Lands Tribunal for Scotland

OPINION

Ross
v
Dundee City Council

The tenant of a local authority dwelling applied to the Tribunal under section 71 of the Housing (Scotland) Act 1987 ("the Act") for a finding that the landlord had failed timeously to issue a Notice of Refusal in response to her application to purchase and for a finding that she had a right to purchase on such terms as the Tribunal might determine. However, before the application was determined by the Tribunal, the tenant died. Her executor sought to be sisted as a party. The substantive issue at the hearing before us was whether the executor had any right to continue the application in her place.

The hearing, on 14 March 2000 took the form of an opposed motion to allow the executor to be sisted as a party in room of the deceased. The executor was represented by Mr G K Murray, solicitor of Messrs Blackadder Reid Johnston, Solicitors, Dundee. The respondents were represented by their employee, Mr J D McDonald, Solicitor.

We heard submissions on the question of whether the executor should be sisted as a party and submissions as to his right to continue the application. The former was purely a question of procedure and it is appropriate to deal with it at the outset. Parties were agreed that nothing of substance turned on the question. The issue of the executor's right to continue the application was the only reason for the respondents' opposition to having the executor sisted. It was accepted that exactly the same result would be achieved by sisting him and then having a debate as to whether the application should be dismissed. It may be noted that parties were agreed that in the whole circumstances of this case each party should meet their own expenses whatever the outcome of the present hearing. Accordingly, no question of expenses arose in relation to the procedural dispute.

Mr Murray founded on the decision in Martin's Executrix v McGee 1914 SC 628 as authority for the proposition that an executor should always be sisted leaving any substantive issue to be determined as part of the process thereafter. There is certainly force in this contention where it is the executor who seeks to be sisted and we are prepared formally to follow this course in the present case. We think it unnecessary, however, to accept this as a hard and fast rule for practice in the Tribunal. Our procedure does not require any formal Minute of Sist. Our practice has been to use the term "sist" where the prospective party seeks to replace an original party. This can arise in circumstances such as the present or, for example, on a change of title. In any case where a prospective party makes plain his intention to be allowed to take part in the proceedings, the Tribunal will try to see that the substantive issue is determined at as early a stage in proceedings as possible. Where issues are complex it will be necessary to allow the prospective party to join in such proceedings as are necessary to determine his right, title and interest. Where a preliminary issue is clearly identified a convenient opportunity to have it dealt with may well arise by way of hearing to decide what further procedure, if any, is necessary. The respondents' opposition to the motion to sist provided a suitable opportunity for full ventilation of the substantive issue in the present case. However the respondents had in fact lodged detailed answers to the Minute of Sist and both parties had adjusted. A record was made up on the Minute and Answer. In other words, the executor had already been allowed to take part in the proceedings as far as was necessary to allow parties to focus the issue between them.

For completeness, we record that reference was also made in submissions on this point to the decisions in Gibson v Barbour 1846 8D 427 and Green v Borthwick 1896 24R 211. These, however, were cases where an opponent was seeking to compel a representative to be conjoined. They had no bearing on the present issue.

The substantive issue can best be understood against a timetable of dealings in relation to the original application.

The tenant, Mrs Ross, applied to purchase her house on 17 April 1998. No notice of refusal was issued. It is clear that this was because the landlords assumed that the tenant had a right to buy and intended to deal with the matter on that basis. The landlords in fact issued a draft offer to sell on 3 June 1998 and a formal offer on 16 July of that year. However on 17 August 1998 they intimated a withdrawal of the formal offer on the basis that they had initially failed to identify the property as a "sheltered house". It was a matter of agreement between the present parties that the effect of failure to serve a notice of refusal within a month of the application was to impose on the landlords an obligation to serve an offer to sell on the tenant in terms of section 63(2): East of Scotland Water Authority v Livingstone 1999 SC 65 (hereinafter "Livingstone").

The tenant then wrote to the landlord challenging the competency of the change of mind. A further letter was written in February 1999 making express reference to the decision of the Tribunal in Livingstone. (That decision was reported in 1997 SLT (Land Tr) 28) It appears, however, that the respondents considered that having regard to their whole statutory obligations in relation to housing, they could not make any concession as to the tenant's rights.

