The Permissive Notice

Spencer v Taylor [2013] EWCA Civ 1600

This case was flagged recently on the Arden Chambers eflash service. This flash gave some bare bones details and led to much debate on the internal NL email discussion list. However, we now have the vital transcript and so we can give a proper report.

[Update 11/12/13 – Judgment now on Bailii ]

[Update 1/3/13 – There is a mistake in the transcript as regards the day of the notice. This post has been corrected.]

Facts
S granted an Assured Shorthold Tenancy under the terms of the Housing Act 1988 to T on 6 February 2006, a Monday. It was for a fixed terms of 6 months with rent payable weekly. Thus the first day of each period was a Monday and the last day was a Sunday. The fixed term of the tenancy ended on a Saturday. At the end of the fixed term a periodic tenancy arose by way of s5 of that Act and so it would also have been a weekly periodic tenancy running from a Sunday to a Saturday. In October 2011 a notice under s21 of the Act was served giving an expiry date of 1 January 2012 (which was a Sunday) and also including, as an alternative, the usual saving provision of the type approved by the Court of Appeal in Lower Street Properties v Jones [1996] 28 HLR 877. In this case it read:

“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 Law So Far
Section 21 reads, as far as is material to this case:

(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.

In general most commentators (including me) have taken the view that s21(2) is a deciding factor and controls which flavour of notice is to be served under the section. If the notice is being given before or on the day on which a fixed term tenancy ends then a notice complying with s21(1)(b) is appropriate. If the notice is served during a periodic tenancy then a notice complying with s21(4)(a) is appropriate. A s21(1)(b) notice must simply give two calendar months notice while a notice under s21(4)(a) must give two months notice and must expire at the end of a relevant period and must not give less notice that a common law notice to quit.

On that reading of the law the notice in this case should have been seeking to comply with s21(4)(a) as it was served during a periodic tenancy. Further in giving its date of expiry as a Saturday that element of the notice was defective.

A New View
The case came before the Court of Appeal and LJ Lewison gave the leading judgement with which LJ Macfarlane and the President of the QBD agreed without comment.

Surprisingly, LJ Lewison did not simply turn to the second component of the notice, the saving provision and rule the notice as valid on that basis, which he could easily have done.

Instead LJ Lewison embarked on a careful reading of the section. I am going to take this out of order a little as I think the conclusions reached are more useful in this way.
Starting with a view of s21(2), what we have always all seen as a compulsion which prohibits a landlord from using s21(1)(b) once the fixed term has expired was read very differently by the Court. In fact s21(2) was described as permissive rather than as proscriptive. S21(2) states that an s21(1)(b) notice “may be given before or on the day on which the tenancy comes to an end” (emphasis mine). It does not say that such a notice must be given or can only be given but rather that it may be given. LJ Lewison therefore read this as suggestive as opposed to requiring an outcome.

If s21(2) allows an s21(1)(b) notice to be given in a periodic tenancy then does the wording of s21(1) allow for the same conclusion? LJ Lewison felt that it did. S21(1)(a) merely requires that the fixed term of any AST has ended and that no further fixed term has come into existence. S21(1)(b) simply requires that two months notice has been given. Nothing in s21(1) specifies that the notice is only applicable to a fixed term tenancy or cannot be given during a periodic tenancy.

Therefore LJ Lewison rules that the s21 notice was valid as the expiry date of 1 January 2012 on the notice was more than two months from the date of service and under s21(1)(b) this is all that was required.

Different Dates
At this point the notice was valid and the appeal was lost for the tenant. However Lewison LJ went on to review the position under s21(4)(a) in the light of the tenant’s argument that the notice was defective because it essentially gave more than one date, 1 January 2012 and the date calculated under the saving provision. Lewison LJ dismissed this argument. He held that if one date is clearly primary and the other is seen as a fall-back then the position is clear to a reasonable reader of a notice. Additionally, it was clear from the notes on the back of the notice that the 1 January date was wrong and so a reasonable reader would see that this first date was incorrect and so turn automatically to the other.

Comment
This case is a bit of a shocker in that it overturns a common belief structure. In summary the position is now that if a tenancy has at some stage had a fixed term then a notice which complies with s21(1)(b) will always be an acceptable means of termination, whether it is being served during a fixed or periodic part of the tenancy. Accordingly, a notice under s21(4)(a) is only for tenancies that were periodic from the outset and have always been so. This means that for the majority of tenancies in England & Wales the s21(4)(a) notice is now irrelevant as almost all of them have at some stage been operating under a fixed term. This also means that for these tenancies cases such as Church Commissioners v Meya, Macdonald v Fernandez, and Lower St Properties v Jones are also all irrelevant as they all deal with aspects of s21(4)(a) notices.

It is also worth noting that Lewison LJ did not bother with a review of the legislative history and what was intended. This was a surprise as it seems almost incredible that this outcome was what the legislation intended. In fact, the entire structure of the Housing Act 1988 has been built around trying to keep the tenancies similar to the common law position. Hence the use of the s21(4)(a) notice and its linking with a notice to quit. Breaking this undermines that intent. I also find it hard to accept a reading of any Act that sets out a piece of legislation as optional in nature.

Finally, it will of course be a great relief to landlords and agents as the vagaries of s21(4)(a) have defeated a great many possession cases over the years.

About D

D is a solicitor specialising in landlord and tenant matters with a London firm.
Posted in Assured Shorthold tenancy, Housing law - All, Possession.

