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||Neutral Citation Number:  EWCA Civ 1600
||B5/2013/1408 + (A)
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
||Royal Courts of Justice
Strand,London WC2A 2LL
||20th November 2013
B e f o r e :
THE PRESIDENT OF THE QUEEN'S BENCH DIVISION
LORD JUSTICE MCFARLANE
LORD JUSTICE LEWISON
DAR Transcript of the Stenograph Notes of
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MR O RADLEY-GARDNER (instructed by BRM SOLICITORS) appeared on behalf of the Respondent
MR I COLVILLE (instructed by HOPKINS SOLICITORS) appeared on behalf of the Appellant
HTML VERSION OF JUDGMENT
Crown Copyright ©
Wednesday 20 November 2013.
LORD JUSTICE LEWISON:
- On 6 February 2006 Miss Taylor took a tenancy from Mr Spencer of 81 Prospect Road in Chesterfield. It was an assured shorthold tenancy which was originally granted for a term of 6 months, beginning on 6 February 2006, which was a Monday. The rent was payable weekly with the first payment becoming due on signing the tenancy. On the expiry of the fixed term a periodic tenancy arose under which the rental periods were also weekly. Thus, the end of the period of the tenancy would have been a Sunday.
- On 18 October 2011 Mr Spencer gave notice requiring possession of the property. The notice was on a printed form. The notice said that Mr Spencer required possession of the dwelling house, giving its address and then continued "(a) after." There was then a blank box to be filled in, next to which were the words:
"Or (b) at the end of your period of tenancy which will end next after the expiration of two months from the service upon you of this notice."
- The date inserted into the blank box was 01/01/2012. That date was Saturday. The notes on the back of the printed form said:
"the date specified in the notice must be the last day of a period of the tenancy, at least two months after the notice is given, no sooner than the earliest day on which the tenancy could ordinarily be brought to an end by a notice to quit."
- Two months after the service of the notice would have expired on 18 December 2011. The next Sunday after that was 23 December 2011. The claim form seeking possession was issued on 27 April 2012.
- Mr Spencer concedes that 1 January 2012, being a Saturday, was not the last day of the period of the tenancy.
- The issue on appeal is whether the notice was nevertheless valid.His Honour Judge Godsmark QC decided that it was; and I agree with him. I would therefore dismiss the appeal for the following reasons.
- The requirements for a valid notice are contained in section 21 of the Housing Act 1988. That says, as far as is material:
"(1) Without prejudice to any right of the landlord under an assured shorthold tenancy to recover possession of the dwelling house let on the tenancy in accordance with chapter one above, on or after the coming to an end of an assured shorthold tenancy which was a fixed term tenancy a court shall make an order for the possession of the dwelling house if it is satisfied -
(a) that the assured shorthold tenancy has come to an end and no further assured tenancy, whether shorthold or not, is for the time being in existence other than an assured shorthold periodic tenancy, whether statutory or not and -
(b) the landlord, or in the case of joint landlords at least one of them, has given to the tenant not less than two months notice in writing stating that he requires possession of the dwelling house.
(2) A notice under paragraph (b) of sub-section (1) above may be given before or on the day on which the tenancy comes to an end and that sub-section shall have effect notwithstanding that on the coming to an end of the fixed term tenancy a statutory periodic tenancy arises.
(3) Where a court makes an order for possession of a dwelling house by virtue of sub-section 1 above, any statutory periodic tenancy which has arisen on the coming to an end of the assured shorthold tenancy shall end without further notice and regardless of the period in accordance with section 5(1A).
(4) Without prejudice to any such right as is referred to in sub-section 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.
4A. Where a court makes an order for possession of a dwelling house by virtue of sub-section 4 above, the assured shorthold tenancy shall end in accordance with section 5(1A)."
There is no prescribed form for the purposes of section 21.
- Let me first consider section 21(1). It begins by saying that it is without prejudice to a right to recover possession under chapter 1 of the Act. That Chapter applies to assured tenancies whether they are assured shorthold tenancies or not and contains a number of grounds on which possession may be claimed. Arrears of rent or anti social behaviour are two examples. A landlord seeking possession under chapter 1 must first serve a prescribed form of notice under section 8 and begin proceedings within the time limits laid down by that section. Nothing like that is alleged in the present case, so we can pass over that.
- Under section 21(1)(a), the court must be satisfied first that the assured shorthold tenancy has come it an end. As applied to our case, this means the fixed term shorthold tenancy referred to in the opening part of section 21(1). In our case, that tenancy came to an end on its expiry date.
- Next, the court must be satisfied that no further shorthold tenancy has come in an existence apart from the an assured shorthold periodic tenancy. In our case, on the coming to an end of the fixed term assured shorthold tenancy an assured shorthold periodic tenancy came into existence by virtue of section 5 of the Housing Act 1988. No other tenancy came into existence so that condition is also satisfied.
- The third condition that must be satisfied is that the landlord has given two months' notice. Sub-section 21(1)(b) does not require the notice to expire on any particular date nor does it require a date to be specified in the notice. In our case, Mr Spencer gave notice on 18 October for the following 23 December or 1 January. That was more than two months' notice.