After some preliminary correspondence with the Tribunal, a formal application was lodged with the Tribunal on 28 April 1999. This sought a finding that the landlords had failed to intimate timeously a Notice of Refusal and a finding that the tenant had a right to purchase the dwellinghouse on such terms as the Lands Tribunal might determine. An Order for Answers was made and Answers were lodged on 26 May 1999. On that date the Tribunal pronounced an Order allowing the tenant to lodge any adjustments, if so advised, by 16 June 1999. On 21 June intimation was made on behalf of the applicant that no adjustment was proposed.

The landlords had suggested that the matter might be determined without need for oral hearing. The next procedural stage would have been for the file to be put before a member of the Tribunal for a decision as to whether the case was one which could appropriately be dealt with on written submissions. If so, parties would then have been invited to submit in writing their contentions as to the legal effect of the facts set out in the pleadings. However, the tenant died on 4 July 1999.

Thereafter her nephew, George Reid, the present minuter, obtained confirmation as executor nominate and various procedures took place involving presentation of a Minute of Sist, Answers and Adjustments.

Submissions

Mr McDonald submitted that the rights given by the Act were conferred on a tenant. On death, the tenancy ended in terms of section 46(1) unless there was succession by a "qualified person" within the meaning of the section. It was agreed there was no such succession in the present case.

The remedy provided by statute for enforcement of a tenant's rights was to provide the Tribunal to replace the landlord and carry out the landlord's obligations. In short, the Tribunal would have to issue an offer to sell on behalf of the landlord. However, that offer had to be an offer to the tenant. There was now no tenant. He accepted that there were many situations where an executor stepped into the shoes of the deceased, but submitted that that was not the case here. It was inconsistent with the statutory provisions for succession to the tenancy. The purpose of the application was to have an offer issued to the tenant. It was a statutory right. There was no such right in an executor.

It was to be noted that if there was a qualified person, such person would succeed to the tenancy. He or she might not wish to buy. In any event there was a potential conflict of interest between such person and the executor of the deceased tenant. That consideration supported the view that the executor did not succeed to the statutory rights.

He referred to McKay v City of Dundee District Council 1996 SLT (Lands Tr) page 9 for the proposition that an applicant must still be a secure tenant right up until the stage when he or she accepts an offer to sell. Where a tenancy had in fact been terminated, the landlord could not make an offer to sell.

He submitted that Livingstone had no bearing on a situation where there was a change of circumstances such as death of the tenant. McKay was an illustration of such a change. The point of the decision in Livingstone was clear from the observations of Lord Prosser, at page 80G to H, to the effect that the Tribunal could not start the process all over and do all that the landlord might originally have done. However the Tribunal had to start at the point that had actually been reached. They could deal as the landlord would have done with the change of circumstances. The decision in Livingstone proceeded on the assumption that the tenant was still alive. He stressed that Lord Prosser, in commenting on change of circumstances qualified his comments by the expression "as between landlord and tenant". This relationship no longer existed.

Lord Coulsfield (page 83D to E) appeared to accept the decision in McKay. Mr McDonald founded on the dictum: "It is certainly true that the point from which the Act begins is that the tenant must have a right under the statute and that right must continue until the date of completion of the sale". At 83I Lord Coulsfield expressly recognised that the tenant's right was subject to supervening events which might lead to a cancellation of his tenancy. Mr McDonald stressed that although the procedure could be described as administrative, that was only insofar as it related to the applicant tenant.

In relation to the question of joint purchasers he submitted that the joint purchaser would frequently be entitled to succeed as secure tenant. If so, such person might have his own right to buy. It was noted that the right to purchase was not given to all family members even where title could be taken in their name along with the tenant applicant under section 61(6). In any event, the Act plainly contemplated some limitations which might appear to operate harshly in certain circumstances. Where there had been one succession to a secure tenancy there would be no entitlement on a second succession. This might mean, for example, that a child living in family with parents who were joint tenants would have a right to purchase but would not have such a right if the parents had had two single successive tenancies. There had to be some cut-off points.

He acknowledged that the statutory scheme might appear to operate harshly in relation to the present applicant. However, the respondents were bound by their statutory obligations. On a proper construction of the Act, the application to sist should be refused and the action, in any event, dismissed.

