Arguing incompatibility

August 23, 2024

Eloise Marriott analyses the Court of Appeal’s ruling in a case where it considered whether the statutory provisions governing succession to secure tenancies under the Housing Act 1985 were discriminatory in circumstances where a family member was not able to succeed to a tenancy, as the tenant had ceased to occupy the property due to ill-health and did not have capacity to assign the tenancy to them.

Save for the question of whether the treatment complained of fell within the ambit of the European Convention on Human Rights (“the ECHR”), the appeal in Dudley Metropolitan Borough Council v Marilyn Mailley [2023] EWCA Civ 1246 required the Court of Appeal to consider each aspect of the test in respect of incompatibility, as set out within R (Stott) v Secretary of State for Justice [2018] UKSC 59 (“Stott”). Therefore, this decision provides a comprehensive consideration of arguments in relation to Article 14 of the ECHR.

As such, whilst here the Court of Appeal were concerned with succession rights in the context of social housing, the reasoning and analysis will have broad application to many cases in which direct discrimination is being advanced. Of particular note, the Court of Appeal considered and provided guidance in respect of the following interesting areas of developing jurisprudence:

Whether a status for the purpose of article 14 of the ECHR may be defined by reference to capacity;
Whether it is permissible to refine the proposed status on appeal;
The evidence required to provide justification of any discrimination; and
The role of subsequent legislation in justifying discrimination.

The Court of Appeal comprehensively dismissed the appeal, finding that the legislation concerned was compatible with article 14 of the ECHR. Permission to appeal was refused by the Court of Appeal. However, the Appellant has recently made an application to the Supreme Court for permission to Appeal. As such, this article provides a timely overview of the Court of Appeal’s decision.

In order to place the Court of Appeal’s reasoning into context, it is necessary to briefly consider the factual background, statutory scheme and first instance decision that the Court of Appeal were concerned with. Each of the grounds for appeal, which correlated to the elements of the test for incompatibility, will then be considered as follows:

“Other status” for the purpose of article 14;
Analogous situations;
Justification of the difference in treatment; and
Reading down the legislation.

Background

Factual background

This matter commenced as a claim for possession of a property by Dudley Metropolitan Borough Council (“the Council”). The relevant property (“the Property”) is a three-bedroom family home. In addition, the Property had two downstairs living rooms; one of which could be used as a fourth bedroom. The Property would therefore ordinarily have been allocated to a family. As in most local authority areas, social housing is and was a scarce resource within the Council’s area, with a particularly long waiting list for family homes.

The Council granted the Appellant’s mother (“the Late Tenant”) a tenancy of the Property in May 1965 (“the Tenancy”). Upon the Housing Act 1980 coming into force, the Tenancy became a secure tenancy. The Appellant lived at the Property with the Late Tenant. At the time that the Tenancy commenced, the Appellant was 11 years old. By the time of the appeal, she was 68 years old.

Sadly, the Late Tenant’s health deteriorated such that she required substantial care. In March 2016, the Late Tenant moved to a residential nursing home. This was initially on a temporary basis but, in October 2016, it was decided that she would remain there permanently. Ultimately the Late Tenant never returned to the Property and sadly died in the residential nursing home in January 2018.

The Appellant, however, remained in occupation of the Property. In November 2016, following the Late Tenant being made a permanent resident at the nursing home, the Council served the Appellant with a Notice to Quit (“the NTQ”).

Legislative framework

Secure tenancies were introduced by the Housing Act 1980 but are now governed by the Housing Act 1985. One of the requirements for a tenancy to be “secure” is that the “tenant condition” set out at section 81 of the Housing Act 1985 is satisfied. The tenant condition requires that: “the tenant is an individual and occupies the dwelling-house as his only or principal home”.

A secure tenancy can only be ended by the tenant or court order. Secure tenancies may be transferred in some circumstances by assignment or on death by way of succession.

Section 87 of the Housing Act 1985 sets out the rights of succession. Under this section, a person may succeed to a secure tenancy if the following conditions are satisfied:

They occupy the property as their only or principal home at the time of the tenant’s death; and
They are:
1. The tenant’s spouse or civil partner; or
2. A member of the tenant’s family and have resided with the tenant for a period of 12 months ending on the tenant’s death.

It is important to note that the Localism Act 2011 significantly curtailed rights of succession. Following the Localism Act 2011, only a spouse or civil partner have rights of succession; family members may not succeed to a tenancy. However, the Localism Act 2011 came into force on 1 April 2012 and does not affect tenancies granted before this date. As such, these changes are not applicable to the Tenancy here.

