CHRISTOPHER MOONEY v KAREN VICTORIA WHITELAND

This appeal is concerned with the validity of a notice to increase the rent payable under a periodic tenancy which was sent by the appellant landlord, Mr Christopher Mooney, pursuant to section 13 of the Housing Act 1988.

The tenancy was a week to week tenancy which commenced on Monday 20^th May 1991. So the rent fell due every Monday. However the practice of the respondent tenant, Miss Victoria Whiteland, was to pay the rent on the preceding Friday of each week, in order to ensure that it was received by the landlord in time.

Section 13 requires that a notice to increase the rent must propose “a new rent to take effect at the beginning of a new period of the tenancy specified in the notice”. As each new period of the tenancy began on a Monday, a notice compliant with section 13 would need to propose that the new rent should take effect on a Monday. However, the notice which Mr Mooney sent stated that the new rent should take effect from Friday 7^th December 2018, rather than from Monday 10^th December 2018.

This has given rise to a difference of view in the courts below as to the validity of the notice. Deputy District Judge Evans, sitting in the County Court at Swansea, held that the notice was valid: it had to be seen against the background of the tenant’s practice of paying the rent on a Friday and was effective to increase the rent from Friday 7^th December when the tenant would be paying the rent anyway; the tenant’s objection to the notice was entirely technical as the notice was clear. On appeal, His Honour Judge Beard sitting in Cardiff held that the notice was invalid. Although one interpretation of the notice was that the increased rent was intended to take effect from Monday 10^th December, which was the beginning of a new period of the tenancy, that was not the only interpretation and the position would not have been clear to a reasonable recipient of the notice.

Mr Mooney now appeals to this court, contending that the notice was valid and effective to increase the rent from £25 to £100 per week. He contends also that it is too late for Miss Whiteland to challenge the validity of the notice as she did not refer the matter to a rent assessment committee.

The issue arises in the context of proceedings by the landlord for possession of the property. If the notice was effective to increase the rent, there are substantial arrears. Accordingly the validity of the notice was ordered to be determined as a preliminary issue.

The dealings between the parties have been complex, but the facts which are relevant for the purpose of this appeal can be shortly stated. I think it preferable to say nothing about other matters which are or may be in dispute between them and which are not relevant to what we have to decide.

On Monday 20^th May 1991 the property, a cottage called Graigina at Llanbydder in Carmarthenshire, was let to Miss Whiteland at a weekly rent of £25. The rent book provided to her confirmed the start date of the tenancy and stated that the rent was payable on the Monday of each week. However, Miss Whiteland usually paid the rent on the preceding Friday, although it appears that there was a period during which, by agreement with the then landlords, no rent was paid and Miss Whiteland lived in the property rent-free while providing care for them. However, rental payments resumed in 2001.

In October 2018 Mr Mooney, who had acquired the property in August 2017, served a notice proposing an increase in the rent to £100 per week. It appears that an earlier notice was also served in September 2017, and that there had been disputes between the parties, but we are not concerned with those disputes, while proceedings for possession based on the earlier notice were dismissed for reasons which do not affect this appeal.

Miss Whiteland did not accept the validity of this notice. She maintained that she had been told by a previous landlord that the rent would be £25 per week for as long as she lived at the property. She did not refer the matter to the local rent assessment committee, but continued to pay rent at the rate of £25 per week.

Mr Mooney therefore issued proceedings for possession, including on the ground that an order should be made by reason of substantial arrears of rent. It was in those circumstances that the trial of a preliminary issue was ordered to determine the validity of the October 2018 notice.

Section 13 of the Housing Act 1988 provides as follows:

It is not disputed that the tenancy in this case is one to which section 13 applies.

Subsection (2) provides that the notice must be in the prescribed form. In the case of a property in Wales, the form for a notice under section 13 is prescribed by the Assured Tenancies and Agricultural Occupancies (Forms) Regulations 1997 (SI 1997/194) as amended by the Assured Tenancies and Agricultural Occupancies (Forms) (Amendment) (Wales) Regulations 2003 (SI 2003/307(W)) and the Assured Tenancies and Agricultural Occupancies (Forms) (Amendment) (Wales) Regulations 2014 (SI 2014/374(W)). However, the Regulations also permit the use of a form “substantially to the same effect” as the form prescribed.

In the present case the landlord did use the prescribed form, form 4D. Accordingly no question arises whether the form used was “substantially to the same effect” as form 4D.

It is apparent from the terms of section 13 that a notice must comply with three requirements. First, it must specify a minimum period after service of the notice before it takes effect. In the present case of a weekly tenancy which had been running for many years, the minimum period was one week (subsections (2)(a) and (3)(c)). The notice here was served on 29^th October 2018 and therefore gave considerably more than the minimum period of notice required.

