Landlord and tenant — Assured tenancies — Failure to serve section 20 notice — Whether ‘just and equitable’ to dispense with written notice in claim for possession under ground 1 of Schedule 2 to the Housing Act 1988
The appellant,
who with her husband rented a country cottage, acquired the subject flat in
1987 intending to keep it for use as a London home for themselves. Prior to the
grant of an assured tenancy of the flat in April 1993 to the respondent, there
was some conversation between the parties about the appellant’s intentions for
occupation of the flat. The respondent knew that the appellant intended to
serve a notice under section 20, to ensure the grant of an assured shorthold
tenancy, but had failed to do so. The appellant appealed the decision of the
judge who, in refusing her claim for possession under ground 1 of Schedule 2 to
the Housing Act 1988, in that she required the flat for her husband who had
found employment in London, decided that she had not given even oral notice
prior to the grant of the tenancy as required by this ground.
with the requirement of a written notice under ground 1 of Schedule 2 to the
1988 Act. If oral notice had been given prior to the grant of a tenancy, that
may be an important factor in favouring dispensation of a written notice. But
an oral notice is not a prerequisite of such dispensation. A proper comparison
of the circumstances of the parties was such that the respondent’s position was
not such as to outweigh the error of the appellant in failing to serve a
section 20 notice of which the respondent had taken advantage. The respondent’s
persistent late payment of rent was also a relevant circumstance to be taken
into account.
The following
cases are referred to in this report.
Bradshaw v Baldwin-Wiseman (1985) 49 P&CR 382; [1985] 1 EGLR 123;
274 EG 285; 17 HLR 260, CA
Fernandes
v Parvardin [1982] 2 EGLR 104; (1982) 264 EG
49; 5 HLR 33
Kennealy
v Dunne [1977] QB 837; [1977] 2 WLR 421;
[1977] 2 All ER 16; (1976) 34 P&CR 316; [1977] 1 EGLR 50; [1977] EGD 155;
242 EG 623, CA
This was an
appeal by Rita Madeleine Boyle from a decision of Judge Maher in Wandsworth
County Court in proceedings for possession against the defendant, Richard Hugh
Verrall, under the Housing Act 1988.
The parties appeared
in person.
Giving
judgment, Auld LJ said:
This is an appeal from an order of Judge Maher in Wandsworth County Court on
August 3 1995 dismissing the plaintiff’s, Mrs Rita Boyle’s, claim for
possession of a flat at 207b Castelnau, Barnes, London SW13 9EA.
Mrs Boyle let
the flat to Mr Verrall on March 30 1993 at a rent of £650 per month, later
increased to £700 per month.
There were two
main alternative issues before the judge.
The first was
whether the tenancy was an assured shorthold tenancy under section 20 of the
Housing Act 1988, terminable by Mrs Boyle on notice at or after the end of the
agreed period, or an assured tenancy under section 1 of the Act, terminable by
Mrs Boyle only on one of a number of grounds specified in Schedule 2 to the
Act. The judge held that it was an assured tenancy, and there is no appeal
against that ruling.
The second
issue was whether Mrs Boyle was entitled to terminate the tenancy on ground 1
in Schedule 2, namely that she required the property as a principal home for her
husband. A precondition of such entitlement under that ground was that she had,
not later than the beginning of the tenancy, notified Mr Verrall in writing
that she might require possession for that reason, or, failing such notice,
that she could satisfy the judge that it was just and equitable to dispense
with it.
The
circumstances in a little more detail are as follows. In 1987 Mrs Boyle bought
the freehold of the flat. She and her husband, both of whom had worked as
television or radio journalists in London, were unemployed. They had a tenancy
of a small country cottage and intended to keep the flat for use as their
London home if and when one or both of them secured work again in the capital.
Mrs Boyle decided to let it furnished until they needed to use it again. In
early 1993 she advertised it as ‘a long let’. Mrs Verrall responded to the
advertisement and, on March 29 1993, the two ladies met at the flat. Mrs
Verrall liked it and Mrs Boyle handed her a signed and witnessed form of
agreement for an assured shorthold tenancy and a blank notice under section 20
of the 1988 Act stating that it was to be such a tenancy. The form of agreement
was the Oyez standard form for letting a furnished dwelling-house on an assured
shorthold tenancy and was completed then or later so as to run for a term
certain of one year from April 4 1993 to April 4 1994 at a rent of £650 per
month. Clause 2 provided:
This
Agreement is intended to create an assured shorthold tenancy as defined in
section 20 of the Housing Act 1988 and the provisions for the recovery of
possession by the Landlord in section 21 thereof apply accordingly.
Mrs Verrall
took away both documents, and two or three days later Mr Verrall signed the
agreement and returned it to Mrs Boyle. On about April 6 Mrs Boyle and he met.
