Fully mutual housing co-operatives boosted by High Court ruling on possession proceedings

The High Court has clarified the status of fully mutual housing cooperatives after granting Southward Housing Co-operative an order for possession.

The case of Southward Housing Co-operative Limited v (1) Miss Vicky Walker (2) Mr David Hay and Secretary of State for Communities and Local Government [2015] EWHC 1615 (Ch) concerned the nature and effect of tenancies granted by fully mutual housing co-operatives and in particular how they can lawfully be brought to an end and a possession order obtained.

The defendants, Vicky Walker and David Hay, had been members of Southward Housing Co-operative since 2011 and tenants of a property let by it. They had fallen into arrears.

Under the Housing Acts of 1985 and 1988, tenancies of fully mutual housing co-operatives such as Southward cannot be secure or assured, so the Co-op issued a notice to quit and sought possession.

The proceedings were transferred from Wandsworth County Court to the Chancery Division of the High Court.

Mr Justice Hildyard noted that there were issues of both private and public law involved and, given the number of tenancies potentially affected, these were "of general importance”.

The High Court judge considered whether the Supreme Court decision in Mexfield Housing Co-operative Ltd v Berrisford [2012] 1 AC 955 was applicable in this case.

He concluded that the case was distinguishable from the Mexfield case “so that (a) the tenancy is a periodic tenancy which the claimant had every right to recover at the end of the term, (b) there is no question of the notice to quit being a forfeiture, and (c) accordingly there is no recourse to relief from forfeiture”.

When in came to the public law issues, the judge said that the defendants’ contentions were that if the agreement was not transmogrified into a long lease (and the judge held that it was not), and if the tenancy provided for by the agreement was exempted from secure and assured status (which they also disputed), that exemption was discriminatory; and that even if not discriminatory, it would be unreasonable and disproportionate, and a breach of the defendants' rights under articles 8 and 14 of the ECHR and/or article 1 of the First Protocol ("A1P1"), for the claimant to seek and the court to make a possession order against them.

However, the judge accepted the submission of the claimant (Southward) and the Secretary of State for Communities and Local Government that the claimant should not be considered to exercising functions of a public nature for the purposes of s. 6(3)(b) of the Human Rights Act 1998.

In any event, Mr Justice Hildyard concluded that the possession proceedings were proportionate and did not fall foul of the discrimination provisions of Article 14 of the European Convention on Human Rights.

The judge therefore rejected Walker and Hay’s defences and made an order for possession.

Andrew Lane of Cornerstone Barristers said: “This judgment is good news for mutual housing co-operatives, who often find themselves vulnerable to these types of claims. It also clarifies wider issues within the public law arena. In particular, it rules on the non-public-authority status of such co-ops and the impact that has in dealing with the right to respect for private and family life, which are defences frequently faced in the courts by public authorities.”

Lane added: “This case is an example of a failed macro-challenge, based on the European Convention on Human Rights, to schemes of occupation. By ruling against the tenants, the judgment has put case-by-case reliance on such rights into proper context, as also happened in the Supreme Court case of Sims v Dacorum Borough Council [2014] UKSC 63.”