judgement:
In circumstances in which at the time of a divorce a spouse, say a wife, is awarded capital which enables her to purchase a home but later she exhausts the capital by entry into a series of unwise transactions and so develops a need to pay rent, is the court entitled to decline to increase the order for the husband to make periodical payments to her so as to fund payment of all (or perhaps even any) of her rent even if he could afford to do so?
Mr Mills (whom it will be convenient to describe as the husband notwithstanding his divorce from Mrs Mills, the wife, in 2002) appeals against an order for upwards variation of an order for periodical payments against him in favour of the wife.
The order for variation was made by the Court of Appeal (Longmore LJ and Sir Ernest Ryder, Senior President of Tribunals) on 1 February 2017: [2017] EWCA Civ 129.
By that order, the Court of Appeal allowed the wifes appeal against the dismissal of her application to vary the order for periodical payments by Judge Everall QC (the judge) in the Central Family Court in London on 9 June 2015.
The husband and wife are each aged 52.
They were married in 1987.
The wife is a qualified beauty therapist.
In the early years of the marriage she worked, self employed, in that capacity.
The husband built up a surveying business within two companies which he and the wife owned in equal shares.
They had one child, a son, now adult.
In 1996 the wife unfortunately suffered a late miscarriage, which precipitated a long period of painful gynaecological difficulties for her.
In 2000 the husband left the home in Guildford.
On 7 June 2002, in the ensuing divorce proceedings, financial issues were resolved within a consent order.
In addition to provision for their son, who was to continue to make his home with the wife and have contact with the husband, the order provided that: i) the home, vested in the joint names of the parties, should be sold; ii) its net proceeds should be divided in accordance with a formula which in the event yielded 230,000 for the wife in settlement of all her capital claims against the husband and 23,000 for him; the wife should transfer to the husband her interest in policies worth iii) 23,000 and her shares in the surveying companies; and iv) the husband should make periodical payments to her at the annual rate of 13,200 (not index linked) on the open ended basis, namely during their joint lives until her remarriage or further order in the interim.
The wife therefore received the vast preponderance of the parties liquid capital.
The value of the two companies was not identified.
At the time of making the consent order the wife had represented that ill health was disabling her from working and that she would need 350,000 with which to purchase a suitable home for herself and their son.
The husband had conceded that she then had no capacity to raise a mortgage but had suggested, by contrast, that she could purchase a suitable home for 230,000 or less, in other words free of mortgage.
In the event, later in 2002, she proceeded to purchase a house in Weybridge for 345,000 by deploying in effect her entire share of the proceeds of the home and by raising the balance of 125,000 on mortgage.
When he learnt of the wifes purchase, the husband, by solicitors, expressed surprise at its high cost and concern about her ability to service a mortgage, let alone one of such size.
By solicitors, she replied only that she had not been able to secure reasonably priced accommodation in an area in which it would in her opinion be best for their son to grow up.
wife had begun to work again as a beauty therapist, but part time.
In 2006 the wife sold the house in Weybridge at the price for which she had bought it, namely 345,000.
But the sum owing on mortgage had risen by 93,000 to 218,000.
Having received written and oral evidence from the wife, the judge found that she had been unable satisfactorily to explain why the sum owing had increased or in what way the increase had been spent.
Upon the sale of the house in Weybridge the wife bought a flat in Wimbledon for 323,000, with a deposit of 48,000 and a mortgage of 275,000.
The judge therefore calculated that, net of collateral costs of the transactions, about 62,000 of the proceeds of sale had not been used in the purchase of the flat; but he noted that the wife had refurbished it to some extent.
It is clear that, by the time of her purchase of the house in Weybridge, the
In 2007 the wife sold the flat in Wimbledon for 435,000.
The sum then owing on mortgage had risen only marginally, namely to 277,000.
Instead she bought a flat in Battersea for 520,000, with a deposit of 78,000 and a mortgage of 442,000.
The judge therefore calculated that, net of the collateral costs, about 44,000 of the proceeds of sale had not been used in the purchase of the second flat.
It is unclear from his judgment how the wife was able to secure, and then to service, a borrowing as high as 442,000.
In 2009 the wife sold the flat in Battersea for 580,000 and began to rent accommodation.
The judge calculated that, after repaying the mortgage of 442,000 and meeting the collateral costs, the wife received about 120,000 from the proceeds of sale.
Between 2009 and 2015 the wife rented six successive properties in London and Surrey.
By April 2015, when the judge heard the case, the wife had no capital.
On the contrary, she had overdrafts of 4,000, credit card liabilities of 18,000 and a tax liability of about 20,000.
Before the judge were cross applications.
The husband had applied for discharge of the order for periodical payments on his payment to the wife of a modest capital sum, say of 26,000; or for a fixed period to be set on her continued receipt of periodical payments and/or for a downwards variation of their amount.
The wife had cross applied for an upwards variation of their amount.
Both applications were made under section 31(1) of the Matrimonial Causes Act 1973 (the Act).
Section 31(7) provides: In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, [which] shall include any change in any of the matters to which the court was required to have regard when making the order to which the application relates, and (a) in the case of a periodical payments . order made on or after the grant of a decree of divorce . , the court shall consider whether in all the circumstances and after having regard to any such change it would be appropriate to vary the order so that payments under the order are required to be made only for such further period as will in the opinion of the court be sufficient to enable the party in whose favour the order was made to adjust without undue hardship to the termination of those payments; The matters to which the court was required to have regard when making the order in 2002, even though it was made by consent, were those set out in section 25(2) of the Act.
In his judgment, which was reserved, the judge described the wifes oral evidence as not fully satisfactory.
He explained that she had been unable to give him a clear picture of her financial circumstances in the years since 2002; that, apart from her failure to explain the dramatic increase in the size of the mortgage on the house in Weybridge, she had been unable to identify the size of her income from her part time work in the earlier years, first as a beauty therapist and then for an estate agent.
He accepted that between 2004 and 2010 she had undergone no less than seven surgical procedures referable to her gynaecological difficulties and that they had affected her earning capacity at that time.
He found, however, that she had exaggerated the continuing impact, five years later, of those difficulties upon her earning capacity.
In 2010 she had reverted to work as a beauty therapist.
Her accounts for the last available year, namely to April 2014, disclosed an annual income net of tax of about 18,500.
She had then been working about three days each week.
The judge rejected her contention that ill health precluded her from working for a fourth day but accepted that she might not be able to attract the extra clients to occupy it.
He therefore ascribed to her annual net earnings of only 18,500.
The husband contends that it was a somewhat conservative figure; but it is appropriate for an appellate court to adopt it without qualification.
The judge found that the husband, by contrast, gave reliable and truthful evidence in all respects.
He had remarried and was living with his second wife, their nine year old son and an adult step daughter in a house in Guildford in which, subject to a substantial mortgage, he had a half interest.
As in 2002 he had little liquid capital.
The judge studied his earned income from the surveying companies.
They had suffered a reverse in 2012 but had slowly recovered since then and, as the husband frankly conceded at the hearing, they were likely to be thriving by 2025.
The judge ascribed to the husband an existing net annual income of 55,000 inclusive of a small salary which one of the companies chose to pay to his current wife.
It may again have been a somewhat conservative figure; but it is again appropriate for an appellate court to adopt it without qualification.
At the hearing the wifes then counsel put before the judge a breakdown of what he suggested to be the amount of her necessary annual expenditure.
The judge accepted it as very modest.
Exclusive of figures referable to the adult son, the annual total was 35,792, of which 10,200 was for rent.
Following deduction of her earnings of 18,500, the wifes annual need was therefore for 17,292.
But the judges decision was not to vary, whether upwards or downwards, the existing order for periodical payments in the annual sum of 13,200.
In other words he countenanced a shortfall of 4,092 between the wifes annual need and the husbands obligation to meet it.
The answer lies in the judges analysis of the wifes loss of the capital sum which had been awarded to her in 2002.
The judge found that: the award in 2002 would then have enabled the wife to buy a home it had however been reasonable for her to be ambitious and to secure i) free of mortgage; ii) a mortgage for the purchase of the house in Weybridge; iii) thereafter she had not managed her finances wisely; iv) like others at that time, she had committed herself to borrowings which were too high; v) or wanton; vi) but her needs had been augmented by reason of the choices which she had made.