They agreed a deposit of £300 which he paid, and Mrs Boyle gave him the keys.
According to Mrs Boyle, she served on him on that occasion a completed section
20 notice. Mr Verrall has denied that, and the judge, while accepting the
genuineness of Mrs Boyle’s evidence on the point, was ‘not convinced’ that she
had done so. However, it is plain from Mrs Boyle’s evidence and the tenancy
form and blank notice used for the transaction that she intended to create an
assured shorthold tenancy; and it is plain from Mr Verrall’s evidence that he
knew that that was her intention and that she had made a mistake in not
completing the notice. He said that he knew if he signed the tenancy agreement
before receiving a completed notice he could claim an assured tenancy. When
asked why he did not draw Mrs Boyle’s attention to her mistake, he said: ‘Why
should I? You have to look after yourself in this world’.
According to
Mrs Boyle, she made plain that she and her husband were expecting to need the
flat at some time in the future and Mr Verrall indicated that he and his wife
would be using it as a base to look for a property in the area to buy. The
judge dealt with this matter in the following way:
I am unable to
find that the plaintiff effectively brought to the attention of Mr and Mrs
Verrall orally that the flat would be required for herself and her husband.
Deciding what was said was very difficult. Different people remember in
different ways …
When
cross-examined as to why she did not give written notice Mrs Boyle said: ‘I
thought I had set up an Assured Shorthold Tenancy. It was not intended to be a
Ground 1 lease’ …
She left me
with the impression that what was said was by way of conversation only. If I
stand back and ask the question, it falls short of giving oral notice. One must
be careful before finding that oral remarks would have brought home to a tenant
that he was embarking on an exercise where he would get limited security of
tenure. In general terms I see no reason not to accept the impression given by
Mr Verrall and fortified by the evidence of Mrs Boyle.
Mr Verrall had
been employed as a housing officer for a local authority and was familiar with
the different security of tenure given by assured shorthold and assured
tenancies. His wife was a solicitor. However, at the time of entering into the
agreement he was unemployed, and he and his wife were apparently dependent on
housing benefit for payment of the rent.
There were
disputes throughout the first 12 months of the tenancy about Mr Verrall’s late
payments of, and deductions without Mrs Boyle’s agreement from, the agreed
rent. On March 4 1994, Mrs Boyle, believing that the agreement between them was
for an assured shorthold tenancy, served notice purporting to terminate it and
offering a new one at a rent of £700 per month. At about the same time Mr
Verrall deducted £250 from the rent for the purchase of a new bed, and wrote to
her pointing out for the first time that he had an assured tenancy because she
had not completed the form of section 20 notice. They exchanged much
correspondence on that issue, but in the meantime Mr Verrall agreed to pay an
extra £50 per month. Mrs Boyle, while clearly unhappy about the legal
relationship between them, took no steps to enforce her notice of termination.
Mr Verrall
continued to pay the rent late, and Mrs Boyle wrote many letters of complaint
to him about it. One such letter was on September 26 1994. In it she made plain
that she and her husband would soon need the flat back for their own use as her
husband’s work was about to change. This is how she put it:
Providing you
pay your rent in future in full, and on time, I am still prepared to let you
stay in the flat until the end of your second year of occupancy — April 1995.
However, as I explained when you moved in, we will need the flat thereafter for
our own use because my husband has now completed negotiations to join the staff
of Reuters radio service as their political correspondent and will in future be
based at Reuters’ premises in Hammersmith. We will therefore not be making
available to you a third year’s Lease. I am giving you lengthy notice of this
fact in order that you and your wife will have plenty of time to find somewhere
else to live.
By letter of
October 3 1994 Mr Verrall replied saying that in his present circumstances,
namely of unemployment and dependence on housing benefit to pay the rent:
… I cannot
say whether or not I will wish to remain after April 1995
Mr Verrall
continued to pay his rent late, and Mrs Boyle, as before, wrote to him
complaining about it. On March 20 1995 she wrote to him asserting that his
lease would end on April 4 1995 and asking him if he intended to leave the flat
voluntarily. On March 27 1995 Mr Verrall replied by letter stating that he
could not say when he and his wife would move and that her husband could
satisfy his need for accommodation in London by renting a pied-à-terre
or staying somewhere overnight as necessary.
