![Case Study – Proportionality and second succession claims to property (Holley v London Borough of Hillingdon)]()
by Hardwick Legal | Nov 14, 2016 | Purpose Built (LexisNexis)
How will the courts approach a social housing landlord’s discretion to allocate accommodation on second successions under Part 6 of the Housing Act 1996 (HA 1996)? Legal analysis on proportionality and second succession claims to property from the Holley and another v London Borough of Hillingdon [2016] EWCA Civ 1052) case.
Toby Vanhegan and Riccardo Calzavara of Arden Chambers, say that in a proportionality assessment under article 8 of the European Convention on Human Rights (ECHR), a long period of residence is of little consequence.
Lexis®PSL subscribers can enjoy expert guidance by accessing some of the links below. If you are not a subscriber, you can take a free Lexis®PSL Property trial here.
What was the background to Holley and another v London Borough of Hillingdon case?
This was a possession claim. The appellant was, together with his brother, the occupier of 46 Westwood Close, London HA4 7RE (the property) which was a three-bedroom house. His grandmother had been granted a secure tenancy of the property and, on her
death, the appellant’s grandmother’s husband succeeded to it. When the husband died, the appellant was unable to succeed because he would have been a second successor. The appellant applied for a discretionary tenancy but this was refused by
the respondents because he was not old enough to qualify under their policy.
The respondents sought possession. The appellant defended the claim on the basis that the respondents’ second succession policy was discriminatory on the grounds of age and had, in any event, not been properly applied to his case. He also relied
upon ECHR, art 8. The case was listed for a summary determination. At that hearing, HHJ Karp sitting at the county court at Willesden, granted a possession order.
What issues were before the Court of Appeal?
The appellant appealed on two grounds. First, the judge was wrong not to have taken account of his length of occupation of the property when deciding his ECHR, art 8 defence. Second, the respondents’ policy on second successions was unduly rigid
because of the age requirement, and this unlawfully fettered their discretion to allocate accommodation under HA 1996, Pt 6.
The Court of Appeal granted permission on both grounds. Before the appeal was heard, the respondents served a witness statement which, for the first time, exhibited a copy of their allocation scheme at the relevant time. The county court had had to make
do with a practice note about the policy in relation to second successions. The disclosure of the scheme revealed that it contained a form of exceptionality provision which gave the respondents the discretion to allocate accommodation in certain circumstances.
The witness statement said that, even applying this exceptionality provision, the respondents would not have granted the appellant a discretionary tenancy.
What did the court decide?
In relation to the ECHR, art 8 ground, the court held that Thurrock BC v West [2012] EWCA Civ 1435, [2012] All ER (D) 99 (Nov) did not decide that length of residence could never be part of an ECHR, art 8 proportionality assessment, even in second succession cases. It was held that the true analysis was that the occupier must
first demonstrate a minimum length of residence in order to show that the property is a home so that ECHR, art 8(1) is engaged.
Second, the length of residence will not on its own be sufficient to found an ECHR, art 8(2) proportionality defence in the second succession context because, if it would, then it is hard to see how the English statutory prohibition of second succession
could be compatible with the ECHR, as has previously been held.
Third, length of residence may form part of an overall proportionality assessment in the sense that all the circumstances of the case need to be considered.
Fourth, length of residence is unlikely to be a weighty factor in second succession cases because Parliament has chosen to exclude second successors whatever the length of their occupation. Accordingly, a long period of residence is of little consequence.
Were it not for the fact that the judge’s decision, albeit not properly reasoned, was plainly right on the merits, the court would have allowed the appeal on this ground. The court then carried out the ECHR, art 8 analysis that the judge should
have done, based on the information that was available at that hearing three years ago, and dismissed the appeal on this ground.
On the second ground, the court held that the appellant’s case came nowhere near the degree of exceptionality that gave him a real, rather than a fanciful, prospect of success under a residual discretion, however widely framed, as to an allocation.
However, the court said two further things about the allocation issue. First, it held that R (Ahmad) v Newham LBC [2009] UKHL 14 did not do away with any requirement for a residual discretion to be included within an allocation scheme. That case was a challenge based on irrationality rather than an unlawful fettering of discretion and, anyway,
Newham’s allocation scheme plainly contained provision for the exercise of a residual discretion. Second, the court left open the issue of whether the respondents’ allocation scheme did in fact contain a provision which gave it a full
residual discretion. Accordingly, the court dismissed the appeal on this ground too.
What should housing lawyers take from this case?
The appellant was refused permission to appeal to the Supreme Court by the Court of Appeal, but is now seeking funding to ask the Supreme Court for permission. This is on the basis that the Court of Appeal’s judgment has effectively prescribed little
weight to length of residence whatever the facts of any future case. Weight must be a matter of fact and degree for the judge to decide on the circumstances of each case. Short residence would ordinarily mean little weight, whereas long residence
should mean greater weight. It is wrong to predetermine weight in the fact sensitive exercise of a proportionality decision under ECHR, art 8.