In the light of those findings the judge decided to reject the husbands submission that the wifes need to pay rent of 10,200 should be entirely eliminated from the total annual need which it would be appropriate for him to meet.
Nevertheless it was it would be wrong to describe her approach to finances as profligate fair that the husbands contribution to the wifes needs should not include a full contribution to her housing costs.
If, however arbitrarily, one omits to ascribe any part of the wifes earnings to the payment of rent of 10,200 and treats the rent as entirely subsumed within her residual annual need of 17,292, it is easy to see that the effect of the judges decision to countenance a shortfall from that figure of 4,092 was to oblige the husband to pay 6,108 towards the rent, or 60% of it.
Although the judge had described the wifes schedule of annual needs totalling 35,792 as very modest and indeed as basic, he said that the husbands contribution should do no more than to enable her to meet her bare minimum needs, which, so he therefore implied, were properly to be reflected in an even lower figure.
The wife, he said, will have to adjust her expenditure to live within her means.
The judge found on clear evidence that the husband could afford to continue to make periodical payments in the annual sum of 13,200.
Indeed, although there was no cause for him to make a finding to this effect, it also seems reasonably clear that the husband could have afforded to pay the extra annual sum of 4,092 if it had been otherwise appropriate to order him to do so; it was certainly no part of the judges reasoning that the husband could not have afforded to pay it.
In accordance with his duty the judge then turned to consider the husbands application for him to set a fixed period upon the wifes continued receipt of the periodical payments.
But, applying section 31(7)(a) set out in para 14 above, the judge concluded, unsurprisingly, that he could not identify any fixed period as being sufficient to enable the wife to adjust without undue hardship to their termination.
It followed that the order should continue to require them to be paid on the open ended basis, namely during their joint lives until her remarriage or further order in the interim.
Although the open ended basis does not specify a fixed term for the life of the order, the circumstances which it identifies as bringing it to an end, in particular the potential for a further order ending it at any time, show how misleading (indeed, as the husband himself says, how unattractive) it is for some non lawyers to describe such an order as a meal ticket for life.
Inevitably the judge also concluded that any appropriate capitalisation of periodical payments in that continuing sum and on that continuing basis appeared to be beyond the husbands means.
So the judge dismissed both the husbands application and the wifes cross application.
Both the husband and the wife sought permission from the Court of Appeal to appeal against the respective dismissals of their applications.
The wife secured permission to do so but, in circumstances which rendered him aggrieved but are no longer relevant, the husbands application for permission was not granted likewise but was listed to be heard by the court at the time when it was to hear the wifes substantive appeal.
At the conclusion of the hearing on 1 February 2017 Sir Ernest Ryder gave an impromptu judgment, with which Longmore LJ agreed.
In his judgment Sir Ernest said that i) the judge did not give any reason why any part of the trimmed budget, that is the wifes basic needs budget, should be cut in explanation of why that shortfall should not be met; ii) budget that he, the judge, had accepted in evidence; and iii) his decision that she would have to adjust her expenditure to reduce those needs was a conclusion [which] required reasoning that is not in the judgment.
he did not explain why she should live below the basic needs
So the Court of Appeal allowed the wifes appeal by varying the order for periodical payments upwards from the annual sum of 13,200 to that of 17,292, backdated to the date of the judges judgment.
It refused the husbands application for permission to appeal to it on the ground that his proposed appeal had no prospect of success.
The husband filed a notice of appeal to this court.
He challenged the increase in the order for periodical payments directed by the Court of Appeal.
But he also purported to challenge its refusal to discharge the order for periodical payments; and, alternatively, its refusal to set a fixed period on the wifes continued receipt of them and/or to vary the amount of them downwards.
In these respects he was, however, purporting to challenge the Court of Appeals refusal to permit him to appeal to itself on these grounds and, by section 54(4) of the Access to Justice Act 1999, no appeal can be brought against a refusal of permission.
So the order of this court was to limit its permission for him to appeal to the single ground whether, in light of the fact that provision had already been made for the wifes housing needs in the capital settlement, the Court of Appeal had been entitled to interfere with the judges determination not to make full allowance for her need to pay rent in the continuing order for periodical payments.
Unfortunately the husbands advisers considered that the terms of the limited grant of permission could in some way prove broad enough to enable them to make submissions at the hearing along the wider lines of his impermissible challenge to the Court of Appeals refusal to grant him permission to appeal to it.
So at an early stage of the hearing the court had to re emphasise the limited ambit of its inquiry in this particular case.
With the greatest of respect to the Court of Appeal, and with (I believe) a full appreciation of the heavy work load under which it currently labours, it erred in saying that the judge had given no reason for declining to increase the order for periodical payments so as to enable the wife to meet all her basic needs.
The judge gave a clear reason which is summarised in paras 20 and 21 above.
So the question which the Court of Appeal should have addressed, and which this court should now address, is the question set out in para 1 above.
the Court of Appeal.
First, Pearce v Pearce [2003] EWCA Civ 1054, [2004] 1 WLR 68.
At the time of the original order in 1997 the wife had owned a flat in Chelsea free of mortgage.
Later she sold the flat; depleted the proceeds by an unfortunate speculation in Ireland; and, upon returning to live in London, could only afford to buy a flat in Fulham subject to mortgage.
The original order had also provided for the husband to make periodical payments to the wife; and the subsequent order under appeal in 2003 was to capitalise her entitlement to periodical payments, ie to discharge the order for them upon payment to her by the husband of a lump sum in lieu of them pursuant to section 31(7A) and (7B) of the Act.
The major significance of the decision of the Court of Appeal lies in its approach to the exercise of capitalising an order for periodical payments.
For present purposes, however, its significance lies in its removal of the wifes mortgage repayments from its calculation of the amount of the periodical payments to which, in the absence of capitalisation, she would then have been entitled and therefore of the amount of the lump sum to be paid by the husband in lieu of them.
Thorpe LJ said at para 36 that the judge In addressing the question, the court must consider three earlier decisions of should not have allowed the wife to discharge her mortgage at the husbands expense.
Such an indemnity violates the principle that capital claims compromised in 1997 could not be revisited in 2003.
There is simply no power or discretion to embark on further adjustment of capital to reflect the outcome of unwise or unfortunate investment on one side or prudent or lucky investment on the other.
Second, North v North [2007] EWCA Civ 760, [2007] All ER (D) 386 (Jul).
In 1981 an order by consent had provided the wife with ownership of a mortgage free house in Sheffield and of ground rents which generated a comfortable income for her.
The order had also included provision for the husband to make periodical payments to her in a nominal sum.
In 2000 the wife sold her assets in England and moved to Sydney with relatively disastrous financial consequences, which led her to apply for an upwards variation of the order for periodical payments.
The Court of Appeal set aside an order capitalising her entitlement to them in the sum of 202,000 and, although not visible in the transcript or in the report, apparently substituted a substantially lower figure.
Thorpe LJ said: 32.
In any application under section 31 the Applicants needs are likely to be the dominant or magnetic factor.
But it does not follow that the respondent is inevitably responsible financially for any established needs.
He is not an insurer against all hazards nor, when fairness is the measure, is he necessarily liable for needs created by the applicants financial mismanagement, extravagance or irresponsibility 33.
Thus in the present case the wifes failure to utilise her earning potential, her subsequent abandonment of the secure financial future provided for her by the husband, her choice of a more hazardous future in Australia, together with her lifestyle choices in Australia, were all productive of needs which she had generated and for which the husband should not as a matter of fairness be held responsible in law.
And third, Yates v Yates [2012] EWCA Civ 532, [2013] 2 FLR 1070.
Under a consent order the wife had received a substantial lump sum on the basis that she would use half of it in discharging a mortgage on her home.
In the event she had repaid only part of the mortgage debt and had invested in a non income bearing bond the sum which she had thus elected not to apply to full clearance of the mortgage.
When, later, a judge came to capitalise her right to continuing periodical payments, he included in his calculation of her need the amount of interest payable by her in respect of the residual mortgage debt.
