Former tenant with learning difficulties has rent arrears application remitted to First-tier Tribunal
The Inner House of the Court of Session has allowed an appeal by a former tenant with severe learning difficulties against a payment order for rent arrears made against her and remitted her case back to the First-tier Tribunal Housing and Property Chamber.
The appellant, SW, argued that she had entered into a tenancy agreement with Chesnutt Skeoch Ltd by way of facility and circumvention. Both the First-tier Tribunal and Upper Tribunal for Scotland rejected the argument that the FtT had jurisdiction to deal with her submission.
The appeal was heard by Lord Malcolm, Lord Woolman, and Lord Doherty. The appellant was represented by Robert Sutherland, instructed by Helen McHugh of Legal Services Agency.
Open to manipulation
The appellant had entered into an assured tenancy agreement with the respondent for a flat in Port Glasgow. Following the tenancy’s termination, the respondent made an application to the First-tier Tribunal seeking a payment order for rent arrears plus damages for cleaning and repair.
In opposition to the application, the appellant’s solicitor lodged representations that the tenancy was void because she lacked the capacity to enter into a tenancy agreement because of her learning difficulties. The appellant did not lodge any evidence to support this defence but in May 2019 the FtT and the respondent received a six-page submission document from her solicitor including reports from her social worker and a clinical psychiatrist.
The submissions made on the appellant’s behalf indicated that the tenancy had been induced by facility and circumvention by the respondent’s director, Kenneth Johnstone, and that she was “vulnerable to harm and exploitation”. The letter from her social worker concluded: “It is the opinion of the writer, that Ms [W] is open to manipulation with regard to managing her finances.”
At the FtT hearing, the Tribunal decided that it did not have the jurisdiction to deal with an action for reduction, as it did not consider that it was an action “arising from” an assured tenancy in terms of section 16 of the Housing (Scotland) Act 2014. Further, even if it was within jurisdiction no Rule 70 application had been made on the appellant’s behalf. The FtT ordered the appellant to pay the respondent the sum of £3,915.
The appellant was granted permission to appeal to the Upper Tribunal. The UT dismissed the appeal, noting that the written submission raised a new argument of facility and circumvention, and that it did not constitute an application in terms of the FtT rules of procedure. To do otherwise would frustrate Rule 5 of Tribunal procedure, which required that an application be considered by the Chamber President or another Tribunal member to consider whether it was valid.
The UT also rejected an argument that the FtT had the same power as the sheriff to grant reduction ope exceptionis if the submission did not constitute a valid application, saying: “It is a leap to transpose a specific Sheriff Court rule to the FtT.” Permission for further appeal was granted by the Court of Session.
It was submitted that the UT had erred in holding that the FtT did not have jurisdiction to reduce an assured tenancy by way of exception, that the appellant’s written submission to the FtT was not an application, and that the submission came too late for consideration as such. Section 16(1) of the 2014 Act had transferred all the functions and jurisdiction of the sheriff to the FtT in respect of assured tenancies except those specifically provided for by statute.
Power to entertain defences
The opinion of the court was delivered by Lord Doherty. On whether the submission to the FtT constituted an application, he said: “An application requires to be in writing, although it need not be on the form provided by the FtT. It must satisfy all of the requirements of Rule 70. We conclude that the Submission did not satisfy Rule 70(c). It does not appear to have been signed and dated by the appellant.”
He continued: “More fundamentally, it lacked another essential attribute. It did not describe itself as an application, and it was not otherwise clearly evident that it purported to be one.”
On the effect this had on the appeal, he said: “Since there was no application, the question of whether an action for reduction of the agreement was an action ‘arising from’ the agreement is not a live issue. Moreover, we are conscious that we have not had the benefit of a contradictor. In those circumstances we prefer to reserve our opinion on the question until a case arises where its resolution is necessary and where the court has the advantage of fully developed submissions which present both sides of the argument.”
Turning to whether the tenancy could be reduced ope exceptionis, Lord Doherty said: “The FtT had jurisdiction in relation to the landlord’s action for rent arrears and damages. It was plainly one ’arising from’ the agreement, and in terms of section 16 the functions and jurisdiction of the sheriff in relation to such actions were transferred to the FtT. In our opinion they included the power to entertain all of the defences to such actions which were available before the sheriff.”
He continued: “For present purposes it is sufficient to say that the ability to consider those defences was either a function or a jurisdiction of the sheriff. We see no reason why a defence seeking reduction ope exceptionis of an agreement may not be stated in response to an application before the FtT which is founded upon that agreement. Otherwise, the transfer effected by section 16 would have made it more difficult for a tenant to defend himself before the FtT than before the sheriff.”
Lord Doherty concluded: “Since the FtT was clear that the Submission was not an application, and it was told that all of the defences to the application were now stated in the Submission, it should have treated the Submission as a proposed amendment of the written representations. It ought to have applied its mind to whether amendment should be allowed (and if so, on what conditions). In our view its failure to address those questions was an error of law.”
For these reasons, the appeal was allowed. The case was remitted to a differently constituted FtT for reconsideration.
© Scottish Legal News Ltd 2021