We have already reported briefly on the Supreme Court decision to refuse permission to appeal to the tenant in the case of a Spencer v Taylor on the grounds that no new points of law were raised.
As the solicitor acting for the landlord in the Supreme Court I have had the chance to see rather more of the papers and so a more detailed discussion of some of the points that came out of this would be interesting.
The original section 21(4)(a) notice served by the landlord’s original solicitors contained a date that was incorrect. The notice also contained a saving provision of the type approved in Lower Street Properties v Jones. The tenant argued in seeking permission to appeal to the Court of Appeal that the presence of the date and the saving provision meant that the notice was defective because it effectively gave the tenant two possible dates by which they had to leave and so it did not “make clear” the date that possession was sought. The Court of Appeal had already refused permission to appeal on this point some time ago in the case of Elias v Spencer (no relation!). However, in this case a key distinction was drawn. In Elias v Spencer the saving provision started with the phrase “or if different” whereas in this case the saving provision merely commenced “or”. The distinction drawn therefore, which led to the appeal being permitted at the CA, was that in Elias the saving provision was written in such a way as to make clear that it overruled the date if there was a discrepancy. In Spencer no such hierarchy existed and the notice was therefore unclear.
The Court of Appeal
This same argument was made by the tenant at the CA and formed the bulk of the submissions for both sides. As most readers will know (and you can read up on it in our report here) the CA went in a totally different and unanticipated direction and held that the original notice was valid under s21(1)(b) and not under s21(4)(a). As a backstop Lewison LJ also dealt with the substantive arguments made to him and held that the notice was still clear even though the date and saving provision could be seen as proposing two alternative dates.
The Supreme Court
The argument in the Supreme Court largely became one over policy and the parliamentary intent. The tenant was arguing that the decision of the CA could not be what parliament had intended. Parliament created two notice mechanisms under s21. The (1)(b) mechanism and the (4)(a) mechanism. At the time of creation the Housing Act 1988 required that an AST be for 6 months and so the intention of the s21(4)(a) was not to deal with tenancies that were periodic from the start but specifically to deal with tenancies that had become periodic before service of the s21 notice. This was undoubtedly correct up to a point. However it is a bit more complex than this.
S21(4)(a) is actually something of an error. The original version of the Housing Act 1988 contained just one notice under s21, the 1(b) notice. The (4)(a) notice was introduced at Commons committee stage largely because the government of the day did not really understand their own legislation. The belief was that a notice given during the periodic tenancy would need in some manner to comply with the common law provisions applicable to notice to quit given in periodic tenancies. Notices to quit had already been ruled as of being no effect in s5 of the new Act and so some method was perceived as necessary to avoid this issue. Hence the introduction of s21(4)(a) which was intended to mimic the notice to quit process so that it would satisfy the common law issues and also to fit within the s21 process.
The reason that Parliament was wrong was set out in the case of MacDonald v Fernandez where no less a personage than Hale LJ (as she then was) held that an s21 notice was not a notice to quit and hence that the s21 regime fell outside the common law notice to quit regime.
Common Law or Statutory
Much of this problem is due to the real inconsistency that operates when considering Housing Act 1988 tenancies. Are they statutory or common law but with a statutory overlay? Parliament clearly must have felt that they were common law but with a statutory overlay as they felt there was a need to have a section 21 process that also complied with the common law notice to quit process. They are also treated this way in Scotland where a section 33 notice (the s21 equivalent there) must be supplemented with a common law notice to quit to prevent the operation of the common law process of tacit relocation.
However, the Courts have been less certain. MacDonald v Fernandez appeared to treat s21 as entirely divorced from the notice to quit process and so assumed that there was no common law component. Likewise the Court of Appeal in Aylward v Fawaz treated a notice under s21 as also terminating the contractual component of a tenancy by implicitly operating the contractual break clause therein.
Resolving this conundrum once and for all would have been an attractive reason for the Supreme Court to hear this matter. However they did not agree.
The tenant also suggested that the s21(4)(a) process allowed tenants in a periodic tenancy a little more time to find alternative accommodation. I am not sure that this was their best argument but it does not seem to be supported by the Parliamentary debates. The issue of time was raised in the Lords where a “use it or lose it” element was suggested so that if a landlord did not use the s21 notice promptly they would have to serve a fresh one, in a similar manner to a s8 notice. This was rejected and it was stated by the government that a tenant who had been presented with an s21 notice would have had their two months notice and would therefore be aware of the precariousness of their position.
This approach is clearly what was intended by Parliament and this was very damaging to the tenant’s argument but it is a very hardened approach to take.
The Supreme Court is clearly not convinced of the need to consider s21 further. The tenant sought to suggest that they should as it had not been considered but to no avail. There is no opportunity to take this further that I can see as there is no aspect of the tenants human rights that is sufficiently engaged to justify a further appeal. There have been no human rights arguments made so far and so making one now would require a fresh approach to the whole issue. Given the very wide latitude afforded to Parliament and that the Court of Appeal decision does appear to fit into the Parliamentary intent I am not sure that it would succeed.
Where We Are
The short position then is that an s21(1)(b) notice is a valid notice for any AST where then a pre-existing fixed term tenancy. This will mean a far more rapid turnover of eviction in periodic tenancies I suspect as some of the technical errors that landlords used to find themselves making have gone. It also means that cases such as Lower Street Properties v Jones, Church Commissioners v Meya, and MacDonald v Fernandez will become much less relevant in a lot of cases.
There are still some cases where s21(4)(a) has relevance. Periodic tenancies that have never had a fixed term component and fixed term tenancies that have become periodic by way of a contractual provision rather than the provisions of s5. Some social landlords create tenancies that are periodic from the outset and some private landlords use contractual periodic tenancies to allow for rent increase clauses to function in the periodic tenancy and to ameliorate the complex deposit effects of Superstrike v Rodrigues (at least until the Deregulation Bill come in).
Where an s21(4)(a) is used it is worth noting that the second part of the Court of Appeal decision is in fact obiter and so a saving provision that does not show a degree of hierarchy may not be valid. However, it would be a brave argument to run.