The Court of Appeal held that the inclusion had been wrong.
Thorpe LJ said: Lewison LJ said: 12.
It seems to me little more than common sense that if a recipient of a lump sum twice the size of the mortgage on the final matrimonial home elects to hold back capital made available for the mortgage discharge in order to invest in a bond that bears no income, she cannot look to the payer thereafter for indemnity or contribution to the continuing mortgage interest payments.
That seems to me to be an absolutely self evident point. 21. the need to pay the mortgage at all arose from her own choice not to apply the lump sum in discharging the existing mortgage The financial consequences of her investment choice are her responsibility.
It is wrong in principle for the husband to have to continue to fund the mortgage.
Mr Feehan QC, who, like Ms Dunseath, nobly appears for the wife without fee, seeks to distinguish the mortgage instalments disallowed in the cases of Pearce and Yates from payments of rent.
I see no relevant distinction.
He also submits that, unlike the present case, all three of the decisions concerned the capitalisation of an entitlement to periodical payments and that what was there rightly disallowed was the insinuation into the lump sum thus payable of a sum more reflective of an impermissible second claim for capital provision than of a permissible claim for conversion into capital of an income entitlement.
Mr Feehan relies in particular on the statement of Thorpe LJ in the Pearce case, quoted at para 36 above.
I reject the submission.
As the Court of Appeal valuably established in that case, the first step in the exercise of capitalisation is a calculation of the amount of periodical payments to which, in the absence of capitalisation, the payee would then have been entitled.
It was in the course of making this calculation that in the three decisions the objectionable elements of the claim were disallowed.
Even had there been no capitalisation of the entitlement to periodical payments, those elements would therefore have been disallowed in quantifying the amount of the ongoing order for periodical payments.
The cases of Pearce, North and Yates were correctly decided.
The answer to the question posed in para 1 above is yes.
By its terms that question asks only whether a court would be entitled, rather than obliged, in the circumstances there identified to decline to require the husband to fund payment of the rent.
Its reference to the courts entitlement to do so serves to respect the wide discretion conferred upon it by section 31(1) and (7) of the Act in determining an application for variation of an order for periodical payments.
But, in the passages quoted above, the Court of Appeal has expressed itself in forceful terms; and a court would need to give very good reasons for requiring a spouse to fund payment of the other spouses rent in the circumstances identified by the question.
A spouse may well have an obligation to make provision for the other; but an obligation to duplicate it in such circumstances is most improbable.
The judge was clearly entitled to decline to vary the order for periodical payments so as to require the husband to pay all of the wifes rent.
The order of the Court of Appeal should be set aside and his order restored.

summary/full:
The Appellant and Respondent are former husband and wife.
They divorced in 2002 after a marriage of approximately fifteen years, and the financial issues in the divorce were resolved by way of a consent order.
Under the terms of that order the wife received 230,000 in settlement of her capital claims against the husband, and it was also agreed that the husband would make periodical payments to her at an annual rate of 13,200.
It was reasonably anticipated by the husband that the wife would use the 230,000 to purchase a suitable home for herself and their son without a mortgage, as the wife had been suffering from ill health which made it difficult for her to work.
In the event, however, the wife did manage to take out a mortgage, and she duly purchased a more expensive home for 345,000.
Between 2002 and 2009 the wife sold and purchased a series of different properties, and with each purchase the amount which she borrowed increased.
In addition, she did not necessarily reinvest all of the sale proceeds from one property into the next and seemingly spent the balance, with the result that the amount of capital she had decreased over time.
Eventually, in 2009 the wife sold her final property and began to rent accommodation.
By April 2015, when the first instance judge heard the case, the wife had no capital, and she had debts of around 42,000.
The hearing before the judge was to determine two cross applications made under s.31(1) of the Matrimonial Causes Act 1973.
The husband had applied for the discharge or downwards variation of the order for periodical payments, whereas the wife had applied for the order for periodical payments to be varied upwards.
In determining the applications the judge noted that there was a shortfall of 4,092 per annum between the wifes current needs and, when coupled with her own earnings, the existing level of the periodical payments.
However, he also held that, although the wifes actions had not been profligate, she had not managed her finances wisely and her current financial needs, in particular her need to pay rent, had been increased by the choices which she had made.
Consequently, the judge considered that it would be unfair to the husband if he had to make a full contribution to the wifes rental costs.
The judge therefore declined to vary the order for periodical payments either upwards or downwards.
This meant that the husband would continue to contribute to around 60% of the wifes rental costs, and the wife would have to adjust her expenditure to accommodate the shortfall.
The wife appealed against this decision to the Court of Appeal, and was successful.
The Court of Appeal considered that the judge had not given sufficient reasons why all of the wifes basic needs should not be met by the periodical payments from the husband, and increased the level of periodical payments to cover her shortfall, i.e. to 17,292.
The husband now appeals against this decision to the Supreme Court.
The Supreme Court unanimously allows the appeal, concluding that the judge was entitled to decline to vary the order for periodical payments so as to require the husband to pay all of the wifes rental costs.
Lord Wilson gives the judgment with which Lady Hale, Lord Carnwath, Lord Hughes and Lord Hodge agree.
The husband was granted permission to appeal to the Supreme Court only on a single ground whether, in light of the fact that provision had already been made for the wifes housing needs in the capital settlement, the Court of Appeal was entitled to interfere with the judges decision not to increase the periodical payments so as to cover all of the wifes current rental costs [32].
The Court of Appeal had erred in saying that the judge had given no reason for declining to increase the order for periodical payments the judge had given a clear reason, namely that the wifes unwise decisions in relation to her capital had increased her basic needs by requiring her to pay rent, and that it was consequently unfair to expect the husband to meet these increased needs in full [33].
The Court of Appeal should have considered the impact of the original capital payment on the wifes current need to pay rent, and this involved a consideration of three earlier Court of Appeal authorities: Pearce v Pearce [2003] EWCA Civ 1054, North v North [2007] EWCA Civ 760, and Yates v Yates [2012] EWCA Civ 532 [34 38].
These cases were correctly decided and in light of this the judge was entitled, although not obliged, to decline to require the husband to fund payment of the rent in full.
This respects the wide discretion conferred upon the court under section 31(1) and (7) of the Matrimonial Causes Act 1973 in determining an application for variation of an order for periodical payments.
Moreover, a court would need to give very good reasons for requiring a spouse to fund payment of the other spouses rent in the circumstances of this case.
A spouse may well be obliged to make provision for the other spouse, but an obligation to duplicate that provision in situations such as this is improbable [40].

summary/background: The Appellant and Respondent are former husband and wife. They divorced in 2002 after a marriage of approximately fifteen years, and the financial issues in the divorce were resolved by way of a consent order. Under the terms of that order the wife received 230,000 in settlement of her capital claims against the husband, and it was also agreed that the husband would make periodical payments to her at an annual rate of 13,200. It was reasonably anticipated by the husband that the wife would use the 230,000 to purchase a suitable home for herself and their son without a mortgage, as the wife had been suffering from ill health which made it difficult for her to work. In the event, however, the wife did manage to take out a mortgage, and she duly purchased a more expensive home for 345,000. Between 2002 and 2009 the wife sold and purchased a series of different properties, and with each purchase the amount which she borrowed increased. In addition, she did not necessarily reinvest all of the sale proceeds from one property into the next and seemingly spent the balance, with the result that the amount of capital she had decreased over time. Eventually, in 2009 the wife sold her final property and began to rent accommodation. By April 2015, when the first-instance judge heard the case, the wife had no capital, and she had debts of around 42,000. The hearing before the judge was to determine two cross-applications made under s.31(1) of the Matrimonial Causes Act 1973. The husband had applied for the discharge or downwards variation of the order for periodical payments, whereas the wife had applied for the order for periodical payments to be varied upwards. In determining the applications the judge noted that there was a shortfall of 4,092 per annum between the wifes current needs and, when coupled with her own earnings, the existing level of the periodical payments. However, he also held that, although the wifes actions had not been profligate, she had not managed her finances wisely and her current financial needs, in particular her need to pay rent, had been increased by the choices which she had made. Consequently, the judge considered that it would be unfair to the husband if he had to make a full contribution to the wifes rental costs. The judge therefore declined to vary the order for periodical payments either upwards or downwards. This meant that the husband would continue to contribute to around 60% of the wifes rental costs, and the wife would have to adjust her expenditure to accommodate the shortfall. The wife appealed against this decision to the Court of Appeal, and was successful. The Court of Appeal considered that the judge had not given sufficient reasons why all of the wifes basic needs should not be met by the periodical payments from the husband, and increased the level of periodical payments to cover her shortfall, i.e. to 17,292. The husband now appeals against this decision to the Supreme Court.