Second, the section contains provisions to ensure that increases cannot take place more frequently than once a year (subsection (2)(c)). In the present case there had been no increase in the rent since the tenancy’s inception in 1991.

Finally, and significantly in the present case, the notice must “take effect at the beginning of a new period of the tenancy specified in the notice”. Thus, for a weekly tenancy beginning on a Monday, the notice must specify a Monday as the date from which the new rent will take effect.

The date from which the new rent will take effect is therefore of critical importance to the validity of a section 13 notice. The date specified will enable the tenant to understand whether these statutory requirements have been complied with and, if so, will leave no room for doubt about the date from which the new rent will be payable. But it also serves another important purpose, which is to specify the deadline for the tenant to challenge the proposed new rent by a referral to the rent assessment committee. This deadline is “the beginning of the new period specified in the notice” (subsection (4)). If a valid notice has been served and the tenant fails to refer the matter before this deadline, the new rent proposed in the landlord’s notice takes effect without further ado.

Section 65 of the Rent Act 1977 provided for rent assessment committees to be constituted in accordance with Schedule 10 of the Act, although it appears that such committees already existed under previous legislation. We were told that rent assessment committees now exist only in Wales. Section 66 of the 1977 Act as subsequently amended provides for an appeal on any point of law from the decision of a rent assessment committee to (what is now) the Upper Tribunal.

When a tenant refers a landlord’s notice under section 13 of the 1988 Act to a rent assessment committee, the provisions of section 14 of the Act apply. These are as follows:

Section 40 of the 1988 Act provides for the jurisdiction of the county court in the following terms:

Thus the county court has jurisdiction to determine any question arising under Chapter I of the 1988 Act, which includes section 13, unless that question falls within the jurisdiction of a rent assessment committee by virtue of any of the provisions of the Act mentioned in subsection (1). In other words, for any given question, either the county court or the rent assessment committee has jurisdiction, but not both.

The October 2018 notice was on Form No. 4D which is the relevant prescribed form. The form is headed:

The form stated as follows. The words in bold and italics below are as in the prescribed form, while the dates and amounts were inserted by the landlord in manuscript at the appropriate places in the form:

The reverse page of the form contains guidance notes for both parties. The “Guidance notes for tenants”, with the heading “What you must do now”, include the following:

Accordingly the prescribed form, including the guidance notes which comprise part of the form, ensures that the correct information is provided to the tenant, including the notes advising the tenant what to do if they do not accept the proposed new rent and wish to challenge it.

There have been a number of cases in which the courts have had to consider whether a notice given by a party to a lease has been effective. Broadly speaking, the approach which has been adopted is to treat the notice as valid and effective even where it does not on its face comply with the requirements of the contractual or statutory provision in question, if it would nevertheless be understood as doing so by a reasonable recipient of the notice with knowledge of the background circumstances. In such a case, of which Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19, [1997] AC 749 is the principal example, the notice will be interpreted so as to give effect to the way in which it would be understood by the reasonable recipient. In that case the tenant was entitled to determine two leases by serving not less than six months’ notice in writing to expire “on the third anniversary of the term commencement date”. The notices which the tenant served were to determine the leases on 12^th January 1995, whereas the third anniversary of the term commencement date was 13^th January 1995. By a majority, the House of Lords held that the construction of the notices had to be approached objectively, the question being how a reasonable recipient would have understood them, in their context; the purpose of the notices was to inform the landlord of the tenant’s decision in accordance with the break clauses; and a reasonable recipient with knowledge of the terms of the leases and the anniversary date would have been left in no doubt that the tenant wished to determine the leases on the third anniversary (13^th January 1995) but had wrongly described this as 12^th January 1995; accordingly the notices were effective to determine the leases.

However, a qualification on this approach in the case of statutory notices (although I see no reason why it should not also apply to contractual notices) is that a notice must fulfil the purpose for which it is to be given. For example, in Speedwell Estates Ltd v Dalziel [2001] EWCA Civ 1277, [2002] HLR 43, notices were held to be invalid because they failed to provide certain information which was required. Mr Justice Rimer, with whom Lord Justice Pill and Lord Justice May agreed, said:

It is unnecessary in this judgment to go through all the cases, as that task was performed by Lord Justice Arnold, with whom Lord Justice Underhill and Lord Justice Floyd agreed, in Pease v Carter [2020] EWCA Civ 175, [2020] 1 WLR 1459. He stated his conclusions as follows:

Expressing his agreement, Lord Justice Underhill added that:

Deputy District Judge Evans held, purportedly applying Mannai, that it was obvious that a reasonable recipient of the landlord’s notice would understand it as meaning that

With respect, it is clear that this was a misapplication of Mannai. If Mannai were applied, the argument would be that a reasonable recipient of the notice would have realised that the date of 7^th December 2018 was a mistake and that the landlord had intended the new rent to apply from Monday 10^th December, which was the beginning of a new rental period, so that the notice should be interpreted as if the date inserted in paragraph 4 had been 10^th December. But this was not what the Deputy District Judge held, as is clear from the terms of his order that the notice “had the effect of raising the rent from £25.00 per week from 7^th December 2018”.

