Public policy and the false statement possession ground

Introduction

I have just concluded the second of 2 trials where my client, a London housing association, was seeking possession of properties “let” to individuals who colluded with a former housing officer in 2004 to provide for (assured) tenancies to which they were not entitled:

Though fraudulent misrepresentation was pleaded as the first of 2 alternative bases of claim, it was the second one (ground 17 of Schedule 2 to the Housing Act 1988) which was ultimately relied upon (see Islington LBC v Uckac [2006] 1 WLR 1303 at para. 29):

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.

In both claims the Judge found that ground 17 was satisfied. The ‘modus operandi’ was the housing file showing that the defendant was in occupation of the subject premises by purported reason of a mutual exchange even though no such arrangement in fact occurred (though the defendants signed the sham deeds of assignment).

This article focuses not on the constituent elements of ground 17, and there is a mirror provision for secure tenancies to be found at ground 5 of Schedule 2 to the Housing Act 1985, but the particular approach to ‘reasonableness’ and whether any possession order made should be outright or suspended on terms.

Discretionary ground

Ground 17, as with ground 5 for secure tenancies, is a discretionary ground in Part II of Schedule 2 and so the landlord must show that it is reasonable to make a possession order. As section 7 of Housing Act 1988 provides:

(4) If the court is satisfied that any of the grounds in Part II of Schedule 2 to this Act is established, then, subject to subsections (5A) and (6) below, the court may make an order for possession if it considers it reasonable to do so.

As for the nature of any such order made, section 9 goes on to explain:

(2) On the making of an order for possession of a dwelling-house let on an assured tenancy or at any time before the execution of such an order, the court, subject to subsection (6) below, may—
(a) stay or suspend execution of the order, or
(b) postpone the date of possession,
for such period or periods as the court thinks just.

The proper approach in false statement cases to the court’s exercise of discretion is described below but it is worth recording at this point Sedley LJ’s dicta in Lewisham LBC v Akinsola (2000) 32 HLR 414 at 417:

“Mr Riza rightly points out that whatever else may be in doubt, there is no doubt, under the Housing Act 1985, that even in cases of fraud, eviction is not the inexorable consequence. Section 84 quite plainly shows that there may be cases of fraudulently obtained tenancies which nevertheless it is not reasonable in the County Court’s view to determine by the making of a possession order. One can readily see that into the consideration of such a question may enter connivance, or laxity of procedure, or delay on the part of the local authority which now seeks to rely on the fraud, as well as, of course, the gravity of hardship on the tenant. All these things will be for the County Court to decide from case to case.”

Public policy approach

In possession proceedings for, say, anti-social conduct (grounds 12, 14) the approach to the court’s discretion is well-worn and established. For example, once the court has determined that it is reasonable to make a possession order the burden of producing cogent evidence to show that the matters complained of will not recur (or is unlikely to do so), such as to “allow” a suspension of any order in terms, shifts to the defendant: Birmingham CC v Ashton [2013] HLR 8, para. 42.

Unless there are other complaints against the tenant in a ground 17 case a suspended order is of little value – in most instances it is therefore an all or nothing claim, outright possession order or none at all.

In Rushcliffe BC v Watson (1992) 24 HLR 124 the tenant appealed against the making of a (ground 5) possession order. She complained that the judge failed to take account or give sufficient weight to the problems she would face in obtaining alternative housing for herself and her children.

At pages 130-131 of the main judgment, which dismissed the appeal, Nourse LJ said this about public policy considerations:

“Mr. Westgate accepts that, in doing that, the judge was entitled, and indeed bound, to take account of the public interest. But he says that he took too narrow a view of it, in particular by not recognising the public interest in keeping a family together as a unit. The judge’s view of the public interest was wrongly confined to a policy of discouraging deceitful applications which result in the unjust relegation on the housing list of applicants who are honest.

Again I cannot accept this submission. I am quite certain that the judge recognised the public interest in keeping a family together as a unit. But since he thought that there was no real likelihood that this family would be split up, that was not something which affected his consideration of the public interest in this case. On the broader aspect of the public interest the judge was fully entitled to attach the importance which he evidently did to the policy to which I have referred. The statistics which he recounted demonstrate the acute shortages in the plaintiff’s housing stock.”

