For appellant: Anderson QC, Hawkes; Drummond Miller (for Allcourt Solicitors, Livingston)

For respondent: SPL Wolffe, QC; Simpson & Marwick

22 January 2009

Introduction

[1] The late Yvonne Bessant (the deceased) died on or about 7 February 1999. At the time of her death she was the sole tenant of a dwellinghouse at 5 Fairinsfell, Broxburn, West Lothian (the subjects) under a secure tenancy held from the respondent. She was cohabiting there with the appellant. On 8 April 2002 the appellant was convicted of having murdered her. This is an appeal against a decision of the Lands Tribunal dated 13 December 2004 on a preliminary issue arising from an application by the appellant to purchase the subjects.

[2] The parties asked the Tribunal to decide whether it had jurisdiction to consider, in the light of the appellant's conviction, whether the forfeiture rule should defeat the application. By decision of a single member it determined that it had such a jurisdiction. It continued the application for a hearing on the question, reserving all other issues. That is the decision appealed against.

The scheme of the 1987 Act

[3] A tenant of a public sector house has a limited right to purchase it under section 61 of the Housing (Scotland) Act (the 1987 Act) (as amended by the Housing (Scotland) Act 2001 (asp 10)) if he qualifies as a "secure tenant." If he seeks to exercise that right, he must serve on the landlord a notice of application to purchase (s 63(1)). If the landlord does not oppose the application, it must serve on the tenant an offer to sell.

[4] If the landlord opposes the application, it may by notice of refusal refuse it outright, or it may offer to sell the house under section 14 of the Act, with which we are not concerned in this case, or under any other power of sale that it may have (s 68(1)).

[5] Where the landlord has been duly served with an application to purchase and fails timeously to issue an offer to sell or a notice of refusal, "the tenant" may refer the matter to the Tribunal (s 71(1)(a)). If the Tribunal finds that the landlord has so failed, it may in effect complete the purchase procedure as if it were the landlord (s 71(2)(a)).

The history of the application

[6] For a considerable time after the death, it was not suspected that the appellant had murdered the deceased. On 22 February 1999 the respondent accepted the appellant as the tenant of the subjects in succession to the deceased (1987 Act, s 52(2)(a)(ii)).

[7] On 6 June 2002, about two months after his conviction, the appellant applied to purchase the subjects. On 29 November 2002 the respondent made an offer to sell. The appellant did not accept it and his application lapsed. The respondent avers that it became aware of the appellant's conviction "from about November 2002," but it does not specify whether that happened before or after it made the offer to sell.

[8] On 10 March 2003 the appellant applied again to purchase the subjects. The respondent failed to serve on him an offer to sell or a notice of refusal. On 10 August 2003 the appellant applied to the Tribunal for a finding in terms of section 71(2)(a) of the 1987 Act (supra) and called on the Tribunal to take such steps as might be required to complete the purchase. Relying on the decision of the First Division in East of Scotland Water Authority v Livingstone (1999 SC 65), he averred that, in consequence of its failure to serve an offer to sell or a notice of refusal, the respondent could no longer dispute his right to purchase.

[9] The respondent relied inter alia on the forfeiture rule (cf Cleaver v Mutual Reserve Fund Life Ass, [1892] 1 QB 147; Burns v Secretary of State for Social Services, 1985 SC 143). It contended that the appellant could not acquire the benefit of the tenancy in consequence of the murder and therefore had no right to buy; and that the Tribunal had jurisdiction to decide the point.

East of Scotland Water Authority v Livingstone

[10] In this case the first respondent applied with his wife, the second respondent, jointly to purchase the subjects of let. The appellant failed to serve a timeous notice of refusal. The respondents applied to the Tribunal under section 71. The appellant agreed that the first respondent was its tenant; but it pled that he had no right to purchase because his tenancy was not a secure tenancy. The First Division held by a majority that since the appellant had failed to serve a notice of refusal, it was too late for it to take the point.