summary/reasons: The husband was granted permission to appeal to the Supreme Court only on a single ground - whether, in light of the fact that provision had already been made for the wifes housing needs in the capital settlement, the Court of Appeal was entitled to interfere with the judges decision not to increase the periodical payments so as to cover all of the wifes current rental costs [32]. The Court of Appeal had erred in saying that the judge had given no reason for declining to increase the order for periodical payments the judge had given a clear reason, namely that the wifes unwise decisions in relation to her capital had increased her basic needs by requiring her to pay rent, and that it was consequently unfair to expect the husband to meet these increased needs in full [33]. The Court of Appeal should have considered the impact of the original capital payment on the wifes current need to pay rent, and this involved a consideration of three earlier Court of Appeal authorities: Pearce v Pearce [2003] EWCA Civ 1054, North v North [2007] EWCA Civ 760, and Yates v Yates [2012] EWCA Civ 532 [34-38]. These cases were correctly decided and in light of this the judge was entitled, although not obliged, to decline to require the husband to fund payment of the rent in full. This respects the wide discretion conferred upon the court under s. 31(1) and (7) of the Matrimonial Causes Act 1973 in determining an application for variation of an order for periodical payments. Moreover, a court would need to give very good reasons for requiring a spouse to fund payment of the other spouses rent in the circumstances of this case. A spouse may well be obliged to make provision for the other spouse, but an obligation to duplicate that provision in situations such as this is improbable [40].


judgement:
The appellant, Nottingham City Council (Nottingham), is the licensing authority for those houses in multiple occupation (HMOs) in its district which are licensable under Part 2, Housing Act 2004.
This appeal concerns two HMOs, namely 44, Rothesay Avenue, Lenton, Nottingham NG7 1PU and 50, Bute Avenue, Lenton, Nottingham NG7 1QA.
Both are owned by the second respondent, Trevor Parr Associates Ltd, which carries on the business of providing accommodation for students.
The first respondent Dominic Parr is the managing director of the second respondent and the manager of the properties.
Nottingham appeals against the decision of the Court of Appeal dated 29 March 2017, dismissing its appeal against the decision of the Upper Tribunal (Lands Chamber) dated 9 February 2016, dismissing its appeals against decisions of the First tier Tribunal dated 5 November 2014 (44, Rothesay Avenue) and 6 May 2015 (50, Bute Avenue) respectively, allowing the respondents appeal against the imposition by Nottingham of certain HMO licensing conditions.
On this appeal to the Supreme Court the respondents have not appeared and have not been represented.
In these circumstances, at the request of the Court an Advocate to the Court was appointed in order to argue the grounds for resisting the present appeal and we are grateful to Mr Martin Chamberlain QC for performing this role.
In addition, the Secretary of State for Housing, Communities and Local Government (the Secretary of State) has intervened in this appeal.
We are grateful to all counsel for their submissions.
Legislation
The Housing Act 2004, Part 2 replaced the previous law on HMOs which was to be found in the Housing Act 1985, Part XI (the 1985 Act).
The 1985 Act defined an HMO as a house which is occupied by persons who do not form a single household but left the word household undefined.
In Barnes v Sheffield City Council (1995) 27 HLR 719 the Court of Appeal set out a number of factors relevant to determining whether occupants were living together as a single household.
It held that in the particular circumstances of that case a group of students sharing a house constituted a single household.
The 1999 consultation paper, Licensing of Houses in Multiple Occupation England (DETR, 1999), which preceded the 2004 Act observed (section 2, para 24) that, as a result of this judgment, housing authorities were wary of attempting to use their HMO powers in shared houses, particularly those occupied by students.
The 2004 Act was intended, inter alia, to extend the regulatory scheme of HMOs to include shared student accommodation, subject to certain exceptions.
The 2004 Act introduced for the first time a system of licensing of HMOs authorising occupation of the house concerned by not more than a maximum number of households or persons specified in the licence (section 61(2)).
A building or part of a building will qualify as an HMO if the living accommodation is occupied by persons who do not form a single household (section 254(2)(b), (3) and 4(c)) and if occupied by those persons as their only or main residence or they are to be treated as so occupying it (section 254(2)(c), (3) and 4(d)).
Section 258 makes provision for determining when persons are to be regarded as not forming a single household for the purposes of section 254.
They are to be so regarded unless they are members of the same family or their circumstances are of a description specified in regulations (section 258(2)).
Such provision is made in the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006 (SI 2006/373) (the 2006 Regulations).
Section 259 makes provision for determining when persons should be treated as occupying premises as their only or main residence.
In particular, a person is to be so treated, inter alia, if premises are occupied by the person as the persons residence for the purpose of undertaking a full time course of further or higher education (section 259(2)(a)).
If an application for a licence is made to the local housing authority, it may grant a licence if it is satisfied as to the matters mentioned in section 64(3).
Those requirements include that the house is reasonably suitable for occupation by not more than the maximum number of households or persons [specified in the application or decided by the authority] or that it can be made so suitable by the imposition of conditions under section 67 (section 64(1), (2), (3)(a)).
Section 67 provides in material part: 67 Licence conditions (1) A licence may include such conditions as the local housing authority consider appropriate for regulating all or any of the following the management, use and occupation of the house (a) concerned, and (b) its condition and contents. (2) Those conditions may, in particular, include (so far as appropriate in the circumstances) (a) conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it; (5) A licence may not include conditions imposing restrictions or obligations on a particular person other than the licence holder unless that person has consented to the imposition of the restrictions or obligations. (6) A licence may not include conditions requiring (or intended to secure) any alteration in the terms of any tenancy or licence under which any person occupies the house.
Guidance
At the material time, minimum sizes of bedrooms in HMOs were not prescribed in legislation.
However, Nottingham issues guidance to its housing officers on the operation of this licensing system.
For present purposes the relevant document is HMO Amenity Guidance 3 Space Provision for Licensable and Non Licensable HMOs.
This states that in the case of bedrooms in single occupation in HMOs where there is adequate dining space elsewhere and where cooking facilities are not provided in the room the minimum space provision is eight square metres.
A general note adds: The dimensions and areas specified shall normally be regarded as the minimum, particularly with regard to new proposals.
However it is recognised that existing buildings cannot always achieve these minima.
A degree of flexibility will sometimes be possible if other compensating features are present.
Conversely it should be noted that irrespective of the dimensions, the shape and useable living space of any room is a determining factor in the calculation of the maximum number of people for which it is suitable.
In carrying out its measurements Nottingham disregards all space with a floor to ceiling height of less than 1.53 metres.
Nottingham participates with other housing authorities in the East Midlands in an organisation named East Midlands Decent and Safe Homes which also sets out amenity standards for HMOs in Amenity and Space in HMOs: A Landlords Guide (the East Midlands DASH Guide).
This recommends adopting eight square metres as the minimum size for bedrooms of this sort but also states: The standards are usually regarded as a MINIMUM but are a guide only.
Other factors or compensatory features will be taken into account when inspecting a property, therefore allowing for a degree of flexibility in certain circumstances.
These factors could include the shape of the usable living space, or the needs and wishes of the occupants. (Original emphasis)
The properties
44, Rothesay Avenue and 50, Bute Avenue are both terraced houses of traditional brick construction with a slate roof.
Both are used for letting to students and in each case the attics have been converted into bedrooms.
In each property the front attic bedroom has a sloping ceiling which reduces the area regarded by Nottingham as useable living space below eight square metres.
At 44, Rothesay Avenue the front attic room has a total floor area of 9.75 square metres but, due to the sloping ceiling, only 5.89 square metres has a floor to ceiling height of 1.53 metres or more.
