OPINION

Eric Maclennan v Dunedin Canmore Housing Association Limited

Introduction and Summary

[1] This application under Section 71(1)(a) of the Housing (Scotland) Act 1987 (“the Act”) turns essentially on one question of law under the ‘Right to Buy’ provisions as amended by the Housing (Scotland) Act 2001. The landlords did not serve a notice of refusal of an application to purchase within the statutory time limit, but wish to argue in answer to this application that the tenant is not entitled to purchase because his right has been suspended until 2022 under Section 61A(3). The 2001 Act brought tenancies under ‘registered social landlords’ into the regime of ‘Scottish secure tenancies’ but at the same time introduced a limitation on the right to buy houses let under such tenancies, including a procedure for Scottish Ministers to suspend the right to buy. In this case, the applicant accepts that his right was indeed suspended under that provision, but argues that the landlords are, under the statutory provisions, precluded from relying on the suspension because they did not timeously serve a notice of refusal. Reliance is placed on the decision of the Inner House of the Court of Session in East of Scotland Water Authority v Livingstone 1999 SC 65. The effect of failure to serve a notice of refusal was also considered in another authoritative decision, McCreight v West Lothian Council 2009 CSIH 04. The circumstances of the present case, however, are not the same as in either of these cases. A subsidiary point is whether, if the landlords can resist the application despite failing to serve a notice of refusal, the Tribunal has jurisdiction to decide whether the suspension does actually apply (although as that matter is not actually in dispute in this case, that issue, which did arise in the different circumstances of McCreight, would not appear to be material to this case).

[2] The Tribunal has decided that the landlords are entitled to rely, in defence of this application, on this exclusion of the right to buy. In summary, it appears to the Tribunal that as a result of the suspension order the applicant could not validly apply under Section 63(1) of the Act, so that there is no basis for an application under Section 71. The reasoning of the majority of the court in Livingstone does not apply to this case. Further, there is no jurisdictional obstacle to the Tribunal deciding the application on this basis. Accordingly, the application must be dismissed.

Procedure

[3] The applicant, Eric Maclennan, tenant of a flat at 12/7 Baltic Street, Edinburgh, submitted an application to his landlords, the respondents Dunedin Canmore Housing Limited, to purchase his flat, on 27 February 2013. The respondents delayed responding to this application until 11 April 2013, when they wrote apologising for the delay but advising that the applicant did not currently have the right to buy. This was because the respondents had applied to Scottish Ministers for an order under Section 61A(3) of the Act and Ministers had on 23 April 2012 made a determination suspending the applicant’s right to buy until 30 September 2022. The applicant applied to the Tribunal for a finding in terms of Section 71(2)(a) that the respondents had failed to issue timeously either an offer to sell or a notice of refusal. Parties agreed to disposal of the application without an oral hearing and on the basis of written submissions. Helpful written submissions were received from each party. The applicant was not formally represented although his submissions were in the form of an opinion of counsel. The respondents were represented at the stage of submissions by Messrs HBJ Gateley, Solicitors, Edinburgh.

[4] In his written submission, the applicant accepted that, as a result of the extended suspension order under Section 61A(3), he did not, at the time of his application, have the right to buy under Section 61 of the Act. Although his tenancy had commenced before the commencement date of the 2001 Act, it had then been an ‘assured tenancy’ (which under the 2001 Act became a ‘Scottish secure tenancy’) so that, although he would have had the right to buy but for the suspension order, he was not in a position to claim the ‘preserved’ right to buy. The applicant’s submission was, however, that having regard to the reasoning in Livingstone the failure to serve the notice of refusal timeously meant that the Tribunal had no jurisdiction to determine that he did not have the right with the result that the Tribunal ought to proceed with his application and make a finding in terms of Section 71(2)(a). The competing submissions are summarised in the Tribunal’s consideration below.

Authorities referred to:-

Garvie’s Trs v Still 1972 SLT 29
East of Scotland Water Authority v Livingstone 1999 SC 65
McCreight v West Lothian Council [2009] CSIH 04

Tribunal’s Consideration

[5] The judicial and administrative procedures set out in the Act remain substantially the same following the quite substantial alterations to the substance of the right to buy made by the 2001 Act. The reasoning of the majority of the First Division of the Court of Session in Livingstone remains, of course, binding on the Tribunal if, on analysis, it covers the situation which has arisen in the present case.