The court’s decision to decide the appellant’s ECHR, art 8 defence on the basis of the facts as they were three years previously has also deprived him of the opportunity of having his current circumstances being considered in relation to the
issue of proportionality. There appears to be no power for the county court to do anything now to halt the eviction process, regardless of the fact that the appellant’s mental health has declined sharply and that his ECHR, art 8 defence is now
stronger than before. This would appear to amount to a procedural breach of ECHR, art 8.
There are probably two lessons to be learnt from the case. First, length of residence is a relevant circumstance to be taken into account when deciding the issue of proportionality under ECHR, art 8, but is likely to carry little weight in second succession
cases. Second, local housing authorities should probably have a provision in their allocation schemes which give them a full residual discretion to allocate accommodation in exceptional circumstances. This provision should be considered in second
succession cases.
Interviewed by Nicola Laver. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.
Source: LexisNexis Purpose Built
Case Study - Proportionality and second succession claims to property (Holley v London Borough of Hillingdon)
![Case Study – Proportionality and second succession claims to property (Holley v London Borough of Hillingdon)]()
by Hardwick Legal | Nov 11, 2016 | Purpose Built (LexisNexis)
When must a property seller return the contractual deposit when the buyer fails to complete? Kate McCall, partner at Shoosmiths, says a recent ruling clarifies how the courts will approach a buyer’s application for the return of a deposit where
it failed to complete—and only in exceptional circumstances will the deposit be returned.
Lexis®PSL subscribers can enjoy expert guidance by accessing some of the links below. If you are not a subscriber, you can take a free Lexis®PSL Property trial here.
What are the implications of this case for lawyers?
The case does not create new law, but serves as a useful reminder of how the courts will approach an application by a buyer for the return of a deposit, in circumstances where the buyer has failed to complete a property acquisition.
The case reiterates that a subsequent price rise and/or the fact that the seller will receive a financial windfall, will not of itself, justify the return of the buyer’s deposit. Similarly, the fact that the buyer has taken steps to rectify its
breach by attempting to complete and pay any associated costs/interest, will not necessarily sway the court. Fundamentally, deposits serve as a guarantee for performance of the obligation to complete and only in truly exceptional circumstances will
they be returned to a buyer who has failed to honour his side of the bargain.
What was this case about? Why is it significant?
The case concerned the acquisition of a property for £430,000. A 10% deposit had been paid by the buyer. Due to difficulties in obtaining funds from abroad, the buyer failed to complete the acquisition on the completion date. On the expiry of a
notice to complete, the seller rescinded the contract, and retained the deposit, as it was entitled to do under the contract. A day later, the buyer informed the seller that it was ready to complete and offered to pay interest and costs, as well as
the purchase price. The seller maintained that the contract had been rescinded, and later sold the property to a third party at a higher price, as the likelihood of obtaining planning permission had improved.
The buyer made an application to the court under section 49(2) of the Law of Property Act 1925 for return of the deposit, which was rejected. The buyer appealed on the basis that the judge had failed to take into account the economic benefit to the seller of rescinding and the
offer from the buyer to pay costs and interest in order for the original deal to proceed.
Perhaps the most interesting thing about this case is that the buyer actually raised the necessary funds and offered to complete the purchase (and pay any interest and consequential costs incurred by the seller) within a day of learning of the seller’s
decision to rescind. What is more, at that point, the seller had not suffered any material loss as a result of the failure to complete. Nevertheless, the court refused to exercise its discretion in favour of the buyer.
How helpful is the judgment in clarifying the law in this area? Are there any remaining grey areas?
The case law in this area was not particularly unclear. The recent line of authorities had made it clear that the court will typically only order the return of the deposit where special or exceptional circumstances exist that justify overriding the ordinary
contractual position that the seller retains the deposit if the buyer fails to complete. Such cases include:
What the decision is useful for is illustrating, by reference to past case law, what the ‘exceptional’ or ‘special’ circumstances referred to above might be.
The fact that the seller had not suffered any loss as a result of the buyer’s failure to complete will not, of itself, amount to a ground for ordering the return of the deposit. However, the economic impact on the seller is a factor that the court
can take into account. Other relevant considerations include:
- how close the purchaser came to completing
- the alternatives that were proposed to the seller and how advantageous they would be compared with the original contract terms
- whether the seller caused or contributed to the failure to complete and/or otherwise acted in a high-handed way
- a lack of funding owing to matters outside of the buyer’s immediate control will not normally warrant the return of the deposit
How does this case fit in with other developments in this area of law? Do you have any predictions for future developments?
