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Livewest Homes Ltd (Formerly Liverty Ltd) v Bamber [2019] EWCA Civ 1174

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30th October 2019

Summary

The six-month notice period required under the Housing Act 1988 (“the 1988 Act”) s.21(1A) and s.21(1B) assumed the expiry of a fixed-term tenancy by effluxion of time, and not as a result of its premature termination under a break clause. Section 21(1)(B) therefore operated as a bar to the court making a possession order only where the term of the assured shorthold tenancy had expired by effluxion of time.

Facts

The Landlord granted to the tenant a second seven-year tenancy, which included a 12-month starter period, which could be extended by six months. The tenancy could be ended by the landlord giving two months’ written notice during the starter period or extended starter period. In light of allegations of anti-social behaviour, the landlord sent a notice during the starter period purporting to exercise the two-month break clause and to be a notice under section 21 of the 1988 Act ending the tenancy. The Landlord bought possession proceedings.

Issues

The tenant argued that the notice did not comply with the provisions of section 21(1B) of the 1988 Act in that the Landlord had not given at least six months’ notice before the making of the possession order.

First instance

At first instance the Judge rejected the Landlord’s argument that the tenancy had become a statutory periodic tenancy after service of the notice. However, he granted possession on the basis that section 21(1A) and section 21(1B) of the 1988 Act were not applicable to a tenancy with a break clause because, where that clause was exercised, it did not come to an end by the effluxion of time.

On appeal to the High Court, the Landlord accepted that section 21(1A) and section 21(1B) applied to the tenancy before the service of the break notice as it was a tenancy of “a term certain of not less than two years”. However, Dingemans J accepted the Landlord’s argument that on giving two months’ notice in the starter period, the tenant did not have a fixed term tenancy for a term certain of not less than two years. The effect of service had left the tenant with a statutory periodic tenancy pursuant to section 5(2) of the 1988 Act. That could be terminated by the service of a section 21 notice, and sections 21(1A) and 21(1B) were of no application. He found that it was necessary to ask whether the tenancy was a fixed-term tenancy at the date of the hearing, rejecting an argument that the words “it is a fixed term tenancy for a term certain of not less than two years” in s.21(1A) should be read as “it was a fixed term tenancy for a term certain of not less than two years”.

Decision on appeal

On further appeal to the Court of Appeal (Patten LJ, King LJ and David Richards LJ) the tenant’s appeal was dismissed.

They held that ministerial statements in relation to the Localism Act 2011 (which introduced sections 21(1A) and 21(1B) made clear that the six-month notice period assumed an expiry of the fixed term by effluxion of time, and not as a result of its premature termination under a break clause.

However, the Judge was wrong to construe the word “is” as importing a requirement that the tenancy should remain a fixed-term tenancy for a term certain of not less than two years as at the date of the hearing or the date of issue of the possession proceedings. That would make the provisions inoperable and could not have been what Parliament intended. Section 21(1A) did no more than identify the type of tenancy to which the notice provisions in Section 21(1B) applied. The use of the present tense was not intended to provide a condition which had to be satisfied as at the date of the possession hearing. Section 21(1B) had to be read as a bar to the court making a possession order only where the term of the assured shorthold tenancy had expired by effluxion of time.

LJ Patten went on to make obiter comments as to the Landlord’s argument that a fixed-term tenancy with a break clause allowing it to be terminated during the first year was not a tenancy for a “term certain” within the meaning of Section 21(1A) or section 107A(2)(a) of the Housing Act 1985. Although it was not necessary to decide the point, his Lordship would have provisionally rejected the point. The draftsman of the Localism Act 2011 had adopted the use of a well-established nomenclature to simply describe a tenancy granted for a term of years.

LJ Patten also commented, again obiter, that a landlord could give a tenant six-months’ notice under section 21(1B) late (i.e. where there is less than six-months left to run on the tenancy) and bring the tenancy to an end. To hold otherwise, and thereby bar landlords from obtaining possession orders under section 21 where the required notice was not served in sufficient time, would not be justified by legislation or its intended purpose.

Comment

This Judgment will be welcomed by providers of social housing as it reinforces the contractual methods of bringing a tenancy to an end. The obiter comments by LJ Patten also provide a useful suggestion of how Section 21 would be construed by a Court if the matter ever needed to be properly determined.

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