Case No: B2/2006/2538 
Neutral Citation Number: [2007] EWCA Civ 1425
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BIRMINGHAM CIVIL JUSTICE CENTRE 
(DISTRICT JUDGE MAUGHAN)
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Thursday, 1st November 2007

Before:

THE CHANCELLOR OF THE HIGH COURT
LADY JUSTICE ARDEN
and
LORD JUSTICE GAGE
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Between:

	SANDWELL MBC	Appellant
	
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HENSLEY	
Respondent	

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Ms C Rowlands (instructed by The Borough Council of Sandwell Legal Services) appeared on behalf of the Appellant.
Mr D Griffiths (instructed by Messrs Millichips Solicitors) appeared on behalf of the Respondent.
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Judgment
Lord Justice Gage:

1.	The Sandwell Borough Council are the owners of 56 Church Gardens, Church Road in Smethwick.  The council, as I shall call them, now appeals against that part of the order for possession made by District    Judge    Maughan in the Birmingham    County    Court on 13 November 2006, by which an order for possession was made against the defendant, while suspended for two years on condition that the defendant abided by the terms of his tenancy agreement.  

2.	The council’s case on appeal is that the district judge should have made an outright order for possession.  At the hearing before the district judge, no oral evidence was called.  The hearing was conducted on the basis of written witness statements put in by both parties.  The facts can be shortly stated.  The defendant first occupied the premises with his partner in September 1993.  In the ensuing years, he first became a joint tenant with his partner, and then from 5 May 1999 the sole tenant with a secure tenancy.  The tenancy contains the usual terms and conditions, one of which is not to commit a criminal offence in the premises, or do anything which caused others nuisance and annoyance.

3.	On 1 December 2005, police officers raided the premises and found an extensive system for the cultivation and production of herbal cannabis.  The equipment seized included hydroponics equipment, plant pots, strip lighting, reflectors, silver reflecting insulating papers, water pumps, heating and electric fans.  In the rear bedroom, there was a complete hydroponics system with over 30 cannabis plants being grown.  The police officer whose statement was before the district judge said of this it was: 

“A full irrigation set up, silver lined walls, strip lighting, fan and large growing trays covering the entire floor”.

4.	On 2 December 2005, the defendant was arrested and interviewed.  In the course of his interview, he admitted possessing the hydroponics equipment, but denied setting it up.  He said he had not been living at the premises and had allowed a woman and her child to stay there for several months.  He suggested this woman must have been using the premises for growing cannabis.  Notwithstanding what he told the police, the defendant subsequently pleaded guilty to an offence of being concerned in the cultivation of cannabis.  He was committed to the Crown Court for sentence, and in due course sentenced to a suspended sentence of nine months imprisonment, with an order to carry out 300 hours of unpaid work, and a supervision order of 12 months.  

5.	It appears that the fact that he had been charged with this offence came to the attention of the council in early 2006.  These proceedings were instituted by a notice seeking possession dated 21 June 2006, and the Particulars of Claim dated 11 July 2006.  The claim sought possession on two grounds under Part 1 of Schedule 2 of the Housing Act 1985.  Those grounds are as follows: 1) arrears of rent; 2) that the defendant was guilty of conduct likely to cause a nuisance or annoyance to anyone residing, visiting, or otherwise engaging in lawful activity in the locality, and he had been convicted of using the premises for an illegal purpose.

6.	The focus of the claim was on the defendant’s convictions, particularly the most recent one, that in 2005.  The undisputed evidence before the district judge was that the defendant had a number of previous convictions for drugs offences, in addition to the offence committed in December 2005.

7.	The documents before the court, recording the defendant’s previous convictions, are far from satisfactory.  However, the pleadings alleged (and before the district judge there was no dispute) that in January 1998 the defendant was convicted of possession of cannabis and producing cannabis.  In October 1999, he was convicted of possessing cannabis with intent to supply.  In August 2004, he was convicted of producing cannabis, and again in October 2005 he committed the offence to which I have just referred.  There was a further offence in October 2005, in respect of which he was convicted of possessing film wraps of cannabis. 