92 Comments

  1. I think it is particularly interesting (and possibly even open to challenge) if you consider that the original assured shorthold had to be for a “term certain”. Therefore, by simple logic when the law was drafted, the only type of periodic tenancy the section 21 notice could be applying to had to be the statutory periodic.

    All credit to Gary Webber he has long said this should be possible but most of us want possession not an argument.

    THis case is undoubtedly a game changer and the logic is indeed to always use section 21(1) notices as they will, on average, be 2 weeks shorter for a monthly tenancy.

    If the tenant’s notice to quit has to follow common law and the periods one wonders if this does not put them at a disadvantage (accepting the notice is usually shorter anyway)?

  2. “Nothing in s21(1) specifies that the notice is only applicable to a fixed term tenancy or cannot be given during a periodic tenancy.”

    This seems to me to be exactly why Lewison LJ’s reading must be incorrect. s21(1) itself does not exclude its own use “before or on the day on which the tenancy comes to an end”. This being the case, the permissive reading of s21(2) appears to render itself meaningless, because it permits something already implicitly permitted. Permissively read, s21(2) might as well say “A notice under paragraph (b) of sub‑section (1) above may be given on a Tuesday”; it adds no new information to the section.

    If I try applying a blue pencil to the legislation it seems to me that s21 with the permissively read s21(2) removed is unchanged in statutory effect. A reading that produces such a result surely cannot be correct.

    I doesn’t seem to me that we need to consider legislative intent, rather we just need to assume that Parliament had *some* purpose for the inclusion of s21(2). As far as I can see, the only possible purpose the subsection can serve is to restrict the use of s21(1), as on a permissive reading it might as well not be there.

    I find Lewison LJ’s “permissive” reading so baffling I keep thinking there must be something I’m entirely missing. Is there?

    • I think one has to put oneself in the position of the draughters of s21. Imagine they start with s21 (1) because the tenancy regime allows fixed-term tenancies. They then ask themsleves what the position would be if the fixed-term ends? Can the landlord evict the client immediately? Clearly not as that would not do justice to the tenant who cannot be evicted without a court order. It becomes periodic to afford some protection from immediate eviction for the tenant. You then move on to dealing with a periodic tenancy and draft (what has become) s21(4).

      The question arises as to what happens if the landlord serves a notice when the tenancy is still fixed-term but it expires when it has become periodic? Oh, we need a new subsection which deals with that. Answer, if it is served within or at the end of the fixed-term the notice requirememnts are the same as in s21(1).

      But we better place that immediately after s21(1), hence it is inserted as s21(2).

      Any reader of the sections (and I have shown it to colleagues who don’t specialise in housing) can see that s21(2) merely explains what happens if a notice is served in the fixed-term but expires after, when the tenancy has become periodic.

      LJ Llewison was being rather naughty here as he obviously has taken the view for a long time that it is too easy for tenants to avoid possession and not easy enough for all those good landlords to evict bad tenants.

      In so doing he has created very bad caselaw indeed and the sooner someone gets it to the Supreme Court to correct it the better!.

  3. Well in the Mexfield case they preserved the sanctity of the ridiculous taboo of a tenancy of uncertain term (other than secure or assured), so there might be a few in the co-op movement who would watch with interest if this decision was appealed.

    • I think it is fair to say that the HA 1988 wording presents two plausible interpretations. It is just that they are contradictory. What it has to do with Mexfield, I have no idea!

    • On first reading, I would have said nothing, but then I read David d’Orton-Gibson’s comment that pointed out that this challenged the concept of tenancies/leases only for a certain term. The problem in Mexfield arose because the residency agreement could not be a tenancy with an uncertain term unless it was a tenancy for life, which was interpreted as a 1925 Act 90 year lease/long tenancy. If this is another nail in the coffin of the term uncertain taboo it will be watched with interest. Unfortunately there might be little short term benefit, but who knows..

  4. The transcript is not on Woodfall yet. I will keep checking each day as I have been for the past week since getting a note about this.

    Perhaps this is a Christmas gift after Superstrike?

    Adrian

  5. At first blush – if this is correct then before 28/02/1997 when periodic AST’s arrived Parliament had in SEction 21(4) Housing Act 1988 legislated for a completely unnecessary alternative procedure.

    • I agree with JS. It will be interesting to see whether Lewison LJ deals with the subtlety in the legislation; s21(1) ,,, which WAS a fixed term…. versus s21 (4) ..which IS a periodic……

  6. I like David Gorton Gibson’s argument (that when enacted ther were no such thing as contractual periodic ASTs because they had to be fixed term}.

    Unfortunately s20[4] enabled contractual periodic ASTs where there had already been a fixed term , and his argument does not stack up.

    If 21[2] , [or at least the 1st clause], is not to be interpreted as requiring a s21 notice to be served during the contractual period then is it not otiose?

    One supposes that although the reason given by the CA judges was the express date , it was technicsally obiter when doing so since the escape clause ?meant? that that the reason given by the CoA judgment was unnecessary to achieve the same result.

    On the assumption it is not going to the supreme court [esp since there is the escape clause] how does one get the point back to the CoA or to the SC ?

    the next qustion is how does one go about

    • I accept that 20(4) allowed for the granting of a periodic after the original fixed term. However, surely by the logic of Lewison, as there had been a fixed term you could still use the section 21(1) notice so 21(4) would have no purpose?

