Watts v Stewart and others (trustees of Ashtead United Charity) CA 2016

We started dismantling the judgement in December last year. Since then we became aware that there was a consultation going on between the Department of Communities and Local Government on the one hand and the Almshouse Association and the Charity Commissioners on the other, about the status of almshouse residents. Consequently, we decided to weigh in with our own representations. We reproduce them here in their entirety (there may be some formatting anomalies regarding paragraph numbering), viz.: –

  1. We are the Almshouse Residents Action Group. To our knowledge, we are the only body representing the interests of some 36,000 almshouse residents throughout England and Wales. These are our representations to the consultative committee of The Department of Communities & Local Government regarding the legal status of almshouse residents.
  2. Note that the Almshouse Residents Action Group is a web presence only and must remain so for as long as an almshouse license remains a license to intimidate. Consequently, these representations will come forward via the agency of one of our correspondents who has agreed to provide a postal contact point for the purpose of these consultations. Note that he is not the author of this document.
  3. Firstly, we quote from our website, viz.: –
  4. November 1st 2014: We are now able to cite the text of a letter dated 24 September [2014] from Brandon Lewis MP, Minister of State for Housing and Planning at the Department for Communities and Local Government, addressed to the member of parliament of one of our correspondents: –
  5. QUOTE/ Thank you for your further letter of 6 August to the Department enclosing one from your constituent …, which also enclosed a copy of a letter from the Almshouse Residents Action Group to UN Special Rapporteur on adequate housing about the status of residents of Almshouses.
  6. My officials have now had helpful discussions with the Charity Commission and the National Almshouse Association and are currently exploring possible options for resolving the issues raised by [your constituent] in his/her correspondence. /UNQUOTE
  7. Given the ineluctability of our argument re the UN criteria for the adequacy of any system of housing, the only possible ‘option’ that would return the UK to a state of grace would be the restoration of defensible tenancies for almshouse occupants. However, given the propensity for prevarication on the part of HMG it remains to be seen how ‘helpful’ these discussions will prove to be.//UNQUOTE
    1. We are now in March 2017 and no further forward. Manifestly, our cynicism was well founded. Given the propensities of the parties which whom those ‘helpful discussions’ took place, the exercise was tantamount to putting the fox in charge of the henhouse. Here we are tasked with putting the hens’ point of view.
    2. A good start would be to impose the rigours of the Housing Health & Safety Rating System upon trustees rather than leaving this life-preserving obligation to their discretion. Almshouse trustees are specifically exempted from the enforcement powers inherent in the Housing Health & Safety Rating System (Bromsgrove District Council provided the example but the link is now inactive). Under the Housing Health & Safety Rating System, local authorities assess the potential dangers or hazards that could cause significant physical or mental harm to tenants and enforce repairs accordingly. Excepting that in the case of almshouse occupants they can only ‘advise’. Several of our correspondents have reported encounters with this adverse and frankly dangerous lacuna.
    3. We now address the DCLG’s letter to [Our Correspondent] dated 27 February, which came forward over the signature of Mrs Adetokunbo Okunlola, and which [Our Correspondent] has passed to us for constructive comment. Here we abbreviate and italicize the third paragraph thereof: –
  • Legislation to make almshouse residents tenants rather than licensees could have significant practical and burdensome consequences for charities …

 

    1. At this point our incredulity knows no bounds. We have to ask; for whom would it be more burdensome; mere administration during the course of the working day for the one party – or the ominous prospect of ‘cardboard city’ for the other? As to that administration, many trustee bodies have practising solicitors on their panel for whom the drafting of an application for a possession order would be all in a day’s work. As to any consequential cost, litigation is an insurable risk. Other relevant issues are addressed later in this document.
  • … which overwhelmingly seem to serve the accommodation needs of their beneficiaries well.

 

    1. Our post-box tells us otherwise.
  • The charitable status of almshouses, unlike other charities which mainly provide housing, is based on those who benefit …

 

  1. Here we perceive the arcane cestui que trust doctrine that has relegated almshouse residents to an archaic judicial subordination. We have two court cases to consider here, Gray v Taylor [1998] and latterly Watts v Stewart and others (trustees of Ashtead United Charity) [2016], both in the court of appeal.
  2. Firstly, we cannot but agree with counsel for the appellant in Watts that Gray v Taylor was decided per incuriam. We feel we have effectively dismantled that judgement on our website and for the sake of brevity will not reiterate our multiplicit logic here.
  1. Legal academia was quick to distance itself from the Gray v Taylor judgement, opining that there was no doctrinal reason why charitable trusts could not offer secure tenancies (vide Warren Barr, Modern Studies in Property Law (edited by Cooke, 2001) Chap.14, Charitable Lettings and the Legal Pitfalls, pp 247-9). In 2002 the Law Commission proposed as much. In 2006 the Commission reiterated its 2002 proposal (vide Renting Homes: The Final Report. Law Com No 297). Reverting to the DCLG’s letter:

 

  1. and not the provision of housing.