Mrs Boyle then
instituted these proceedings for possession. At the hearing, the judge, having
found that there was no assured shorthold tenancy because of the lack of a
section 20 notice and that, in consequence, there was an assured tenancy, went
on to consider Mrs Boyle’s entitlement to recover possession under ground 1(b)
in Part 1 of Schedule 2 to the 1988 Act. As I have indicated, that provision
requires the court to grant possession if the landlord ‘requires the dwelling house
as [her] or [her] spouse’s … principal home’, but only if not later than the
beginning of the tenancy the landlord has notified the tenant in writing
that
possession might be recovered on this ground or the court is of the opinion
that it is just and equitable to dispense with the requirement of notice …
Both Mr and
Mrs Boyle gave evidence of Mr Boyle’s urgent need for a London home to enable
him effectively to work the long and unsocial hours of a political editor for
Reuters Radio. Mr and Mrs Verrall gave evidence about their need to remain in
the property. Mr Verrall acknowledged that he did not have to live in that area
and that he could probably rent property elsewhere, but said that he and his
wife had to live on only £48 per week in the form of income support, and that
he could not afford the expense of moving home. Mrs Verrall, however, said that
she earned some money as a translator and as a solicitor working part-time. The
judge accepted that Mr Boyle’s new job requiring him to live in London in the
week was a genuine reason for seeking possession and that in that respect
circumstances had changed since the grant of the tenancy. He said:
I acquit Mrs
Boyle of any bogus desire to recover possession. I accept that Mrs Boyle’s
husband has undertaken a responsible job which requires him to work long hours
in London. I need not rehearse this contention. He is clearly in a very unhappy
position. He leaves early, gets back late and his social and domestic life is
dealt a severe blow. If he were able to live at the flat this would be
improved. I accept this.
The
conclusion I have come to is that the wish to assert the need for possession
has arisen because of a new job that Mr Boyle has undertaken. This could be
described as a supervening factor not present when the tenancy was entered
into.
The judge went
on to hold that it would have to be an ‘exceptional case’ to justify dispensing
with the written notice when, as he found, no oral notice had been given. He
expressly contrasted the positions of the Boyles and the Verralls. As to the
Boyles, he observed that they had another home, the country cottage which, by
then, they had purchased and did not intend to sell. As to the Verralls, he
noted that the flat was their only home, that they relied on income support and
that they had no savings. He said:
It would be
wholly exceptional to grant possession in these circumstances
Before
determining whether this was an exceptional case justifying dispensing with
notice, the judge considered and rejected two other, discretionary, grounds for
possession under Part II of Schedule 2 to the 1988 Act, namely unpaid rent by
reason of Mr Verrall’s deduction of £250 for the new bed and his persistent
delay in paying rent. As to the former, he found that the deduction was properly
made. As to the latter, he found that Mr Verrall had persistently and
unjustifiably paid the rent late, but never by more than a month, and that his
conduct was not such as to justify an order for possession.
The judge then
returned briefly to record his conclusion on the issue of dispensing with
notice under ground 1. This is how he put it:
I at one
stage thought carefully about dispensing with service of notice on the basis
that it would prevent the tenant taking advantage of an error made by the
landlord. But having given it further thought I decided it would be wrong to
visit the consequences of homelessness … I have considered all the
circumstances. It would be an improper exercise of discretion.
Mrs Boyle, who
argued her own appeal, has submitted that the judge failed, when considering
the exercise of his discretion, to consider or consider sufficiently all the
material circumstances of the case. She referred to the following matters in
support of her contention that he should have exercised his discretion to
dispense with the requirement of service of a written notice:
1. the fact
that she had intended to create an assured shorthold tenancy, and that Mr
Verrall had known that when entering into the tenancy;
2. that that
intention was her reason for not having treated it as an assured tenancy and
for not having served a notice under ground 1;
3. that Mr
Verrall had realised her mistake at the time and had decided to take advantage
of it;
4. that Mr
Boyle, as the judge found, had a genuine need to occupy the flat;
5. that, as Mr
Verrall acknowledged in evidence, he and his wife were not tied by work
commitments or otherwise to the Castelnau area of London and that he could rent
property elsewhere, and that his protestations about being too poor to move
were contradicted by his wife’s evidence that she was practising part-time as a
solicitor and earned money as a translator;
6. that Mr
Verrall had behaved badly as a tenant in making unauthorised deductions from
the rent and in persistently paying it late; and
7. that she
had given the Verralls early notice of her husband’s need for the flat.
Mr Verrall,
who also argued his own case, submitted in reply that the judge did consider
all the circumstances and that this court should not interfere with his
exercise of discretion. He pointed out that the judge in his judgment expressly
referred to the question whether he should be allowed to take advantage of Mrs
Boyle’s mistake about the section 20 notice, but did not describe his conduct
as sharp practice. He said that the judge weighed the evidence on both sides on
the question of need and found in his favour. As to his persistent late payment
of rent, he submitted that it was irrelevant to the question whether the
requirement of notice should be dispensed with. He submitted that where a
landlord has given no oral notice when granting a tenancy of a possible future
requirement of the property a judge is entitled to require it to be an
exceptional case before dispensing with notice. He maintained that the judge
was entitled to find in the circumstances of this case that it was not
exceptional and, therefore, not deserving of such dispensation.
