The court considered conjoined appeals arising from county court decisions to grant suspended possession orders in respect of houses being used for the cultivation of cannabis.
There were features common to each case. There had been a breach of the tenancy agreement even though the tenants were not primarily responsible for the cannabis cultivation; there was no evidence of previous breaches; possession orders had been made; the tenants claimed that they had no knowledge of the use of the properties, but were found by the court to have lied; and they expressed a willingness to comply with the terms of their tenancies in future. SPOs were made conditionally on the future performance of their covenants and surprise inspections of the properties by the housing association landlords. The landlords appealed against the suspension of the orders. In the first appeal, the judge dismissed the appeal; in the second, the judge allowed the appeal on the ground that the decision was perverse. Permission to bring second appeals was granted as it was argued that there was uncertainty regarding the way in which district judges should exercise their discretion when they found a tenant’s evidence to be untrue, and as to whether the court should impose conditions which placed responsibility on the landlord.
HELD: (1) Before making an SPO the court had to be satisfied that there was a sound basis for hope that the tenant would observe the terms of the tenancy agreement in future, Sandwell MBC v Hensley  EWCA Civ 1425,  H.L.R. 22 applied. Cogent evidence that there was such a sound basis was not simply evidence which showed there was some basis on which it could be said that the tenant would comply. To be “cogent”, the evidence had to be more than simply credible: it had to be persuasive. The instant court had repeatedly made it clear that when making an SPO the focus was on the future and not the past, Sandwell and Canterbury City Council v Lowe (2001) 33 H.L.R. 53 considered. The standard was pitched at a realistic level. On the one hand, the tenant did not have to give a cast-iron guarantee; on the other, a social landlord did not have to accept a tenant who set out to breach the terms of his tenancy and disabled the landlord from providing accommodation in more deserving cases. There was no principle that the cogent evidence regarding future compliance had to stem solely from the tenant, without any regard to how others might behave. The likelihood or possibility of others’ action, or even the perception, might, in an appropriate case, be evidence which supported an overall assessment that there was a real hope of future compliance. When framing conditions, judges had to be careful not to expect a social landlord to do more than was reasonable in the circumstances. Those circumstances included the landlord’s limited resources. Social landlords might be expected in some circumstances to take an active role as an ordinary incident of checking on its housing stock. Similarly, the police might be expected to have a general interest in keeping an eye on what was happening in their area. Dishonesty in a tenant’s evidence regarding the grounds for possession was not a complete bar to the making of an SPO. Tenants should realise that if they lied in their evidence to the court, they ran the risk that the court would find that their evidence on other matters was not to be trusted and would not accept assurances from them regarding the future. Giving false evidence was a very serious matter and could have serious consequences for the tenant. There were two stages to a decision whether or not to grant an SPO, involving the exercise of discretion and making findings of fact on the basis of which the discretion was to be exercised. The tenant should normally give evidence in court so that the court could assess his credibility. The court might want to cross-check any assurance given by reference to other objective evidence. A check-list of matters for a trial judge to consider was not appropriate; it gave rise to an expectation that other matters were not relevant or should have less weight attached to them. The decision whether to make an SPO not only involved a multi-factorial assessment, it also called for a broad, commonsense assessment, Cumming v Danson  2 All E.R. 653 applied (see paras 47-62 of judgment).
(2) The first appeal was dismissed. The common features referred to provided grounds for the judge to make an SPO (paras 65-67). The second appeal was allowed. The decision to set aside the district judge’s decision, on the basis that he had wrongly taken into account the impact of landlord inspections when considering whether there was a sound basis for hoping that the tenant would comply with the terms of his tenancy in future, was flawed. That read the test in Sandwell too literally. The test did not require the court to exclude external means of monitoring the tenant. On the contrary, such means constituted one of the relevant circumstances. A tenant could show that there was cogent evidence in any way, Sandwell considered. The appeal judge’s exercise of his discretion was therefore vitiated. In any event, the common features identified entitled the district judge to conclude as he had. His order would be reinstated (paras 68-70).
Appeals allowed in part