McDonald & Anor v J Fernandez & Anor

This was listed as an application for permission to make a second appeal against the order of His Honour Judge Mayor QC dated 11th April 2003 in Leicester County Court dismissing the applicants' appeal against the order of District Judge Merriman dated 17th March 2003. The District Judge had struck out the applicant tenants' defence to the respondent landlords' claim for possession of their home. Chadwick LJ adjourned the application for hearing on notice with the appeal to follow if permission is granted.

The case raises a short point on the construction of section 21(4) of the Housing Act 1988. This reads as follows, with the relevant words italicised:

“Without prejudice to any such right as is referred to in subsection (1) above, a court shall make an order for possession of a dwelling-house let on an assured shorthold tenancy which is a periodic tenancy if the court is satisfied

(a)

that the landlord or, in the case of joint landlords, at least one of them has given to the tenant a notice in writing stating that, after a date specified in the notice, being the last day of a period of the tenancy and not earlier than two months after the date the notice was given, possession of the dwelling-house is required by virtue of this section; and

(b)

that the date specified in the notice under paragraph (a) above is not earlier than the earliest day on which, apart from section 5(1) above, the tenancy could be brought to an end by a notice to quit given by the landlord on the same date as the notice under paragraph (a) above.”

The facts are not disputed. The tenants were granted an assured shorthold tenancy of 15 Avenue Road Extension, Leicester, for 6 months from 4th September 1999 to 3rd March 2000. They remained thereafter as statutory periodic tenants from the 4th of each month to the 3rd of the following month. On 24th October 2002 the landlords gave them a notice headed 'Section 21(4)(a) - Assured Shorthold Tenancy: Notice Requiring Possession: Periodic Tenancy'. The relevant part reads as follows:

“I give you notice that I require possession of the dwelling house known as 5 Avenue Road Extension Leicester on 4th January 2003"

The issue, therefore, as summed up by Chadwick LJ is: 'whether a notice which (i) does not specify any date which is (or is said to be) the last day of a periodic tenancy, but (ii) requires possession to be given on a day which is (and is known to be) the day immediately following the last day of a periodic tenancy is a valid notice for purpose of section 24(1)(a)'.

He considered that this was a question which ought not to be in doubt. County courts deal with large volumes of accelerated possession proceedings every day. There should not be uncertainty and inconsistency between them. Chadwick LJ did not himself give permission to appeal because a stay of execution would be needed and this should not be granted without giving the landlord an opportunity to make representations. Hence the most convenient course was to adjourn for hearing on notice.

Despite Mr Peter Dean's valiant attempts to persuade us that the case does not raise 'an important point of principle or practice' for the purpose of section 55(1) of the Access to Justice Act 1999, we agree that this simple question of great practical importance to the everyday work of county courts up and down the country should not be left in doubt. Save to the parties in this case, to whom of course it is important, it matters less which way the issue is resolved than that it is resolved one way or the other. We therefore gave permission to appeal at the outset of the hearing.

Mr Mark Jones' argument on behalf of the tenants is simple. It must be understood against the background of section 5(1) of the 1988 Act, which provides that 'an assured tenancy cannot be brought to an end by the landlord except by obtaining an order of the court' in accordance with chapters I or II of the Act. Accordingly, 'the service by the landlord of a notice to quit shall be of no effect in relation to a periodic assured tenancy'. Section 21 is in chapter II. Section 21(1) deals with court orders for possession 'on or after the coming to an end of an assured shorthold tenancy which was a fixed term tenancy'. Section 21(4) deals with court orders for possession where the dwelling is let 'on an assured shorthold tenancy which is a periodic tenancy', as here. Section 21(4) is 'without prejudice to any such right as is referred to in subsection (1)' so they are obviously intended to make different provision from one another.

Both subsections, it should be noted, are concerned with the criteria for making court orders for possession and not with the requirements of notices to quit in the contractual or common law sense.

Mr Mark Jones also points out that the notice stated that possession was required on 4th January 2003. This was not 'the last day of a period of the tenancy' for purpose of section 21(4)(a). The last day was 3rd January. The notice did not therefore comply with the requirement that the notice state that possession was required 'after a date specified in the notice, being the last day of a period of the tenancy'. It was thus invalid. Apart from the straightforward wording of section, Mr Jones relies on the only two authorities dealing with section 21(4) which counsel have traced.

In Lower Street Properties v Jones (1996) 28 HLR 877, CA, the notice did not give a date, but did say that it would expire 'at the end of the period of your tenancy which will end after the expiry of two months from service' of the notice. It therefore referred to the last day with sufficient specificity because it could readily be ascertained. But Kennedy LJ said this at p 882:

“… Because of the wording of section 21(4) if an actual date is to be given in the notice it must be 'the last day of the period of the tenancy' and there is an obvious risk of a minor arithmetical error giving rise to the argument that the notice is invalid which no doubt is why the printed form suggests as a possible form of wording that the notice will expire 'at the end of the period of your tenancy which will end after the expiry of two months from the service upon you of this notice'. . . ”

We are told that landlords do often use this saving formula, but they did not do so in this case.