      Superstrike confirmed that the statutory periodic is a new agreement (and the wording of section 5 has not changed on this point since it was enacted). Therefore, if the fixed term can be dead and buried and another periodic agreement can be in force (whether statutory or not) then why would you need the section 21(4) notice? (Accepting the changes of the HA96)

    • More studying may give the reply. The original HA88 as passed, in section 21(1) only allowed for a statutory periodic to be in force if you were to use a section 21(1). (I cannot for the life of me understand the 1989 amendment which appear to be around long leases and what it has to do with section 21 notices, but the Local Government and Housing Act 1989 changed section 21(1) to put in the “whether statutory or not”). Therefore if you were to grant a contract giving a periodic AST after the fixed term (as per section 20(4)) you would have needed section 21(4) to repossess.

    • i think you are focusing too much on the modern PRS here. The legislation as passed envisaged a scenario where someone just moved in and paid rent and the tenancy was periodic from day oen without any fixed term ever arising. This was common at the time ti was written (in the early 1980s) and still happens today from time to time. It was this situation that s21(4)(a) was presumably directed at on Lewison’s reading. There are plenty of similar examples in the Act. For example, ground 1 of schedule 2 cannot be used during a fixed term tenancy and is pointless in a periodic AST as you can use s21. It is however useful if you grant a periodic assured tenancy. This is something that never happens now but was envisaged to be the norm at the time the Act was written.

    • Thanks David. You say they envisaged that someone moved in paid rent and was periodic, but surely the Housing Act 88 then said they were not shorthold and so section 21 was not relevant?

      There had to be an initial fixed term to have a shorthold although a periodic could have been granted after that.

  7. The judgment is on Casetrack.
    And while the judgment may amount to casuistry, that is surely a small price to pay for getting rid of most of the sterile arguments about s 21(4), a subsection with no discernible purpose whatever.

  8. Surely s.21(2) ought to be treated as permissive only in so far as it allows a s.21(1)(b) notice to expire after the fixed term has ended? Also it is difficult to see why the section would have been drafted in such prescriptive terms (“or on the day on which”) unless a different type of notice was required once the periodic tenancy started.

    I was speaking to counsel for the tenant about the case and it appears the point was raised by the Court (and not the landlord) at the last moment and there was sadly only time to deal with the point on oral submissions.

  9. Pingback: Section 21 Notices – Fixed Term and Periodic | GRL Landlord Association

  10. JS has to be right: when I read the transcript I could not understand why Lewison LJ had failed to examine the genesis and later many amendments of s.21, by the 1996 Act in particular. I just don’t see how s.21(4) ever had a point, if the CA’s reasoning is correct. I am familiar with Gary Webber’s thoughtful discussion of the issue, but the version I have does not answer the point that s.21(1) & (4) are mutually exclusive alternatives which result from historical development. But this is not the first time the CA has bolted, riderless, for the finish: nor is it the first time a Parliamentary draftsman might have used “may” instead of “must”, when they meant the latter (or inserted a meaningless sub-section, for that matter). Better reasoning if not a different result may (oops) have emerged if the advocates had been able to go away and put in written submissions. I do hope that the SC is interested enough to look at it. Maybe I should get out more, too.

  11. I have read the transcript several times now. I do not see that this case alters anything significantly. First, it seeks to distinguish McDonald v. Fernandez but as that case also concerned a tenancy which had been a fixed-term, it cannot do so as it was a HL case; this is CA.

    Second, any comments in the judgment which seek to say that s21(4) (a) is only applicable to a tenancy which was periodic from the start, seem purely obiter. The case in point was about a savings clause which in this case DID in my view correct an otherwise invalid notice. I would have had no confidence in seeking to defend the case on the basis of the notice being invalid, especially where the notice clearly gave more than two months and did so even with the earlier date having been calculated from the savings clause.

    Parliament clearly intended two different and mutually exclusive sections and that s21(4) (a) deals with a periodic tenancy however it might have arisen, otherwise why say that a periodic tenancy arises upon the ending of a fixed-term? Nowhere within s21 is anything which seeks to provide two different types of periodic tenancy.

    A landlord always has two options when seeking to end a tenancy; either serve s21 within the fixed term even if it expires beyond the fixed-term and/or provide a new fixed-term consecutively at the end of the existing one.

    My view is that Parliament envisaged that the landlord who was not willing to manage his or her tenancies properly and keep the agreements up to date should have to do so when wishing to bring the tenancy to an end. This theme continued in the Housing Act 2004 requiring a deposit to be protected in a prescribed form, without which, no s21 notice could be served.

    I am sure that the tenant’s lawyers in this case are now kicking themselves for being persuaded to argue about this particular notice and should consider appealing to clarify the issue as per McDonald and try and clean up the mess. Anything else might leave tenants in the private sector with no protection whatsoever. In the light of the changes to the discharge of homelessness duty into the private sector it is even more important.

    • Chris

      it is the saving clause decision in this case that is arguably obiter. The main decision was made on the interpretation of s.21(2) and hence the s.21(1)/s.21(4) point. So I am afraid that it is that issue that is front and centre in the decision. As a result, yes it does alter things significantly.

      There is still the two months notice requirement, so it is not removing all protection. Granted is does remove the requirement for the ‘period of tenancy’ date, but even that was only a ‘protection’ to the extent that landlords often got it wrong.