The front attic room at 50, Bute Avenue has a floor area of approximately 11 square metres of which only 6.89 square metres has a floor to ceiling height of 1.53 metres or more.
Both the Upper Tribunal and the Court of Appeal quoted the following description of the attic bedroom at 44, Rothesay Avenue by the First tier Tribunal: The area of the relevant bedroom having a height of less than 1.53m was utilised to accommodate a desk and for storage.
The relevant room includes a double bed, desk, chest of drawers, bedside table, bookshelves and a built in wardrobe.
The pitch of the roof slope was such that it appeared possible to use the desk without undue risk of collision and any such risk could be reduced further by placing the chair in the area beneath the pitched roof window thereby eliminating the risk of collision when rising from the chair.
The head of the bed was fitted under that part of the room with reduced height.
Risk of collision could be avoided by turning the bed through 180.
The risk of collision when changing the bed linen could be avoided by pulling the bed out of the area with reduced headroom prior to performing the task.
The assessment of the attic bedroom at 50, Bute Avenue was to similar effect.
Nottinghams decisions and the appeals
In each case Nottingham granted a new HMO licence which imposed a condition prohibiting the use of the attic bedroom for sleeping.
The licence for 44, Rothesay Avenue provided: [T]he second floor front bedroom be prohibited for the use of sleeping.
This room will not be allowed for the use for sleeping until it has provided by way of alteration, adaptation or extension a useable floor surface area of eight square metres within a minimum ceiling height of 1.53 metres below the sloping ceiling from the floor. (para 36) The licence for 50, Bute Avenue limited the number of persons permitted to occupy the HMO to a maximum of five and provided: The second floor front bedroom is not to be used as a sleeping room, except where it is let in combination with another room within the property in such a way as to provide the occupant with the exclusive use of two rooms. (para 38) This licence further provided that the restriction on sleeping in the room might be removed if alterations were carried out to increase the size of the room to eight square metres (excluding any area where the ceiling height is below 1.53m).
In each case the respondents appealed to the First tier Tribunal against the imposition of these conditions.
Each of the First tier Tribunals referred in its decision to the guidance issued by Nottingham and, in particular, to the general note quoted at para 7 above.
Each considered that Nottinghams guidance on space provision was reasonable as general guidance but noted that some flexibility was permitted if other compensating features were present.
Each considered that in each of the rooms the area with the reduced headroom was of some value for the uses described.
Furthermore, each considered that in each of the HMOs the provision of communal living space was significantly larger than the minimum contemplated by Nottinghams requirements for additional living space.
In each case the Tribunal regarded this over provision as a compensating feature which could be taken into account in applying Nottinghams own guidance.
In each case the Tribunal concluded that the attic rooms were adequate as study/bedrooms where cohesive living is envisaged and that there were sufficient compensating features in the HMOs to make them suitable for student or similar cohesive occupation for six persons in six households.
Accordingly, in the licence for 44, Rothesay Avenue the First tier Tribunal substituted an alternative condition, namely that: The second floor front bedroom may only be used for sleeping accommodation by a person engaged in full time education and who resides in the dwelling for a maximum period of ten calendar months over a period of one year.
No similar condition was introduced by the First tier Tribunal which heard the appeal in relation to 50, Bute Avenue, but it justified its conclusion by stating that there are sufficient compensating features in the property to make it suitable for students or similar cohesive occupation for six persons in six households.
In dismissing Nottinghams further appeal in that case, however, the Upper Tribunal directed that the same condition be included in the licence for 50, Bute Avenue.
On appeal to the Upper Tribunal (Lands Chamber) both appeals were dismissed.
Martin Rodger QC, Deputy President, referred to examples of guidance by local housing authorities modifying space standards for particular modes of occupation which, he considered, recognise that certain categories of occupier may wish to occupy accommodation in a particular way.
The purpose of all conditions under section 67 was to ensure that the HMO is suitable for the number of persons permitted to occupy it and there was therefore nothing unlawful in formulating a condition applicable to a particular mode of occupation by a category of occupants if the house was suitable for them in greater numbers than it would be for a different mode of occupation.
He rejected Nottinghams submission that the Act requires that an HMO must be capable of occupation by all potential occupants.
Referring to the substituted condition in the case of 44, Rothesay Avenue, he observed that the condition was formulated on the basis that the property was one where cohesive living is envisaged and that by cohesive living the First tier Tribunal clearly had in mind the level of shared activity and social interaction to be expected in a shared house or Category B HMO, as described at greater length in the policy documents of other local authorities.
In his view, the basic idea of a house shared by a number of individuals, not forming a family but who nevertheless wish to share communal living facilities and enjoy a significant level of social interaction, is readily understood.
With regard to the terms of the condition he observed: I am satisfied that there is nothing unlawful in a condition restricting the use of sleeping accommodation in part of an HMO to a person in full time education, if the decision maker is satisfied that, looked at as a whole, the HMO is suitable for the number of households specified in the licence.
An alternative condition, perhaps more closely reflecting the reason for permitting the use of a room smaller than would normally be acceptable, might require that the occupiers be members of a group who intend to share the communal living space, but I do not think the reference to students makes the condition unlawful.
The Court of Appeal (Longmore, Lewison and Briggs LJJ) upheld the decision of the Upper Tribunal: [2017] PTSR 879.
The Court of Appeal considered that the power to impose conditions permitted a condition defined by reference to the general characteristics and activities of an occupier.
A restriction of occupation to occupation by students was a restriction on occupation by persons.
The Court of Appeal rejected submissions that the condition imposed by the First tier Tribunal was irrational and incapable of effective enforcement.
However, it varied the licences to include two further conditions: that the communal space on the ground floor, (i) comprising a kitchen/diner and living room area, be kept available for communal living space only; (ii) students engaged in full time education.
that no bedrooms may be let to persons other than
Nottingham now appeals to the Supreme Court, by leave granted by this Court, on the following grounds: Ground 1: The power to impose conditions under sections 64 and 67, Housing Act 2004, in order to make an HMO suitable for a particular number of households or persons, cannot be used so as to limit the class of persons for whom the HMO is suitable.
Ground 2: The conditions imposed by the Tribunals and Court of Appeal are irrational and unenforceable.
Ground 1
Submissions of the parties
On behalf of Nottingham, Mr Andrew Arden QC submits that the conditions imposed seek to make an exception for full time students otherwise than in the circumstances permitted by the legislation.
Section 64(3)(a) requires the authority to be satisfied that the house is reasonably suitable for occupation by not more than the maximum number of households or persons mentioned in subsection (4) or that it can be made so suitable by the imposition of conditions under section 67.
In his submission the legislation, at this stage, is unequivocal and concerned only with numbers.
Furthermore, section 67(2)(a) which permits conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it does not permit conditions restricting who may occupy an HMO.
The references elsewhere in the statute to the characteristics of occupants do not support setting conditions by reference to such characteristics.
In the alternative, the proposed conditions here seek, contrary to the policy of the legislation, to introduce an exception to its operation for a category of persons or a defined set of circumstances.
A condition which restricts the occupation of an HMO by reference to a class of occupier does not achieve the purpose of improving or maintaining standards and has the effect of making accommodation unavailable to a section of the rental market.
That standards may be lowered for certain categories otherwise than as specified by Parliament is the antithesis of the legislative purpose.
In the further alternative, treating occupation by students in this way is contrary to the statutory object of Part 2 of the 2004 Act which was intended in part to reverse the decision of the Court of Appeal in Barnes v Sheffield City Council.
On behalf of the Secretary of State Mr Jonathan Moffett QC accepts that, in an appropriate case, section 67 does empower a housing authority to impose a condition on a licence which restricts the occupation of all or part of an HMO to occupation by a particular class of person.
However, he submits that a housing authority may not, on the basis of such a condition, grant a licence for an HMO which authorises the HMO to be occupied by a greater number of households or persons than the authority would otherwise authorise.
In particular, he criticises the approach of the Court of Appeal on the grounds that it allows for the application of different standards for different classes of person and assumes that a particular class of occupier will live in the HMO in a way that requires a lower standard of accommodation than other classes.