For the Minuter, Mr Murray accepted the difficulty posed by section 46(1). The executor did not succeed to the tenancy. However, the provisions of that section were effectively made redundant in the present case by the effect of the majority decision in Livingstone. That showed that the scheme of the Act was to provide administrative machinery to enforce an obligation incurred to the tenant. Once a tenant had started the machinery it could not be stopped unless the landlord took the appropriate statutory steps. It was clear that the landlord had not done so in the present case. Once a tenant had asserted his right it was for the landlord to address the issue. Having failed to do so a legal obligation arose which the Tribunal could enforce. The machinery for doing so was simple and mechanical. There was no scope for further dispute about right. This was the clear effect of Lord Prosser's opinion at pages 76A to 78D and of Lord Coulsfield, at page 83D to 84F. Lord Coulsfield identified two phases: the first essentially judicial and the second administrative. Once the time for judicial determination of the tenant's status had passed, the train was off on the administrative railway. There was no reason for it to stop until it reached its conclusion.

In relation to the question of change of circumstances he founded on a dictum of Lord Prosser, at page 80A to B, which, he submitted, indicated a view that the relevance of change of circumstances was doubtful. Although the comment was qualified by the words "as between landlord and tenant", that qualification was met in the present case because, at the appropriate stage, Mrs Ross had been the tenant. Once the landlord had come under the actual obligation to serve an offer the statute proceeded upon the basis that the time for investigating any issue under section 61 had passed. The question of entitlement was such an issue. Mr Murray also relied on the observation of Lord Coulsfield at 83F to the effect that the administrative phase could deal "with any incidental matter which may arise". Changes arising on death of a tenant were essentially incidental matters.

Mr Murray realised that he had to contend that the decision in Livingstone had the effect of either overturning the decision in McKay or restricting it strictly to its own particular circumstances. He accepted that if the decision stood, he could not succeed. In this connection he disputed the submission that Lord Coulsfield at page 83D to E accepted that the tenant's right must continue until completion of the sale. Such acceptance would be inconsistent with the view, apparent in the Opinion generally, that the Tribunal had no locus to look at the tenant's qualification and his Lordship's comment, accordingly, could not be interpreted in that way.

Mr Murray did not go as far as to suggest that the executor could be seen for all purposes as identical to the tenant. That would have been a difficult argument in light of the terms of section 52 which provide for the tenancy to pass by operation of law to "a qualified person" as there defined. There is plainly no automatic succession to a tenancy by an executor. He stressed that although the right to buy was limited to secure tenants, the tenant could exercise that right by taking title in name of a nominee. If the right ended on the tenant's death the nominee's right would also end. This, he said, could not have been intended. This submission was based on sections 61(1)(c) [63(1)(c)]* and the categories of persons set out in section 61(6) as potential "joint purchasers". He accepted that there was no unlimited right to select a "nominee".

Asked what would happen if respondents challenged an applicant's status as "tenant" in proceedings before the tribunal, Mr Murray contended that this too would be outwith the jurisdiction of the tribunal. The stage for challenge was past. If it turned out that the original application to purchase had been made by a person who was not a tenant he suggested that it might be capable of being reduced by appropriate action.

For completeness it should be recorded that reference was made in the submissions to the following cases: Cooper's Executors v Edinburgh District Council 1991 SLT 518; Jack's Executrix v Falkirk District Council 1992 SLT 5; and City of Glasgow District Council v Peart 1999 Housing Law Reports 117. In each of these cases the issue related to the missives actually or potentially completed by or on behalf of the tenant. It was accepted that the references did not directly advance the arguments in the present case. It may be observed, however, that the stress laid on the concluded missives in these cases is consistent with the approach we favour, discussed below.

Decision

We consider the respondents' submissions well founded. It is, no doubt, true that once a tenant puts the administrative train in motion the opportunities for a landlord to stop it are strictly limited. However, the scheme of the Act is to provide machinery leading to an offer being made to a tenant. If there is no tenant, the administrative train has lost its purpose. We can see no good reason why it should not be stopped whenever it becomes clear that the applicant has ceased to be a tenant.

This view is supported by the decision in McKay and by the reasoning set out in that case. It is also supported by the dicta of Lord Coulsfield in Livingstone. At page 83D-E he said, "It is certainly true that the point from which the Act begins is that the tenant must have a right under the statute and that right must continue until the date of completion of the sale"; and at page 83I to 84A he accepted the relevance of "supervening events which may lead to a cancellation of his tenancy before the sale is completed".