8.	The defendant put in a defence of his own composition, which reads as follows: 

“1.  I deny that I have caused any nuisance or annoyance to other tenants or members of the community. 
2.  I admit the convictions but those in the 1990s are spent and are too old to be able to be of relevance.  They were not relevant then as the council took no action then and they are not relevant now. 
3.  I have grown cannabis plants within my home about which no others would have knowledge.  This is not anti‑social behaviour or nuisance.  It has caused no more offence to neighbours than growing tomato plants. 
4.  Since 2001 all cannabis was grown for my own personal use. 
5.  It is not reasonable for possession to be given.”

9.	At the hearing there were witness statements from police officers, which the district judge sought and read.  There was also a witness statement from the defendant, and statements from eight neighbours who said that they had not been aware in any way of his activities.  There was no dispute, nor could there have been, about the defendant’s record of convictions.  If anything, the pleadings appeared to show fewer previous convictions than actually was the case.  

10.	Following submissions by counsel, the district judge gave judgment.  She gave her reasons for making the suspended order in the following terms:  

“7.  The issue is one of reasonableness.  The evidence here is that there is a conviction, the latest conviction, the third in a series over some considerable period of time, following the raid in December 2005.  I have not had to consider today the question of nuisance.  The statements of the defendant’s neighbours, whilst I have read those and noted those (as some form of mitigation for this defendant), there is evidence that they were oblivious to any activity going on in the neighbouring property of which the defendant was a tenant (i.e. he was growing cannabis next door).  There is an obvious breach of the tenancy agreement and a serious one on that basis.  The case of Oxford v Pledge has been relied upon by the defendant’s solicitors but was certainly not put forward by counsel today, that being a case that can be distinguished.  It was a case where the tenant was under a licence and no convictions were obtained.

8.  The real question that I have to decide is whether it is reasonable regarding the interests of the public and the parties to make a possession order today?  The order that I am going to make is an order for possession but suspended on terms.  What I have decided in considering the whole test of reasonableness is that it is certainly in the public interest in this case to make the order but to suspend it.  This is an activity that must stop.  The Council are under a duty to protect and consider the wider issue of the knock‑on effect to tenants, to other people using these premises and in the vicinity, but I have taken on board the submissions made by the Defence counsel that there has been no evidence of any further breaches.” 

The district judge then went on to address remarks to the defendant himself.

11.	The issue in this appeal is whether the district judge, in the exercise of her discretion, was right to suspend the order.  It is submitted on behalf of the council that the district judge should have made an outright order.  The grounds of appeal are sevenfold in number, but essentially they are all facets of one single ground: namely, that the district judge erred in the exercise of her discretion by failing to take into account matters which she should have done, and took into account matters which were irrelevant.  In particular, the conviction of producing cannabis in 2005 on its own is said to be sufficiently serious to make it necessary for an immediate order for possession to be made; and this offence, coupled with the history of previous offending, demonstrated that there was no ground for optimism in the future that the defendant would not commit further offences.  Miss Rowlands, before us, submitted that the district judge should have looked to see if there were any exceptional circumstances which justified him suspending the order.  She submits there were none.

12.	The defendant, in a respondent’s notice and in submissions, submits that the decision of the district judge was correct.  The district judge, it is submitted, decided to give the defendant a chance to show that he had genuinely learnt his lesson and would commit no further offences.  Secondly, the suspended order of the Crown Court and the suspended possession order were quite sufficient to control his activities at the premises.  And finally, there was no evidence of nuisance and annoyance to the neighbours and the wider local community.

13.	The Housing Act 1985 provides that in cases involving a secure tenancy, which this is, the court shall not make an order for possession except on one or more of the statutory grounds set out in Schedule 2 to the Act.  It is further provided that the court shall not make an order for possession, even if one of the grounds are proved, unless it is reasonable to make such an order (that is Section 84(1) and (2).  Section 85 gives the court power to suspend or postpone the date of possession for such a period as it thinks fit.  Section 85(A) makes further provisions in relation to cases of nuisance and annoyance, and cases where it is proved that ground 2 of Schedule 2 exists.  In this appeal, the court is only concerned with the third of what is a three‑stage process.  The first stage is that there has to be a ground for possession.  That is admitted in this case.  The second stage is that it is reasonable to make an order for possession.  That is not challenged by the defendant in this case.  The third stage is whether the order should be suspended or postponed.  As I have said, that is the issue in this case.