[6] In Livingstone, the applicants, one of whom was admittedly a “tenant” within the meaning of the Act, had applied to purchase; the landlords had not issued either an offer to sell or a notice of refusal timeously; the applicants applied to the Tribunal under section 71; and the landlords sought to defend the application on the grounds that, although a “tenant”, Mr Livingstone was not a “secure tenant” and therefore did not have the right under Section 61 of the Act to purchase. The Tribunal held in the applicants’ favour. On appeal by the landlords, the court upheld that decision. Lord President Rodger dissented.

[7] All three of their Lordships gave opinions in which they analysed the Act’s provisions in order to decide whether the landlords were, or were not, at the stage of an application under Section 71, entitled to argue that there was no right under Section 61. The decision of the majority was that, having regard to the statutory scheme of procedural provisions, Parliament must have intended that where a tenant applied under Section 63(1) the only procedure under which the landlords could dispute the right was by serving a notice of refusal: if they failed to do so, or to do so timeously, they “could not be heard to say”, or were barred from saying, that the tenant did not have the right.

[8] That decision can be contrasted with another decision of the court, in McCreight. The landlords had again not served a notice of refusal. There was again an application under section 71. In this case, however, the landlords wished to dispute that the applicant was a tenant at all. This was on the ground that, although he had been accepted as a tenant by succession to his cohabitee he had in fact subsequently been convicted of murdering her and the landlords wished to argue that his tenancy was subject to forfeiture. The Tribunal and the court held that if the applicant was not a tenant, he was not qualified to apply under Section 71. Lord Justice Clerk Gill pointed out that the effect of the applicant’s argument was that a squatter might apply to purchase and, if there was no notice of refusal, become entitled to enforce the purchase by applying under Section 71.

[9] The court, however, further decided in McCreight that the Tribunal had no jurisdiction itself to decide the issue of forfeiture, so that the application should have been sisted to enable that issue to be resolved in the ordinary courts.

[10] The grounds on which the respondents wish to oppose this application under Section 71 are different. The 2001 Act introduced as one of a number of limitations of the right to buy a procedure for registered social landlords to apply to Scottish Ministers, in effect, to extend the suspension under Section 61A(3)(a) of the application of the right to buy to tenancies from them, for a further period of up to 10 years. Section 61A(3) provides:-

“Where this section applies, section 61(1) does not apply in relation to a house let under the tenancy until …”

As indicated above, it is not in dispute that this section does apply because Ministers have made such an order. It may be worth noting that although the respondents made a block application for the whole of its rented housing stock, the conditions set out in Section 61A(1) and (2) for such extension relate to “a Scottish secure tenancy” or “a tenancy of a house”. At all events, the result of the provision is that “section 61(1) does not apply in relation to” (the applicant’s house).

[11] Section 61(1) of the Act provides:-

“Notwithstanding anything contained in any agreement, a tenant of a house to which this section applies … shall, subject to this Part, have the right to purchase the house …”

[12] In his submission, the applicant refers to Sections 63, 68 and 71 of the Act, highlighting the references to “a” or “the” “tenant” and “landlord”. Reliance is then placed on Livingstone, in particular certain passages from the Tribunal’s opinion and the opinion of Lord Prosser. Section 68 required the landlord to tell the tenant he was refusing the application, and why, timeously. The Act provided for the issue as to whether the tenant has the right to buy to be resolved by the Tribunal but only following service of a notice of refusal. A tenant may have made “a perfectly proper application” although it might turn out that he did not in fact have the right. Where no notice of refusal has been served, Section 63(2) obliged the landlord to serve an offer to sell. Section 71 would then (assuming the tenant wished to proceed) take the matter out of the landlord’s hands, with the Section 63(2) obligation remaining and now to be fulfilled by the Tribunal.

[13] The applicant submits that the same reasoning applies in this case. There was no dispute that the applicant is a tenant of the landlord and has duly applied to buy. The suspension of his right to buy could only become a live issue if a notice of refusal had been served. The Tribunal was bound to consider the application in accordance with Section 71. There was no basis on which the Tribunal ought not to fulfil the obligation breached by the landlord. Section 63A merely added an additional consideration as to whether the tenant had properly a right to buy. It did not detract from the reasoning requiring merely the existence of a landlord and tenant relationship and an appropriate application to buy. This was consistent with the approach taken by the court in McCreight when distinguishing the two cases. Section 63A should be characterised as a further qualification restricting the right to buy in much the same way as deciding whether the tenancy was a secure tenancy, to be considered only where the landlord has “put the issue in play”. The court in McCreight had identified a precondition of the jurisdiction under Section 71, viz the existence of a landlord-tenant relationship. That did not assist in the present case in which, as in Livingstone, there was no doubt that a tenancy existed.