- It follows that the three conditions were satisfied with the consequence that the court was bound to make an order for possession.
- Section 21(5) prevents the court from making an order to take effect six months after the beginning of the fixed term tenancy; but when an order is made and executed the tenancy terminates regardless of the period in accordance with sections 21(3) and 5(1A).
- Mr Colville, appearing for Miss Taylor, relies on sub-section (2) as prohibiting the landlord from serving notice under section 21(1) once the fixed term has expired. That has been the view of some commentators. In other words, he reads it as saying that the landlord may only serve notice before or on the day on which the tenancy comes to an end. But that is not what the sub-section says.
- In my judgment it turns the permissive language of sub-section 2 on its head to read as containing a prohibition of that kind. Moreover it is not, as Mr Colville submitted, a question of serving notice retrospectively, the notice will always be prospective in its operation.
- In addition, as Mr Radley-Gardner, appearing for Mr Spencer, points out on Mr Colville's construction the landlord could serve notice during the currency of the fixed term tenancy, leave the tenant in possession for years afterwards under a statutory periodic tenancy and begin possession proceedings without any further notice at all. That would give the tenant no certainty. I would hold, therefore, that on a straightforward reading of section 21(1) and (2), our case is governed by those sub-sections. On that basis, it is clear that the landlord complied with the relevant requirements.
- It may be that the legislative history would shed some light on the evolution of these two sub-sections, but as was common ground between counsel, we must construe the statute as it is today.
- In the court below Mr Spencer did not rely on section 21(1) but relied solely on section 21(4). This approach may have been inspired by Fernandez v McDonald  EWCA Civ 1219;  1 WLR 1027. But Fernandez v McDonald is to my mind a puzzling case. In order to explain why, I must set out the facts which I take verbatim from the judgment of Hale LJ:
"The tenants were granted an assured shorthold tenancy of 15 Avenue Road Extension Leicester for 6 months from 4 September 1999 to 3 March 2000. They remained thereafter as statutory periodic tenants from the 4th of each month to the 3rd of the following month. On 24 October 2002 the landlords gave them a notice headed 'section 21(4)(a) assured shorthold tenancy notice requiring possession - periodic tenancy'. The relevant part read:
"I give you notice that I require possession of the dwelling house known as 15 Avenue Road Extension Leicester on 4 January 2003'."
- On the facts it seems to me that that was a case falling squarely within section 21(1) rather than section 21(4). There had been an assured shorthold tenancy which was a fixed term. It had come to an end and there was no further assured tenancy in existence apart from the statutory periodic tenancy. Yet the court focused on section 21(4). The landlord does not appear to have argued that the relevant section was 21(1) rather than section 21(4). The tenants' argument is recorded in paragraph 7 as follows:
"Mr Mark James' 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 1 or 2 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 2. Section 21(1) as amended by section 191(1) of and paragraph 1(a)(3) of schedule 1 to the Local Government and Housing Act 1989 and section 99 of the Housing Act 1996 deals with court orders for possession on or after the coming it 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 sub-section 1 so they are obviously intended to make different provisions from one and other."
- There are, with respect, a number of fallacies in this argument. First, section 21(1) also encompasses cases in which a fixed term assured tenancy is followed by a periodic tenancy. That is because it says it does. Second, that periodic tenancy may or may not be a statutory periodic tenancy. It does not matter, because section 21(1) says that it does not. Thus, third it is a mistake to see section 21(4) and section 21(1) as in some way mutually exclusive. Fourth, section 21(4) is expressly stated to be without prejudice to any such right as is referred to in sub-section (1). So if there is any conflict between the two sub-sections, section 21(1) prevails. But the landlord does not appear to have contested any of the steps in this argument and sub-section (2), on which Mr Colville relies, was not part of the argument at all.
- The actual decision in the case was that the notice under section did not comply with section 21(4) so in my judgment what the court said, or rather did not say, about the applicability of section 21(1) is not part of the ratio decidendi of the case. If, therefore, as I think, section 21(1) rather than section 21(4) governs this case, then all of the arguments about whether the notice in the present case did or did not comply with section 21(4) are irrelevant.
- Thus, in my judgment the Judge reached the right answer albeit for different reasons.
- But in case I am wrong, let me go on to consider them briefly. A notice that only requires possession on a single date which is not the last date of a period of a tenancy is not a valid notice for the purposes of section 21(4); Fernandez v McDonald. On the other hand, a notice that only contains a formula referring to the last day of a period of a tenancy which enables the tenant to work out when it expires is valid; Lower Street Properties Limited v Jones  28 HLR 877. In that case Kennedy LJ said:
"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. In my judgment this is a form of words which does meet the requirements of section 21(4) because the tenant knows or can easily an obtain the date referred to."
- The perceived problem in our case is that the notice contains both a fixed date and also a formula, the application of which results in a different date from the fixed date. The first point that Mr Colville takes is that this very fact invalidates the notice. Section 21(4) requires that the notice specifies "a date." That means only one date and if a notice specifies two dates that very fact invalidates it.