14.	We have been referred by counsel to a number of decisions of this court dealing with orders made and refused in proceedings for possession under the provisions of the Housing Act.  It is not in issue that this court will only rarely  interfere with decisions of a trial judge when making orders in the exercise of their discretion.  It is the discretion to suspend the order with which we are concerned.  It is not, in my view, necessary to cite all of the authorities to which we have been referred.  I content myself with referring to two of them.  First, City of Bristol v Mousah [1997] 30 HLR is relied on by Miss Rowlands, for the council, for the proposition that where the defendant commits a criminal offence, an order should be suspended only if there are exceptional circumstances for doing so.  In that case, the court was concerned with tenants or a tenant who had been found guilty of allowing the premises to be used for the consumption and supply of crack cocaine.  The assistant recorder held that it was not reasonable to make an order for possession.  The Court of Appeal reversed that decision, and made an order for immediate possession.

15.	Beldam LJ, giving the first judgment of the court, at page 39, accepting a submission made on behalf of the local authority, said this: 

“This was a case in which there had been a most serious offence committed over a period of three or four months at these premises, and, as I have said, the lapse of time since the last occasion was largely due to the failure of the respondent (or those who were representing him) to comply with the requirements of the Court. 

For those reasons, I am satisfied that this Court is in a position to review the decision of the Assistant Recorder, to substitute its own decision and exercise its own discretion in place of the Recorder’s discretion.  I consider that Mr Arden’s approach to this question is correct.  When there is such a serious breach of a condition of the tenancy, it is only in exceptional cases that it could be said that it was not reasonable to make the order.”

Otton LJ, agreeing with Beldam LJ, made a similar comment at page 41 of the report.  It is from those passages that Miss Rowlands makes the submission that there must be exceptional reasons for suspending the order in cases where, as in this case, there has been a criminal offence committed.

16.	In Stonebridge Housing Action Trust v Gabbidon [2002] EWHC 2091 Chancery, Lloyd J, as he then was, pointed out that in Mousah the court made no distinction between stage 2 and stage 3.  For my part, I would be cautious about accepting that there is a general principle that where a tenant has been convicted of a criminal offence, there must be exceptional circumstances before the court can suspend an order for possession rather than making an outright order.

17.	What in my judgment can be said is that the effect of Mousah is to stress the serious nature of a breach of a condition which involves the committing of a criminal offence. The more serious the offence, the more serious the breach.  Convictions of several offences will obviously be even more serious.  In such circumstances, it seems to me that the court should only suspend the order if there is cogent evidence which demonstrates, as Ward LJ put it in Manchester County Council v Higgins EWCA Civ 1423, a sound basis for the hope that the previous conduct will cease.

18.	Miss Rowlands’s submissions on the exercise of the discretion can be shortly summarised.  She submits that the district judge erred in failing to identify any exceptional circumstances, or any serious reason why the court should suspend the order.  She goes on to submit that the defendant’s record of convictions, coupled with the offence committed in 2005 which triggered these proceedings, were so serious that only an outright order for possession was appropriate.  She submits that the defendant’s attitude to his offending is at odds with councsel’s submissions to the district judge that he was determined to turn over a new leaf.  She further submits that in the circumstances of this case, the judge’s order sends the wrong message to the local neighbourhood, one that indicates an undesirable tolerance to such behaviour.

19.	Mr Griffiths, on behalf of the defendant, makes a number of submissions.  First and foremost, he submits that the defendant has kept himself out of trouble since the last offence in 2005.  He relies on the submission that he made to the district judge, that the defendant has now seen the error of his ways.  He accepts that the convictions were offences committed at 56 Church Gardens, but he submits the evidence of the neighbours was to the effect that none of them were in any way offended by this behaviour, nor regarded it as a nuisance and annoyance.  Indeed they were, he submits, oblivious of it going on.  

20.	So it is submitted that the district judge’s exercise of her discretion, refusing to make an outright order, was not flawed.  She decided to give the defendant one more chance.  She was entitled to do so on the basis that he had turned over a new leaf. Mr Griffiths also relies on the fact that there is no evidence of any further offending or such conduct since December 2005. 