The First Instance Decision and Appeal

The claim for possession was brought on the basis that, upon the Late Tenant moving to residential care, the tenant condition ceased to be satisfied. As such, the Tenancy lost secure status. The Appellant was served with a Notice to Quit and possession proceedings were commenced on the basis that she was a trespasser.

The Appellant defended the possession claim on the basis of three key defences:

The possession proceedings were unlawful in public law terms;
Eviction would amount to a breach of the Appellant’s Article 8 rights; and
The provisions of the Housing Act 1985 governing succession of secure tenancies are incompatible with Article 14 of the ECHR as they directly discriminate against the Appellant (“the Incompatibility Defence”).

At first instance ([2022] EWHC 2328 (QB)), Mr Justice Cotter (“the Judge”) dismissed each aspect of the Appellant’s defence and made a possession order in favour of the Council.

The only aspect of the decision that was challenged on appeal was the Judge’s conclusion that the provisions of the Housing Act 1985 were compatible with Article 14 of the ECHR. As such, only the Incompatibility Defence is dealt with within this article. Each of the defences pursued at first instance are considered in full within an article in respect of that decision: Tackling a trio of defences to a possession claim, Local Government Lawyer, November 2022Local Government Lawyer, November 2022.

It was not contentious that the Court must consider the four questions set out in R (Stott) v Secretary of State for Justice [2018] 3 WLR 1831:

Does the treatment complained of fall within the ambit of one of the Convention rights?
Is that treatment on the ground of some ‘status’?
Is the situation analogous to that of some other person who has been treated differently?
Is the difference justified; is it a proportionate means of achieving a legitimate aim?

It was also uncontentious that the treatment complained of would fall within the ambit of Article 8 of the ECHR.

At first instance, the Appellant argued that she had an “other status” as, “the daughter of a tenant who was permanently removed from her home as a result of her ill health and who did not have capacity to assign her tenancy to her potential successor”. It was argued on behalf of the Tenant that section 87(b) of the Housing Act should be read to include the following wording:

He is another member of the tenant’s family and has resided with the tenant throughout the period of twelve months ending with the tenant’s death or the date at which the tenant permanently ceased to reside at the dwelling-house due to ill-health and was incapable of assigning the tenancy to the member of the family at that date.

The Appellant appealed the decision on the basis that the Judge had been wrong in law in dismissing the Incompatibility Defence. Specifically, it was argued that the Judge had erred in making the following findings:

The Appellant did not have a status for Article 14 purposes;
The Appellant could not establish that she was treated differently from those in an analogous situation;
Any difference in treatment was justified; and
It would be overstepping the constitutional boundary to interpret the Housing Act 1985 as proposed.

(A) Status

As set out above, the Judge found that being, “the potential successor of a tenant who was permanently removed from her home as a result of her ill health and who did not have capacity to assign her tenancy to her potential successor” did not amount to an “other status”. Applying MOC (by his litigation friend, MG) v Secretary of State [2022] EWCA Civ 1, the Judge found that this characteristic was too uncertain because it relied on the capacity of a third party,

The Appellant argued that the Judge had erred in finding that she did not have “other status” for the purpose of Article 14 of the ECHR. In the alternative it was argued that the difficulties highlighted could be avoided by refining status as, “the qualifying successor of a daughter of a disabled person such that at the material time, namely when she permanently ceased to occupy as her only or principal home she was unable to assign the tenancy to her daughter as a consequence of her illness/disability.”

The Court of Appeal dismissed these arguments and agreed that the Judge had been right to find that the Appellant did not have “other status”. Two particularly interesting and important points arise from the Court of Appeal’s analysis of “status”:

Whether capacity may amount to an “other status” for the purpose of Article 14; and
The extent to which the proposed status may be refined on appeal.

(i) Capacity

The Court of Appeal accepted that status would not be unduly vague because it raises factual questions to be answered or because they could only be identified by an evaluative exercise. For instance, whether a person had the status of ‘cohabitee’ would require an evaluation of whether the relationship was sufficiently close (Jwanczuk v Secretary of State for Work and Pensions [2023] EWCA Civ 1156).

Further, the Court of Appeal accepted that it was not the case that capacity could never form part of status. As such, a proposed status will not fail simply because it includes an element of capacity. However, several conceptual challenges arise from defining status by reference to capacity, such that typically capacity does not amount to status. It will therefore be necessary for the Court to consider all the circumstances of the status being advanced.

