These were the words of a district judge concluding his judgment yesterday (3 June 2021) in a sub-letting possession case brought by a housing association. Regrettably such cases are not unusual and this blog has considered sub-letting matters previously.
However, I thought it might be helpful to highlight a few issues that stood out in this case which may assist and inform those dealing with similar cases.
Firstly, significant evidence requires, in most instances, a rebuttal / explanation. For example here, why were there padlocks on the internal room doors? Why did one of the occupants found at the property by the association describe the defendant’s claimed bedroom as a storage room? Why did the electoral roll evidence obtained by way of the credit reference report show multiple people registered there in the last 10 years or so, and often for long periods? Who were they? Why did the defendant’s bank accounts show so many cash payments into her account over the years?
The absence of clear (or any) answers to these matters in the pleaded case or witness evidence is significant. The attempt to “fill the gap” during cross examination may make matters even worse (and did here).
Secondly, sometimes you need to step back and see the bigger picture. A 2nd witness statement by the defendant served less than a week before trial is undoubtedly frustrating and should not have been necessary so late but what is to be served by opposing its submission? That is not to say there will never be a good reason – e.g. it raises new matters you would have wished to investigate – but where it largely says more of the same (e.g. my bills always went to the demised premises’ address) opposition to its admission can appear churlish, insecure and unattractive. In this instance it actually helped the association’s case because they could say that the defendant had failed even at that late stage to provide sufficient responses to the evidence seemingly against her.
Thirdly, your evidence may not have a knock-out point but that is not fatal to the case. Indeed my skeleton argument said as much: “It may be argued on behalf of the first defendant that individually none of the pieces of information provide conclusive proof of any sub-letting”. To paraphrase the district judge’s more artistic position on this, “Individually all of the above may not be enough but put all the pieces together and it beats with a single rhythm”. See also Lord Justice Mummery’s remarks in Lambeth LBC v Vandra  H.L.R. 19 at para. 13:
“There was no direct evidence, it is true, but there was sufficient evidence from which a reasonable inference could be made about a state of affairs in which a number of people were paying to live in Miss Vandra’s flat and were in fact living there.”
Fourthly, remember that not every question in cross examination is designed to “catch the witness out”, though you may well be laying the trail. For example, it had been said that one of the occupants found at the premises was the defendant’s sister. A little time was spent at the start of the cross examination of the defendant asking her to explain her family set up. It became clear by that point that the said occupant was not after all her sister, and the other person found with her was not a family member as claimed.
Lastly, often one of the most compelling features of a case is what is not there more than what is. Why was there nothing (email, letter, statement, etc) from those persons found at the premises? Why was there nothing from the defendant’s adult children who apparently sometimes stayed there? Why was there nothing from the husband (not least to refute the notion that his wife lived with him)? Why was there nothing from the neighbours who surely after 26 years of the defendant apparently living at the premises could have confirmed as much? Don’t forget to consider and use authorities such as Wisniewski v Central Manchester Health Authority  PIQR P324 where Brooke LJ considered the court’s ability to draw adverse inferences from the absence or silence of a witness (that can of course go both ways).
The district judge had little hesitation in finding that there had been a sub-letting of the whole of the premises, and that the notice to quit had brought the remaining common law tenancy to an end at its expiry. Even had it have been only of part the district judge indicated that he would have made an outright order – this was not the case for a second chance.
As well as the “usual orders” an unlawful profit order in the sum of £145,177.89 was made against the defendant based on estimated figures of the rents received by her over many years.
Finally, I must pay particular tribute to association’s counter fraud specialist, Raj Vine, and the intelligence officer Magnus Lærke-Hall for their fantastic and crucial work without which there could have been no successful outcome. As always, I was also served by excellent solicitors, this time in the form of Katrina Robinson and, before her, Victoria Smith of Capsticks.