Over 5 years later, the Court of Appeal was called upon to consider this issue again, in Shrewsbury & Atcham BC v Evans (1998) 30 HLR 123. Beldam LJ held at page 132, in dismissing the tenant’s appeal:

“The effect of the decisions, in my view, is that in a case such as this, where there has been a deliberate lying to obtain public housing that only in exceptional cases would the court consider the effect of the homelessness legislation. It is not the function of the court to decide whether or not a person is intentionally homeless. That is the function of the local authority and has been entrusted to the local authority by Parliament.

Those who are on the housing list who have an equal or even greater claim to public housing would, in my view, justly be indignant to find that the court did not think it reasonable in circumstances where someone has obtained accommodation by a deliberate and flagrant lie, to make an order for possession merely because the effect of the order would result in the occupant having to be considered by the local authority as homeless or intentionally homeless.

It seems to me, that in deciding questions of reasonableness in a case such as this, a court can, in exceptional cases take into account the nature and the degree of the untrue statements which have been made and the circumstances in which they are made and whether, for example, they are deliberate or reckless. If the court had considered the matters in detail in this case it would have concluded, as the evidence showed, that this appellant had flagrantly and deliberately lied about her circumstances and had done so with the express purpose of providing herself with a higher score under to the local authority’s qualifications for public housing, than she would otherwise have had; not merely a point or two more, but, according to the evidence, very substantially more.

Next, the court could reasonably, it seems to me, take into consideration the attitude of the appellant when the deception was discovered. Her attitude was to lie and lie again to deny completely that she had made the application to the District Council, suggest that this had been made by someone using her name, and when this was not wholly accepted by the officers of the respondents, to complain about the conduct of the housing officer quite unjustifiably. In my view, the court could take into account, as was said, the current position in which the appellant found herself, but at the same time it would have to have in mind, as I have previously indicated, the great importance to be attached to honesty in making application for public housing accommodation.”

And so in both the trials referred to in the Introduction, the Judges were influenced in the making of an outright possession order by:

  1. The evidence of the shortage of social housing at the time of the deception and now.
  2. The continued lies perpetrated by the defendants, in one case including at a caution interview, up to and including trial.
  3. The availability of alternative accommodation in the first case (she had exercised the right to buy the year before her tenancy).
  4. The finding that the defendants were fully complicit in the fraud.
  5. The fundamental and serious nature of the fraud.
  6. The total lack of remorse.

The Court decides

Ultimately of course it is a question for the court and, regardless of public policy considerations, an order may be refused. After all, the judge will always have in mind Lord Green’s dicta in Cumming v Danson [1942] 2 All ER 653 at 655:

“…the duty of the judge is to take into account all relevant circumstances as they exist at the date of the hearing. That he must do in what I venture to call a broad, common-sense way as a man of the world, and come to his conclusion giving such weight as he thinks right to the various factors in the situation.”

In Southwark LBC v Erekin [2003] EWHC 1765 (Ch), for example, the defendant obtained housing from the council on the basis of a fraudulent application form, and was sentenced for that and other frauds to 18 months imprisonment. Laddie J dismissed the local authority’s appeal against the trial judge’s dismissal of the ground 5 possession claim.

He referred to HHJ Cotran’s reasoning in this way:

“11 The learned judge, having heard submissions from counsel, having read the evidence and having heard the cross-examination, came to the conclusion that the council had not discharged the onus upon it to show that a possession order in the particular circumstances of this case was justified. It is clear from the terms of his judgment, an agreed note of which has been provided to me today, that he considered this to be a very borderline matter. He refers to the authorities I have mentioned. He refers to the extensive fraud committed by the first respondent. He refers to the situation of the children, and the fact that they have been enjoying a stable home life in the property for the last five years. His judgment ends as follows:

“Having anxiously considered all the factors, I come to the conclusion that it would be unreasonable to make an order. The claimant’s claim is dismissed.””

Conclusion

The obtaining of a tenancy by means of a false statement is a criminal offence:

In a case concerning partial sub-letting and criminal activity, Poplar HARCA v Begum [2017] HLR 42 at para. 40, Turner J helpfully articulated the court’s approach to housing fraud:

“I would stress that it is not compassionate to allow profiteering fraudsters indefinitely to continue to occupy premises and thereby exclude from such accommodation more needy and deserving families.”

and whilst a sub-letting case such as Begum has a more obvious and calculable profiteering element than a ground 5/17 case, and is perhaps more likely to involve the defendant having alternative accommodation, these words are a cautionary warning to all those committing housing fraud.