The decision in Livingstone is, of course, binding on us. That decision makes clear the importance of the distinction between the concepts of a "tenant" and a "secure tenant" and it may be noted at this point that the above dicta of Lord Coulsfield refer only to the former. Not all tenants have a right to buy. The decision shows that the opportunity for challenge of the tenant's right to buy is limited. If the landlord does not respond timeously to the tenant's assertion of right, he loses the chance to do so. The Tribunal has no jurisdiction to raise the issue at its own hand. After the statutory opportunity for dispute as to right has passed, the function of the Tribunal is an administrative one to enforce the obligations which have accrued. The Tribunal is obliged to "start at the point which has actually been reached, accepting any obligations which have arisen and moving on to exercise the choices and discretions which would then still have been open to the landlord": page 80 G to H.

It is clear that challenge to a tenant's right does not raise the same issues as the question of whether an applicant is in fact a tenant. We find nothing in the Act to prevent the Tribunal considering that question and nothing in the opinions in Livingstone which would have that effect. A fortiori, we are satisfied that there is nothing to prevent the Tribunal considering a change of circumstances relative to the existence of the tenancy.

In McKay it was not disputed that, at the date of application, the tenancy was secure and that the applicant satisfied all the requirements giving her a right to purchase. The landlord had not issued either a notice of refusal or an offer to sell. It was not in doubt that, at the time of referring the matter to the Tribunal, the applicant was a tenant who had a right to purchase and that normal procedure would have been for the Tribunal to make a finding that paragraph (a) of section 71(1) applied and for the Tribunal to go on to issue to that applicant an offer to sell. However, the landlord had raised Sheriff Court proceedings for recovery of possession and, at the stage when the Tribunal came to consider the matter, the tenancy had in fact been terminated by sheriff's order. The applicant, accordingly, was no longer the tenant. It followed that she was no longer the secure tenant.

The Tribunal treated the case as turning on whether, in order to have a right to purchase, a tenant required to be a "secure tenant" only when he or she served an application in terms of section 63(1) or whether it was necessary that she remain a "secure tenant" until an offer to sell was served and she accepted that offer: page 12A-B. On examination of the scheme of the Act the Tribunal concluded that the applicant must still be a secure tenant until she accepted the landlord's offer to sell. Although the reasoning was expressed in terms of "secure tenancy" the distinction between a tenant and a secure tenant was not relevant for the purposes of that case. The matter was summed up by the Tribunal, at page 13, as follows: "If Mrs McKay's tenancy has been terminated, the Tribunal cannot now make an offer to sell and, if it did, she could not validly accept it". We think this accurately reflects the ratio of the case. It was termination of the tenancy which was the relevant fact. The question of whether that tenancy was a secure tenancy was not in issue.

It is not altogether easy to figure a situation where there might be a change in circumstances bearing on the right to buy without also affecting the status as tenant. (The case of Muir Group Housing Association Ltd referred to in McKay might be an example although it arose under English provisions which are not the same as the relevant provisions of the 1987 Act.) However, it is clear that no such issue arises in the present case and neither party required to address the distinction. It is unnecessary for us to consider it further.

It is clear that in Livingstone the judges were not considering any question of dispute as to the existence of a tenancy. Lord Prosser expressly prefaced his analysis of the Act by stating that no issue arose as to the existence of a tenancy or the relationship between the appellants and Mr Livingstone as being that of landlord and tenant. The relationship of landlord and tenant was admitted and assumed as the basis of the discussion: Lord Prosser, 74F-G, 80A-B; and Lord Coulsfiel, 81D-E. Their analysis laid stress on the fact that there is nothing in section 71 to require an applicant to establish his right to buy in proceedings before the Tribunal. This can be contrasted with the fact that section 71 does expressly provide for the application to the Tribunal to be by a "tenant". In other words, an applicant can only come within the scope of the section if he is a tenant. If it was patent that an applicant was not a tenant, there is no apparent statutory basis upon which the Tribunal would be entitled to proceed by assuming that he was. Similarly, if the status as tenant was challenged, we see no reason why the Tribunal should not consider the basis of challenge. It must be for an applicant to show that he falls within the section. No doubt, in the normal course, that matter will not be in issue between parties and the Tribunal can accept the status at face value. However, status as tenant is the basis upon which the application is made. It would be within the usual scope of the Tribunal's jurisdiction to hear any challenge of such status. In Livingstone, at page 84D-E, Lord Coulsfield observed: "It is true that a statutory Tribunal may have the right, or duty, to investigate facts and circumstances to determine whether or not conditions for the exercise of its discretion are satisfied". His Lordship, of course, went on to say that the provisions of the Act were inconsistent with the suggestion that the Tribunal was under some independent duty to investigate the circumstances with a view to determining whether or not the tenant had a right to purchase. This qualification does not, however, have any direct bearing on the question of whether or not a particular applicant has status as tenant.

