07 July, 2009
The recent case of Patricia Whitehouse v A H Loi Lee  EWCA Civ 375 has provided practitioners, landlords and tenants alike with a clearer understanding of what must be taken into consideration by a landlord when a claim for possession of a property is brought by a landlord.
Given that such a decision will not be taken lightly, with a landlord wanting the possession of property which they own and a tenant wishing to remain in their home, the verdict of the Court of Appeal in this case may be beneficial for all parties to help understand how these competing interests will be assessed.
The tenant (W) and her husband had been the tenants of a property owned by Dr Lee (L). W had lived in the flat for over 45 years and had a protected tenancy. L wished to sell the property with vacant possession and therefore offered W an alternative flat to live in. This new flat was said to have considerably more modern amenities and was less than a mile away from W's current residence. At the trial, the judge had considered that this new option would have been acceptable for most people to live in. Nevertheless, W rejected the offer and refused to leave the flat in question. Consequently, L sought a possession order for the flat.
At trial, L was granted an order for possession. The judge based this on the view that pursuant to the Rent Act 1977, suitable alternative accommodation had been made available to W and that in the circumstances it was reasonable to grant the order. In reaching this decision, the judge had considered that the issue of reasonableness had required him to balance the interests of W remaining in the flat against the wishes of L to sell the property. This meant, according to the judge, evaluating the length of time which W had been in the flat, her attachment to and social networks in the local area and her foundation and membership of a neighbourhood association, against the reasonable wishes of L to realise her assets in order to fund her pension.
W appealed the decision on the grounds that the judge had misdirected himself in relation to determining the reasonableness of his decision and had failed to consider the potential consequences of not granting an order upon both W and L.
In granting W's appeal, the Court of Appeal ruled that an appeal court's approach to a challenge of a view of reasonableness was similar to that of a challenge to an exercise of an organisation's discretion, in that a verdict could only be reviewed if there was an error of judgment or was plainly wrong.
For the purposes of W's case, this meant that the judge had to look at the issue from all possible angles, in particular by considering the effect upon the parties if an order was or was not made. Although the judge had been aware of the of the effect upon both W and L if an order had been made and of the effect on W if no order was granted, he had not given consideration to what the outcome would be for L if an order was not made. This meant, according to the Court of Appeal, that the judge had not properly taken into account L's concession that she did not need to sell the W's flat in order to enjoy a sufficient pension fund and that there was no suggestion that L would suffer any significant hardship if she was not able to sell the flat with vacant possession. This pointed to the conclusion that it was not reasonable to grant an order for possession in these circumstances and, therefore, the judge had reached a decision that was obviously wrong.
This case has highlighted that there is truth in the saying that there are two sides to every story. For a possession order to be deemed as reasonable, it appears that a judge will have to analyse the facts and circumstances in considerable detail and from all possible perspectives to come to a conclusion on the consequences of a ruling to grant, or not to grant, the order.
To ensure that a judge is able to reach such a decision, and thus potentially save additional time and money being spent on appeal hearings, landlords may wish to ensure that all evidence submitted to court is as comprehensive as possible and addresses what the ramifications would be for them in each different scenario.