The decision appealed against

[11] The Tribunal considered that since an application under section 71 had to be made by the tenant, it was open to the respondent to plead that the forfeiture rule should be applied. It considered that the respondent's failure to serve an offer to sell or a notice of refusal did not prevent it from raising that question. It distinguished East of Scotland Water Authority v Livingstone (supra) since the appellant in that case agreed that the first respondent was its tenant. The Tribunal also held that it had jurisdiction in an application under section 71 to decide the point.

Conclusions

[12] There are two questions in this appeal; namely (1) whether, regardless of the forfeiture rule, the Tribunal was bound to grant the appellant's application simply because the respondent had failed to serve an offer to sell or a notice of refusal; and (2) if not, whether the Tribunal had jurisdiction to decide whether the rule should be applied.

(1) Effect of failure to serve an offer to sell or a notice of refusal

[13] The right to buy provisions apply only in relation to a secure tenant of a relevant public sector dwellinghouse and then only when the qualifying conditions are made out. An application under section 71 can be made only by "the tenant." Although certain further qualifications restrict the right of purchase, including the requirement that the applicant should be a "secure tenant," it is plainly a precondition of the Tribunal's jurisdiction under section 71 that the existence of the landlord-tenant relationship between the parties is not disputed. I agree with the Tribunal that East of Scotland Water Authority v Livingstone (supra) is distinguishable since in this case the existence of a tenancy is disputed. If I am right, it is unnecessary for us to consider the soundness of the majority view in that case.

[14] Counsel for the appellant has taken the ratio of that case a stage further by submitting that the respondent's failure to serve an offer to sell or a notice of refusal precludes it from even denying the appellant's right to be tenant. On that argument, it would seem to follow that a squatter in a public sector dwellinghouse who made a speculative application to purchase it would become entitled to enforce the purchase if by an administrative error the authority failed to serve a notice of refusal. In my view, section 71 cannot have the effect of conferring a right to a conveyance upon an applicant whose right to the tenancy is in dispute.

[15] In my opinion, the respondent has pled a stateable case on the forfeiture rule. A secure tenancy of a public sector dwellinghouse is a valuable right. Its incidents include the right to a fair rent, the prospect of a succession to the tenancy by an entitled relative and, not least, the right to purchase the dwellinghouse at a discount to open market value. In my opinion, it is arguable, to say the least, that the right to such a tenancy should not be available to one whose claim to it has been made possible by his own crime.

[16] If I am right, it follows that the appellant's right to the tenancy is an issue to try. That issue, and the related issue of personal bar, must be resolved before any question under section 71 can arise.

(2) Jurisdiction of the Tribunal

[17] This appeal raises the important question as to the scope of the Lands Tribunal's jurisdiction in an application under section 71 of the 1987 Act. The Tribunal decided that it had jurisdiction to decide whether or not the forfeiture rule should defeat the application in the circumstances of the case. In my opinion, the Tribunal misdirected itself on the point.

[18] The Tribunal is a creature of statute and has only those jurisdictions that statute has conferred upon it. This principle was established in relation to the Land Court in Garvie's Trs v Still (1972 SLT 29). It was held in that case that a jurisdiction under the Agricultural Holdings (Scotland) Act 1949 to decide on the merits of the landlord's objection to receive the acquirer of a deceased tenant's tenancy did not entitle the Land Court to decide whether the respondent was the acquirer at all (ibid, Lord Justice Clerk Grant at 36; cf Brodie v Ker; McCallum v McNair, 1952 SC 216; Craig and Anr, Apps 1981 SLT (Land Ct) 12).

[19] The Tribunal has power to explicate its own jurisdiction in matters affecting the validity of an application; for example, by deciding whether an obligation that the applicant seeks to have varied is a valid land obligation (Macdonald, Petr, 1973 SLT (Lands Tr) 26). In an application under the present provisions, it has power to decide whether there has been a valid offer to sell (Thomson v City of Edinburgh District Council 1982 SLT (Lands Tr) 39). In all cases it has the power to consider whether its jurisdiction has been elided through a failure to observe a time limit (ibid).