The Deputy District Judge held also that the tenant should have referred the notice to the rent assessment committee, which could either have determined the new rent or rejected the referral if it considered the notice to be invalid. As in his view the notice was valid, the new rent of £100 per week took effect and it was too late now for a referral to the committee.

On appeal, His Honour Judge Beard took a different view. He accepted the submission on behalf of the tenant that there were three possible interpretations of the notice. These were:

Judge Beard held further that the question whether the notice was valid was a question over which the court and not the rent assessment committee had jurisdiction.

There are three grounds of appeal, which I can summarise as follows:

Ground 1 can be rapidly disposed of. It was the landlord’s own pleaded case in the possession proceedings, and was common ground before the Deputy District Judge, that the tenancy began on 20^th May 1991. I would not permit the landlord to depart from his own pleading.

Mr Forz Khan for the landlord submitted as his primary case that a reasonable recipient of the notice would have understood that it contained an obvious mistake in that it specified a Friday (the day when the tenant paid her rent) rather than the following Monday (the day the weekly tenancy started), and that the notice was intended to take effect from Monday, 10^th December 2018. In effect, his submission, applying Mannai, was that the form should be interpreted as if the date inserted in paragraph 4 had been 10^th December 2018 rather than 7^th December 2018. However, his written submissions also developed an alternative (and contradictory) case that the effect of the notice was to increase the rent from Friday, 7^th December 2018, and this was the case which succeeded before the Deputy District Judge. Thus Mr Khan’s submissions included the following:

A party seeking to contend that a reasonable recipient would appreciate that a notice contained an error, and would have no reasonable doubt what meaning the notice was intended to convey, is unlikely to assist his case by advancing alternative and contradictory interpretations of the notice in question. Be that as it may, I agree with Judge Beard and Mrs Catherine Collins for the tenant that it is not clear that the notice in this case should be interpreted as if the landlord had inserted 10^th December 2018 as the start date for the new rent in paragraph 4 of the prescribed form. While it may be one possibility that the landlord simply made a mistake, it is in my view at least as likely that he intended the new rent to take effect from Friday, 7^th December 2018. As explained in Pease v Carter, in order for the Mannai principle to be invoked, there must be no reasonable doubt what the notice was intended to say.

Moreover, the question is how the notice should have been understood by a reasonable tenant in the position of Miss Whiteland. For that purpose, the guidance notes on the reverse of form 4D, to which the tenant’s attention is expressly directed, are significant. Those notes make clear the requirements of a valid notice under section 13, including (in paragraph 17) the requirement, said to be applicable “in all cases”, that the proposed new rent must start at the beginning of a period of the tenancy. The note goes on to say in terms that if the tenancy is weekly, and started on a Monday, the new rent must begin on a Monday.

It seems to me that the starting point (and in most cases the finishing point) is that a reasonable tenant, reading those notes, would be entitled to conclude that if the date inserted in paragraph 4 is not the beginning of a period of the tenancy, the landlord has failed to comply with the requirements of section 13 and the notice is invalid: that is what the prescribed form tells her. Generally speaking, the tenant is not required in such circumstances to consider whether the notice may be saved because the landlord has made a mistake and intended to insert (or should be treated as having inserted) a different date into paragraph 4 of the form. This is not to say that there may not be cases where a mistake is so obvious that a reasonable tenant would recognise that a mistake had been made and would know precisely what the landlord had meant to say. An example would be where the landlord gets the year wrong, as in Pease v Carter (where a notice of possession proceedings served on 7^th November 2018 stated that court proceedings would not begin until after 26^th November 2017, an obvious typographical error). In such a case, there is scope for the notice to be interpreted in accordance with the Mannai principle. But this is not such a case.

Indeed Mr Khan accepted that, in one respect at least, it was not possible to interpret paragraph 4 of the form as if the date inserted was 10^th December 2018. Thus he accepted that the only possible reading of paragraph 6, dealing with the deadline for a referral to the rent assessment committee, was that the deadline was 7^th December 2018 (“If you do not accept it, there are steps you should take before the starting date in paragraph 4 above”). But this creates, on Mr Khan’s case, an unhappy disconnect between the deadline for a referral to the rent assessment committee and the start date for the new rent which is contrary to the terms of section 13(4).