He submits that section 64(3)(a) refers to conditions that make the house reasonably suitable for occupation by the maximum number of households or persons and does not refer to conditions that make the households or persons suitable to occupy the house.
Mr Chamberlain, as Advocate to the Court, has at the Courts request advanced the submissions which might have been made by the respondents had they taken part in this further appeal.
He submits that section 67 permits the imposition of the conditions in question here.
First, he submits that the conditions imposed on the letting of each of the properties were, on their face, conditions regulating the use of the second floor front bedroom and were correctly characterised as such.
However, Parliament chose to permit conditions regulating management, use and occupation of an HMO.
On a natural reading, a condition regulating the occupation of a house is apt to include one that governs how or by whom it may be occupied.
Contrary to the submissions of Nottingham, the Court of Appeal decision does not introduce an exception to the operation of the legislation for a category of persons or a defined set of circumstances, nor does it allow occupation at a lower standard than would otherwise have been permitted in the circumstance of the HMOs in question.
Discussion
Section 64(3)(a) indicates that the purpose of the imposition of conditions is to make a house reasonably suitable for occupation by not more than the maximum number of households or persons specified in the application or decided by the housing authority.
The question as to what sort of conditions may be imposed is governed by section 67.
Section 67(1)(a) provides that a licence may include such conditions as the local housing authority considers appropriate for regulating all or any of the management, use and occupation of the house concerned.
Section 67(1) is followed in section 67(2) by a non exhaustive list of permitted conditions including in section 67(2)(a) conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it.
Considering these words in their natural meaning, they extend sufficiently widely to include the conditions with which we are concerned.
I am persuaded that the words use and occupation in section 67(1) are not used as a composite term.
Section 67(2)(a) refers disjunctively to the use or occupation of particular parts of the house.
The inclusion of occupation in addition to use must have been intended to extend the scope of permissible conditions.
It may well be, as Mr Chamberlain submits, that the conditions in respect of each of these houses related to the use of the attic bedrooms.
However, it seems clear that they relate to the occupation of those rooms.
As Mr Chamberlain put it, on a natural reading a condition regulating the occupation of a house is apt to include one that governs how or by whom it may be occupied.
In my view, these conditions seek to regulate the occupation of particular parts of the house by persons occupying it and fall squarely within the natural meaning of section 67(2)(a).
It is, however, necessary to stand back from the plain meaning of these provisions and to consider whether such a reading is consistent with the object of the legislation.
In this regard it is significant that elsewhere in Part 2 of the 2004 Act the manner of occupation of a house and the general characteristics of occupants are considered relevant in contexts connected with HMOs and with housing standards generally.
In some instances, the personal occupation or activities of an occupier will have a bearing on whether the legislation applies.
Thus, for example, persons carrying out domestic services are regarded as occupying the same household as their employer if they are occupying rent free tied accommodation in the same building (2006 Regulations, regulation 3); a full time student is regarded as occupying accommodation as his only or main residence if it is occupied for the purpose of his full time course (section 259(2)(a)); and some religious communities are outside the HMO scheme if their principal occupation is prayer, contemplation, education or the relief of suffering (Schedule 14, paragraph 5).
Therefore, in certain circumstances the operation of the legislative scheme will depend on the personal characteristics of the occupants or their activities.
In the present case the Deputy President of the Upper Tribunal drew attention in his judgment to the fact that prior to the present legislation, under the 1985 Act, regard was had to the suitability of an HMO for occupation by a particular category of occupier.
Thus, in 1986 the Institution of Environmental Health Officers published guidance on amenity standards for HMOs which distinguished between different categories of HMOs.
In particular, Category A comprised houses occupied as individual rooms where there was some exclusive occupation and some sharing of amenities but each occupant lived otherwise independently of all others.
Category B comprised houses occupied on a shared basis which would normally be occupied by members of a defined social group, for example students or a group of young single adults.
In such houses the occupants each enjoyed exclusive use of a bedroom but would share other facilities including a communal living space.
Having distinguished between these categories in this way on the basis of the manner of occupation, the guidance then went on to set out different specifications for each category.
I note, moreover, that a revised version, the 1994 Amenity Standards, remained current until very recently and was available on the website of the successor body, the Chartered Institute of Environmental Health.
A similar approach can be detected in certain guidance issued following the implementation of the current legislation.
The Deputy President of the Upper Tribunal in his judgment in the present case drew attention to the East Midlands DASH Guide produced by housing authorities in the East Midlands including Nottingham (see para 8, above) which recognises that different facilities may be required for different modes of occupation.
It provides that in HMOs where the occupants tend to live separately there should be a sink/wash hand basin within the living units.
Similarly, there was before the Court of Appeal in the present case a note prepared by Mr Robert Fookes, counsel for the respondents, setting out extracts from the current guidance issued by a selection of housing authorities responsible for accommodation likely to be used by students attending Oxford, Cambridge and Russell Group universities.
In half of these standards the housing authorities distinguish between students and other occupants.
As the Deputy President of the Upper Tribunal observed, it is obvious that nothing in this guidance can change the meaning of the present legislation.
Nevertheless, I agree with him that it provides a useful point of reference.
It may be thought that, as a matter of common sense, the manner of occupation of a room and the type of occupant may have a bearing on the suitability of a particular room for a particular use and that this is reflected in the guidance referred to above.
That guidance also supports the view that in practical terms the availability of communal living space may be capable of compensating for an undersized bedroom.
However, the critical question is whether the approach reflected in such guidance is consistent with the present legislation.
At the heart of the appeal on this ground lie two submissions by Mr Arden on behalf of Nottingham.
First, he submits that the conditions in issue here seek, contrary to the policy of the legislation, to introduce an exception to its operation for a category of persons or a defined set of circumstances.
It is clear that Part 2 of the 2004 Act is intended to apply to shared student houses.
One purpose behind the 2004 Act was to reverse the effect of Barnes v Sheffield City Council as a result of which many shared student houses fell outside the scope of the 1985 Act.
Express provision is made in section 259(2)(a) in respect of occupation for the purpose of undertaking a full time course of further or higher education and the effect of section 254(5) and Schedule 14, paragraph 4 is, by way of exception, to remove from this regulatory scheme certain buildings occupied by students.
Contrary to Nottinghams submission, however, I do not consider that the three conditions with which we are concerned have the effect of undermining this purpose.
These conditions do not remove shared student houses from the regulatory scheme.
On the contrary, as the decisions of the First tier Tribunal in the present cases demonstrate, the standard of accommodation available in a shared student house will be inspected and subjected to rigorous examination and the house will be licensed as suitable for a stipulated number of occupants only if it is considered to be so suitable (if necessary subject to conditions) by the housing authority for the area or, on appeal, by a specialist tribunal.
Secondly, Mr Arden submits that there is no doubt that the purpose in imposing the conditions in the present case was to allow occupation at a lower standard or by a greater number than would otherwise have been permitted in the circumstances of the HMOs in question.
I should observe at this point that it is clear that Nottingham in bringing this appeal and the Secretary of State in intervening have clearly been motivated by a wish to ensure that HMOs provide acceptable living conditions, to protect the vulnerable or potentially vulnerable groups that tend to occupy HMOs and to avoid an interpretation of the legislation as a result of which lower standards are to be considered appropriate for particular groups such as students.
That is commendable.
However, I consider that their concern is unfounded.
The imposition of conditions such as those imposed by the Tribunals and the Court of Appeal in the present case do not have that effect.
It is entirely appropriate, when considering the suitability of accommodation in an HMO for a particular purpose, to have regard to the mode of occupation.
If the house is to be occupied by a group living together cohesively, each having his or her own bedroom but sharing other facilities including a kitchen/diner and a living room, the availability of those additional facilities is a material consideration.
In these circumstances the mode of occupation means that the shared facilities will benefit all the occupants and, as a result, this may compensate for a bedroom which is slightly smaller than the recommended minimum.
By contrast, where occupants of an HMO each live independently of all others, sharing only bathroom, toilet and kitchen facilities, any communal living space made available will not benefit the occupants in the same way because of their different living arrangements.
It seems to me to be entirely appropriate, therefore, that in considering the suitability of accommodation in an HMO regard should be had to the proposed mode of occupation.