On 24 February 2021 the Court of Appeal handed down judgment in Dale v Banga and others  EWCA Civ 240. The opening paragraph of the (main) judgment of Lady Justice Asplin makes it clear what the issue in the appeal was:
“This appeal raises the question of what the appeal court should do when fresh evidence is adduced after a trial which allegedly shows that the judgment below was obtained by fraud, the conduct relied upon being that of a witness and of a party to the action which took place after the events in issue, and is unrelated to the issues which were before the court. In particular, it raises the following questions: whether the fresh evidence (permission to rely upon it having already been granted) is capable of establishing that the Respondents misled the judge at trial by asserting that a letter of revocation in relation to a will had been duly attested; if so, whether the question of whether the judge was misled (the fraud issue) should be referred to the lower court to be determined or should be the subject of a separate action; and, if it is determined that the lower court was misled by fraud, whether a previous will should be admitted to probate on the basis of the original judge’s obiter dicta.”
This is an issue which this blog has previously dealt with.
The “fresh evidence” concerned the discovery that one of the two attesting witnesses to the letter had been sent to prison for fraud offences, and Mr Banga himself had been indicted with attempting to pervert the course of justice (though no evidence was offered at trial and he was acquitted):
“7…It is alleged, nevertheless, that it is incontrovertible that Mr Banga had sought to pervert the course of justice by the production of false invoices.
8. Mr Brennan, on behalf of Mrs Dale, submits that if the fresh evidence had been available to be adduced at trial it would have entirely changed the way in which the judge approached the question of the proper attestation of the Letter and his conclusion in that regard. It is said that the fresh evidence: undermines Mr Arif’s credibility as a witness of fact (as to the attestation of the Letter); supports the conclusion that Mr Arif and Mr Banga are sufficiently dishonest to have attempted to deceive the court about the circumstances in which the Letter was signed by the attesting witnesses and even that it was a forgery and was produced on another occasion; made Mr Arif the obvious person to have been chosen to assist in attempting to deceive the court; and gave Mr Arif an obvious motive to assist Mr Banga and his family.”
Coming back to Asplin LJ’s judgment, she explained what would be necessary to allow for a set aside of the final judgment:
- It is not sufficient that the evidence given below can now be proved to have been mistaken.
- It is not sufficient that a witness committed perjury.
- “It is necessary that the judgment was obtained by fraud and that the fraud was that of a party to the action or was at least suborned by or knowingly relied upon by that party” (27).
- There are two options then available – a new action to set aside the judgment (as preferred by the Court of Appeal – Salekipour v Parmer  QB 833) or an appeal against the original order as in the present case, alleging that the judgment upon which it is based was obtained by fraud (39-41).
As for the test on appeal:
“42…It seems to me that it is necessary to decide whether the new evidence is capable of showing that the judge was deliberately misled by the Respondents and that the judgment may have been obtained by fraud. It must be sufficient to justify pleading a case of fraud. It must be capable of showing that there was conscious and deliberate dishonesty which was causative of the judgment being obtained in the terms it was. The conscious and deliberate dishonesty must be that of a party to the action, or was at least suborned by or knowingly relied upon by a party.
43. Secondly, if that threshold test is satisfied, the court must determine whether on the facts and in the circumstances of the particular case, it is appropriate that the fraud issue should be remitted or otherwise dealt with within the same proceedings. There is no question but that the appeal court has power to “refer any claim or issue for determination by the lower court”: CPR 52.20(2)(b). The question is whether the discretion to do so should be exercised. It is not possible to list the matters which will be relevant to the exercise of that discretion because they inevitably depend on the circumstances.”
Ultimately, the court declined to remit the issue of fraud to the lower court and dismissed the appeal:
“45. Unlike in Noble v Owens, the new evidence is of allegedly similar fact and bad character. It does not go directly to the central matters of fact before the judge. It requires inferences to be drawn based upon the alleged lack of credibility of the witnesses who gave evidence before him and their alleged propensities. It is tangential. Furthermore, all of the conduct from which it is said that the inferences should be drawn post-dates the alleged attestation of the Letter.”
Cases cited in judgment:
Odyssey Re (London) Ltd & Ors v OIC Run Off Limited & Ors  EWCA Civ 71
Cinpres Gas Injection Ltd v Melea Ltd  EWCA Civ 9
Takhar v Gracefield Developments Ltd & Ors  AC 450
Royal Bank of Scotland plc v Highland Financial Partners lp  1 CLC 596
Noble v Owens  EWCA Civ 224,  1 WLR 2491
Salekipour v Parmar  EWCA Civ 2141,  QB 833
This is a short article on the notice provisions for possession actions relying on:
- A notice to quit – where sub-letting / parting with possession of the whole is alleged, and/or it is said that the tenant(s) was not living at the demised premises as their only or principal home at the time the notice expired.