Here, the Court of Appeal found that by defining status by reference to being the daughter of a tenant that, amongst other things, lacked capacity to assign their tenancy fell foul of these issues. The following factors were of particular significance in meaning that the proposed status was too uncertain:

Capacity here was decision specific; it referred specifically to the ability to assign the tenancy.
Capacity related to a specific material time and there was scope for individuals to regain capacity.
Capacity only formed one aspect of the status contended for. In this case, it was argued that a safeguard would be in place as the individual must have ceased to reside at the Property as their only or principal home. However, the Court found that this simply added a further element of uncertainty and complexity.
The legislation concerned here had wide application and could apply in a range of circumstances where a person may lose capacity. Each circumstance may involve different levels of severity and duration.

It will also be noted that the Court of Appeal also considered that the proposed refined status (a lack of capacity to assign as a consequence of her illness/disability) was equally problematic and did not address the issues set out above.

As such, incompatibility arguments based on a status which is defined in whole, or in part, by capacity, are not entirely redundant. However, when considering the Court of Appeal’s judgment both here and in MOC it appears that such definitions of status are likely to face significant difficulties. The Court can be expected to scrutinise all the circumstances of the case to determine whether the proposed status is sufficiently certain or whether the conceptual difficulties are too significant.

(ii) Amendments to Status Relied on at the Appeal Stage

As set out above, the Appellant sought to redefine the proposed status on appeal to address the concerns raised by the Judge at first instance. However, considering Prudential Assurance Co Ltd v HMRC [2016] EWCA Civ 376, the Court of Appeal made clear that it would be impermissible to amend the status relied on at the appeal stage.

It was noted at paragraph 43 of the judgment that, “[i]t is very important in an article 14 case to know precisely what is the alleged status that is relief on”. The following reasons were particularly important within the considerations of the Court of Appeal:

The status relied upon gives rise to different questions of fact and therefore the evidence being adduced would also differ. Here, there was no evidence in respect of whether the Late Tenant was disabled or whether the Late Tenant lacked capacity to assign by reason of her disability.
The status relied upon will call into question different questions of law which were not considered at trial. For instance, the question of whether a person lacked capacity to assign a tenancy was a different question to whether a person was disabled.
On the facts of this case, there had been previous amendments to the statements of case prior to the trial, yet the status relied upon had not been amended.
MOC, which the Judge had applied, was decided before the trial of the possession claim. The Appellant would have been live to the issues raised in this decision in respect of capacity and status. Therefore, it had been open to the Appellant to make an earlier amendment the statement of case in light of the matters raised in MOC prior to the trial.
No explanation had been provided as to why a refined status had not been raised prior to the appeal stage.

As such, any party seeking to advance an incompatibility argument ought to ensure that the status proposed is carefully considered at the outset. If an amendment or refinement is unavoidable, this should be dealt with by way of an amendment to the statement of case at the earliest opportunity and, at least, prior to trial.

(B) Analogous Position

The Appellant relied on two comparators in arguing she was treated differently than persons in an analogous position:

The potential successor of a tenant who dies at home; and
The potential successor of a tenant who is permanently removed from their home because of ill health but is capable of assigning their tenancy.

At first instance, the Judge found that these situations were not analogous. He did so on the basis that, in the case of proposed comparators, the tenant would lose their rights permanently and could not be in direct conflict with the successor. This was not true in the case of the potential successor of a tenant who had ceased to reside at the property due to ill health and had lost the capacity to assign the tenancy. The Judge concluded that “a right to succeed on a certain and permanent occurrence is not analogous to a right to succeed on an uncertain and possibly temporary basis”. The Appellant appealed the decision on the basis that the Judge erred in law.

The Court of Appeal dealt with these grounds relatively briefly. The Appellant’s arguments were dismissed, and the Court of Appeal found that the Judge was right to find that the proposed comparators were not in an analogous position.

It is interesting to note that the Court of Appeal reached this conclusion on somewhat of a more straightforward basis than the Judge at first instance. Rather than finding that the comparators were not analogous, as they were more certain, the Court of Appeal found that these were not analogous as in the case of the comparators, the statutory criteria were met. This was not the case in the circumstances of the Appellant. The Court of Appeal determined that the correct comparator was a secure tenant who was forced to leave their home permanently for reason other than illness or disability and does not assign the tenancy before doing so. In those circumstances, the proposed successors would be treated in the same way as the Appellant and there was no right to succeed to the secure tenancy.

(C) Justification

At first instance, the Judge was satisfied that even if the Appellant was discriminated against, the difference in treatment was justified. It pursued, by proportionate means, the legitimate aims of:

Achieving certainty; and
Ensuring that scarce social housing is suitably allocated.