    • Giles- I appreciate that the Lord Justices had a debate with themselves about the meaning of s21(2), but none of that gets around the fact that as Court of Appeal they cannot with any weight say that a House of Lords decision in McDonald v Fernandez was wrongly decided. And, as I stated earlier, the sections do not distinguish between a periodic tenancy which arises as a result of a fixed-term coming to an end and one which was periodic from the outset; there simply are not two types of statutory periodic tenancy. For any court to say there is would be to re-write the Acts which they cannot do. Rather than read s21(2) in the landlord-friendly way, the court should have gone to s21(4) instead; if a tenancy is periodic when the case is brought to court then section 21(1) (2) is irrelevant. One should not be referring to it at all. That is, in my opinion, where their Lordships got it very wrong.

      All I see in 21(2) is a measure which allows a notice to be given within or at the very end of the fixed-term, which does not have to expire on a last day of a period. But we already knew that. The issue is where a landlord serves a notice dated after the ending of the fixed-term and during the subsequent periodic tenancy. That is when s21(4) is engaged. To argue otherwise would render s21(4) meaningless.
      On that note I think it would be good if it was appealed purely on the basis that the Supreme Court (or HL as it was) would take a dim view of being criticised for their decision in McDonald and would strike Spencer v Taylor down.

    • I can end this discussion rather quickly by pointing out that McDonald v Fernandez is not a decision of the House of Lords. It is a Court of Appeal decision. There may be confusion because Lady Justice Hale (as she then was) gave the leading judgement, but this was before her further elevation. Therefore the Court of Appeal in Spencer v Taylor can indeed set it aside. Therefore the grounds of appeal advanced by Chris are not open.
      I also don’t agree that s21(4)(a) is rendered meaningless by this case. It still has a role in tenancies which were periodic from the start. That is relatively meaningless in today’s context but at the time the legislation was drafted it was expected that many tenancies would be periodic from the start. Many other parts of the legislation are similarly obviated by the way things are today.

    • Apologies David, you are correct that McDonald was CA. However your comment ‘I can end this discussion very quickly’ suggests that you are trying to stifle debate contrary to the purpose of this blog.

      However the fact that it was an equal court merely leaves me to argue either one of them; and as a a defender of tenants, I shall always argue McDonald as it makes perfect sense in terms of stautory interpretation, whilst Spencer does not. Their Lordships interpret s21(2) to say something which it clearly does not. s21(2) clearly says something different to what their Lordships interpreted. S21(2) allows for a notice to be served under s21(1)(b) where it is served during or at the end of a fixed-term in terms that the dates are not relevant. But once a tenancy is periodic, then s21(4) must be read in conjunction with it. That is what their Lordships in McDonald did.

    • I am not trying to stifle debate. It was merely a comment that this case was not HL and so the discussion about whether it should overrule could be ended quickly.
      Given Kim Lewison’s long and glittering career in property I don’t think it is fair to simply say that MacDonald makes more sense. In fact, Kim Lewison does say that MacDonald was incorrect but in fact it was not entirely so. The s21(2) argument was simply not canvassed by the Court. In a sense both judgements can co-exist, it is not a case of choosing one over the other.

    • Chris

      I really don’t think it is open to you to argue either one, at least in the lower Courts, simply because the s.21(2) wasn’t raised in McDonald. Spencer gives a very clear position on s.21(2). It is not a position that is (wholly) incompatible with McDonald because McDonald effectively did not involve any finding per se on when s.21(4) notices should be used.

      This is not to disagree that the alternative ‘non-permissive’ reading of s.21(2) doesn’t make more sense, historically and in terms of the division of s.21(1) and s.21(4). I agree that it does. But unless or until the issue goes to the Supreme Court, you, along with the rest of us, are stuck with Spencer.

    • Thanks Giles. So, if someone comes to me with a notice citing s21(4)(a) for a tenancy which has become periodic, I should still be arguing that the notice should expire on the last day of a perod of the tenancy? Surely we deal with the notice before us and the court would have to do the same?I foresee a problem only if the landlord has cited s21(1)(b) where the fixed-term has clearly come to an end.

    • That is a question. My initial view would be that if the notice is stated to be under s.21(4) it should comply with the s.21(4) requirements. But there is a counter argument that so long as the notice satisfies s.21(1) that is all that is needed, and that the description on the notice is not determinative. We will have to see what the Courts make of it.

    • Thanks Giles..I’m going to try it when I next get one. Will keep the site posted!

    • I don’t think I agree with this. S21(1) does not require stipulation that the notice is under that part of the section. It is silent on the point. In Spencer it is clear that the notice was a 21(4) notice and was treated as acceptable under s21(1). However, s21(4) does appear to require stipulation that the notice is served “by virtue of this section”. What is not clear is whether that means an s21(4) notice has to mention the section, s21 or the subsection s21(4).
      However, the point has never been taken either way.Given though that the drafters went to the trouble to say explicitly that stipulation is required for a s21(4) notice but did not say so for an s21(1) notice I would conclude that stipulation is not required.

    • I agree s.21(1) doesn’t require stipulation. But it isn’t clear that the notice in Spencer was stipulated to be a s.21(4) notice. It was a s.21(4) in form, obviously, period and saving clause etc., but it isn’t clear that it was identified on the notice as a s.21(4) notice.