[14] The respondents’ submission is that whether the applicant had the benefit of the right to buy was an essential precondition of the jurisdiction under Section 71. In the present case, in contrast to McCreight, the essential precondition was whether Sections 61 to 84 of the Act applied to the tenancy at all. That was a matter which fell within the terms of the Act and did not require determination by the ordinary courts. The consequence of a determination by Ministers under Section 61A(3) was that “Section 61(1) does not apply”. That was fundamental to the determination of the application. In the same way as Section 71 could not have the effect of conferring the right upon an applicant whose right to the tenancy was in dispute (McCreight, at Para 14), the section could not have the effect of conferring the right where Section 61(1) “does not apply”. Livingstone concerned the application of Section 61(1) to the tenancy. In the present application, Section 61 did not apply. The Tribunal’s power to “explicate its own jurisdiction” enabled it to decide whether the application was validly made, including whether Section 61 had been suspended, with the result that there could be no valid application. Section 71 empowered the Tribunal to make orders within the scope of Sections 61 to 84, but as Section 61 had been suspended there were no such orders which could competently be made.

[15] There appears to the Tribunal, on the basis of the reasoning in Livingstone, to be some force in the arguments on both sides. The question which requires an answer appears to be whether there was a competent application under Section 63(1). If a competent application was made, the provisions under this statutory scheme meant that it could only be resisted by following the statutory procedure of serving a notice of refusal. Otherwise the landlords came under the duty in Section 63(2) to sell, subsequent procedure being administrative rather than judicial. If the only essential precondition was the existence of a tenancy, even one which might not qualify for the right, why should not the tenancy in this case be sufficient to have the same result even although Section 61A(3) applied?

[16] It appears to the Tribunal that while that approach might be sufficient to meet the requirement for an application to be made by “a tenant”, it does not meet the full requirement in Section 63(1) for “a tenant who seeks to exercise a right to purchase a house under Section 61”. At the time when he made his application, Section 61 did not apply to the applicant’s house. It might be suggested that there was “a house” in the same way as there was “a tenant”, even although the landlords might by following the procedure establish that there was not a right under Section 61 to purchase it. That, however, ignores the words round about, in particular the reference to Section 61. Section 61 having been specifically dis-applied in relation to this house, it is very difficult to see how this condition can have been satisfied. Put another way, the requirement for “a tenant” is not the only precondition: there has to be a claim of entitlement to buy a house under section 61. Any “tenant” within the meaning of the Act can make a competent application, but not in relation to a tenancy of a house in relation to which section 61 does not at the time apply.

[17] In Livingstone, Lord Prosser reasoned on the basis that, there having been a competent application and no notice of refusal, the landlord had come under a duty to offer to sell the house and the subsequent administrative procedure could not be used to avoid that. It is difficult to see how there could be a duty to sell a house in relation to which the right to buy has been dis-applied. It may of course also be suggested that it is difficult to see how there could be a duty to sell to a tenant who does not have a qualifying tenancy, but it seems to the Tribunal that the requirement for a house in relation to which section 61 applies is fundamental. At all events, the reasoning of the majority in Livingstone relates to “a tenant” and not to the house, there having been no issue about the application of Section 61 to the house in question. We can see a difference between requiring a landlord to consider in an individual case whether the particular tenant is a qualifying tenant and requiring a landlord none of whose housing is affected by the ‘right to buy’ to go through the formality of refusing individual applications.

[18] For these reasons, the Tribunal has decided that this application cannot succeed.

[19] Further, the jurisdictional difficulty which arose in McCreight does not arise in this case. We are not deciding on the basis of an extraneous rule of law which we have no jurisdiction to apply. Rather, we are asking a similar question to that asked by the Tribunal in Livingstone, viz. whether, on a correct application of the statutory scheme, the applicant is entitled to the statutory remedy. In this case, we have reached a different answer.

[20] Accordingly, we must dismiss this application.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 4 February 2014.

Neil M Tainsh – Clerk to the Tribunal