The Appellant sought to persuade the Court of Appeal that the Judge was wrong as, first, his conclusions were not supported by evidence and, second, the justification relied upon did not stand up to scrutiny. The Court of Appeal were not persuaded and were satisfied that the Judge had been entitled to make the findings that he did on justification. In doing so, the Court of Appeal provided helpful guidance in respect of:

How the justification should be evidenced; and
The extent to which subsequent legislative developments could be considered.

(i) Evidencing Justification

In arguing that the justification for the legislation was not evidenced and that the Judge had erred into speculation, the Appellant relied upon the following matters within her Grounds of Appeal:

The Secretary of State had been notified upon a defence of incompatibility being raised within the proceedings, as well as upon the appeal. That notwithstanding, the Secretary of State had chosen not to intervene in the appeal; and
There was no reference within Hansard, or other publicly available material, to the reasons relied upon by the Judge.

The Court of Appeal confirmed that it was not necessary for it to be shown that a particular justification was in the policy maker’s mind at the time the legislation was passed. Indeed, it was open for new, additional and retrospective justification to be advanced. As such, the absence of the evidence suggested by the Appellant was not fatal to the argument that the legislation was justified.

Rather, the justification may simply be gleaned from the underlying statutory purpose. In this case, the legislative aim of limiting succession rights was to strike a balance between the interests of members of the deceased’s family who have lived at the Property as their home and those of the local community in the context of limited housing stock. It was also inherent in the legislation that bright line rules were adopted to achieve certainty. This was reflected by the fact that the legislation provided qualified and limited rights to succession and assignment.

The Court of Appeal were also willing to take into account the fact that it was generally accepted that public sector housing was a scarce resource. This was taken into consideration in respect of the justification of the legislation.

It would therefore appear from the Court of Appeal’s judgment that there is a relatively broad scope for a party seeking to justify the legislation relied on, to advance any aim which may arise from the underlying statutory purpose and overall spirit of the legislation. There are no strict requirements as to how that is evidenced.

This approach is particularly useful in the context of proposed discrimination that has become more prevalent with the passage of time, because of changes in society or the economy. For instance, as recognised by the Appellant, the number of individuals dying in residential care has increased significantly since the Housing Act 1985 was passed. It therefore would be highly unlikely that Parliament would have specifically considered this at the time that the legislation was passed.

(ii) Subsequent Legislation

In considering the legitimate aim of ensuring that housing stock was allocated to those most in need, the Judge at first instance recognised that Parliament had been incrementally working towards reducing succession rights having regard to the pressure on social housing stock. The Localism Act 2011 had reduced the category of persons entitled to succeed to a secure tenancy. The Appellant argued that the amendments, which came into force in 2012, could not justify the succession legislation applicable to tenancies granted prior to that date, such as the Tenancy. It was further argued that subsequent legislation could not be used to interpret legislation prior to amendment.

This argument was dismissed. The Court of Appeal found that the Judge was entitled to consider the progressive reduction of succession rights. The Court of Appeal took the view that this was simply one of the factual circumstances considered as part of the Judge’s analysis. It was not a case of using subsequent legislation to interpret earlier legislation or providing justification for a difference in treatment in the earlier legislation.

As such, subsequent changes in legislation may be a factor that can further elucidate the general aims of a legislative scheme. Again, this will be particularly helpful in circumstances such as this, in which the effect of the legislation has become more apparent over time.

(D) Reading Words into the Legislation

As practitioners will be aware, section 3 of the Human Rights Act 1998 requires legislation to be read to remedy any incompatibility with Article 14 of the ECHR. The Appellant argued that the discrimination should be remedied by reading section 87(b) of the Housing Act 1985 to include the following wording:

At first instance, the Judge concluded that it would “cross the constitutional boundary” to read the proposed wording into the legislation. The Appellant argued that the Judge was wrong as the words proposed did not go against the grain of the legislation and were limited to preventing a class of person from being unlawfully discriminated against.

The Court of Appeal briefly considered these arguments within the final paragraphs of its judgment and found that the Judge was right to consider that it would have been wrong to read the proposed wording into the legislation. The Court of Appeal considered that the wording proposed would effectively create a new succession right which could only be appropriate for Parliament to determine.

Conclusions

The determination of the Appellant’s application for permission to appeal to the Supreme Court is awaited. In the interim, this decision is not only important in the context of the legislation applying to succession and assignment, but also provides a comprehensive analysis of the test to be applied in arguments relating to the incompatibility of legislation. It therefore provides essential reading in any case in which incompatibility is being argued.

Eloise Marriott, led by Michelle Caney, both of St Philips Chambers, acted on behalf of Dudley Metropolitan Borough Council in the Court of Appeal. Michelle and Eloise were instructed by Nabila Ahmed of Dudley Metropolitan Borough Council Legal Services.