  12. Just been to a Shelter course on advanced security of tenure and have been informed, If I have understood this correctly, that the need to stipulate the tenancy period date in a statutory period ten is no longer necessitated.
    I just this week advised a landlord to do exactly that, during the stat period ten. The notice expires on 20th February, having been served this week. In new money, he would only need to give two months from the day of service.
    if I have got this wrong, I’ll need to start searching for a job outside of housing or perhaps listen more diligently!

    • See my continuous comments and debates above-play safe, still advise your landlords to stipulate …I will still be arguing s21(4)(a) for my tenant clients where applicable…someone needs to take a case to the Supreme Court as Spencer is bad law and makes no sense!

    • The Notice to Quit, prescribed by Protection from Eviction Act 1977 Section 5 requires two thing, in writing and at least 28 days long. However, to this common law rules about a period of the tenancy and expiry at the end of a period are applied. Is the a danger/potential defence to argue that though statue may not specify it in section 21(1) (as it does not in the Protection from Eviction Act), the common law rules should still apply.

      Interesting to see how long before we see this one.

    • Um David, it still has to be two months notice, and a written notice. So no problem with PEA. And statute trumps common law where the provisions conflict. (The point about common law ‘adding to’ PEA is that there is no conflict.)

    • Agree to all, that was my point, Common law would not be in conflict with section 21(1) either, hence the danger.

  13. Pingback: Good news for landlords a new s21 case changes all the rules

  14. Just trying to work on this judgement and cannot see why section 21(1)(a) says the notice works is there is no further assured tenancy “whether shorthold or not”. Surely if there was a non shorthold assured tenancy then a section 21 notice could not be used? By Lewisons arguement would this mean that if you ever gave an assured shorthold tenancy then you could change to an assured periodic and still serve section 21?

    Doesn’t sound right to me but see what it is doing there.

    Thanks

    • Well no, because s.21(1)(a) says you can’t. which would be the reason that is there. Arguably it supports Lewison, as it appears to contemplate s.21(1) notice being served when a further tenancy has arisen – then limits the kind of new tenancy it applies to.

  15. Related to this case, though not strictly the ratio, does the wording of section 21(1) raise a problem with the using break clauses.

    My logic is a follows:

    1) Section 5 HA88 says the landlord can only end the tenancy by “enforcement of a court order”, or some other action on the part of the tenant.

    2) Section 21(1) only allows a court to make an order “where the fixed term TENANCY” has ended (note it says the tenancy must have ended, not the fixed term).

    The normal effect of a break clause is to end the fixed term, but by virtue of section 5 this cannot end the tenancy as it is neither enforcement of a court order nor some action of the tenant. If the tenancy has not ended then you cannot use a section 21(1) notice.

    Presumably the only way to make the break clause work would be to break the fixed term by some notice specified in the contract, the tenancy would continue (no court order) so then a section 21(4) could be used on the ensuing periodic agreement that then existed?

    • You are not reading the legislation properly here. S5 states specifically at s5(1)(c) that a landlord can terminate a fixed term tenancy where it “contains power for the landlord to determine the tenancy in certain circumstances”. In other words, a break clause. Therefore a service of a break notice will end the fixed term tenancy and can also give notice under s21(1)(b). A periodic tenancy may then arise under s5 and the court could then make a possession order.
      A far better question is whether the service of a break notice, in ending the fixed term tenancy and giving rise to a new periodic tenancy by way of s5 then requires service of the Prescribed Information per Superstrike v Rodrigues.

    • Thanks David for pointing that out.

      Personally I cannot see how you can avoid the Prescribed information.

  16. “S granted an Assured Shorthold Tenancy under the terms of the Housing Act 1988 to T on 6 February 2006, a Monday. It was for a fixed terms of 6 months with rent payable weekly. Thus the first day of each period was a Monday and the last day was a Sunday. At the end of the fixed term a periodic tenancy arose by way of s of that Act and so it would also have been a weekly periodic tenancy running from a Monday to a Sunday.”

    The tenancy period for the fixed term was 6th February – 5th August 2006; there were no weekly tenancy periods, only weekly rental periods. The statutory periodic tenancy arose on 6th August 2006, a Sunday. The SPT replaced the fixed term tenancy, and the tenancy periods of the SPT under s.5 ran Sunday to Monday commencing Sunday 6th August 2006.

    • Perhaps the point the Court of Appeal were making the point they do not agree with your interpretation of section 5. There were always two interpretation in that section 5 only said the periods were that as for which rent was last payable under the fixed term. It was not clear if this was only the length, and starting from the day after the fixed term, or if this was the length and the start and end dates of each period. The Court of Appeal have clearly chosen the latter, though ironically it does not matter now if you only use a section 21(1) notice!

  17. Hello

    Another blog has today stated that section 21(4)(a) notices are still required where a contractual periodic tenancy follows a fixed term:

    “Section 21(4) a will continue to apply to … tenancy agreements which run for an initial term and then become contractual periodic tenancies. The latter may become more prevalent following the Superstrike ruling as a way of avoiding the need to serve prescribed information, and it should be noted that for the purposes of section 21 (1)(a ) the tenancy will not have come to an end at the end of the fixed term and therefore section 21 (1) (b) will not apply.”

    That would seem to conflict with the allowance of “an assured shorthold periodic tenancy (whether statutory or not)” being in existence but equally I see the assertion that the assured shorthold tenancy must have come to an end.

    Do we think that statement is correct?

