Rakusen v Jepsen [2023] UKSC 9

Supreme Court, 1 March 2023

The Supreme Court has held that an application for a rent repayment order by a tenant under the Housing and Planning Act 2016 can only be made against an immediate landlord of the applicant and not against a superior landlord.

The freeholder of a property granted a lease of a flat to Mr Rakusen. Mr Rakusen and his partner lived in the flat, but then decided to move and in 2016 let the flat to Kensington Property Investment Group Ltd (KPIG) for 36 months. KPIG entered into separate written licence agreements with Mr Jepson and two others (the respondents), each of whom was granted the right to occupy one room in the flat. However, by 2018, there were four people living in the flat, meaning it was now a house in multiple occupation (HMO) and was required to be licensed. However, no license was obtained by KPIG from the local housing authority.

In May 2019, KPIG’s tenancy ended and the respondents applied to the First-tier Tribunal (Property Chamber) for a Rent Repayment Order (RRO) against Mr Rakusen and his partner on the basis that he was in control of an unlicensed HMO. However, Mr Rakusen countered this by arguing that an RRO could only be made against the immediate landlord of the person who had made the application (and he was not the immediate landlord). The First Tier Tribunal struck out the application against his partner on the basis that there was no reasonable prospect of it succeeding. However, it refused to strike out the application against Mr Rakusen, as it considered that it was bound by the case, Goldsbrough v CA Property Management Ltd [2019] UKUT 311, which had determined that an application for an RRO could be made against a superior landlord despite the parties never having been in the either a landlord/tenant or licensor/licensee relationship.

Mr Rakusen appealed. The Upper Tribunal (Lands Chamber) dismissed the appeal, finding that the First Tier Tribunal had jurisdiction to make an RRO against any landlord who had committed an offence, including a superior landlord. There was no additional requirement that the landlord be the immediate landlord of the tenant.

The Court of Appeal, in allowing the appeal, held that, as a matter of statutory interpretation, an RRO can only be made against an immediate landlord. It held that the term “landlord” was not defined in the Housing and Planning Act 2016, but that a “landlord” was usually viewed as being the immediate landlord of the tenant. The Court said that “if the intention had been to extend liability to superior landlords, it would have been easy for section 40(2)(a) of the Housing and Planning Act 2016 to say so”.

On a further appeal, the Supreme Court has upheld the Court of Appeal ruling, ruling that the Court of Appeal had been correct in its interpretation that an RRO could only be made against the immediate landlord of the tenant. The Supreme Court said that if parliament had intended to capture superior landlords under RROs, it would have to bring in legislation rather than relying on the courts and a “distorted interpretation of the relevant provisions in the 2016 Act”.

A copy of the judgment is here.

Reekie v Oakwood Court Residents Association Ltd [2023] UKUT 45 (LC)

Upper Tribunal (Lands Chamber), 16 February 2023

The Upper Tribunal (Lands Chamber) has held that a leaseholder, who claimed not to use a communal lift, was liable under the lease for a service charge to pay for its refurbishment.

The appellant (“Mr Reekie”) was the leaseholder of three flats in a converted building. Under the lease, the management company (“Oakwood Court Residents Association”) was entitled to demand service charges from the leaseholders for carrying out any repairs or maintenance of the building.

Oakwood Court Residents Association wanted to refurbish the communal lift which served the upper floors of the building, but Mr Reekie claimed that he did not use the lift and should not have to pay – two of his flats were on the ground floor and were accessible by the original front entrance to the building. The other flat was accessible by a side entrance leading to a communal hallway. Mr Reekie claimed that under the definition of “service charge” in the lease, Oakwood Court Residents Association could only demand a service charge if the leaseholders “have the use” of that part of the building (in this instance, the lift) and in such proportion as to “reflect such use”. As Mr Reekie claimed that he did not use the lift, he therefore believed that he did not have to pay for its maintenance.

The First-tier Tribunal (Property Chamber) held that Mr Reekie was liable, as he was able to use the lift if he chose to do so. Mr Reekie appealed.

The Upper Tribunal (Lands Chamber), in dismissing the appeal, held that the words “have the use” and “reflect such use” had been included in the lease because certain parts of the building, such as a private balcony or access to the flat roof, could only be used by one leaseholder or certain leaseholders and they should therefore pay the costs related to it. However, the lease did not require repair or maintenance costs associated with communal facilities, such as the lift, to be apportioned on a basis which reflected how much an individual used it – this would be very complicated. If, as he claimed, Mr Reekie did not use the lift, he would avoid liability for its maintenance altogether and there would be a shortfall, which the other leaseholders would have to make up. That approach would be a recipe for uncertainty and dispute as, from one year to the next, Oakwood Court Residents Association would not know whether it could rely on a contribution from Mr Reekie towards the cost of any work to the lift. Also, such an approach would necessitate the installation of a surveillance system to see who used the communal areas. The Tribunal held Mr Reekie’s approach was “completely unsustainable” and that he should pay the same proportion as the other leaseholders with flats on the upper floors and access to the lift.