 

  1. Almshouse trusts are de facto providers of housing, notwithstanding it be targeted and subject to cy près where that has arisen. They are charged with administering estates of dwellings in accordance with the will of the historical benefactors. By reason of the persuasive authorities mentioned above, this does not make them unique vis-à-vis other landlords.
  2. Proceeding now to the letter’s closing paragraph, which we will take as read: the Almshouse Association, on its website, vaunts that “almshouses are homes for life”; whereas it knows full well that almshouses are merely accommodation to the extent of a 30-day stay of execution per the Protection from Eviction Act 1977. It is self-evident that no association of landlords is voluntarily going to relinquish powers to its natural adversaries.
  3. As for the Charity Commissioners, since R v Charity Commissioners for England & Wales ex parte Baldwin, [2001] WTLR 137 they have rested secure in the knowledge that their policy of not intervening in the internal affairs of almshouse trusts has been endorsed by the court. Post Watts, § 54, they can similarly rest secure in the knowledge that the eviction of almshouse residents is not subject to charity law. Thus, they are now so divorced from the issue here under consideration that their purported oversight is a dead letter. So much for the DCLG’s letter. To continue:
  4. According to the judgement, trustees owe no fiduciary duty to almshouse residents and, as we have indicated, their evictions are not subject to charity law. In the light, therefore, of such freedom from surveillance (and in accordance with Section 149(6) of the Law of Property Act 1925 and Section 36.9c (i & ii) of the Charities Act 1993) we might postulate that, on the facts, the nexus between the parties in Watts metamorphoses into a 90-year non-repairing lease determinable on death or the prior realisation of such terms as attach to the nexus.
  5. On the matter of those terms: – except for item 13 it is clear from the terms proffered in the ‘letter of appointment’ that the hapless appellant was inveigled into the nexus on the understanding she was being offered a defensible tenancy. We find the court’s assertion that those who constructed those terms were entitled to be relieved of responsibility for the inveiglement because they were ‘amateurs’, to be quite unsustainable. These were housing matters; due diligence was requisite and they should have been held to their negligence in not hiring a lawyer to do their drafting.
  6. Reverting to the cestui que trust doctrine: it has become something of a mantra that “the world of charity is essentially private” [Rix LJ dissenting in R (Weaver) v London & Quadrant Housing Trust [ 2009 ]; and that almshouse occupants are “objects of charity” rather than tenants amenable to housing law. On those specifics, it could be argued that an almshouse occupant is object of charity only insofar as the rent (or ‘periodic maintenance charge’, howsoever a trustee disingenuously may call it) he/she pays falls short of the equivalent market rent for a commensurate local dwelling. However, since the inception of the welfare state the amount he/she pays is in many cases recompensed by Housing Benefit or Local Housing Allowance. This means that ostensible charities are in receipt of public funds, albeit at a remove (all governing schemes will include a stipulation that charity income is not to be used to defray public funds). We maintain that along with this should go a commensurate accountability at public law.
  7. On the matter of the application of paragraph 12 of Schedule 1 to the Housing Act 1985 referred to at §24: it is moot whether a dwelling is “maintained as an almshouse” if (a) the cost of maintenance is defrayed by public funds, as expounded above, or (b) rent has advanced towards the level of local market rates. It is a statement of the obvious that an almshouse divested of alms can no longer be an almshouse.
  8. On the issue of ‘exclusive possession’ versus ‘exclusive occupation’ considered at §31: we would point out that little other than a holiday let confers exclusive occupation, otherwise it would not be saleable as such, and that the nexus thus created is amenable to the law of contract. We feel constrained to ask therefore, is an almshouse a “home for life” as the Almshouse Association aver – or is it less than a holiday let? It would take a fine-tuned legal mind to conflate the two nexuses. Or perhaps the emperor has no clothes …
  9. Reverting to the phrase “maintained as an almshouse” in paragraph 12 of Schedule 1 to the Housing Act 1985 and considering item 32 in the governing scheme (re contributions): it was historically the case that stipends were paid to residents of some trusts prior to the advent of the welfare state. That situation has long been reversed. As to the “maintenance” referred to in the Act, we conjecture that this is the origin of the preferred terminology of trustees when circumlocuting the word ‘rent’. Since the reversal of fortune therefore, it could be said that trustees have been inveigling residents into unwittingly acquiescing to their own relegation!
  10. In actuality, not all residents are eligible for Housing Benefit or Local Housing Allowance; they are merely in the position of not being able to afford local market rents. Thus, almshouse estates, by default, are “maintained” by both public and private funding in addition to revenue from the historical bequests. One question arising is, do almshouse estates as a concept survive this palpable hybridity? On the basis that they have inexorably converged with other forms of social housing, we would maintain that they do not.
  11. Another question arising is, given these hybridities, do almshouse residents survive as ‘objects of charity’ as per Lord Templeman’s peroration in Gray v Taylor? The facts seems to dictate that they might, but certainly not exclusively.
  12. At §40 it is held that the trustees could only properly discharge “the trusts of the Charity” if a personal revocable licence was granted. By “trusts of the charity” presumably is meant the will of the historical benefactors. The drafting of a suitably worded tenancy agreement to protect this will would be a mere administrative exercise. The result might be a diversion from the standard form of tenancy but these are peculiar circumstances which demand a peculiar solution.
  13. At §45 the judgement seems to concede as much, notwithstanding it holds adverse to the appellant.
  14. At §17 we have to ask; could not a prior solution have been sought via inter alia section 7 (a) and (b) of the Mental Health Act 1983? This would have provided eventual relief for all the parties. The wielding of a possession order would not be causa sine qua non therefor.
  15. At §87 the judgement makes a summation which for the sake of illustration we will quote in its entirety, viz.:

QUOTE/In the context of almshouses the exclusion of security of tenure for almspersons has been in place for many years. Parliament has not required the grant of assured shorthold tenancies to almspersons. In Gray v. Taylor this court concluded that the grant of a tenancy would be inconsistent with the duty of the trustees to provide accommodation for deserving persons and that the relationship was one of licensor and licensee. We consider on the basis of the material before us that not only is this the correct characterisation as a matter of domestic law but it also fairly balances the competing interests of the Charity and the resident in a manner which would not be achievable if residents had the status of tenants. In the present case the Scheme, approved by the Charity Commission, under which the Charity is required to operate provides, inter alia, that the residents in the almshouses belonging to the Charity shall be poor single women of not less than 50 years of age. If the almspersons were entitled to security of tenure this would be inconsistent with the performance by the Trustees of their duties under the Scheme because it would be impossible to ensure that only qualifying persons occupied the almshouses. In terms of HRA 1998, which came into force in 2000 after the decision in Gray v. Taylor, the denial of security of tenure to almspersons is clearly justifiable as a proportionate measure which secures a fair balance between the interests of charities and current and future almspersons./UNQUOTE

  1. Once again, as in Gray v Taylor our judiciary seems to have been asleep at the wheel. When awake, they are unnecessarily inventive. Here they are presuming to interdict statute, a practice that they have elsewhere preached against, vide McDonald v McDonald [2016] in the Supreme Court. The scenarios postulated above have been pre-empted by statute, viz.: – the Housing Act 1985 Schedule II, part 2, Ground 11, apropos secure tenancies (a court may order possession provided suitable alternative accommodation is available if “The landlord is a charity and the tenant’s continued occupation of the dwelling-house would conflict with the objects of the charity.”).
  2. And, for good measure, the Housing Act 1988 s.8 Ground 17, apropos assured tenancies (“The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by— (a) the tenant, or (b) a person acting at the tenant’s instigation.”)
  3. In our estimation both clauses would capture promoted almshouse occupants; and again, in our estimation, the court has acted ultra vires – unless the sticking point is “alternative accommodation”. Could it be that trustees would wish to retain the malevolence of decanting their charges onto the street? Be that as it may: these two preclusive statutory clauses appear to take care of all the purported impedances to defensible tenancies, including Right to Buy.
  4. Furthermore, it should have been pleaded – and the court should have recognised – that an equitable interest arose upon accession to the benefice and that a defensible tenancy ensued therefrom. By reason of the aforementioned statutory preclusions, such accessions would be non-devisable and, were the arbitrarily adverse clauses to be written out of governing schemes and letters of appointment, the accession would be complete, and aspirants to the benefice would not be disadvantaged thereby.
  5. In this connection, we also observe that Earl of Pomfret v Lord Windsor (1752) was not adequately disposed of in the judgement, in that only legal possession was addressed; the prospect of an equitable interest arising by default under the common law of trusts was not advanced by either side.
  6. On the issue of human rights, firstly, we would refer to Orliċ v Croatia (Application no. 48833/07) Strasbourg 21 June 2011. Paragraph 54 of the judgment states: “Human Rights caselaw is clear on the point that the concept of ‘home’ within the meaning of Article 8 is not limited to those premises which are lawfully occupied or which have been lawfully established. ‘Home’ is an autonomous concept which does not depend on classification under domestic law.” We commend that pronouncement to the consultative parties.
