Law Report: Tenant's right to buy lost on death: City of Bradford Metropolitan Council v McMahon. Court of Appeal (Lord Justice Balcombe, Lord Justice Staughton and Lord Justice Waite). 7 April 1993
The Court of Appeal allowed an appeal by the City of Bradford Metropolitan Council against the decision of Judge Hutchinson QC, sitting in Bradford County Court on 14 November 1991, who refused the council's claim for possession of a council house at 32 Hillcrest Road, Queensbury, Bradford, and declared on a counterclaim by Mrs Linda McMahon, that she had a right to buy it.
That right, the judge found, was an equitable interest vested in and enforceable by her as the representative of the estate of her mother, Mrs Eleanor Eggett, a secure tenant who had lived in the Bradford property since it had been built in 1951, who had acquired by the time of her death a right to buy the property for the sum of pounds 10,713, and who had applied to do so, although the council had not yet conveyed it to her.
Nicholas Stewart QC and Toby Kempster (Sharpe Pritchard, for Allen R Sykes, Bradford) for the council; Terence Etherton QC and P B Walker (Harrison Tankard & Mossmans, Bradford) for the defendants.
LORD JUSTICE STAUGHTON said in this context the 1985 Act provided for five events:
(1) a secure tenant claimed to exercise the right to buy, by written notice served on the landlord (section 121);
(2) the landlord then either admitted or denied the right (section 124);
(3) where the right to buy was established, the landlord then stated the sale price and other terms (section 125);
(4) those terms were then agreed by the tenant, or any issue between them was determined;
(5) by section 138(1): 'the landlord shall make to the tenant (a) if the dwelling house is a house and the landlord owns the freehold, a grant of the dwelling- house in fee simple absolute . . . (3) The duty imposed on the landlord by subsection (1) is enforceable by injunction.'
There was nothing in the Act which said in express terms that the right to buy was lost if the secure tenant died, as happened here, before the fifth event occurred.
In Sutton LBC v Swann (1985) 18 HLR 140, the first three events had occurred when the tenant moved out and bought another property. The Court of Appeal held he had lost the right to buy, either because the council's offer to sell had lapsed, or because, in Lord Justice Ackner's words, 'the status of 'secure tenant' has to exist, not only at the time when the claim to buy is made, but also at the time when the grant comes to be made. If during the period between claim and grant the tenant has ceased to be a secure tenant, he is not entitled to that grant.'
Lord Justice Ackner's reasoning, which concerned section 16(11) of the Housing Act 1980, applied equally to section 139(2) of the 1985 Act, which read: 'The secure tenancy comes to an end on the grant to a tenant of an estate in fee simple, or of a lease, in pursuance of the provisions of this Part relating to the right to buy . . . '
But though persuasive, that case was not binding because the fourth event had not occurred, whereas in the present case it had.
Nevertheless, his Lordship agreed that the 1985 Act contained the implicit requirement that the tenant must remain a secure tenant until the conveyance or grant (the fifth event).
It followed from the judge's reasoning, castigating the council for its 'dilatory conduct', that Mrs Eggett might have obtained an injunction, immediately before her death, requiring the council to convey the house to her. And in future, other secure tenants might seek such an injunction, if their health was precarious and their landlords dilatory. But that did not justify their Lordships departing from the clear meaning of the Act.
LORD JUSTICE WAITE and LORD JUSTICE BALCOMBE concurred.
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