Capsticks comment

We covered a similar case – Anchor Hanover Group v Cox [2023] UKUT 14 (LC) – in last month’s Alert. In this case the Upper Tribunal (Lands Chamber) held that a landlord is entitled to include the costs of lift repairs and maintenance in the service charge.

A copy of the judgment is here.

Westminster City Council v Kazam [2023] 3 WLUK 312

High Court, 9 March 2023

The High Court has held that a judge had been wrong to find that a wife had unequivocally concurred with her husband's act of surrender of their joint tenancy of a social housing property by excluding him from the home.

Westminster City Council had granted a joint secure tenancy to the first defendant (“D1”) and his wife (“W”) in 2005. When their relationship ended in March 2011, D1 left the property and was rehoused in the same building as W. In August 2011, a local authority officer requested that D1 be removed from the rent account in respect of the property he had shared with his wife. In May 2017, W’s grandson (“D2”), who had been living abroad in a refugee camp, moved to the UK and lived with W in her property until she died in 2020. In November 2020, Westminster City Council refused D2's application for succession of the tenancy and, in May 2021, the Council issued a notice to quit on D1 as he was not occupying the property as his primary home. In August 2021, Westminster City Council issued a claim for possession of the property. However, in November 2021, D2 sought a declaration that he had succeeded to the tenancy on the basis that

1. the original tenancy had been surrendered after D1 left the property and W had been regranted a secure tenancy on a sole basis
2. the notice to quit was not valid
3. D2's eviction from the property would be a breach of his rights under article 8 of the European Convention on Human Rights (the right to respect for private and family life).

At the subsequent court hearing, the judge held that

1. D1 had surrendered the tenancy by unequivocally relinquishing possession, moving out and requesting new accommodation from Westminster City Council
2. W had unequivocally agreed with D1's act of surrender by excluding him from the property.

Westminster City Council appealed against the dismissal of its claim for possession of the property.

The High Court, in allowing the appeal, held that the judge had erred in finding that W had unequivocally concurred with D1’s act of surrender of their joint tenancy by excluding him from the property, so that she had a new solo secure tenancy for the property. The judge had correctly looked for evidence that W had agreed to the surrender, but D2 could not provide any. D2's argument that a new tenancy had been created failed as the judge had not made a finding that there was a new tenancy, nor was there any other evidence to support that finding. As a result, W had not concurred with the surrender. Consequently, D2 did not succeed the tenancy and Westminster City Council was entitled to possession of the property.

This is an extempore (oral) judgment, so there is currently no transcript of the case.

Begh v Tower Hamlets LBC [2023] EWHC 433 (KB)

High Court, 24 January 2023

The High Court has refused an application to stay or suspend a possession order, as it would have had to overturn a County Court's decision and repeated a matter that had already been decided on its facts.

In 2010, a tenant (“Mr Begh”) and his wife applied to London Borough of Tower Hamlets for housing. In 2013, his wife and three children moved to Newcastle and were housed by Newcastle City Council. In 2014, Mr Begh signed a tenancy for a two-bed property in Tower Hamlets and listed his wife and three children as occupants, despite the fact that they now lived in Newcastle. Consequently, London Borough of Tower Hamlets, who did not know that his wife and children were now housed in Newcastle, served a notice seeking possession on the basis that Mr Begh had obtained his tenancy by deception after failing to disclose that his family were no longer living with him. The Council argued that Mr Begh should have notified it of his family’s move, as such changes may have affected the priority awarded to his housing application. Mr Begh defended the possession claim.

The County Court held that it was reasonable to grant possession and to make an outright possession order. The order required Mr Begh to give possession within 14 days and he did not appeal it. The matter was then transferred to the High Court for enforcement by writ of possession. Mr Begh applied for the stay or suspension of the possession order, submitting that he thought that his wife and children would return to London in 2015 and that he did not know about the family being housed in council property in Newcastle.

The High Court, in refusing the application, held that to grant a stay or suspension of a possession order on the basis that Mr Begh had not deceived London Borough of Tower Hamlets would effectively overturn the County Court's decision, where no appeal had been made and Mr Begh’s assertion that he had not acted deceitfully would remain untested. This would be inappropriate. Had Mr Begh wanted to challenge the County Court's decision, he should have appealed against it. The High Court concluded that such an appeal would be difficult, as Mr Begh would be appealing on the facts. There was therefore no basis for suspending or staying the possession order.

A copy of the judgment is not currently publicly available, but is available on request.