The sections which set out the procedure to be followed prior to an application to the Tribunal do not, in our view, give rise to any binding presumption that such application is by a tenant. The provisions of section 68(1) relate to challenge of "the tenant's right". In that subsection the status of tenant is assumed. It is clear that challenge to a tenant's "right" does not raise the same issues as the question of whether or not the applicant is in fact a "tenant". Similarly, the status of an applicant as "tenant" is assumed in section 68(2) where provision is made for challenge of information contained in the application.

It may be difficult to envisage a situation where an application to purchase could be made by a person who was not within the statutory definition of a tenant without there being some element of fraud or deception. Mr Murray may well have been right to suggest that a remedy of reduction would be possible. It must be observed, however, that while the assumed intention of Parliament to protect and enforce the rights of tenants can be accepted as a factor relevant to construction of the provisions relating to the machinery for implementation of these rights, such intention is irrelevant to the prior question of whether a particular applicant is or is not a tenant. The purpose of the Act was to protect tenants and not to assist putative tenants. There is no reason to restrict opportunity for challenge of status as a "tenant". If that is so, it follows that there can be no reason to read the Act as intended to preclude investigation of change of circumstances relating to the tenancy. We are satisfied that it is competent and appropriate for us to deal with the matter.

In the decision of the Tribunal in Livingstone (at 41K-42F of the report in 1997 SLT (Lands Tr) 28), consideration was given to the significance of the change from section 7 of the Tenant's Rights Etc. (Scotland) Act 1980 to what is now section 71 of the 1987 Act. It was pointed out that there was no longer any mention of a "secure tenancy" within the four corners of what is now section 71. It thus could no longer be argued that the section, taken on its own, required that the Tribunal should investigate whether the landlord was a "landlord under a secure tenancy" and therefore whether the applicant was a secure tenant. All that was necessary under section 71 was that a "tenant" must be able to show that the landlord has been duly served with an application to purchase and had then failed to issue timeously either an offer or notice of refusal.

It is plain from consideration of that decision as a whole that the Tribunal did not found on this particular distinction. The decision proceeded on a careful analysis of the whole scheme of the Act and its purpose. That analysis was accepted as sound by the majority in the Inner House. However, the discussion of the distinction between the provisions of section 7 of the 1980 Act and the present section 71 implies that if section 71 had contained express reference to a "secure tenant" as being the applicant, this would have justified the Tribunal in examining that status. This is consistent with the view we take, that although the Tribunal is not entitled to examine the secure tenancy it must, under section 71, be satisfied as to the applicant's status as "tenant".

As discussed above, we consider that it was unnecessary for the decision in McKay to refer to the continuance of a "secure" tenancy. Nevertheless the reasoning in that decision is persuasive in relation to continuance of the tenancy. It was a decision taken by two legal members of the Tribunal sitting together. We are not bound by previous decisions of the Tribunal but it is desirable that we endeavour to ensure that decisions are consistent. Accordingly we should not lightly depart from a previous decision. We think it quite clear that the decision in Livingstone is expressly restricted to situations where the status of the parties as landlord and tenant is not in issue and to situations where there has been no change of circumstances. There is, therefore, nothing in it which could be said to over-rule the decision in McKay. Further, we are satisfied that nothing in the decision affects the ratio of that case. We recognise the force of Mr Murray's submission that if the stage for challenge of the tenant's right has passed and the function of the Tribunal is purely administrative, there is no justification for consideration of a change of circumstances. However, we are not considering a change of circumstances relative to the tenant's right to buy. We are concerned with a change in tenancy.

Any doubt expressed by Lord Prosser (80A-B) as to the relevance of a change of circumstances in relation to the issue of rights as a secure tenant explicitly assumed that the fundamental status of landlord and tenant continued. Mr Murray's submission that it was enough that Mrs Ross was tenant at the outset is not persuasive in the context of discussion of change of circumstances. It may also be observed that, implicit in Mr Murray's emphasis on the stage for objection being past, is an acceptance that if the death had occurred shortly after the initial application, the respondents would have been entitled to issue a notice of refusal - had they known to whom it should be issued. Change of circumstances would be relevant at that stage. We can see no statutory purpose to be served by excluding change of circumstances from consideration thereafter and no reason not to follow the decision in McKay

The application must accordingly be dismissed as a result of the death of the applicant tenant. As we noted above, parties were agreed that no order was required in relation to expenses.