Mr Jones also refers us to Gracechurch International SA v Tribhoven and Alodul (2001) 33 HLR 263, CA, in which it was accepted that the notice was invalid and Lower Street Properties was referred to in that context. Although it might be inferred that the notice was invalid because the wrong date was specified, we do not know this to be the case. This case therefore adds nothing to the simple proposition that the subsection requires the date specified to be the last date of a period of the tenancy, which this was not.

For the landlords, Mr Peter Dean has two submissions. His first is that a periodic tenancy may have ‘two last days’, the last day of one period and the first day of the next. Hence the last day of this period could be either the 3rd or the 4th January and the notice was accurate. To the ordinary person this would be a startling proposition. But Mr Dean relies on authorities dealing with contractual and common law notices to quit. In Sidebotham v Holland [1895] 1 QB 378, this Court held (AL Smith LJ doubting) that a notice to quit a yearly tenancy on either the last day of the year or the anniversary of its beginning was a good notice. This was followed in Crate v Miller [1947] 1 KB 946, where this Court held that a weekly tenancy which begins on Saturday may be determined validly by notice to quit either on Friday or Saturday. Both are equally intimations that tenant is to quit when the current period ends.

Mr Dean very properly admitted that in neither of these cases was it stated that a periodic tenancy could have two last days. He relied upon the words of Leggatt LJ in Yeandle v Reigate and Banstead Borough Council [1996] 1 EGLR 20, at p 21G:

"In my judgment, a valid 12 months' notice in writing to determine the tenancy from year to year, commencing on September 29 1968, may, if given in time, specify either September 28 or 29 in a subsequent year as the date for delivery of possession because the tenancy would be construed as ending on the last moment of the 28^th or on the first moment of the 29^th."

However, the other member of the Court, Roch LJ, expressed himself differently, at p 22C:

"A 12 months' notice will mean a 12 months' notice to quit and will remain a 12 months' notice to quit whether it is expressed to end on September 28 - in which case it will take effect at the last moment of September 28 - or whether it is expressed to take effect on September 29, when it would take effect on the first moment of that day."

In my view, this approach makes much more sense. It may be possible to give a notice to quit which expires on either day, but that is not because there are two last days: it is because the last day ends at midnight and the first day of the new period begins thereafter and that is the first day on which possession can be required. It might, I suppose, be possible to grant a tenancy from midday on the 3rd of each month to midday on the 3rd of the next. In that event, the same day could be both the first day of the new period and the last day of the old. Otherwise, however, the idea that one day could simultaneously be the first day of a new period and the last day of the old would come as a surprise to most people. The niceties of contractual notices to quit should not be imported into the plain words of a statute which is about something else. I would therefore reject Mr Dean's first submission.

Mr Dean's second submission is that the notice in this case was sufficiently clear to comply with its statutory purpose. He relies upon the House of Lords' approach to the construction of contractual notices in Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd [1997] AC 749. The facts were the reverse of ours. There was a contractual provision that notice under a break clause in a commercial lease had to expire on the third anniversary of the commencement date. The tenants served a notice referring to the day before that anniversary. The majority of their lordships held that it was valid. They approved the test adopted by Goulding J in Carradine Properties Ltd v Aslam [1976] 1 WLR 442: 'Is the notice quite clear to the reasonable tenant reading it? Is it plain that he cannot be misled by it?'; the reasonable tenant must be taken to know the terms of the lease. But Lord Steyn made it clear that the reasonable recipient should be left in no doubt as to what intended by the notice.

These tenants, it is argued, knew that their tenancy ran from the 4^th to the 3^rd . They can have been in no doubt that the landlord was giving them notice that after the expiry of the December 2002 to January 2003 period, he would be going to court to seek possession if they did not voluntarily vacate the property. Saying 'I want possession on the 4th January' is no different from saying 'I want possession on the day after the 3rd January'.

The question is how the reasonable recipient test is to be applied to a statutory requirement of this sort. In Ravenseft Properties v Hall [2001] EWCA Civ 2034, [2002] HLR 33, CA, the Court was concerned with notices under section 20 of the 1988 Act. An assured tenancy is an assured shorthold tenancy if, among other things, the landlord serves a notice which is in the prescribed form. The relevant regulations prescribe either a form scheduled to the regulations or one 'substantially to the same effect'. Mummery LJ, at pp 630 to 631, pointed out that 'the question whether a notice under section 20 is in the prescribed form or is in a form "substantially to the same effect" is a question of fact and degree in each case, turning on a comparison between the prescribed form in Annex 1 and the particular form of notice given.' He went on to make two general statements steering the courts to a consistent approach. The first concerned the purposive approach: the purpose of the notice was to tell the tenant that it would be an assured shorthold tenancy with legal consequences which included very limited security of tenure. The second concerned the reasonable recipient test derived from Mannai:

