City West Housing Trust v Massey: Manchester & District Housing Association v Roberts 
The Supreme Court has refused permission to appeal the judgment in City West Housing Trust v Massey; Manchester & District Housing Association v Roberts  EWCA Civ 704 on the issue of the exercise of the court’s discretion when making a suspended possession order (“SPO”) in cases where a tenant’s property is being used for cultivation of cannabis.
Where a SPO had been made providing for landlord inspection, City West Housing Trust (“City West”) hoped for review of the landlord inspection issue as they felt the judgment had far reaching implications for both local authority possession claims, as well as those brought by registered providers.
The main concern was that a condition which shifts responsibility for compliance with the tenancy to the landlord (whose resources are already stretched), is potentially an unworkable proposition and sends entirely the wrong message to tenants. This is compounded for a landlord with limited resources who deals frequently with cases where premises are used for drug dealing and cultivation.
That said with the last door of appeal firmly closed, it is now time to focus on the positives and work with the decision of the Court of Appeal.
Both cases involved houses in the Greater Manchester area being used as cannabis factories, which was a clear breach of the tenancy agreement and in each case the tenants had lied on oath at trial about their knowledge or responsibility for the cultivation. The housing associations sought immediate possession.
SPOs were made conditional on the tenant’s compliance with the tenancy going forward, and that they would allow the landlord to inspect the property at short notice. In Roberts, the SPO was replaced with an outright order at first instance appeal which was appealed by the tenant. In Massey, the appeal at first instance was refused. With the issues being crucial for the housing sector, it was recognised that a review was needed and so both the landlord’s and tenant’s appeals were conjoined – and the issues for the Court of Appeal to clarify were:
- how should district judges exercise their discretion when a tenant’s evidence has been dishonest? And;
- can prospects of a tenant’s future reform be “cogent” in circumstances when the terms of compliance are not fully incumbent upon the tenant i.e. additional property inspections by the landlord?
Upholding the SPOs the Court of Appeal found that a tenant’s dishonesty is not an automatic bar to making a SPO. It also clarified that the evidence required to demonstrate the sound basis for hope that the previous conduct will not be repeated need not come from the tenant themselves, and can be based upon a tenant acceding to third party intervention.
What this means for you
So with permission to appeal to the Supreme Court being refused the priority now must be to take the positives out of the Court of Appeal’s recent judgment. Adopting a practical viewpoint, landlords need to ensure that their possession cases are prepared to address the issues that ought to be taken into account, when exploring whether it is appropriate for the extended discretion to be exercised in favour of a SPO.
When reviewing the appropriateness of suspending possession orders in similar cases, whether at trial or in consideration of offers there should be focus on the following:
- In consideration of making a suspended possession order a two- stage test applies. Firstly, to make relevant findings of fact, and secondly on the basis of those findings the court exercises its discretion. This is a simple reminder for landlords, and also something worth urging district judges to reflect upon at trial.
- As part of that process, the court should be encouraged to take all relevant factors into account, and asked to make specific findings of fact. Landlords should ensure that a number of the factors referred to in the judgment are taken into account, including a tenant’s cooperation; honesty; genuine remorse and early acceptance of wrong (along with all other relevant factors specific to the case). Of further importance will be evidencing the landlord’s resources, or lack of, to support an inspection condition. If resources are scarce, then a judge should specifically address why the resourcing issue has been overlooked in making findings.
- A landlord has no legal right to enter residential premises and inspect them for evidence of continued criminal use, unless the tenancy agreement specifically provides for this which is not the norm. A tenant’s offer of a licence to enter upon the property is freely revocable, so the landlord is not permitted to force access if refused entry. The landlord must then restore the matter at further cost and delay to determine whether the tenant was in breach or not, which cannot properly be assessed in lieu of the inspection having taken place. It is still arguably an unworkable condition, and this should be stressed to the court.
- The clarity about “cogent evidence” is helpful. This is the evidence upon which a sound basis for hope that the previous conduct will not be repeated must be judged. The evidence must be more than merely credible; it must be persuasive. In exercising the discretion, landlords should invite the court to properly highlight why they were so persuaded despite the relevant factors advanced by the landlord.
- If a tenant is dishonest or lies in evidence, landlords must seek to persuade the court that their evidence of future assurances should not be trusted. If the court is reluctant to dismiss the tenant’s assurances, it should be directed to give careful consideration and an appropriate explanation as to what persuasive evidence has been relied upon in making the finding that the tenant will respect the tenancy agreement in future.
- It is still worth highlighting that an inspection condition appears to contradict the proposition that there is persuasive evidence demonstrating a sound basis for hope that the previous conduct will not be repeated. It seems implicit in the imposition of such a condition that there is a fear that the conduct will be repeated. If the court is hesitant about an inspection clause, it should be invited to assess, in the circumstances of the case, whether it can be properly convinced the conduct will not be repeated if steps are required to try and mitigate the risk that it will.
This case is a timely reminder to take stock of how landlords manage cases involving serious anti-social behaviour and breach of tenancy. The court must take into account all the factors, and the landlords own circumstances are often an overlooked but vitally important part of the overall picture in carrying out this assessment – thorough preparation will avoid them going unnoticed as well as highlighting the need for the court to vocalise the decision making process.
Matthew Hyam partner at BLM acted on behalf of City West Housing Trust.