Ground 1 of
Schedule 2 to the 1988 Act, if established by a landlord, entitles him to
possession. The judge has no discretion. The landlord does not even have to
show that his requirement of the property for use as his or his spouse’s
principal home is reasonable. All that he has to establish is that he bona fide
wants, and genuinely has an immediate intention, of using the property for that
purpose. Kennealy v Dunne [1977] QB 837*, CA. Discretion only
comes into play where a landlord did not serve the requisite written notice at
the time of entering into the tenancy and the court has to consider whether it
is ‘just and equitable’ to dispense with the requirement.
*Editor’s
note: Also reported at [1977] 1 EGLR 50
Bradshaw v Baldwin-Wiseman 49 (1985) P&CR 382*, CA is authority
for the proposition that in determining what is just and equitable for this
purpose the court should look at all the circumstances of the case.
Griffiths LJ, with whom Browne-Wilkinson and Walker LJJ agreed, said, at p388:
*Editor’s
note: Also reported at [1985] 1 EGLR 123
… The words
‘just and equitable’ are of very wide import, and I can see nothing in the
context that justifies giving them any restrictive meaning.
I would
regard the use of those words as directing the court to look at all the
circumstances of the case. Those would embrace the circumstances affecting the
landlord, or his successors in title, the circumstances of the tenant and, of
course, the circumstances in which the failure to give written notice arose.
Clearly, if
oral notice was given when a tenancy was granted, it may, with or without other
circumstances, be an important factor favouring dispensation: see, for example,
Fernandes v Parvardin (1982) 5 HLR 33*, CA. However, it does not
follow that oral notice is a prerequisite of such a decision. Nor, in my view,
is the absence of oral notice a reason for restricting dispensation to
circumstances where an ‘exceptional case’ for it can be shown — the judge’s
stated approach here.
*Editor’s
note: Also reported at [1982] 2 EGLR 104
I acknowledge
that this court should only interfere with a judge’s decision on such an issue
where he has failed to consider all the relevant circumstances or, if he has
considered them, where his decision on those circumstances is plainly wrong. In
my view, the judge has had regard to most, but not all, the relevant
circumstances; has plainly given the wrong weight to some of them and has, in
any event, wrongly applied a test of exceptionality to them.
This dispute
has arisen only because Mrs Boyle did not serve a ground 1 written notice
because she mistakenly thought she was granting an assured shorthold tenancy,
and because Mr Verrall knew at the time of her mistake and deliberately took
advantage of it. While the judge found that she did not give any oral notice
either, he clearly accepted, in the passage from his judgment that I have set
out, that there was some conversation about her and her husband’s intentions
for occupation of the flat, albeit falling short of formal notice. There was
also the early written notice that Mrs Boyle gave to Mr Verrall in the
September 26 1994 letter, and in other letters at about that time, that her
husband would need the flat by April 1995.
As to the
respective needs of the parties, the judge appears to have regarded the
Verralls as in greater need and to have treated that factor as decisive when
weighed against Mr Verrall’s conduct in taking advantage of Mrs Boyle’s error.
However, it does not seem to me that he correctly analysed the position by
comparing the availability to the Boyles of another home with the proposition
that the Verralls were without money and that the flat was their only home. The
Boyles’ country cottage did not meet Mr Boyle’s genuine — as the judge found —
requirement for a London home in the week for his work. The Verralls were not
as poor as Mr Verrall had maintained, as the evidence of his solicitor wife indicated.
They did not need to live in that particular area of London, and the housing
benefit from which they were paying their rent would no doubt have been
available to them at other rented accommodation. In short, they would not be
homeless, as the judge suggested, if Mrs Boyle were granted possession of her
property. In my view, on a proper comparison of the circumstances of the two
parties, the Verralls’ position was not such as to outweigh the error of Mrs
Boyle of which Mr Verrall had taken advantage.
Finally, as to
Mr Verrall’s persistent late payment of rent, I do not see why, in the light of
Griffiths LJ’s words in Bradshaw v Baldwin-Wiseman, it should not
be a relevant circumstance on this issue. Having read the voluminous
correspondence on this and other difficulties between the parties, all of which
was before the judge, it is plain that Mr Verrall behaved in an unco-operative
and obstructive manner throughout. The judge clearly did not fully accept his
attempted explanation for the persistent late payments. He described his
behaviour as selfish and as ‘peevish resistance’ to paying promptly.
If the judge
had applied the correct test, unglossed by any consideration of exceptionality
because of the lack of formal oral notice, I do not see how he could possibly
have come to any other conclusion than that it was just and equitable to
dispense with the requirement of written notice. Even applying his test of
exceptionality, I would agree with Mrs Boyle that this case, in the
circumstances in which the assured tenancy came into being, would plainly
satisfy it.
I would,
therefore, allow the appeal, and substitute for the order made on the claim an
order for possession.
Thorpe LJ
agreed and did not add anything.
Appeal
allowed.