- But that in my judgment must depend on the way in which the two dates are expressed to operate. If the reasonable reader of a notice would understand that one date is the primary date and the other date is a fall back then I can see no reason to invalidate the notice on that account. Mr Colville accepted that if the notice makes this clear then it will be valid. If both dates satisfy the requirements of section 21(4) and there are simply no means of knowing which is to take priority, there may be a problem. Judge Godsmark thought that there would be and he may well be right. But that is not our case and can wait for a case in which it matters.
- Mr Colville's next point was the notice said that it required possession at the end of a period of the tenancy rather than after the end of the period of the tenancy. This argument was considered and rejected by this court in Notting Hill Housing Trust v Roomus  EWCA Civ 407;  1 WLR 1375, so it is not open to Mr Colville in this court.
- The combination of a specified date and a formula was present in Hussain v Bradford Community Housing Limited  EWCA Civ 763;  HLR 16. That was not a case about section 21; it was a case of a notice to quit given at common law by one of two joint tenants. The fixed date in that case was the wrong date and the question was whether the notice was nevertheless validated by the inclusion of the formula. Patten LJ said:
"It is true that the notice gives two possible termination dates, but only only one complies with the requirements of clause 2(2) of the tenancy agreement and that date, which is Friday 23 February, is the first in time. In my judgment there is no basis for construing the notice so as to exclude the operation of the catch all provision. It was obviously inserted to ensure that the notice expired at the end of a contractual period of the tenancy if that was not Sunday 25 February, and that would have been read by the respondent as intending to terminate the tenancy in accordance with clause 2(2) of the tenancy agreement; Mannai Investment Co. Limited v Eagle Star Life Assurance Co. Limited  AC 749."
- Mr Colville argues that a different approach applies in the case of a notice given under section 21(4) of the Act. In support of this submission he relies on Fernandez v McDonald so it is necessary to return to that case. The notice in that case specified 4 January 2003 and no other date. It should have specified 3 January rather than 4 January. The landlord argued that the tenant would have understood that 4 January was a mistake for 3 January, relying for this argument on the decision of the House of Lords in the Mannai case. In that case the House of Lords said that if the reasonable recipient of a notice would have realised what the server of the notice intended to convey, an obvious error could be corrected.
- In Fernandez v McDonald this court rejected that argument. It held that with a the statute required was notice specifying the last day of a period of the tenancy and the notice in that case had not satisfied the statutory requirement.
- So I approach this part of the case on the basis that in the case of a section 21(4) notice the court cannot correct obvious mistakes even if satisfied that a reasonable recipient would have realised that a mistake had been made and had also realised what information the server of notice had tried to convey. But importantly, court in Fernandez v McDonald did not say that Mannai was irrelevant. What Hale LJ said as paragraph 18 was that the question was how the reasonable recipient test, that is the test in Mannai, was to be applied to the case of a statutory notice.
- I accept Mr Radley-Gardner's submission that the statutory requirement is that the notice under section 21(4) must specify a date that has the dual characteristics of being (a) two months after the notice is given and (b) the last day of the period of the tenancy. The notice in Fernandez v McDonald did not do but the notice in our case did. It did so by means of the formula. The barrenness of Mr Colville's argument is that if the fixed date and the formula date had been contained on two separate pieces of paper served simultaneously, the landlord could have issued a single claim form relying on both notices and would undoubted have succeeded.
- The decision in Fernandez v McDonald was concerned with what the statute required. Hale LJ was clear about what the notice in that case meant; it meant 4 January not 3 January. But we are also concerned with what the notice in our case means. Answering that question does not in my judgment rule out the approach of Hussain v Bradford Community Housing Limited.
- In order to see whether the notice complies with the statutory requirement, one must see what it does. In our case the notice refers to two dates, the fixed date and the date calculated by reference to the formula. They are clearly alternatives, as the word "or" separating them makes clear, so they are at least capable of leading to different results. In the event that they do, which one prevails?
- In my judgment, the reasonable recipient of this notice would look at the back of the form which contains the notes and they say that the notice must specify the last day of a period of the tenancy. She would know that she paid her rent on the Monday and she would be able to see from the calendar that 1 January 2012 was a Saturday. So it obviously was not the last day of a period of the tenancy. Conformably with Fernandez v McDonald, that mistake, if such it was, cannot be corrected. But that leads to the conclusion that that part of the notice does not do what the notes on the back say it must do. So that part of the notice cannot be effective. Since that alternative is ruled out as being ineffective, the other alternative must prevail.
- This is perhaps variant of the principle that if a document admits two interpretations, one of which makes it valid and the other invalid, the validating interpretation should be preferred.I would therefore dismiss this appeal on this ground, too.
- I might just add by way of postscript that an application was made at the start of the appeal to rely on some additional evidence but on the view that I have formed of the appeal itself that application does not, at least for the time being, arise.
- THE PRESIDENT OF THE QUEEN'S BENCH DIVISION: I agree.
- LORD JUSTICE MCFARLANE: I also agree.
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