Mexfield Housing Co-Operative Ltd v Berrisford

This is the appeal by the Appellant the landlord in question against the order of HH Judge Mitchell dated 20th November 2008 sitting in the Central London County Court.

By his judgment he dismissed the Appellant’s application for summary judgment for possession of the premises (“the Premises”) known as 17 Elton Avenue Barnet EN5 2EB.

The Respondent’s tenancy of the Premises started on 13th December 1993 at an initial rent of £89 per week. The rent by the time of the proceedings had risen to £170.92 per week.

The Appellant served a notice to quit on the Respondent dated 11th February 2008 terminating the tenancy on 17th March 2008.

The Appellant contended that the tenancy was terminated either because it was a tenancy from month to month and was terminated by the notice and in addition was forfeit on account of actual arrears. The Respondent (the Tenant) is in receipt of housing benefit and as I understand the position arrears arose because of a mix up over the payment of benefit for a short period. By the time of the appeal all arrears had been paid.

The Appellant had applied by application dated 20th August 2008 seeking to strike out or determine as a preliminary issue the Defence which had been served.

At the hearing below and before me the Appellant’s primary submission was that the tenancy in question fell outside the provisions of the Housing Act 1988 because the Appellant was registered under the provisions of the Industrial and Provident Societies Act 1965 (registration no. IP2759R). It contended that it was a fully mutual housing co-operative association within the meaning of section 5 (2) HA 1985 and section 1 (2) Housing Associations Act 1985. Thus the Appellant contended the tenancy was not an assured tenancy with the protection afforded by a tenancy of that nature because it fell within the exceptions set out in Schedule 1 s12(1)(h) Housing Act 1988.

I should also add that the tenancy is not a secure tenancy within the provisions of the Housing Act 1988 because whilst the Appellant is a Housing Association it is not a social Housing Association and therefore is not a landlord for the purpose of the creation of a secure tenancy.

Thus the Appellant’s primary submission was that this was a periodic tenancy which could be terminated at common law (subject to the provisions of the Protection from Eviction Act 1977) by serving a contractual notice. The second submission arising out of that was that the power to terminate overrode and did not need any other provision and was not subject to a requirement for there to be breach. In fact as I have said there was a breach at the time of the service of the notice although it was remedied by the time of the appeal. Thus the Appellant contends that the notice to quit if properly served will terminate the tenancy and no reasons or grounds have to be given for the service of the notice.

In that context I observe that the Respondent had been a tenant since 1993 and as I understand it this was her first breach and was not in reality her fault.

It follows from the Appellant’s submissions that, providing the tenancy had been determined, that the only discretion conferred on the Court, is that within section 89 Housing Act 1980 in that subject to the exceptions set out in sub-section (2) (none of which apply) the giving up of possession shall not be postponed whether by the order or variation or suspension or stay of execution to date later than 14 days after making the order unless it appears to the Court that exceptional hardship would be caused by requiring possession to be given up by that date. In that eventuality the maximum postponement is 6 weeks after making of the order.

When the case came before HH Judge Mitchell the arrears were approximately £1,000 and those arrears arose because the tenancy provided for rent to be payable weekly in advance but the Respondent received housing benefit monthly in arrears. The rent arrears by the time the case came before him would be reduced by a payment of £700 immediately and the balance was offered to be paid off at £120 per month. As I said by the time the appeal came before me the arrears had all been paid off.

I should observe that the Respondent (who was at the time represented by Counsel before HHJ Mitchell) withdrew the main plank of the Defence (so described by HHJ Mitchell) based on article 8 of Human Rights.

The only live issues before me therefore were whether or not the tenancy had been validly terminated and whether if that was correct the Appellant was entitled to possession.

The learned Judge below primarily decided the issue against the Appellant on the basis that they had waived the contractual obligation for an advance payment of rent. He rejected the Appellant’s submission based on Prudential Assurance v The London Residual Body H.L. [1992] 2 AC 386 that the tenancy was a periodic tenancy terminable on that basis and that any provision which purported to vary that would mean that the lease was of an uncertain duration and would therefore be void.