Furthermore, in appropriate cases effect may be given to such considerations by the imposition of conditions in the licence.
This is not inconsistent with the statutory scheme.
As the Deputy President of the Upper Tribunal pointed out in his judgment, certain types of accommodation may lend themselves to different styles of occupation and it would be surprising if the 2004 Act did not reflect that.
The various guidelines referred to earlier in this judgment refer in different ways to the need for flexibility in their application.
In that regard, account should be taken of the proposed mode of occupation where it is likely to influence the quality of the accommodation made available to the occupant.
It must be emphasised that this does not permit the application of lower standards than would otherwise be applicable.
On the contrary, it is simply that there will be certain circumstances in which, as a matter of common sense, it will be appropriate to have regard to the mode of occupation when applying the same objective standards which apply to all HMOs.
For these reasons, I consider that the power to impose conditions under sections 64 and 67, Housing Act 2004, in order to make an HMO suitable for a particular number of households or persons, can be used so as to limit the class of persons for whom the HMO is suitable.
Finally, I should draw attention to the fact that there exist other mechanisms to maintain standards of accommodation in HMOs, in particular the imposition of mandatory conditions under Schedule 4 of the 2004 Act.
In this regard, I note that the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018 (2018 No 616) (the 2018 Regulations), came into force on 1 October 2018 and introduced additional mandatory conditions in respect of floor area.
As a result a licence must now include a condition requiring the licence holder to ensure that the floor area of any room in the HMO used as sleeping accommodation by one person over ten years is not less than 6.51 square metres (paragraph 2, inserting Schedule 4, paragraph 1A(2)(a)).
Ground 2
Submissions of the parties
On behalf of Nottingham, Mr Arden submits that if there is a power to impose a condition based on a class of occupier, the conditions in the present case as directed by the Tribunals and the Court of Appeal are irrational, both in the conventional sense and in the sense that they are not effective to achieve their purpose, and incapable of enforcement.
While the conditions are designed to secure occupation only by students, this, he submits, is not necessarily the same as cohesive living.
The judgments below are said to have proceeded on the basis of an image of student life which is simply not true of all or necessarily most students, and this is an irrational basis for determining who may or may not occupy an HMO.
The conditions go no further than setting up the possibility of sharing.
In addition, it is said that the condition limiting occupation for a maximum period of ten calendar months over a period of one year is irrational.
Either the rooms are or are not suitable to be used as sleeping accommodation all the year round.
Nottingham objects that the condition that the attic rooms be occupied for only ten months over the course of a year could not practicably be monitored.
It also maintains that while it is possible to ensure that occupants are all in full time education, that requirement cannot in practice be enforced.
The Secretary of State has taken no position on this ground of appeal.
Mr Chamberlain submits that, while not all students live in the same way, the proxy employed by the condition is sufficiently precise.
Moreover, the First tier Tribunals which heard the initial appeals were well placed to judge whether cohesive living was the norm among students in the area where the properties were located.
With regard to enforceability, he takes issue with Nottingham.
Discussion
I agree with the Court of Appeal that the conditions imposed by the Tribunals were deficient in that they failed to require any part of the HMO to be available for communal living and did not require the bedrooms other than the front attic bedrooms to be let to students.
That deficiency is, however, cured by the further conditions introduced by the Court of Appeal.
The reasoning of the First tier Tribunals and the Upper Tribunal in this case makes clear that the intention was to restrict occupation to students because they were considered to be a category of occupants who were likely to live in a cohesive manner.
In the Upper Tribunal the Deputy President observed that by cohesive living the First tier Tribunal clearly had in mind the level of shared activity and social interaction to be expected in a shared house or Category B HMO, as described at greater length in the policy documents of other local authorities.
The first issue for consideration under this ground is therefore, as Mr Chamberlain put it, whether a condition limiting the occupation of each of the houses to occupation by persons engaged in full time education is a sufficiently precise proxy for occupation by persons living together cohesively.
All students are individuals and their respective activities and life styles will, no doubt, vary considerably.
Nevertheless, it does seem to me that the normal state of affairs generally to be expected when students share a student house is that there will be a high level of social activity and social interaction among them and that they will all make extensive use of the shared living facilities.
There can be no guarantee that any given student occupier will make full use of the shared facilities, but the availability of such facilities, emphasised by the Court of Appeal, coupled with the normal expectation of cohesive living in a student house makes it reasonable to adopt this proxy in this context.
It is also significant that the members of the First tier Tribunals in these cases, with their experience of student accommodation in Nottingham, considered this a reasonable approach.
While I agree with the Deputy President of the Upper Tribunal that an alternative condition, perhaps more closely reflecting its rationale, might require that all occupants be members of a group who intend to share the communal living space, the proxy adopted is sufficiently precise.
Moreover, the alternative might give rise to difficulties of enforcement.
The requirement that the attic rooms may only be occupied for ten months in each year was clearly intended to reinforce the requirement that occupation be by full time students.
If the latter requirement is lawful, the former is strictly unnecessary.
I consider that the requirement limiting occupation to ten months in each year is irrational.
If a room is suitable for occupation for sleeping for ten months in the year, it is suitable for such occupation for the entire year.
Moreover, full time students often require accommodation for the entire year.
In these circumstances, it is unnecessary to consider whether this requirement is enforceable.
I would vary the conditions imposed in respect of each property to delete the requirement that the attic rooms may only be occupied for ten months in each year.
Finally, it is said on behalf of Nottingham that while it is possible to ensure that occupants are all in full time education, it is not in practice possible to enforce the requirement.
Nottingham points to the 12 months assured shorthold tenancy agreements employed by the respondents.
Each requires the tenant to ensure that the propertys strict purpose as a set of lets to students of the University is not prejudiced and also contains a clause which entitles the landlord to re enter if the tenant ceases to be a student of the university.
However, Nottingham draws attention to the practical difficulties of evicting a tenant in these circumstances which, it is said, would make it practically impossible to enforce the conditions in the way envisaged by the legislation.
I note that if a landlord tries but fails to evict tenants who have ceased to be full time students, for example because the court considers it unreasonable to make the order, the landlord may well have a reasonable excuse for permitting the occupants to remain and a defence under section 72(5) of the 2004 Act to the offence of failing to comply with the licence condition.
However, the sanction of revocation of the licence will be available which, in itself, should be a sufficient sanction.
Conclusion
For these reasons, and subject to the deletion of the requirement of occupation for only ten months in each year, I consider that the conditions imposed by the Tribunals and the Court of Appeal, considered cumulatively, in respect of 44, Rothesay Avenue and 50, Bute Avenue, respectively, were entirely lawful.
Accordingly, I would vary the conditions to delete the requirement of occupation for only ten months in each year but would otherwise dismiss the appeal.

dataset_name: UK-Abs

summary/full:
Nottingham City Council, the appellant, is the licensing authority for houses in multiple occupation (HMOs) in its area under Part 2 of the Housing Act 2004 (2004 Act).
This appeal concerns two HMOs, 44, Rothesay Avenue and 50, Bute Avenue which are owned by the second respondent, Trevor Parr Associates Ltd. The first respondent, Dominic Parr, is the managing director of the second respondent and the manager of the two HMOs.
The 2004 Act requires HMOs to be licensed by the local housing authority.
The local housing authority can grant the application under section 64 of the 2004 Act if it is satisfied that, among other requirements, the house is reasonably suitable for occupation by not more than the maximum number of households or persons [specified in the application or decided by the authority] or that it can be made so suitable by the imposition of conditions under section 67 [of the 2004 Act].
The appellant issued guidance on the operation of the licensing system, which provides that the minimum space provision in the case of bedrooms in single occupation in HMOs is eight square metres, although a degree of flexibility is sometimes possible if other features are present. 44, Rothesay Avenue and 50, Bute Avenue are both used for letting to students and each has an attic bedroom with an area of useable living space below eight square metres.
In each case, the appellant granted an HMO licence which imposed a condition prohibiting the use of the attic bedroom for sleeping.
The respondents appealed to the First tier Tribunal against the imposition of the conditions.
The First tier Tribunal at separate hearings deleted the conditions imposed by the appellant.