Some might say that the decision is harsh, but I don’t think that it is entirely surprising—the buyer had plenty of chances to get its house in order and failed to do so (the seller had already made two offers to extend the date for completion,
and served a valid notice to complete which had expired). Nevertheless, the decision still feels slightly harsh—particularly when you consider the double whammy windfall (in the form of the retained deposit and the uplift in purchase price)
which the seller obtained as a result.
The case is, at first glance, also at odds with the decision in the Cook v Irvine case (the most recent of the authorities) referred to above. In that case, the court ordered the return of the deposit in circumstances where it was clear that the
seller knew that the buyer would be able to complete in a matter of days but had rescinded the contract anyway to obtain the benefit of rises in the market. However, the reality is that the seller in that case had acted particularly unconscionably
and there were other factors at play that seemingly swayed the trial judge (the buyer in that case had undertaken enhancement works to the property in anticipation of completing the purchase).
Ultimately, as unsatisfactory as this decision may have been from the buyer’s perspective, it at least gives practitioners relative certainty when advising on this area of the law. Had the decision gone the other way, it would have put sellers wishing
to rescind and resell to a third party in a difficult and potentially risky position—potentially stifling onward sales. For now at least, the position is clear—failure to complete will result in the buyer’s deposit being forfeited
in all, but the most exceptional and compelling cases.
Interviewed by Nicola Laver.
The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.
Source: LexisNexis Purpose Built
Retaining deposit when the buyer fails to complete (Solid Rock Investments v Reddy)
![Case Study – Proportionality and second succession claims to property (Holley v London Borough of Hillingdon)]()
by Hardwick Legal | Nov 9, 2016 | Purpose Built (LexisNexis)
Now that the government has stated its preference for a new runway at Heathrow Airport, John Hobson QC, a barrister at Landmark Chambers, discusses the planning procedure that lies ahead.
Lexis®PSL subscribers can enjoy expert guidance by accessing some of the links below. If you are not a subscriber, you can take a free Lexis®PSL Planning trial here.
What are the key aspects of the decision?
The government’s announcement, adopting the recommendation of the Airports’ Commission, is intended to reinforce Heathrow Airport’s role as the major hub airport in the UK. The government hopes that the expansion of Heathrow which the
proposed new runway will enable, will bring forward wide economic benefits—both locally with up to 77,000 new jobs, and nationally amounting to £61bn benefits accruing. It is also claimed that it will benefit the regions by opening new
routes and improving connectivity between London and the regional airports.
Most importantly, while declaring its preference for expansion with a new runway at Heathrow, the government’s announcement explains that the expansion will only be allowed to proceed on the basis of what is described as a ‘world class package
of compensation and mitigation’. The proposed package includes a commitment to noise reduction including a proposal for a six and a half hour ban on scheduled night flights, more stringent night noise restrictions, ‘new legally binding
noise targets’, a timetable of respite for those living under the final flight path, and a pledge to provide over £700m for noise insulation for residential properties.
Additionally, there will be a redesign of the airport’s flight paths, which will be a part of a wider programme of airspace modernisation which is already needed in view of the crowded airspace above the UK.
The most controversial aspects of the government’s intention to proceed with the expansion of Heathrow are likely to be the implications for air quality. The government’s press statement states that further work in this respect has been carried
out, as recommended by the Airport’s Commission, and a new runway at Heathrow is deliverable within air quality limits. However, this is subject to the caveat that this will depend on whether ‘necessary mitigation measures are put in place’.
Moreover, the government has confirmed that meeting air quality legal requirements will be made a condition of planning approval. In so far as the measures to be adopted include offsetting emissions against reductions from other sectors, eg vehicular
traffic, this may prove difficult to achieve.
What is likely to be the proposed procedure for obtaining consent if the Heathrow expansion goes ahead?
The government has stated it proposes to follow the development consent order (DCO) procedure in accordance with the Planning Act 2008.
This procedure was introduced for the approval of nationally significant infrastructure projects (NSIP), including significant airport related development; avoiding the delays such as occurred in relation to Heathrow T5. The DCO, if granted is equivalent
to planning permission. It may also authorise the compulsory purchase of land that is needed for the implementation of the NSIP.
The application for a DCO will be made to the Secretary of State for Transport. However, before submitting the application, Heathrow Airport Ltd will be required to carry out initial consultation, including consultation with local authorities affected
and also the local community.
As part of the process local authorities will be invited to submit a written impact report giving details of the impact of the proposed development on their area.
When the Secretary of State has accepted the application, he must arrange for its examination and decide whether the application should be examined by a single Inspector or by a panel. He should decide the latter if he considers the case to be particularly
complicated. The examining authority (EA) will be responsible for determining its own procedure, but the emphasis will be to avoid delays or the sort of formalities associated with public inquiries.