    Many thanks

    Adrian

    • No need to be coy on the source, Adrian. It is the Painsmith blog. And I’d go along with that. The requirements of s.21(1)(a) are that the assured shorthold tenancy has come to an end. Further, s.21(1) provides “on or after the coming to an end of an assured shorthold tenancy which was a fixed term tenancy”. No end of tenancy, no s.21(1) notice and have to use s.21(4).

    • Sorry but I am going to respectfully disagree with NL and PainSmith. S21(1)(a) states:
      “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);”
      If the fixed term has ended and you then have a contractual periodic tenancy then this will be allowed within s21(1)(a) because it will be permitted by the phrase “other than an assured shorthold periodic tenancy”.

    • I’m with you on that one Giles. Of course it hasn’t come to an end. It can only be ended by court order and subsequent execution of a warrant (HA 1988 ss5(1A).

      As previously stated I read s21 (2) as merely a device to deal with situations where a notice is served within the fixed-term, but expires after it has ended, not what His Lordship inferred (rather mischievously in my book).

    • But this is a rather different problem. If the tenancy is for 6 months and then thereafter on a monthly perioidic, can the AST be said to have ended, where it clearly can if 6 month fixed term only, then statutory periodic?

    • Only the fixed-term has ended, not the tenancy which without a new agreement continues on the same terms but as a statutory periodic..thereby ended only byvirtue of s21(4) (a).

    • Good point. I think it probably comes down to how you read the ‘and’ in the middle of the phrase. The new reading from Spencer makes this a rather difficult phrase to define as it becomes slightly self-contradictory.

    • I think 21(1) is clear though – on or after the coming to an end of AST which was a fixed term. So ending of tenancy is required as condition for effectiveness of 21(1)(b) notice

    • This is dealt with by s5(3)(e) which states:
      “under which, subject to the following provisions of this Part of this Act, the other terms are the same as those of the fixed term tenancy immediately before it came to an end, except that any term which makes provision for determination by the landlord or the tenant shall not have effect while the tenancy remains an assured tenancy”.
      So the terms of a statutory periodic are the same as the pre-existing fixed term save where they conflict with Part 1 of the Act (so s13 notices override rent increase clauses for example).

    • which leads us nicely ( and circularly) back to the original point. A new tenancy which is stautory periodic and therefore subject to s21(4) (A) not 21 (1). QED

    • No. Not on the Court of Appeal reading. You are going round in circles, saying that a periodic must be s.21(4) so if it is a periodic it must be s.21(4). It just doesn’t get you anywhere against the logic of the COA decision on s.21(2).

  18. Hello

    I think on balance I prefer the Painsmith / NL view because the tenancy does not end. It may not have been the intention of 21(1)(a) but it does seem to be that literal in what it says.

    Taking that view also means where this type of tenancy is used, help and guidance remains unchanged and assuming the date is calculated correctly (or just a formula used) a section 21(4)(a) will always work even if it might have been possible to only comply with 21(1).

    Many thanks

    Adrian

  19. I have had little time or chance to study this case but it seems to me that the error in Lewison LJ’s approach is to ignore the fact that the assured shorthold tenancy is a creature of statute. Once it has ousted the common law NTQ for bringing to an end an assured tenancy then the only power to do so arises under the statute . Hence , despite the permissive use of language in S21(2) HA 1988 that is as far as the permission to serve a S21(1) notice goes .There is no other power and nor is there any need for S21(2) to be cast as a prohibition as if the notice does not fall within S21(2) there is no power to serve it .

  20. Has no bearing on the actual decision but does reduce confidence in the “quality” of the judgement. Some has point out to me that the landlord’s notice expired 1/1/12. The transcript at para 5 says this is a Saturday (the “wrong” day of the week), but checking my Outlook calendar the 1/1/12 was a Sunday (the “right” day of the week).

    Likewise I make the 23 December 2011 (para 4 of the judgement) a Friday, not a Sunday.

    Worrying that such a judgement comes on the back of such poor factual analysis. If they can’t get the day of the week right is the judgement anymore reliable (even if binding!)

    • I am still preferring Fernandez v McDonald as a better authority especially where the notice cites s21(4) (a)- the reasoning in Spencer is flawed and gives rise to a very thinly veiled bias towards landlords in my view. Is anyone bringing any new cases through the courts?

    • I’m afraid it really doesn’t matter that you prefer Fernandez. Unless or until superceding decision, Spencer v Taylor is the law.

    • Once again as I said before- if the notice before the court states s21(4)(a) and does not expire on the last day of a period of the tenancy, , then McDonald works. as McDonald was on an equal footing, precedent-wise to Spencer, The court must follow McDonald-McDonald is also the law as Spencer does not override it. i agree that we may have difficulty arguing McDonald rather than Spencer if the notice cites either s21(1) (b) or 21 (2), but I see no difficulty if the notice cites s21(4) (a) for a periodic tenancy. Many of the landlord webistes are erring on the side of caution and urging use of s21(4) (a) and getting the date right. They also do not have confidence in the judgment even if it benefits them.

    • Chris, you were mentioning preferring McDonald generally and ‘especially’ where the notice stated itself to be under s.21(4)(a). Having said that, I’m not sure what I think about notices that are expressed to be s.21(4)(a) notices any more. My first thought, like you, was that they would still be governed by the 21(4) requirements (and McDonald), as it is surely still open to the landlord to exercise the ‘option’ of proceeding by s.21(4)(a).