- A notice seeking possession – where it is alleged that tenant(s) were granted the tenancy because of a false statement (i.e. grounds 5 or 17 of Schedule 2 to the Housing Acts 1985 or 1988 respectively).
Notices to quit
The “easy” part of the explanation is that notices to quit have never been reformed by reason of the pandemic under the Coronavirus Act 2020 or otherwise save so far as concerns Rent Act tenancies. That remains the case.
Notices seeking possession
The notice seeking possession route is more complicated and I have chaired a recent webinar on the subject with four colleagues from Cornerstone Barristers. I have also produced a table of the changes but you can also of course check the amended notice sections of the Housing Acts and/or the Regulations themselves.
“The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by —
(a)the tenant, or
(b)a person acting at the tenant’s instigation.”
The Coronavirus Act 2020, Schedule 29 had changed the usual 14-days (assured tenancies) and 28-days (secure tenancies) notice period to 3 months and now this temporary amendment has itself been amended by the Coronavirus Act 2020 (Residential Tenancies: Protection from Eviction) (Amendment) (England) Regulations 2020 from 29 August 2020 to 31 March 2021.
The effect is that:
- Ground 5 requires 28-days notice so long as it is not joined by any other grounds other than 1, 2ZA and/or 2A (so long as with 1 at least 6 months rent is unpaid at the date of service). Also Ground 2 (no period) and section 84A (28 days (periodic) / 1 month (fixed term)) Schedule 29 changes have been suspended and these can include any other ground.
- Ground 17 requires 14-days notice so long as it is not joined by any other grounds other than 14A and/or 14ZA. Also Ground 7A (28 days (periodic) / 1 month (fixed term)) and Ground 14 (no period) Schedule 29 changes have been suspended and these can include any other ground.
In Jet 2 Holidays Ltd v Hughes  1 WLR 844 the Court of Appeal held that:
- CPR r 32.14, the provision which provides for committal proceedings against a person if they make, or cause to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth, did not confer jurisdiction to bring committal proceedings in respect of a witness statement that had been made before the commencement of proceedings.
- However, if a statement made before the commencement of proceedings interfered with the due administration of justice the court would be able to exercise its inherent power to commit for contempt in respect of it.
- Since pre-action protocols were now an integral and highly important part of litigation architecture, a dishonest witness statement made before the commencement of proceedings in purported compliance with a pre-action protocol was capable of interfering with the due administration of justice, even though, following a challenge by the prospective defendant to the truth of the statement, proceedings for substantive relief were never issued.
- The witness statements in the present case were closely connected to the administration of justice and, if false, interfered with it, thus giving rise to jurisdiction to commit the defendants for contempt.
- However, on a true construction of CPR r 81.13(2) , the witness statements had been made “otherwise than in connection with any proceedings”, which phrase referred to proceedings commenced before the contempt was committed.
- Therefore, the application for permission to make a committal application should have been made to the Administrative Court, but that procedural defect would be waived, pursuant to paragraph 16.2 of CPR Practice Direction 81, and permission would be granted.
- That, further, since the new witness statements fell within CPR r 32.14 and there was a clear public interest in the bringing of contempt proceedings in respect of them, the claimant would be granted permission to amend its claim form to add the new grounds of contempt.
In the judgment of the court it was said:
“50. It is not satisfactory that false statements made in witness statements served before the commencement of proceedings in purported compliance with a PAP fall outside CPR r 32.14 . Nor is it satisfactory or convenient that any application for permission to bring contempt proceedings for such false statements must always be made to the Administrative Court pursuant to CPR r 81.13(2) . It is highly desirable, therefore, that the possibility of contempt in relation to such statements should be expressly addressed in the Civil Procedure Rules and a practice direction.”