Finally, in a results-driven world the trial last week represented the final case in the former officer “fall out”, with 3 tenants surrendering their tenancy in addition to the 2 possession orders referred to above. For 5 households the results of the fraud investigation will mean affordable, good quality homes.

Only or Principal Home – Trial Lessons Learnt

Judgment has been handed down this week in the County Court at Clerkenwell & Shoreditch in a possession claim brought by a private registered provider of social housing and based on the allegation that the defendant was no longer living in her demised premises at the expiry of a notice to quit served by her (erstwhile) landlord.

There is nothing unusual in such a scenario of course and it is of depressingly common concern to social landlords that a minority of their tenants are not using their properties in the manner they should – abandonment, sub-letting, parting with possession or not using the property as their only or principal home.

The details of the case are not important for the purposes of this article, but the question of why the landlord succeeded in its case is. Seven points are of special note:

  1. Most of the Landlord’s evidence was hearsay and the Judge was very careful to assess its weight set against the factors provided for at section 4 of the Civil Evidence Act 1995. She particularly looked for corroborative documentary evidence, and treated neighbour “views” with particular caution in their absence from the trial.
  2. One of the key issues was the performance of the defendant (and indeed her witnesses) under cross examination. This is generally difficult to anticipate and pre-judge when considering in advance the strengths of any case.
  3. How a witness gives evidence can be as important as what they say. Here the defendant was found to be evasive at times and lacking in credibility in some of her explanations.
  4. There were further a number of inconsistencies in the defendant’s evidence (and, again, that of her mother and friend) brought out under cross examination, and a lack of documentary proof of residence (a lack of ‘footprint’ at odds with 11 years’ residence).
  5. The defendant’s witnesses were kept out of the court room until the time for them to give evidence arrived. This highlighted some stark differences between the defendant and her friend which though not in themselves especially significant or determinative did demonstrate a serious credibility issue.
  6. Evidence of low/no usage of utilities at the subject premises was especially helpful to the landlord’s case.
  7. A ‘trigger’ had been placed in the front door at one stage to check on access, and was still in place some 4 months later.

Though this article is not intended to explain the legal arguments for only or principal home cases, reference to and use of Dove v London Borough of Havering [2017] PTSR 1233 will also often be helpful, not least at paragraphs 31 and 33 of Lewison LJ’s judgment, where the defendant still “uses” the demised premises to a degree:

31. At [39] the judge said that he understood why they wished “to be in a position to have their own place – their own space – somewhere to which they can return in order either to be alone or if the worst happens and their relationship breaks down a place to live.” But there was no evidence that either Ms Evelyn or Ms Elaine Dove had any actual intention to change the settled pattern of life which they were living. He held therefore that he “would have had to have” reached the same conclusion as the FTT.

33. The issue before the judge was not of course whether either Ms Dove was occupying the flat at Highfield Tower as a home. On the basis of the judge’s findings of fact one or other of them may or may not have been. It was whether either of them was occupying that flat as her principal home. The judge’s findings of fact are, in my judgment, clear to the effect that neither of them was. As I have said each of them had a settled way of life and there was no suggestion that it would change in the future. This is not, therefore, a case which turns on any intention to return or revert to a previous pattern of life. The question in cases which turn on an intention to return, as explained by Thorpe LJ in Goldenberg at 733, is whether a period of absence breaks the continuity of residence. In a case such as the present where the pattern of residence has been the same throughout the period under consideration there has been no break in continuity. So the question is a different one: is the pattern of residence such that either Ms Dove is occupying the flat at Highfield Tower as her principal home?

These claims are especially difficult because the defendant may well still have access to and be using at times their social rented property, but “simply” not as their only or principal home. Sometimes their use of a 2nd property is particularly clear to show the reality of the situation. Where that is not the case, as in the case here, the focus will centre more on the demised premises.

Inconsistencies need to be identified in full, the explanation for them assessed and positive evidence of residence considered.