OPINION

Patricia Hosie, Applicant v West Dunbartonshire Council, Respondents

Introduction

[1] This is an application under section 71(2)(b) of the Housing (Scotland) Act 1987. The applicant has exercised her right to purchase her dwelling house. Her landlords, the respondents, have contended that they are entitled to take into account, in calculating the statutory discount, the share of a previous discount which the applicant received in a statutory purchase of another property in 1993. In 1993 the applicant had been a joint purchaser of a property, but not a tenant of the relevant landlord. The applicant seeks an order requiring the respondents to make an appropriate offer on the basis of a full discount. The issue is whether the 1993 discount should count against the current discount.

Statutory provisions

[2] The Housing Scotland Act 1987 (“the 1987 Act”), as amended, gave certain public sector tenants the right to purchase their house prior to the repeal of relevant provisions on 1 August 2016. The provisions included:

“61.— Secure tenant's right to purchase.

(1) Notwithstanding anything contained in any agreement, a tenant of a house to which this section applies (or such one or more of joint tenants as may be agreed between them) shall, subject to this Part, have the right to purchase the house at a price fixed under section 62

(6) A tenant may exercise his right to purchase, if he so wishes, together with one or more members of his family acting as joint purchasers, provided—

(a) that such members are at least 18 years of age, that they have, during the period of 6 months ending with the date of service of the application to purchase, had their only or principal home with the tenant and that their residence in the house is not a breach of any obligation of the tenancy; or

(b) where the requirements of paragraph (a) are not satisfied, the landlord has consented.

62.- The price.

(1) …, the price at which a tenant entitled to purchase a house under this Part shall be fixed as at the date of service of the application to purchase by subtracting a discount from the market value of the house.

(3) …, the discount for the purposes of subsection (1) shall be—

(a) 20 per cent of the market value of the house,

together with

(b) an additional one per cent. of the market value for every year beyond 5 of occupation by the appropriate person, preceding the date of service of the application to purchase, of a house …

up to a maximum discount of 35 per cent or £15,000, whichever is less.

(3A) There shall be deducted from the discount an amount equal to any previous discount, or the aggregate of any previous discounts, received by any of the persons (our emphasis – see paragraph [3]) mentioned in subsection (4)(a)(i) to (iv) on any previous purchase of a house from a (specified) landlord … reduced by any amount of such previous discount recovered by such a landlord.

(3B) Where a previous discount was received by two or more persons jointly, subsection (3A) has effect as if each of them had received an equal proportion of the discount.

(4) For the purposes of subsection (3)

(a) the “appropriate person” is whoever of—

(i) the tenant; or

(ii) the tenant’s spouse if living with him at the date of service of the application to purchase; or

(iii) a deceased spouse if living with the tenant at the time of death; or

(iv) any joint tenant who is a joint purchaser of the house,

has the longer or longest occupation of the type mentioned in subsection (3)(b):”

[3] We note that, unfortunately, the online Westlaw version of the statute for the period 30 September 2002 until 28 February 2011, and for the period 1 March 2011 until 31 July 2016 contains errors. The version incorrectly omits the words “by any of the persons” underlined above, and incorrectly contains other words (not quoted above) which were repealed by section 49(3) of the Housing (Scotland) Act 2001.

Procedure

[4] The applicant was unrepresented. The respondents were represented by their in house solicitor Mr Anderson. The facts of the case are not in dispute and parties agreed to the case being disposed of by written submissions in terms of Rule 26. The following facts are taken from the documents before us.

Background facts and circumstances

[5] In 1992 the applicant’s mother, Catherine Campbell, applied to purchase her flat from her landlords namely Dumbarton District Council. The applicant was not a tenant at that time, but was named in her mother’s application as a joint purchaser along with her mother. The application proceeded under the right to purchase legislation in force at the time, and the relevant application form was a statutory one. The transaction completed and the applicant and her mother both became proprietors. The discount applicable to that transaction was £23,303. A standard security was executed by both proprietors to the council to cover the possibility that the discount (or a percentage of it) should become statutorily repayable in the event of early resale. A further standard security was granted by them in favour of the Bank of Scotland at the time of the transaction.

[6] The applicant has now applied to purchase another property in which the respondents are her landlords. We infer that she became a secure tenant of the respondents at some stage since there is no dispute that she has the right to purchase.

Submissions

[7] The respondents’ position is that section 62(3A) of the 1987 Act is engaged. They maintain that one half of the 1993 discount entitlement; i.e. £11, 651.50, requires to be deducted from the current discount entitlement. The current discount entitlement is said to be £11,000; thus the entire discount is cancelled out and the applicant is required to pay the full market price to purchase the property. The council accepts that the applicant was not a tenant at the time of the 1993 purchase; but they contend that it was enough for her to have been a joint purchaser for the section to apply to the current transaction. An amount equal to one half of the previous discount should be applied in terms of subsection (3B). The applicant does not dispute the figures but maintains that as she was not a “tenant” in the 1993 transaction she had no discount entitlement at the time, thus the 1993 discount should not be taken into account.

Discussion by Tribunal

[8] There can be no dispute that as a joint purchaser in 1993, paying a reduced price for the property and obtaining a share in ownership, the applicant can be fairly said to have received a proportion of a previous discount within the meaning of subsections (3A) and (3B). All subsection (3A) requires is for the discount to have been “received” by a person mentioned in subsection (4). Whether she previously exercised a right to buy as a tenant, or was a joint purchaser within the meaning of section 61(6) as a family member of a tenant, does not alter the fact that she received a discount on the price.

[9] It seems to us that for the applicant to avoid the consequences of subsection (3A), “the tenant” in subsection (4)(a)(i) would require to be read as meaning, as it were, “the tenant in any previous transaction” as opposed to the tenant making the current application to purchase. But sub-sections (3) and (4) are expressly linked. The purpose of subsection (3), when taken along with subsection (4) is to allow for an increased discount based upon occupation not necessarily by the tenant, but by an appropriate person as defined by the statute whoever has the longest occupation. So for example if a tenant’s spouse (subsection 4(a)(ii)) living with the tenant at the date of service of the application had had a longer period of occupation, that longer period would be used in the calculation. It is clear therefore that the provision necessarily focusses upon the length of occupation by the tenant who is making the current application, as well as the spouse. A similar point could be made with regard to subsection (4)(iii) in that one requires to look to the period of occupation by a deceased spouse. Only by a comparison with the period of occupation by the tenant making the application can one calculate the correct discount. So it would be odd if sub-section (3A), when referring to those same provisions for another purpose, namely to prevent accrual of a double discount, were to require the reading of the provisions in a different sense.

[10] In these circumstances we think we require to give the words “the tenant” in subsection (4)(a)(i) an unglossed meaning in context, namely the tenant making the current application to purchase. It follows that as the applicant is the current tenant, and has received a discount in the past from a specified landlord, that discount (or a proportion of it) requires to be taken into account. It seems to us that this interpretation is in line with the purpose of the subsection as mentioned above, and is reasonable in that the legislation does not rule out a discount for a tenant who was a joint purchaser in a previous transaction, but merely requires that the new discount is reduced by the amount of the previous discount or a proportion of it.

Decision

[11] In these circumstances we consider that the respondents’ position is correct. We shall refuse the application.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 18 July 2017

W Douglas Ballantyne – Deputy Clerk to the Tribunal