A few months later, on the 16 July 2020, the 122nd amendment to the CPR was produced and included an amendment to the Practice Direction: Pre-Action Conduct and Protocols with effect from 1 October 2020:
“In paragraph 2, at the end insert “A person who knowingly makes a false statement in a pre-action protocol letter or other document prepared in anticipation of legal proceedings may be subject to proceedings for contempt of court.”.”
Pre-action letters are important in sub-letting, allocation fraud, etc cases where a possession claim or other proceedings are being contemplated and are usually expressly made pursuant to Part 3 of the Pre-action Protocol for Possession Claims by Social Landlords.
This may appear to take them outside of the amended Practice Direction, which says at paragraph 2:
“This Practice Direction applies to disputes where no pre-action protocol approved by the Master of the Rolls applies.”
but a proper reading of this practice direction must rather demonstrate that the amendment will apply even if a pre-action protocol operates.
It follows that it would be good practice from 1 October 2020 to include a warning in pre-action correspondence that false statements may lead to contempt proceedings.
The circumstances arising from the current pandemic have led to many pressing practical issues for social landlords and tenants alike. Much of the focus has been, quite rightly, on matters surrounding homelessness and rent, but in the housing fraud field the particular concerns can be identified in 3 broad topics:
2. Service of notices.
3. Court proceedings.
This short post considers the current state of play in these 3 areas, with the obvious caveat that matters are constantly changing, and what a social landlord can still do.
One of the obvious impacts on ongoing and proposed fraud investigations is that staff numbers are inevitably reduced, and tenants and other potential witnesses are similarly unavailable.
Even if health is not an issue the government policy of self isolation means that, for example, caution interviews are unlikely to go ahead and home visits are going to be effected in the same way. They have have generally been suspended, and anecdotally some staff temporarily redeployed.
- Pre-action (protocol) letters can still be drafted and sent.
- information can still be obtained from third parties, such as banks and fuel suppliers, in the usual way – see for example The Prevention of Social Housing Fraud (Power to Require Information) (England) Regulations 2014/899.
- E-mail and telephone/video conferencing can be used in place of direct face to face interview where appropriate.
The much lauded legislative attempt to restrict possession actions in the courts for a period because of Covid 19, the Coronavirus Act 2020 (section 81, Schedule 29), does not change or restrict the services of notice to quit on secure or assured periodic tenants, though there may be questions of proof of service (though personal or even hand-delivery service should not be required given that most tenancy agreements provide for service by post).
Schedule 29 does though change the process with regard to notices seeking possession – at least when served during the initial period of 26 March to 30 September 2020 – and requires 3 months notice to be given. This will therefore effect in particular:
- Ground 5 Sch 2 Housing Act 1985/Ground 17 Sch 2 Housing Act 1988 (false statement) notices seeking possession.
- Ground 1 Sch 2 Housing Act 1985/Ground 12 Sch 2 Housing Act 1988 (breach of tenancy) notices seeking possession.
- Introductory tenancy section 128 notices.
- Flexible tenancy section 107D notices.
The Schedule 29 reforms do not impact upon notices served prior to 26 March 2020 and they therefore remain valid (assuming they otherwise were), and are capable of being relied upon in possession proceedings.
There is no restriction at all on the issue of possession proceedings, save for the obvious practical hurdles in the current circumstances (e.g. signing the statement of truth, though see the electronic signature provisions in CPR r. 5.3 and PD5A), albeit all such proceedings are stayed during the 90 day period starting from 27 March 2020 by reason of the new Practice Direction 51Z:
1. This practice direction is made under rule 51.2 of the Civil Procedure Rules (“CPR”). It is intended to assess modifications to the rules and Practice Directions that may be necessary during the Coronavirus pandemic and the need to ensure that the administration of justice, including the enforcement of orders, is carried out so as not to endanger public health. As such it makes provision to stay proceedings for, and to enforce, possession. It ceases to have effect on 30 October 2020.
2. All proceedings for possession brought under CPR Part 55 and all proceedings seeking to enforce an order for possession by a warrant or writ of possession are stayed for a period of 90 days from the date this Direction comes into force.