  7. On the matter of human rights and the courts, it is lately argued that the court merely provides the arena wherein private litigants pursue their disputes and that the horizontal effect of human rights law does not follow therefore. Indeed, we are referred to McDonald v McDonald [2016] UKSC 28 as the defining case, wherein it was held that the court had no mandate to re-write statute. That may so be, but in the case of almshouse charities we perceive no relevant statute to re-write, other than paragraph 12 of Schedule 1 to the Housing Act 1985 considered above. Thus, we would argue that the horizontal effect survives and beleaguered almshouse residents should benefit accordingly.
  8. The judgements in both Gray v Taylor and Watts v Stewart are in either denial or ignorance of the fact that, according to UN criteria, English almshouse charities are purveyors of inadequate housing. They are in conflict with the rights accorded under international law by the UN International Covenant on Economic, Social and Cultural Rights. The Covenant is a multilateral treaty adopted by the United Nations General Assembly and which Her Majesty’s Government ratified on 20 May 1976. Article 11 (1) of the Covenant, General Comment No. 4, section 8(a) thereof, binds HMG to ‘take immediate measures aimed at conferring legal security of tenure upon those persons and households currently lacking such protection, …”
  9. However, HMG failed to take up the Optional Protocol thereto which would give complainants direct access to the relevant Special Rapporteur. So, it seems HMG can sign up to any high-minded ideal and then follow it up with a derogation which in effect renders it a dead letter. We consider that the lacuna thus generated, in and of itself and irregardless of any ‘horizontal effect’ deriving from the courts, engages article 13 of the ECHR in conjunction with Articles 8 and 14. It follows that because Article 13 is excluded from the HRA, the issue of the status of almshouse occupants can now only be satisfactorily resolved in the ECtHR. Post Watts, by reason of estoppel, there would be no need for a beleaguered almshouse resident to seek remedy in the domestic court system; instead he/she would have unimpeded access to the ECtHR by reason of the precedent set in Reynolds v United Kingdom [2012] ECtHR 437.
  10. We respectfully remind the Minister of the obligations – pending ‘Brexit’ – imposing upon HMG, and the rights accruing to EU citizens by reason of the effect of the Treaty of Lisbon and its derivative Charter of Fundamental Rights of the European Union, to which all Member States are signatories.
  11. Regarding that instrument: we perceive possible general violations under Article 7 apropos the home, Article 17 apropos property and our postulated equitable interest therein, Article 21 apropos discrimination on the grounds of association with property, Article 21 again apropos age, Article 25 apropos the rights of the elderly, Article 34.3 apropos housing, Article 47 apropos the right to an effective remedy. Article 47 again apropos the right to a fair trial, Article 53 apropos the level of protection, and Article 54 apropos the prohibition of abuse of rights.
  12. Given the combination of social housing, possible discrimination, and the involvement of public funds in the administration of almshouse estates, it could so be that, in Watts, the national court had no mandate to try the case, and instead, should have referred the matter to the Administrative Court with a view to a determination in the Court of Justice of the European Union.
  13. In general, and to conclude: while we readily acknowledge that most almshouse trustees apply due diligence and act with appropriate empathy, it is salutary to remind others that they are charged with executing the will of the historical benefactors rather than dispensing ‘grace and favour’ largesse on their own account (we have instances of almshouses being described as ‘grace and favour’ dispensations in letters of appointment). To the Minister we would say that the legal situation of almshouse residents is now so complexed that only a statutory intervention would be requisite; and we petition accordingly.

The Almshouse Residents Action Group, March 2017

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We’ll let you know what response we get. March 27th 2017. [Well, it’s now June 29 2017 and, unsurprisingly, given an ill-advised general election, Brexit negotiations and the ramifications of the Grenfell Tower disaster, nothing has transpired. We live in hope…