The Appellant submits as I have said that the tenancy created is not an assured tenancy or a secure tenancy because of the status of the Appellant. For the Appellant to be excluded from the assured tenancy regime the rules must restrict membership to persons who are tenants and preclude the granting or assignment of tenancies to persons other than members.

Before HH Judge Mitchell there was some debate about whether the Appellant had proved that it was a housing association within those provisions. Ultimately it turned on the question of the rules which had not been produced. For that and other reasons I adjourned the appeal on 6th July 2009 to come on before me on the week commencing 24th August 2009. On adjourning I directed the Appellant to provide the rules. Mr Richard Ferkin the managing director of Westgate Property Management Ltd the managing agent for the Appellant provided a copy of the rules. Under rule 27 it is provided “27. An agreement may not be granted other than to a member. A member must comply with his obligations as contained in the Agreement and in particular may not assign the Agreement except if permitted by the Agreement then only to a member”. Further rule 2 provides one of the objects of the Appellant is the provision and management of houses for occupation exclusively by members and rule 8 provides no person shall be or become a member unless that person is a tenant or prospective tenant.

It follows from that that if the notice was effectual to terminate the tenancy the Respondent ceased to have any entitlement to remain in possession and was not longer entitled to be a member of the association.

Given all of those provisions the Appellant submits that there was a common law tenancy which was terminable according to its terms by the service of a 4 week notice to quit. This is in accordance with the decision of the House of Lords in Prudential referred to above.

These are well known. In this case the Court may give summary judgment if it considers that there is a Defence which has no real prospect of succeeding and there is no other compelling reason why the case or issue should be disposed of at trial (CPR 24.2). The criteria which the Judge has to apply is not one of probability; it is absent of reality (Three Rivers DC v Bank of England (No 3) [2001] 2 All ER 513) the Judge has to be careful against over confident Claimants and shadowy Defendants see Mummery LJ in The Bolton Pharmaceutical Company100 Ltd v Doncaster Pharmaceutical Group Ltd [2006] EWCA Civ 661.

I have come to the conclusion that the Appellant’s submissions are correct. The tenancy is a common law tenancy with no overriding statutory procedure to protect it. Given that the tenancy can be terminated by service of the relevant contractual notice. The question of whether or not there are arrears or whether or not the rent had been agreed to be taken in a different basis of that specified in the Agreement are completely irrelevant to the overriding power given the Appellant to terminate the tenancy by an appropriate contractual notice.

This the Appellant has done. It follows therefore in my view that the tenancy terminated. There is no defence in my view which has any prospect of success. I am satisfied on the basis of Mr Ferkin’s latest witness statement that the Appellant satisfies the exceptions under the Housing Associations Act 1985 as set out above. I am of the view that it was incumbent upon the Appellant to establish that it was within the exceptions and that until it provided the rules pursuant to my order referred to above it had failed to establish that point. Now it is established however in my view the Appellant’s submissions are correct that the tenancy was nothing other than a common law contractual tenancy terminable on serving a notice with the minimum of 4 weeks.

I also accept that the learned Judge was wrong to entertain various arguments about whether or not there were arrears. As I have said above the question of arrears has no application because the tenancy can be terminated by notice without giving any reason. Therefore whether or not there was an agreement to take payment of rent on a basis other than that set out in the Agreement is irrelevant. Even if the tenancy was fully paid up the Appellant in my view had an overriding right to terminate the tenancy by the notice.

Given all of those above matters the Appellant’s appeal will succeed.

In my view the provisions of section 89 of the Housing Act 1980 are the only provisions which apply to a tenancy of this nature. The case is comparable to that of North British Housing Association v Matthews [2005] HLR 17. The power to adjourn is prescribed by the section and fall outside the wide discretion of the County Court to adjourn.

For all of those reasons the appeal will be allowed.

I am grateful for the detailed and comprehensive arguments provided by Miss Bretherton Counsel for the Appellant who also was constantly mindful of her duties to assist the Court bearing in mind the fact that the Respondent was unrepresented before me.