procedure to an end at any stage that he wishes, in particular before the landlord has served his notice under section 124….
26. Had I come to a different conclusion as to the effect of the claim determined [in the first set of proceedings in the county court], I would have doubted, therefore, how a notice could have been resurrected more than 12 years after it had been served. The whole emphasis of the Statutory Scheme is that the parties should act promptly."
"138. – (1) Where a secure tenant has claimed to exercise the right to buy and that right has been established, then, as soon as all matters relating to the grant and to the amount to be left outstanding or advanced on the security of the dwelling-house have been agreed or determined, the landlord shall make to the tenant –
(a) if the dwelling-house is a house and the landlord owns the freehold, a grant of the dwelling-house for an estate in fee simple absolute…"
The recorder held that, although the right to buy had been established by the local authority's admission in the notice dated 3 August 1989, the stage had never been reached in 1989 or 1990 at which "all matters relating to the grant and to the amount to be left outstanding or advanced on the security of the dwelling-house [had] been agreed or determined"; and thus that no cause of action had then accrued.
"As regards abandonment [the judge] held – and in my judgment he was clearly right in this – that in order to succeed the trustees had to show either some reliance and change of position amounting to an estoppel (of which there was no suggestion) or what amounted in effect to a contract for mutual release. Quite clearly there was no question of an express contract and what he had, therefore, to look for was whether there was material from which mutual promises could be implied. On the facts, he found himself unable to find any mutual release but, perhaps even more importantly, he held that the Act of 1967 and the regulations provided, as it were, a complete statutory code which regulated exclusively how the statutory contract of sale was to be either completed or discharged and that there was no room for the application of the common law concept of inferred abandonment by mutual consent.
With respect to the judge, I doubt whether this latter conclusion can be right…As he rightly pointed out there is, in the law of contract, no room for a concept of unilateral abandonment. What the court has to look for is…material from which there can be inferred mutual releases or mutual promises not to proceed. In other words…there has to be established, if only by inference, a fresh contract which has the effect of dissolving the relationship originally entered into by the parties and upon which one party still seeks to rely. Now tenants who are entitled to enfranchise under the Act of 1967 are not permitted to contract out of their entitlement, but there is nothing in the Act which prevents them, once their right of enfranchisement has accrued, from releasing contractually the immediate right of enfranchisement which they have acquired by serving a notice under the Act."
Thereupon Oliver L.J. explained the reasons for his agreement with the judge's alternative conclusion that in the facts of the case there was no material from which mutual releases could be inferred.
(a) at 1103B that, in the (unamended) words of s. 138(1) of the Act, the right to buy had been established and all matters relating to the grant and to the amount to be left outstanding or advanced on the security of the property had been agreed;
(b) at 1104H and 1105B that, once such a right had been established and all such matters had been agreed, the tenants had become entitled under s. 138(3) to enforce completion of the sale and had thus acquired an equitable interest in the property; and
(c) at 1105C that therefore on any view the tenants had already exercised their right to buy and so the local authority would not remain entitled to an order for possession.
Sir Martin Nourse:
Lord Justice Ward:
"138. (1) Where a secure tenant has claimed to exercise the right to buy and that right has been established, then, as soon as all matters relating to the grant and to the amount to be left outstanding or advanced on the security of the dwelling-house have been agreed or determined, the landlord shall make to the tenant –
(a) if the dwelling-house is a house and the landlord owns the freehold, a grant of the dwelling-house for an estate in fee simple absolute …
(3) The duty imposed on the landlord by subsection (1) is enforceable by injunction."
"Mrs Martin decided not to proceed with the purchase because she was concerned about the risk of repossession if the mortgage loan could not be afforded."
In the absence of agreement about these matters, the requirements of s. 138(1) were not satisfied and the claimant was not entitled to the relief he sought.