Local authorities, notices to quit and undue influence

The Court of Appeal recently examined whether a notice to quit was procured by the undue influence of a housing officer employed by a council. Jonathan Manning and Amy Knight explain the judgment.

In (1) Janet Beech and (2) Michael Beech v Birmingham City Council [2014] EWCA Civ 830, June 18, 2014 the Court of Appeal held that the relationship between a local authority, by its housing officer, and its tenant is not inherently a relationship of trust and confidence so as to give rise to a presumption of undue influence, nor did any such relationship arise on the facts of the case.

Rather, there was a contractual and property relationship under which each party had separate and distinct rights and obligations in relation to the other. In that context, the signing of a notice to quit by a former secure tenant, who was no longer able to reside in the property was not an unusual or unexpected transaction which, under the doctrine of presumed undue influence, called for an explanation.

The respondent local authority sought possession of a three-bedroom property which had been let under a secure tenancy to its tenant (W). W had originally been a joint tenant of the property with her husband, but had succeeded to the tenancy on his death in 1994 (Housing Act 1985, s.88(1)(b)).

In 2007, W’s daughter (H) and her husband (B) had come to live at the property with W. H had helped care for W. H repeatedly sought to have her name added as a joint tenant of the property with W. The authority refused this request on the basis that such a request would only be considered if made by the tenant. W never requested that H be should made a joint tenant.

In December 2009, W went to live into a care home for a trial period. In January 2010, H wrote to the authority to the effect that W would not be returning to the property but would be staying permanently in the care home. The letter asked the authority to grant H a new tenancy of the property under its policy in relation to lodgers left in occupation.

In February 2010, the authority’s housing officer (P) interviewed W in the care home, in the presence of the manager, to ascertain whether the information received from H was correct. P explained that W could not keep the tenancy because she was no longer able to occupy it as her only or principal home, that if she signed the notice to quit, H would no longer be able to live at the property, but that she was under no obligation to sign the notice, and could discuss it with her daughters if she wanted to, but the authority would not allow her to retain the tenancy. W signed the notice to quit. On its expiration, H applied for a tenancy of the property.

W died in June 2010. H could not succeed to the tenancy because W was herself a statutory successor, and was neither a secure tenant nor living with H when she died.

In July 2010, a senior officer panel decided that H should not be granted a tenancy, primarily because the property had three bedrooms and H and B only needed only one, but that they should be given sufficient points to bid for alternative one bedroom accommodation. H and B remained at the property and made no bids for alternative accommodation. In August 2011, the authority issued possession proceedings.

High Court

H and B conceded that W had capacity to sign the notice to quit, but argued that she nonetheless had “capacity issues” which assisted their arguments that the notice had been obtained by undue influence and that it had been unreasonable of the authority to rely on W’s notice to quit. The High Court granted a possession order: W’s notice to quit had terminated her tenancy, and it had not been obtained by undue influence or unconscionable behaviour. The authority’s decision not to grant H a new tenancy was lawful, and the eviction of H and B was not disproportionate.

Court of Appeal

H and B appealed, contending that:

1. W’s notice to quit must be presumed to have been procured by undue influence, because the relationship between her and P was one of trust and confidence in that P was a professional housing officer and W was a frail old lady with short term memory issues; and
2. They had a public law defence to the proceedings in that the authority’s decision to rely on the notice to quit was irrational, as it had been obtained without P having undertaken a formal assessment of W’s capacity under the Mental Capacity Act 2005 and its Code of Practice.

Dismissing the appeal, the Court of Appeal held that the relationship between P and W at the date of the notice was that of landlord’s agent and tenant under a contractual periodic tenancy, which was not inherently a relationship of trust and confidence in an equitable sense or indeed any sense, but was a contractual and property relationship under which each party had separate and distinct rights and obligations. Nor was there anything in the history of the personal relationship between P and W to have made that relationship one of trust and confidence.

Nor was W’s giving the notice an unusual or unexpected transaction or one that objectively called for an explanation or was capable of giving rise to a presumption of undue influence. The authority was guardian of the stock of social housing and was concerned to make the best use of that stock in the public interest. W’s tenancy had ceased to be secure because it had ceased to be her home. H was not entitled to succeed to the tenancy and nor could it be assigned to her. The property was too large for the needs of H and B. It was perfectly predictable that the authority would seek to bring the tenancy to an end and it was entitled to do so. As for W’s interests, she was never going to return to the property and the notice would bring to an end her continuing liability under the tenancy. Any decision by W not to give notice would have resulted in no more than a week’s delay until the authority served its own notice, which it inevitably would have done.

The public law defence was quite hopeless. It was never formally part of the appellants’ pleaded defence, no evidence was led on it, and no opportunity was given to the authority at the trial to call oral evidence on the point. It was obvious as a matter of basic fairness that the provisions relied upon by H and B should have been put to the authority’s witnesses in cross-examination and that the authority itself should have had the opportunity to call its own written and oral evidence on the relevance and application of the Code.

In any event, a public law defence based on Wednesbury unreasonableness would be bound to fail. W had the mental capacity to give the notice. There was no evidential basis for any suggestion that a formal assessment at the time of the notice would have disclosed that W did not have capacity. The Judge found that there was no unconscionable conduct or use of power by P in the sense of his trying to take advantage of W and that it was proportionate for the authority to rely on the notice and to seek possession of the property in which H and B were over-housed for their requirements. It was proportionate of the authority to act in that way as guardian of the housing stock and acting in the public interest. The notion that in such circumstances it was unreasonable to rely on the notice and to take possession proceedings, with the consequence that H and B were entitled to remain in the property, because a formal assessment was not carried out on W’s mental capacity when she brought her tenancy to an end, was plainly untenable.

Jonathan Manning and Amy Knight of Arden Chambers appeared on behalf of Birmingham City Council. Jonathan can be reached by This email address is being protected from spambots. You need JavaScript enabled to view it., while Amy can be contacted by This email address is being protected from spambots. You need JavaScript enabled to view it..