[20] The explicatory power continues throughout the course of an application. The Tribunal may therefore refuse an application if it should become apparent that a precondition of its jurisdiction is no longer satisfied. In McKay v City of Dundee District Council (1996 SLT (Lands Tr) 9) the applicant's tenancy was terminated while her application to purchase was pending. The Tribunal held that it could not complete the proposed purchase under section 71. In Ross v City of Dundee Council (2000 SLT (Lands Tr) 2) the applicant died during the course of the application. Her executor, who sought to continue it, had no right to purchase. The Tribunal dismissed the application. Counsel for the respondent submitted that these decisions establish that the Tribunal has a jurisdiction under section 71 to consider the validity of a tenancy where that question is in dispute. I do not agree. They establish the proposition that where an essential precondition of jurisdiction is no longer satisfied, the Tribunal's jurisdiction ceases.

[21] In my opinion, section 71 confers on the Tribunal a strictly limited jurisdiction. It arises only where the applicant is agreed to be the tenant of the subjects and only where the landlord has failed to issue either an offer to sell or a notice of refusal. Its power under that section is administrative or executorial only (cf East of Scotland Water Authority v Livingstone, supra, at Lord Prosser at p 80E-F; Thomson v City of Edinburgh District Council, supra, at p 45).

[22] In this case the respondent contends that the appellant had no right to succeed to the deceased's tenancy and, in consequence, has no right to purchase. That is not an incidental matter that the Tribunal can determine by way of explicating its jurisdiction (cf Eagle Star Ins Co v Simpson, 1984 SLT (Land Ct) 37, Lord Elliott at pp 40-41). It is a fundamental and antecedent question on which the Tribunal's entire jurisdiction depends.

[23] The question of the existence of the landlord-tenant relationship may affect third party rights and interests (cf Garvie's Trs v Still, supra, Lord Justice Clerk Grant at p 36). In a case such as this the question whether the forfeiture rule disqualified the spouse or cohabitant of the deceased tenant could affect the interests of any member of the deceased tenant's family who, in default of the spouse's or cohabitant's claim, might have a claim to the tenancy (cf 1987 Act, s 52(1),(2)). In my opinion, the question whether the appellant has succeeded to the tenancy can be determined only in the ordinary courts. I am confirmed in this view by the provisions of the Forfeiture Act 1982 which might be invoked by a party in the appellant's position in a case such as this. With the express exception of social security claims (s 4), the limited power to modify the application of the forfeiture rule under that Act can be exercised only by a court (s 2).

[24] In my view, the Tribunal should have sisted the application so that the dispute about the existence of the tenancy could be resolved in the courts.

[25] Counsel for the respondent submitted that Burns v Secretary of State for Social Services (supra) and R v Chief National Insurance Commissioner, ex p Connor ([1981] 1 QB 758) are authority for a general principle that a tribunal can apply the forfeiture rule wherever it is appropriate on the facts. I do not agree. In both cases the commissioner had jurisdiction to decide whether a widow was entitled under the relevant legislation to a widow's allowance. The breadth of that question entitled the commissioner to decide whether the widow's claim was extinguished on a principle of public policy. In this case the scope of the Tribunal's jurisdiction is defined by the section.

Disposal

[26] Since this appeal was taken on the basis that the Tribunal was bound to grant the application, I propose to your Lordship and your Ladyship that we should refuse it. However, since I consider that the Tribunal erred on the question of jurisdiction, I propose that we should return the case to the Tribunal with a direction to proceed as accords.

For appellant: Anderson QC, Hawkes; Drummond Miller (for Allcourt Solicitors, Livingston)

For respondent: SPL Wolffe, QC; Simpson & Marwick

22 January 2009

[27] I agree with the opinion of your Lordship in the chair and have nothing to add.

For appellant: Anderson QC, Hawkes; Drummond Miller (for Allcourt Solicitors, Livingston)

For respondent: SPL Wolffe, QC; Simpson & Marwick

22 January 2009

[28] I agree with your Lordship in the chair and have nothing to add.