      But, and this is the bit I find myself wondering about, what if the notice doesn’t meet s.21(4)(a) requirements. Does that now make it defective such that the claim fails, or can the Spencer version of s.21(1) then act as a kind of saving clause, to the effect of ‘but anyway, so long as you’ve given two months…’. I don’t know. I can see it going either way. McDonald would be good law for the notice failing to meet s.21(4) requirements. But does that mean the notice is a failure altogether?

      Let us just hope the Supreme Court does decide to hear Spencer and put us out of such uncertainty.

    • I’m with you there Giles- just not had one to test it with in those circumstances yet…and the DJs out in the sticks are not always up with the latest caselaw. I think if they go off on a ‘frolick of their own’ on a defective s21(4)(a) notcie they could be appealable..thereby starting the whole process again. Let’s just hope that the tenant in Spencer does appeal and that the Supreme Court has its common-sense hat on.

    • I’d presume these were the agreed facts as they came up from the Court below. The Court of Appeal would not have spent any time checking them unless they were the subject of argument, which they weren’t. As they were argued in the Court below, there was presumably a transcription error somewhere along the line. But as you say, nothing turns on that anyway.

  21. I have explained why I think the decision is wrong on Garden Court North website . Complete failure to consider the provisions in their historical context.

  22. Pingback: Section 21 Notices – Spencer v Taylor – Fixed Term and Periodic | GRL Landlord Association

  23. Pingback: Section 21 update - Spencer v Taylor

  24. I’m sorry for commenting on an old post, but I’m faced with an unusual variation on Spencer and I don’t really know where to turn. I’m not expecting to hit anyone up for free advice, but I hope someone might find this interesting enough to try and throw some light on the issues it raises.

    The potted version is: It’s styled as a s21(4) notice but, unlike in Spencer, there’s an error in the saving clause too that means no possible expiry dates lie at the end of a period. It then adds standard s21(4) notes saying it must expire at the end of a period. If we apply the rule used in Fernandez [33-35] and Spencer [34] that parts of the notice that contradict each other in this way are ineffective and can be ignored then the notice, at best, now says only “We require possession” without saying when. Now, I don’t see how you can give someone “two months’ notice in writing” of something simply by telling them it will happen one day, especially when it’s already a given that it will happen one day. In support of this: Spencer [11] justifies the notice’s validity by referring to the actual dates provided being at least two months away, rather than by saying the landlord waited two months before claiming. Although to my surprise, [11] does cite the 1 January date as relevant even though [3, 5, 34] surely that date is ineffective; I wonder if this is an error or whether it means the court didn’t consider that date to be ineffective.

    Both the Legal Aid call handler and the District Judge quickly rejected the fleshed-out version of this defence, both with the rather hand-wavey reasoning that post Spencer, a notice is always valid if it was served more than two months before possession was sought; and giving no specific rebuttals to the counterarguments raised. The DJ did allude to a more recent case clarifying Spencer but I haven’t managed to find it. I already felt out of my depth litigating this myself, so the idea of trying to litigate an appeal to a Circuit Judge (without knowing where exactly the case is supposed to fall down) – well, that would be like being out of my depth, but with added sharks. So any comment is most welcome!

    • You don’t say whether the date given was at least two months after service (regardless of not being the end of a period)? The key bits of Spencer being 19-21.

    • Sorry – perhaps my potted version was a little too potted. Both the main and the fallback date lay more than two months away – the intended defence being that, whereas in Spencer the fallback date was operative and more than two months away (so the required length of notice before expiry had been given), in this case the wording ensures neither date can be operative so the notice never expires and the statutory requirement of s21(1)(b) is not met.

    • But Spencer doesn’t rely on the end date (either end date) being the end of a period. That is rather the point. As long as there is a date, and it is more than two months notice.

    • Understood; the objection to this notice is that it appends standard s21(4) wording saying that it must expire “on the last day” of a period, and so both the parts of the notice that aim to indicate when it expires do not do what the notice itself says they must do. If that makes those parts ineffective, then I cannot say there is any date when the notice will expire, so I cannot say it gives at least two months’ notice (or any other amount).

    • But… The notice in Spencer was also in the form of a s.21(4) notice, with the notes on the back – see 34. So unless your notice had to be a s.21(4) notice (ie tenancy was periodic from the start, with no fixed term), Spencer would appear to mean it can be treated as a s.21(1) notice (see also para 19).

    • I’ve assumed it will be treated as a s.21(1) notice; the objection to it is that it says what boils down to: “This notice requires possession after [a date in mid-period] or else … ON the last day of a period; this notice must expire on the last day of a period” which is an unfortunate wording that contrives to eliminate all possible expiry dates and is little better than saying nothing at all. Or is it? As long as the expiry date must be the day before possession is required, then there are no possible dates the notice allows itself to expire on. s.21(1)(b) doesn’t require any particular expiry date but it does require written notice of at least two months.

    • Ok. Step by step.
      The notice in Spencer was in the form of a s.21(4) notice.
      The notice in Spencer had the same wording in the notes about expiring on the last day of a period.
      The date of expiry of the notice in Spencer was not the last day of the period
      The notice in Spencer had a saving clause, but that was found to be irrelevant as unnecessary.
      The notice in Spencer was held to be valid for the date given, as a s.21(1) notice.