21.	For my part, I am quite satisfied that the district judge’s reasons for suspending the order do not stand up to scrutiny.  Her reasons for doing so are sparse.  There is little explanation of which factors she regarded as important and which were not.  The determining factor appears to have been the absence of any further breaches of the tenancy agreement or commission of further offences since the offence in late 2005.  The district judge appears to have accepted the assertion by counsel for the defendant that the defendant was determined to turn over a new leaf.  I take this to be so from her reference to “taking on board” the submissions made by defence counsel. 

22.	But as Miss Rowlands points out, this ignored the defendant’s attitude to his offending, as expressed in the defence in these proceedings, and also by reference to his witness statement which was before the district judge, in which he referred to his drug dealing as “my hobby”.  More significantly, in my judgment, is the fact that the district judge was prepared to accept these submissions made by counsel without the benefit of hearing any oral evidence from the defendant.  Bearing in mind the seriousness of the defendant’s breaches and his offending, I would have expected the district judge to have invited oral evidence, or at the least raised with his counsel the possibility of the defendant giving evidence counsel before accepting counsel’s submission, unsupported as they were by evidence, save for the absence of further breaches since 2005.  

23.	Although the district judge makes a passing reference to the defendant’s previous convictions, there is no reference to the impact that those convictions had on her decision.  There is also only a passing reference to nuisance and annoyance to the defendant’s neighbours, but this is dismissed as of no significance in view of the statement from neighbours.  The district judge refers to the fact that the defendant has admitted his convictions and “paid the price within the criminal court”.  In my view, Miss Rowlands’s submission that it is irrelevant that he was punished in the criminal court, is correct.  What is relevant is that the suspended sentence and supervision order may provide some additional deterrent against reoffending in the short term.  However, this latter factor is only obliquely (if at all) referred to by the district judge.

24.	In the circumstances, in my opinin, the district judge’s exercise of her discretion is flawed, and this court must exercise it afresh.  For my part, I regard the offence as a very serious one.  The evidence of what the police officers found at the premises shows that the defendant was carrying on a substantial operation of cannabis cultivation.  Whether or not the defendant was living at the premises all the time, and there is some evidence he was not, is immaterial.  It is clear that a large proportion of the premises was devoted to this operation.  Further, the photographs would seem to indicate that the installation of the hydroponics may have caused some damage to the premises.  This was at least the defendant’s third offence for cultivating cannabis at these premises.  He has, in addition, a conviction for supplying cannabis.  These offences, coupled with the defendant’s attitude to them and drugs in general, demonstrate a complete disregard for the terms of his tenancy agreement and, in my view, give no cause for optimism about his future conduct.  Whilst I accept that there is no evidence of further offending since late 2005, the seriousness of the offences and the pattern of the defendant’s offending are, in my judgment, a better guide to the future than the absence of offending since 2005.  In my opinion, the district judge attached too much weight to the absence of evidence of breaches since 2005, and far too little to the offence and the defendant’s previous convictions.

25.	I would add that the council, as a provider of social housing, have a duty to make sure (so far as it can) that its properties are properly managed and are kept free from the sort of activity with which we are concerned.  This, in my judgment, is another factor which weighs the balance in favour of an outright order.  

26.	In my view, unless there was cogent evidence providing a real hope that the defendant had mended his ways, the council was in all the circumstances entitled to an outright order.  In my judgment, there was no such evidence.  Exercising the discretion afresh, I would allow the appeal and make an outright order for possession.

Lady Justice Arden:

27.	I too would allow this appeal and make an outright order for possession.  I agree with what my Lord has said, but would like to add some observations.  First, my Lord said that he did not think that in every case exceptional circumstances could be shown simply from the fact of a conviction, in that considerable weight should attach to the question of whether there was a sound basis for the hope that the serious conduct would cease.  For my part, I do not consider that the question of whether the serious conduct would cease is the only factor, since the court has a very wide discretion, including the duty to consider the effect on those living in the locality.  This was a serious and serial drug‑related offence, and that would, in my judgment, normally give rise to a necessity for a tenant to have to show a strong case to resist an immediate possession order.  I think that the making of a stay in this type of case is likely to be exceptional.  The court can also take into account, in addition to the prospect of better behaviour in the future, the effect on the housing authority of having a tenant who has proved to be so unsatisfactory.  It is certainly not enough for the tenant to say he did not realise the consequences for his tenancy of his unlawful conduct.  He signed the tenancy agreement, and it is obviously not enough for a defendant to say, as the defendant did here, that he did not consider the growing of cannabis to be antisocial behaviour.  He has to comply with the judgment on those matters.