A preliminary meeting will be arranged at which the EA will indicate the initial assessment of the principal issues. Local authorities and interested parties will be able to make representations as to the procedure to be followed. When hearings are held,
the procedure will be inquisitorial, with the EA conducting the questioning. Cross-examination will only be allowed when the EA considers it necessary for adequate testing of any representation, or to ensure that a party has a fair chance to put their
case.
As mentioned, the emphasis will be to avoid delay. In this regard the examination process will be subject to a strict timetable: requiring its completion within six months of the date of the preliminary hearing. Time for the completion of the examination
can be extended, but only by the Secretary of State and not the EA. The government is reluctant to extend deadlines, and in the case of the Thames Tideway Tunnel DCO, declined to do so.
On the conclusion of the examination the EA will report with a recommendation to the Secretary of State. He will then have three months to decide the application, giving reasons for his decision.
In deciding whether or not to approve the application the Secretary of State must have regard to any NPS relating to the application, and also any local impact report submitted be a local authority. The importance of an NPS in this respect is emphasised
by section 103(4) of the Planning Act 2008, which provides that the application must be determined in accordance with the NPS, except in limited specified circumstances, including where the Secretary of State is satisfied that the adverse
impact of the proposed development outweighs its benefits.
If the Secretary of State decides to approve the DCO he may impose requirements, equivalent to planning conditions, restricting the development. As mentioned below, whether an effective package of mitigating restrictions can be put in place is likely
to be one of the critical aspects of the consideration of the proposed DCO for the new runway.
When the decision is made, it can only be challenged by way of an application for judicial review brought within six weeks of the date of the decision.
Would the government need to publish a national policy statement (NPS)?
Yes, and the government has indicated that it intends to do so, publishing a draft NPS in the New Year.
As the name indicates an NPS sets out national policy for specified descriptions of development. In relation to DCOs they are of particular importance because, as mentioned above, section 104(3) provides that where an NPS has effect the decision must
be made in accordance with the NPS unless one of the limited specified exemptions applies.
An NPS is promulgated by the relevant Secretary of State. It must set out the reasons for the policy, including how it takes account of government policy in relation to the mitigation of, and adaptation to, climate change.
An NPS produced for the expansion of Heathrow as intended will be required to undergo a sustainability assessment and a strategic environmental assessment. It will also be the subject of requirements in relation to publicity and public consultation, consulting
each local authority affected and also the GLA.
Although the Secretary of State is required to lay the proposed NPS before Parliament, it is not subject to parliamentary approval. However the Secretary of State must consider and respond to any resolution of either House that is passed in respect of
the NPS.
A legal challenge to an NPS can only be brought on an application for judicial review within six weeks of the publication of the NPS.
What are the implications for local planning authorities in the area?
Local planning authorities will not have a decision-making role. Under the DCO procedure it is the Secretary of State for Transport, taking into account the recommendation of the examining authority, who will decide whether consent should be granted so
that the scheme can go ahead. Local planning authorities for the area affected, including the GLA, must however be consulted both in relation to the draft NPS and also the proposed DCO. They should also be consulted by the promoting authority, Heathrow
Airport Ltd, as to what should be included in the statement it must prepare indicating how it proposes to consult those living in the vicinity.
Also, as I’ve mentioned above, local authorities whose area is affected should be invited to submit a local impact report, which should be taken into account in reaching a decision on the application.
What happens next?
The next step is likely to be issue of a draft NPS in the New Year followed by a consultation process leading to its adoption. If it is published and survives the legal challenges that have been threatened, it will then form the basis for the application
for the DCO which is required to permit the necessary development of the construction of the new runway.
The critical aspect is likely to be the impact of increased noise and air pollution and whether the government and Heathrow Airport Ltd are able to demonstrate that they can put together, and rely upon, ‘a comprehensive package of mitigation measures’
to overcome such harmful impacts. Details of this package are intended to be included in the draft NPS consultation and are likely to prove a key battleground in the process. If it cannot be demonstrated that an effective and legally binding set of
restrictions cannot be put in place, it is likely to jeopardise the whole project as the government have made it clear that it will be a condition of approval that the air quality legal requirements will be met. It remains to be seen if this can be
achieved.
John Hobson QC’s principal areas of practice are in the fields of planning, environmental, compulsory purchase and highway law, together with a broad range of local government and public law cases. He appears in the High Court, Court of Appeal and Supreme Court, as well as public inquiries throughout the country, representing a wide variety of clients including developers, local and other public authorities.
Interviewed by Kate Beaumont.
The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.
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Source: LexisNexis Purpose Built
Planning ahead for Heathrow expansion - what happens next?
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