Landlord and tenant – Fully mutual housing association – Possession – Claimant housing association granting weekly tenancy of house to defendants – Claimant serving notice to quit for rent arrears – Claimant seeking possession order – Whether agreement for uncertain term being treated as tenancy for 90 years – Whether statutory exclusion of fully mutual housing co-operatives from security of tenure being compatible with defendants’ human rights – Whether service of notice being unlawful in public law sense – Whether making possession order disproportionate – Claim allowed
The claimant was a fully mutual housing association, a non-profit-seeking housing co-operative registered under the Industrial and Provident Societies Act 1965 and section 5 of the Housing Associations Act 1985. The defendants were members of the claimant and had acquired a share in it. The claimant granted the defendants a weekly tenancy of a property at 8 Kimber Road, Wandsworth, London. By clause 7(3) of the agreement, the claimant agreed that, before seeking possession, it would serve a written notice to quit giving at least one calendar months’ notice and would not begin proceedings until the expiration of that notice. The agreement also provided that the defendants would only be required to give up possession by order of the county court on specified grounds, including non-payment of rent due and/or persistent delay in the payment of rent lawfully due.
When the defendants fell into arrears of rent, the claimant served a notice to quit. At the end of the notice period, it commenced proceedings for possession which were transferred to the Chancery Division of the High Court. As there were issues of both private and public law involved and, given the number of tenancies potentially affected, the Secretary of State for Communities and Local Government was added as an interested party. The claimant contended that it had validly terminated the agreement in accordance with its express terms, which conferred or gave rise to no security of tenure and that it was therefore absolutely entitled to a possession order given the claimant’s particular statutory status and the nature of a fully mutual housing co-operative.
The defendants contended that: (i) by analogy with the decision of the House of Lords in Mexfield Housing Co-Operative Ltd v Berrisford [2011] UKSC 52; [2011] 3 EGLR 115, the agreement was to be treated as one for an uncertain term which, by virtue of section 149(6) of the Law of Property Act 1925, was to be treated as a tenancy for 90 years which had not been terminated; (ii) the statutory provisions excluding fully mutual housing co-operatives from security of tenure had to be interpreted compatibly with articles 8 and 14 of the European Convention on Human Rights to provide the defendants with assured or secure tenancies; (iii) the decision to serve a notice had been unlawful in a public law sense; and (iv) the making of a possession order would be disproportionate.
Held: The claim was allowed.
(1) It was clear from the Mexfield case that a tenancy agreement had to be interpreted in the same way as any other written contract, so the precise rights and obligations of the parties under it depended on the terms which the parties had agreed and the circumstances in which they were agreed. However, in some circumstances, there might be principles of law which resulted in the parties’ intentions being frustrated or modified and, as was clear from the reasoning in Street v Mountford [1985] AC 809, the legal consequences of what the parties had agreed was a matter of law rather than dependent on what the parties intended.
In the present case, it was clear that the parties has envisaged that the defendants would be long-term tenants and would be entitled to continue to remain in the property provided that the adumbrated conditions were fulfilled. However, it was not the intention of the parties that they should be legally entitled to enjoy the premises for life. The terms of the agreement showed a clear contrary intention. The right to serve notice to quit was dependent upon the existence of one or more of the grounds specified in clause 7(3). It followed that the agreement had to be treated as was the occupancy agreement in Mexfield, as one for an uncertain duration but principle and precedent dictated that it was beyond the power of the landlord and tenant to create a tern which was uncertain. However, if an agreement could not take effect as a tenancy for what for want of certainty of term, it could nevertheless subsist as a contractual licence taking effect between the parties according to its terms: Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 applied. Mexfield Housing Co-Operative Ltd v Berrisford [2011] UKSC 52; [2011] 3 EGLR 115 distinguished. Zimbler v Abrahams [1903] 1 KB 577, Lace v Chantler [1944] KB 368 and Clays Lane Housing Co-Operative Ltd v Patrick (1984) 49 P & CR 72 considered.
(2) If, contrary to the court’s view, a 90-year lease had arisen pursuant to section 149(6) of the Law of Property Act 1925, it had been determined by the notice to quit. There was no provision for re-entry. Clause 7 was, consistently and demonstratively of the intention of the parties that the tenancy be a periodic tenancy, a notice to quit clause. It was to be treated as an innominate process for termination and, on a fine balance, the hypothesis of a long lease compelled the construction of clause 7 as a provision for re-entry or forfeiture. The service of the notice to quit was to be treated as an unequivocal election tantamount to an act of forfeiture and no acts of the claimant thereafter could be relied on as constituting waiver: Civil Service Co-Operative Society Ltd v Trustee of Sir JRD McGrigor [1923] 2 Ch 347 considered.
(3) The claimant was not to be considered to be exercising functions of a public nature for the purposes of section 6(3)(b) of the Human Rights Act 1998. The court was not entitled to subject a private landlord to considerations of proportionality in the private act of seeking possession form a defaulting tenant. The defendants’ proportionality defence was misconceived: Thurrock v West [2012] EWCA Civ 1435; [2012] PLSCS 241 and McDonald v McDonald [2014] EWCA Civ 1049; [2014] 3 EGLR 30; [2014] EGILR 48 considered.
Brynmor Adams (instructed by Glazer Delmar Solicitors) appeared for the claimant; Toby Vanhegan and Tobias Eaton (instructed by South West London Law Centre) appeared for the defendants; Oliver Jones (instructed by the Treasury Solicitor) appeared for the interested party.
Eileen O’Grady, barrister