In the case of 44, Rothesay Avenue it substituted a condition that the attic bedroom may only be used for sleeping accommodation by a full time student who resides in the bedroom for a maximum of ten months in each year.
The appellant appealed both decisions to the Upper Tribunal, which dismissed the appeals and also directed that the substituted condition be included in the HMO licence for 50, Bute Avenue.
The appellant then appealed to the Court of Appeal, which upheld the decision of the Upper Tribunal and included further conditions in both HMO licences that the communal space be kept available for communal living only and that no bedrooms be let to persons other than full time students.
The appellant appealed to the Supreme Court contending that the power to impose conditions under sections 64 and 67 of the 2004 Act cannot be used to limit the class of persons for whom the HMO is suitable, and that the conditions imposed by the First tier Tribunal, Upper Tribunal and the Court of Appeal are irrational and unenforceable.
The Supreme Court unanimously dismisses the appeal, subject to varying the conditions to delete the requirement of occupation for a maximum of ten months in each year.
Lord Lloyd Jones gives the sole judgment with which the other Justices agree.
Section 64(3)(a) of the 2004 Act indicates that the purpose of the imposition of conditions is to make a house reasonably suitable for occupation by not more than the maximum number of households or persons specified in the application or decided by the housing authority.
Section 67(1)(a) provides that a licence may include such conditions as the local housing authority considers appropriate for regulating all or any of the management, use and occupation of the house concerned, and section 67(2) sets out a non exhaustive list of permitted conditions including conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it [18].
These words in their natural meaning are sufficiently wide to include the conditions imposed by the Tribunals and the Court of Appeal [18].
Such a reading is also consistent with the object and purpose of the 2004 Act.
Elsewhere in Part 2 of the 2004 Act, the manner of occupation and characteristics of occupants are considered relevant in contexts connected with HMOs and housing standards generally [20].
The guidance in respect of the 2004 Act also supports the view that the manner of occupation of a room and the type of occupant may have a bearing on the suitability of a particular room for a particular use [23].
The Court does not consider that the conditions in issue introduce an exception for a category of persons or a defined set of circumstances [24].
Furthermore, they do not permit occupation at a lower standard [25].
It is therefore appropriate to have regard to the proposed mode of occupation in considering the suitability of accommodation in an HMO [26].
In particular, account should be taken of the proposed mode of occupation where it is likely to influence the quality of the accommodation made available to the occupant.
However, this does not permit the application of lower standards than would otherwise be applicable [26].
Thus, the power to impose conditions under sections 64 and 67 of the 2004 Act can be used to limit the class of persons for whom the HMO is suitable [27].
The Court agrees with the Court of Appeal that the conditions imposed by the Tribunals were deficient in that they failed to require any part of the HMO to be available for communal living and did not require the bedrooms other than the attic bedrooms to be let to students.
That deficiency was, however, cured by the further conditions introduced by the Court of Appeal [33].
The condition limiting the occupation to persons engaged in full time education is rational [35] and enforceable [37].
The Court considers, however, that the requirement limiting occupation to ten months in each year is irrational [36].
Therefore, subject to the deletion of the requirement of occupation for a maximum of ten months in each year, the conditions imposed by the Tribunals and the Court of Appeal in each case, considered cumulatively, were entirely lawful.
Accordingly, the Supreme Court varies the conditions to delete the requirement of occupation for a maximum of ten months in each year but otherwise dismisses the appeal [38].

summary/background: Nottingham City Council, the appellant, is the licensing authority for houses in multiple occupation (HMOs) in its area under Part 2 of the Housing Act 2004 (2004 Act). This appeal concerns two HMOs, 44, Rothesay Avenue and 50, Bute Avenue which are owned by the second respondent, Trevor Parr Associates Ltd. The first respondent, Dominic Parr, is the managing director of the second respondent and the manager of the two HMOs. The 2004 Act requires HMOs to be licensed by the local housing authority. The local housing authority can grant the application under section 64 of the 2004 Act if it is satisfied that, among other requirements, the house is reasonably suitable for occupation by not more than the maximum number of households or persons [specified in the application or decided by the authority] or that it can be made so suitable by the imposition of conditions under section 67 [of the 2004 Act]. The appellant issued guidance on the operation of the licensing system, which provides that the minimum space provision in the case of bedrooms in single occupation in HMOs is eight square metres, although a degree of flexibility is sometimes possible if other features are present. 44, Rothesay Avenue and 50, Bute Avenue are both used for letting to students and each has an attic bedroom with an area of useable living space below eight square metres. In each case, the appellant granted an HMO licence which imposed a condition prohibiting the use of the attic bedroom for sleeping. The respondents appealed to the First-tier Tribunal against the imposition of the conditions. The First- tier Tribunal at separate hearings deleted the conditions imposed by the appellant. In the case of 44, Rothesay Avenue it substituted a condition that the attic bedroom may only be used for sleeping accommodation by a full-time student who resides in the bedroom for a maximum of ten months in each year. The appellant appealed both decisions to the Upper Tribunal, which dismissed the appeals and also directed that the substituted condition be included in the HMO licence for 50, Bute Avenue. The appellant then appealed to the Court of Appeal, which upheld the decision of the Upper Tribunal and included further conditions in both HMO licences that the communal space be kept available for communal living only and that no bedrooms be let to persons other than full-time students. The appellant appealed to the Supreme Court contending that the power to impose conditions under sections 64 and 67 of the 2004 Act cannot be used to limit the class of persons for whom the HMO is suitable, and that the conditions imposed by the First-tier Tribunal, Upper Tribunal and the Court of Appeal are irrational and unenforceable.

summary/judgement: The Supreme Court unanimously dismisses the appeal, subject to varying the conditions to delete the requirement of occupation for a maximum of ten months in each year. Lord Lloyd-Jones gives the sole judgment with which the other Justices agree.

summary/reasons: Section 64(3)(a) of the 2004 Act indicates that the purpose of the imposition of conditions is to make a house reasonably suitable for occupation by not more than the maximum number of households or persons specified in the application or decided by the housing authority. Section 67(1)(a) provides that a licence may include such conditions as the local housing authority considers appropriate for regulating all or any of the management, use and occupation of the house concerned, and section 67(2) sets out a non-exhaustive list of permitted conditions including conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it [18]. These words in their natural meaning are sufficiently wide to include the conditions imposed by the Tribunals and the Court of Appeal [18]. Such a reading is also consistent with the object and purpose of the 2004 Act. Elsewhere in Part 2 of the 2004 Act, the manner of occupation and characteristics of occupants are considered relevant in contexts connected with HMOs and housing standards generally [20]. The guidance in respect of the 2004 Act also supports the view that the manner of occupation of a room and the type of occupant may have a bearing on the suitability of a particular room for a particular use [23]. The Court does not consider that the conditions in issue introduce an exception for a category of persons or a defined set of circumstances [24]. Furthermore, they do not permit occupation at a lower standard [25]. It is therefore appropriate to have regard to the proposed mode of occupation in considering the suitability of accommodation in an HMO [26]. In particular, account should be taken of the proposed mode of occupation where it is likely to influence the quality of the accommodation made available to the occupant. However, this does not permit the application of lower standards than would otherwise be applicable [26]. Thus, the power to impose conditions under sections 64 and 67 of the 2004 Act can be used to limit the class of persons for whom the HMO is suitable [27]. The Court agrees with the Court of Appeal that the conditions imposed by the Tribunals were deficient in that they failed to require any part of the HMO to be available for communal living and did not require the bedrooms other than the attic bedrooms to be let to students. That deficiency was, however, cured by the further conditions introduced by the Court of Appeal [33]. The condition limiting the occupation to persons engaged in full-time education is rational [35] and enforceable [37]. The Court considers, however, that the requirement limiting occupation to ten months in each year is irrational [36]. Therefore, subject to the deletion of the requirement of occupation for a maximum of ten months in each year, the conditions imposed by the Tribunals and the Court of Appeal in each case, considered cumulatively, were entirely lawful. Accordingly, the Supreme Court varies the conditions to delete the requirement of occupation for a maximum of ten months in each year but otherwise dismisses the appeal [38].