"In applying the Mannai approach, it is therefore important to have well in mind the context of the evident purpose of the requirement of a notice in the prescribed form. If notwithstanding errors or omissions, the substance of the notice is sufficiently clear to the reasonable person reading it, the notice is likely to serve the purpose . . . "

The question remains, however, what does the statute require and has it been complied with? Burman v Mount Cook [2001] EWCA Civ 1712, (2001) 33 HLR, CA, concerned the contents of landlords' counter notices in proceedings for a new lease under the Leasehold Reform, Housing and Urban Development Act 1993. The judge had applied the reasonable recipient test: but Chadwick LJ said this at para 11:

“The relevant enquiry is what does the statutory language require. The task is to construe the words which Parliament has used in context of the statutory scheme. It is only when the court has informed itself of the true nature of the statutory requirement that it can sensibly address the second question: does the notice in this case meet that requirement?”

He went on to explain, at para 15, that the proper working of the statutory scheme required that the tenant be left in no doubt as to what the landlord admitted, how far the tenant's proposals are accepted and what, if any, are the landlord's counter-proposals. He commented, at para 23, that in neither Carradine nor Mannai did the contract require the notice to be in any particular form. If they had done, the result would have been different. At para 26, he cited with approval a passage from the judgment of Rimer J in the unreported Court of Appeal decision in Speedwell Estates Ltd and Covent Garden Group Ltd v Dalziel [2001] EWCA Civ 1277:

“. . . I consider that the better approach is to look at the particular statutory provisions pursuant to which the notice is given and to identify what the requirements are. Having done so, it should then be possible to arrive at a conclusion as to whether or not the notice served under it adequately complies with those requirements. If anything in the notice contains what appears to be an error on its face, then it may be that there will be scope for the application of the Mannai approach, although this may depend upon the particular statutory provisions in question. The key question will always be: is the notice a valid one for the purpose of satisfying the relevant statutory provision."

Chadwick LJ described this passage as encapsulating 'succinctly and accurately' the correct approach not only for notices served under statutes but also notices served under contractual provisions such as those commonly found in leases.

Mr Dean did not disagree, save with the suggestion that the scope for the Mannai approach arises only if the notice contains what appears to be an error on its face. He argued that the reasonable recipient test applies whether or not the error is obvious. In York v Casey [1998] 2 EGLR 25, at p 27K, Peter Gibson LJ had said that the court must see whether the error in the notice was obvious or evident and then go on to ask whether it was sufficiently clear. In Ravenseft Properties v Hall, on the other hand, at para 27, Mummery LJ did

"not read the authorities as laying down a two stage test which can only be operated when the error is 'obvious'. The question is simply whether, notwithstanding any errors and omissions, the notice is 'substantially to the same effect' in accomplishing the statutory purpose of telling the proposed tenant of the special nature of an assured shorthold tenancy."

In my view, the obviousness or otherwise of an error is simply a factor in deciding what the reasonable recipient would understand by the notice. The more obvious it is that a slip has been made, the less likely is the reasonable recipient to be in any doubt as to what was meant.

In this case, however, a good deal hangs upon the precise question which is to be asked. If the question is simply, what would a reasonable tenant understand by this notice, then a reasonable tenant would understand that the landlord wanted to regain possession on or after 4th January 2003. If the question is what is the purpose of requiring such notice, I would accept that one purpose is to give the tenant at least two months' notice that the landlord will be starting the process of regaining possession once the relevant period of the tenancy has expired, so that the tenant can begin to make plans accordingly.

But if the question is, what does the statute require, the answer is that the statute requires the notice to specify a date which is the last date of the period. The statute does not require the landlord to specify a date on which he requires possession. This is not a notice to quit. The landlord will not get possession without the tenant's consent unless he goes to court. That is why the statute requires the landlord to state that possession is required 'after a date specified in the notice, being the last day of a period of the tenancy'.

This is not a case where the legislation permits a form to be 'substantially to the same effect'. The subsection is clear and precise. Nor is it difficult for landlords to comply. They know when the period ends. Furthermore, this is not a case where the consequences of failure to comply are particularly serious for landlords: a defective notice can be cured the next day. Even if the defect is not noticed until the point is taken in court, a valid notice can then be given. The landlord is not unwillingly and unwittingly saddled with a tenant who has security of tenure, as would be the case with an invalid notice under section 20. One purpose of the subsection may be to alert tenants to the need to look for alternative accommodation, but another is to give the courts a clear and simple set of criteria which trigger their mandatory duty to order possession. The notice in this case was only one day out, but once Mr Dean's first submission is rejected, his alternative submission would leave room for all sorts of arguments, uncertainty and inconsistency up and down the country on a matter about which there should be no doubt at all.

I would therefore hold that this notice did not comply with section 21(4)(a) and allow this appeal.

I agree.