28.	I would further add this.  Miss Rowlands, who has argued this case with conspicuous ability, made no reference to Article 8 of the European Convention on Human Rights.  I note that in the Stonebridge case there was a fleeting reference by Lloyd J to a reference by the Recorder in that case to Article 8.  In addition, in Manchester CC v Higgins, Ward LJ said in his judgment at paragraph 38:

“38.  Ultimately, given the Art.8 ECHR respect for the tenant’s home, the question is whether the immediate possession order is necessary in order to meet the need to protect the rights and freedoms of others – the neighbours -- and is proportionate to it.”

29.	As I read his judgment, the other member of the court, my Lord Gage LJ, did not refer to this point or express particular agreement with it.  Since the decision in Stonebridge, the House of Lords in Kay v Lambeth [2006] UKHL 10 has considered the impact of Article 8 on possession proceedings, and it has held that the court should assume that the balance required to be struck by that Article is struck by the legislation, and should not in the normal case consider whether the individual’s circumstances meet the requirements of Article 8.

30.	As far as I can see, the Kay v Lambeth was not cited in Manchester, and for the reason given it could not have been cited in Stonebridge.  The effect of the decision in Kay on this point can, in my judgment, be taken from the summary of his speech by Lord Bingham at paragraph 39.  He states: 

“39.  The practical position, in future, in possession proceedings can be briefly summarised as follows.  (1) It is not necessary for a local authority to plead or prove in every case that domestic law complies with article 8.  Courts should proceed on the assumption that domestic law strikes a fair balance and is compatible with article 8.  (2) If the court, following its usual procedures, is satisfied that the domestic law requirements for making a possession order have been met the court should make a possession order unless the occupier shows that, highly exceptionally, he has a seriously arguable case on one of two grounds.  (3) The two grounds are: (a) that the law which requires the court to make a possession order despite the occupier's personal circumstances is Convention-incompatible; and (b) that, having regard to the occupier's personal circumstances, the local authority's exercise of its power to seek a possession order is an unlawful act within the meaning of section 6.  (4) Deciding whether the defendant has a seriously arguable case on one or both of these grounds will not call for a full-blown trial.  This question should be decided summarily, on the basis of an affidavit or of the defendant's defence, suitably particularised, or in whatever other summary way the court considers appropriate.  The procedural aim of the court must be to decide this question as expeditiously as is consistent with the defendant having a fair opportunity to present his case on this question.  (5) If the court considers the defence sought to be raised on one or both of these grounds is not seriously arguable the court should proceed to make a possession order.  (6) Where a seriously arguable issue on one of these grounds is raised, the court should itself decide this issue, subject to this: where an issue arises on the application of section 3 the judge should consider whether it may be appropriate to refer the proceedings to the High Court.”

(See further per Lord Hope at paragraph 72 to 76, and per Baroness Hale of Richmond, paragraph 181).

31.	In my judgment, no distinction can be made for this purpose between an order to give immediate possession and an order giving possession but staying or suspending the order, or postponing the date of possession under Section 85.2 of the Housing Act 1985.  The court should ordinarily exercise its discretion without any further and separate consideration of Article 8, excepting the exceptional circumstances set out by Lord Bingham; and even then it is likely to be the situation that if the case is in the County Court, that court should transfer the issue to the High Court.

32.	The court hearing possession proceedings or considering the question of a stay would not then be required in the usual case to consider any additional argument based on Article 8, and its decision will not be challengeable on appeal on the basis of violation of Article 8.

33.	With those additional observations, I agree with the order that my Lord proposes.

The Chancellor of the High Court:

34.	I agree for the reasons given by Gage LJ that the appeal should be allowed and an outright order for possession should be made.  We heard no argument on the application of Article 8 of the European Convention on Human Rights, and I make no observations or comments in relation to it.  

Order: Appeal allowed