I would hold, therefore, that the landlord’s notice was invalid.

It is therefore necessary to consider whether the notice nevertheless took effect to increase the rent from £25 to £100 per week as a result of Miss Whiteland’s failure to refer it to the local rent assessment committee pursuant to section 13(4) of the 1988 Act. If the committee had jurisdiction to determine whether the notice was valid so as to bind the parties, the effect of section 40 of the 1988 Act would be that the county court did not have such jurisdiction and, in consequence, there could be no appeal to this court from such a determination by the county court. In that case, the deadline for a referral to the committee having passed, the rent increase would take effect pursuant to section 13(4).

In my judgment, however, it is clear that the rent assessment committee does not have jurisdiction to determine the validity of a section 13 notice. That is a matter for the court. Section 40(1) of the 1988 Act confers jurisdiction on the county court to determine any question arising under section 13 other than a question which falls within the jurisdiction of a rent assessment committee by virtue of a provision of Chapter I of the Act. Thus the basic rule is that the county court has jurisdiction, unless there is a provision of the Act which provides otherwise.

Section 14 does not provide otherwise. As section 14 makes clear, the jurisdiction of the committee is to determine what is an appropriate rent, having regard to market conditions and disregarding the various matters specified in subsection (2). The section contemplates that the members of the committee will have expertise in determining the appropriate rent, which a county court judge cannot be expected to have. In contrast, a judge does have expertise in determining whether a notice complies with the various statutory requirements for a valid notice set out in section 13. In short, there is no provision in the 1988 Act which confers on the rent assessment committee jurisdiction to determine whether a section 13 notice is valid.

That is not to say that a rent assessment committee may not sometimes need to take a view whether a notice is valid. If it considers that a notice is invalid, it may decline to proceed until the question has been determined by the court. Conversely, if it considers that a notice is valid and that objections are without substance, it may proceed to determine the appropriate rent, but its determination will not prevent a tenant from disputing the validity of the notice. In the present case, Miss Whiteland did not refer the notice to the local rent assessment committee. She therefore took the risk that the notice might be held to be valid, in which case the new rent of £100 per week would have taken effect pursuant to section 13(4). But her failure to refer the notice to the committee did not deprive the court of jurisdiction to determine the validity of the notice.

Mr Khan submitted that the conclusion which I have reached based on the terms of the legislation is contrary to the view expressed by Lord Justice Mummery in R (Morris) v London Rent Assessment Committee [2002] EWCA Civ 276. That case was concerned with the validity of a notice terminating the tenancy of a flat. The notice was required to be given “to the tenant”, but was instead addressed to a previous tenant. Unusually, it was the landlord who contended that the notice was invalid, while the tenant contended that it was valid. That was because, if the notice was valid to terminate the tenancy, the tenant had become a statutory tenant within the meaning of the Rent Act 1977, with the consequence that the rent assessment committee had no power to determine the appropriate rent for the flat under the provisions of section 186 of the Local Government and Housing Act 1989. On the other hand, if the notice was invalid, the tenant held as an assured tenant under the 1989 Act and the committee did have power to determine the rent.

The Court of Appeal, agreeing with Mr Justice Hooper, held that the notice was invalid. Accordingly the committee did have power to determine the rent and the application for judicial review of its determination failed.

Mr Khan relied on the following passage of Lord Justice Mummery’s judgment:

However, Lord Justice Mummery immediately went on to leave open the question whether the committee’s determination had created an issue estoppel:

I do not read this judgment as holding that the rent assessment committee had power to determine whether the notice was valid so as to exclude the jurisdiction of the court or to be binding as between the parties. If this had been intended, the court would not have decided for itself, as it did, whether the notice was valid, and could not have left open the question whether the committee’s determination gave rise to an issue estoppel. It would simply have said that the committee had determined the validity or invalidity of the notice, that it had power to do so, and that its determination was binding on the parties. Moreover, it is not apparent whether the applicable legislation in that case had any equivalent of section 40 of the Housing Act 1988 which applies in the present case. So I do not regard this case as standing in the way of what, to my mind, is the clear intention of the applicable legislation in this case.

For these reasons I agree with the judge that the rent assessment committee did not have jurisdiction to determine the validity of the section 13 notice. Accordingly the court does have such jurisdiction and, as I have indicated, the notice was invalid.

I would therefore dismiss the appeal.

I agree.

I also agree.