3. For the avoidance of doubt, claims for injunctive relief are not subject to the stay in paragraph 2.
HMCTS’ daily operational summary of 3 April 2020 provided that injunctions, a remedy often used in shared ownership sub-letting scenarios, are a priority 1 case (work that must be done), though does go on to say in a separate bullet point immediately following “emphasis must be on those with a real time element (such as post-termination employment restrictions), noise or interference with property”. Other noteworthy matters to take from the summary are that enforcement work involving bailiffs/sheriffs is not a priority or even recorded as work that could be done (Priority 2), multi-track trials are priority if the parties agree the trial is urgent and fast-track trials are only priority 2 and, again, even then only if the parties agree the trial is urgent.
In summary therefore:
- Possession claims can still be issued as before, but they will thereafter be stayed.
- Notices to quit in sub-letting/parting with possession of the whole and only or principal home cases are not effected by the temporary changes brought in by the Coronavirus Act 2020.
- Notices seeking possession are, conversely, effected though not if served prior to the aforementioned changes.
- Injunction claims are still available though in a fraud context are unlikely to be seen as a priority.
The operational summary says in respect of magistrates’ courts that they are only covering urgent work (not, therefore, including fraud trials such as under the Prevention of Social Housing Fraud Act 2013).
Similarly, Crown Courts are said to be covering only urgent work.
As noted in the Introduction, we are living through uncertain and ever-changing times. It is entirely understandable that social landlords presently have different priorities but insofar as fraud remains relevant work can still continue albeit there are obvious restrictions and will be inevitable delays.
On Tuesday, 17 March 2020 the Court of Appeal handed down judgment in the (Ground 5) possession claim case of Oshin v The Royal Borough of Greenwich  EWCA CIV 388. Lord Justice Floyd delivered the main judgment of the court, and explained:
- The issue in this appeal is whether the respondent local authority, the Royal Borough of Greenwich, was induced to grant the appellant, Blessing Oshin, a tenancy of 15 Jessup Close, London SE18 (“Jessup Close”), by a false statement knowingly or recklessly made by her. The issue arises in the local authority’s claim for possession against the appellant of Jessup Close, pursuant to Ground 5 of Schedule 2 of the Housing Act 1985. By a decision dated 13 April 2018 Deputy District Judge John Calver (“the DDJ”) held that the respondent had been induced to grant the tenancy by the appellant’s false statement and granted an order for possession. The appellant’s appeal to the County Court at Central London was dismissed by HHJ Saunders by his decision dated 30 August 2018.
Ground 5 of Schedule 2 to the Housing Act 1985 provides (as mirrored in Ground 17 of Schedule 2 of the Housing Act 1988 with regard to assured tenancies):
The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by—
(a) the tenant, or
(b) a person acting at the tenant’s instigation.
This is a discretionary ground of possession and as such the claimant landlord must show not only that Ground 5 is satisfied but that it is reasonable to make a possession order (s. 84(2)(a)). It will then be for the defendant tenant to argue that any such order should be suspended or postponed on terms (s. 85(2)). In June 2019 I wrote about the public policy aspect of judicial consideration in this area.
The False Statement
Turning back to Oshin, the false statement alleged was described in Floyd L.J.’s judgment thus:
3. In about 1999 the appellant was living with a close friend at 112 Robert Street, London SE18 (“Robert Street”). She had no tenancy at Robert Street, and so applied to the respondent to have her name placed on the housing list. On 2 February 2001 she completed in her own name the respondent’s “Housing Application Form” (“the 2001 form”). The 2001 form has a number of questions requiring responses from an applicant. Question 10 on the form was headed “Immigration Status” and asked:
“Has anyone you have mentioned so far lived outside the United Kingdom in the last 5 years? Please [tick] the correct box.”
4. The appellant ticked the “No” box. This was untrue. The DDJ held that the appellant arrived in the United Kingdom in September 1998 from Nigeria, and that she had therefore lived outside the United Kingdom in the five years prior to the completion of the 2001 form.
5. Underneath the boxes marked “Yes” and “No” the form stated:
“If Yes and an Asylum/Immigration Form has not been already been completed, please ask for one.”
6. The appellant also answered Question 15 on the 2001 form. That question was designed to elicit an applicant’s addresses in the previous five years. She answered by saying that from 1990 to 1999 she had been living in private rented accommodation at 49 Camberwell New Road, London SE5. In the light of the DDJ’s finding that she first came to the United Kingdom in 1998, that statement was also untrue. Her false answer gave the impression that she had been living in the UK for more than 10 years at the date of the 2001 form.