      I cannot see how your notice differs significantly from the one in Spencer, given that the saving clause provision is unnecessary. As long as two months notice was given…

    • Aha – now I understand your earlier replies and I believe I can see where we’ve diverged. Sorry about the pause – technical issues, plus reviewing everything in detail.

      You say the notice was held to be valid for the date given. The court never states this, so it seems to me that it must come from a fair reading of [11] where it is held the notice was for “23 December or 1 January”. I’ll explain why I find that reading very problematic and much prefer the alternative view that once s21(1) was held to apply, it would have been common ground that the fallback date made the notice valid and no submissions were needed as to whether the first date was inoperative. That allows the phrasing in [11] to simply mean that the notice expired on one of two dates more than two months away which had both passed before proceedings were started, and so the appeal had to fail and it was unimportant whether one date or the other or both were correct.

      Under s21(4), the date given in Spencer would have been ineffective [34]. This looks like a general point of law to me, and I admit I don’t know what I’m doing but I don’t see how the same principle wouldn’t apply under s21(1) in which case the (unnecessary, but present) notes on the form do rule that date out as not permitted. It is the court itself that introduces this point so presumably it would see that on the face of it the date given cannot be used; why then in [11] would it cite that date without explaining how it can still be effective? The alternative reading of [11] doesn’t have this problem so I have to prefer it, which would be fatal because the saving clause would come back into play.

      If the court was holding the date given to be valid, then the landlord had given notice to that date so there would have been no need to mention the fallback date in [11] at all.

      If [11] by stating the date given implies it is considered a possible or definite expiry date, then the same must be taken to apply to the other date, yet both are stated while giving no indication as to which of the two is the true date. The court would be creating an ambiguity of exactly the kind it says itself [24-25] could well be problematic. Alright, it’s obiter but would the court not have felt the need to comment on this or express itself more clearly? Again, the alternative reading of [11] does not have this problem.

      If the court was indeed expressing a view in [11] as to when the notice actually expired, then why would it cite both dates at all and why would it do so in a way that left the meaning unclear rather than simply stating when the notice had expired? Could the court have meant that the duration of notice was somehow indeterminate, with the associated consequence of the tenant not being able to determine the date for which they should have their bags packed? That would seem to defeat the purpose of the legislation. I’m also assuming the court cannot have meant that the notice had more than one expiry date.

    • No, that doesn’t fit the judgment. Key para here is 21, read with 11 on meaning of s.21(1)(b).

      “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”.

      That, I’m afraid, is the end of your argument. See para 20: “So if there is any conflict between the two sub-sections, section 21(1) prevails”

  25. No argument about [21]; I’ve never thought s21(4) applied (although I have drawn parallels) but rather I relied on the idea that when parts of the notice required it to do things and other parts required it at the same time to not do those things, then as a consequence the parts involved would do nothing – although it does so happen that those parts happen to be parts more usually found in a s21(4) notice.

    As for the quote from [11], I can see two things you might mean:
    (a) If you mean that “does not require the notice to expire on any particular date” means “does not require the notice to expire,” I doubted that Parliament meant to invite the landlord to give an indeterminate, never-expiring notice that would only confuse the tenant, so I took the purpose of the passage to be to distinguish s21(1) from s21(4) by observing that it has no rules allowing only particular expiry dates – a reading that I thought would make good sense in the context. But I think more likely:
    (b) That you take not requiring a date to be “specified” to mean not requiring there to be any “readily ascertainable” date [Fernandez para.10] at all. If that’s the case then I think we’re right at the heart of the matter and the point I must have got wrong is this: The last two sentences of [11] explain that the statutory requirement of two months’ notice was complied with by giving notice for “23 December or 1 January”, which means that the two months’ notice required for validity is derived from the text of the notice, not from the time waited before enforcing it (else the sentence ought to read “…gave notice on 18 October and did not enforce it until after 18 December”). However any notice given by my notice is indeterminate (if we exclude the parts rendered ineffective by contradictions) and there is nothing left standing in the notice to say that it is for at least two months. So, I can’t see how it meets the requirement.

    Failing that, I am defeated. There is wording on the notice to say the landlord cannot enforce it until it has run out, and it seems to me that without an ascertainable expiry date the notice can’t run out. But I suspect that if my main argument didn’t fly, that one probably won’t either!

    • No, the simple point is that the first date was valid as it was longer than two months. Of course, a sensible landlord would wait until after the expiry of the second date as well before issuing.

      There is no suggestion whatsoever in Spencer that the first date had been rendered invalid by the note on the notice (which was in exactly the same form as yours). On the contrary, para 11 makes clear that either date was valid.

      And actually s.21(1)(b) does not require a date to be specified. It would be sufficient to say ‘after two months from the date of service’ for example.

      On your view on contradictory elements of a notice, see 35.

      “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”.

      Basically, all you are trying to say is that the notes on a s.21(4)(b) notice mean that the notice has to expire on the last day of a period even if that notice would be valid if it was a s.21(1)(b) notice. This was absolutely not the case in Spencer (despite that the notice also having that note). Just to make this clear, para 25 refers to a hypothetical situation in which there were two dates on a s.21(4)(a) notice, both of which satisfied the s.21(4) requirement:

      “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.”

      So, para 11 says that both dates satisfy the s.21(1) requirement for two months notice and this is not a problem. Para 25 says it may be a problem for a s.21(4) notice – but ‘this is not our case’. Why? Because it is not a problem for a s.21(1) notice.

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