Ms Oshin was granted the tenancy of 112 Robert Street, London SE18 (“Robert Street”), the Jessup Close tenancy agreement then being entered into in 2008, and repeated these falsehoods in 2005 (post Robert Street grant) with regard to her two sons when she advised Greenwich that they were now living with her (having joined her from Nigeria in 2004).
The courts below
A Deputy DJ found that the 2001 falsehoods were material (though not those in 2005 as the 2 sons were minors and would not be tenants of any property offered) and held that it was reasonable to make a possession order. The issue of reasonableness was not contested in the Court of Appeal.
On appeal by Ms Oshin, HHJ Saunders found against her.
Grounds of Appeal
Lewison L.J. granted permission for a second appeal on 2 grounds:
Ground 1 – The false statement induced the grant of the Robert Street tenancy but not the Jessup Close tenancy.
Ground 2 – The false statements did not induce the grant of either tenancy, because the respondent was unaware of the appellant’s immigration status.
It was argued on behalf of Ms Oshin that the allocation process had closed once the Robert Street tenancy had been granted in 2005, and that the form was of no relevance thereafter and therefore to the 2008 Jessup Close grant of tenancy (when Ms Oshin could no longer be said to be an applicant for housing). Further, it was said that with regard to the 2005 update the information concerning her sons had no impact on the grant of the latter tenancy.
As for Ground 2, it was said that the false statement did not induce the grant of any tenancy as it could not sufficiently conclude whether an applicant was eligible for social housing whatever the answer. It was said that a more direct question as to the applicant’s immigration status was required.
Floyd L.J. did not accept the arguments made on behalf of Ms Oshin, and the appeal was dismissed. Rather he held and maintained (approved by Coulson & McCombe L.JJs):
- Ground One – The 2005 form was an amendment to that made in 2001 and so it was inevitable that Greenwich would consult both in seeking larger accommodation and allocating, ultimately, Jessup Close: para. 18.
- The argument that once a property has been allocated any false statement in an application is no longer operative is simply wrong: para. 20.
- The Deputy DJ was entitled to conclude that the 2001 application played on Greenwich’s mind when allocating the Jessup Close tenancy in 2008: para. 24.
- Ground Two – Greenwich were clearly asking about time out of the UK in the context of immigration status and though the correct answer would not have been determinative as to eligibility for a social housing tenancy it would have required the completion of an Asylum Immigration form to that end: para. 29.
- “I accept that, in order to be material, the false statement must be relevant to whether the applicant is eligible for social housing. That, however, is not the same thing as requiring that the statement be directly determinative of that question. The appellant’s false statements did not mean that she was entitled to social housing, but they still had sufficient materiality to be capable of inducing the local authority to grant her a tenancy when she was not entitled to one. I would therefore reject ground 2 as well.”: para. 31.
This was an interesting appeal on its facts, albeit robustly dealt with by the Court of Appeal. It confirms that whilst one is looking at the grant of the current tenancy, there can on the right facts remain the position with respect to the grant of an earlier tenancy and the information provided by or on behalf of the tenant for that purpose.
That doesn’t work if a new tenant appears, such as by assignment, as was clear from the Court of Appeal’s judgment in LB Islington v Uckac  1 W.L.R. 1303.
But here, as Floyd L.J. said at para. 23 of the Oshin judgment:
“In the end, therefore, the question of what induced the grant of the Jessup Close tenancy was a question of fact for the DDJ to decide. The proper approach to such questions was explained in the judgment of Newman J, sitting as a judge of this court, with which Peter Gibson and Sedley LJJ agreed, in Waltham Forest LBC v Roberts  EWCA Civ 940;  H.L.R. 2 at  to . The court does not have to decide “what really would have happened”, but whether the false statement had played “… a real and substantial part, though not by itself a decisive part, in inducing the Authority to act”. It had to be “one of the inducing causes”. In considering inducement “it is helpful to start by considering the materiality of the statement”. “A false statement of a material matter is likely to have induced the misrepresentee”.”