Pease v Carter & Anor (2020) EWCA Civ 175

Does an error in a section 8 notice – in this case specifically as to the earliest date on which possession proceedings can begin – invalidate the notice?

At first instance in this case, the landlord had served a section 8 notice for rent arrears, specifying grounds 8, 10 and 11. The notice was served on 7 November 2018 and was in Form 3. However, under s.5 for the date that was the earliest possession proceedings could begin, the notice was completed “The court proceedings will not begin until after: 26 November 2017”. The standard notes to s.5 stated “Where the landlord is seeking possession on grounds … 8, 10 to 13 … court proceedings cannot begin earlier than 2 weeks from the date this notice is served.”

At the first instance hearing, the Circuit Judge held:

i) Applying the test laid down by the House of Lords in Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd [1997] AC 747 with respect to notices under break clauses in commercial leases, “2017” was an obvious typographical error, and the reasonable recipient of the Notices would have realised that the intended date was 26 November 2018. The Judge rejected a contention that the reasonable recipient might think that the date could be 26 November 2019 and therefore be uncertain as to the intended date.

ii) The reasonable recipient test did not apply to notices served under section 8 of the 1988 Act because, applying the reasoning of Hale LJ in Fernandez v McDonald (2003) EWCA Civ 1219, [2004] 1 WLR 1027 at [23], section 8(3)(b) and 8(4B) were clear and precise, were not difficult for landlords to comply with and did not have particularly serious consequences for landlords if not complied with since a defect in a notice could easily be cured by service of a further valid notice. The statute required notices to specify a date which was not earlier than the expiry of two weeks from the date of service of the notice. The Notices did not do so. They were therefore invalid.

iii) The Notices were not “substantially to the same effect” as the prescribed form. The wording of the Notices followed the prescribed form precisely. The problem was that the date inserted in section 5 of the Notices contained a typographical error.

iv) It was just and equitable for service of the section 8 notices to be dispensed with in respect of grounds 10 and 11 in Schedule 2 to the 1988 Act pursuant to section 8(1)(b), but the court had no power to do this with respect to ground 8 by virtue of section 8(5). There is no challenge to these conclusions by either side.

The landlord appealed – and was granted permission by the Court of Appeal on a point of general importance. The issue was whether the ‘reasonable recipient ‘ test applied to section 8 notices.

The Court of Appeal began with the ‘reasonable recipient’ test in Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd (1997) AC 747 which concerned notices under break clauses in commercial leases. The House of Lords had held

“the construction of the notices had to be approached objectively, and the question was how a reasonable recipient would have understood them, bearing in mind their context; that the purpose of the notices was to inform the landlord of the tenant’s decision to determine the leases in accordance with the break clauses; that a reasonable recipient with knowledge of the terms of the leases and of the third anniversary date would have been left in no doubt that the tenant wished to determine the leases on 13 January 1995 but had wrongly described it as 12 January”.

And this was a general proposition for unilateral contractual notices.

In Ravenseft Properties Ltd v Hall [2001] EWCA Civ 2034, and in B Osborn & Co Ltd v Dior [2003] EWCA Civ 281, both concerning the validity of notices under section 20 Housing Act 1988, it was held that the same approach applied to statutory notices, and also  “they also establish that notices which contain errors or omissions that are not obvious may be “substantially to the same effect” as a prescribed form if the notices nevertheless fulfil the relevant statutory purpose.”

The position was complicated by the Court of Appeal decision in Fernandez v McDonald (2003) EWCA Civ 1219. This concerned the validity of a section 21(4)(a) notice where the notice “that the landlords required possession “on 4 January 2003″. The tenants contended that the notice was invalid because the last day of a period of the tenancy was 3 January 2003”. Lady Hale’s lead judgment found

“20. …. (Counsel for the landlord) argued that the reasonable recipient test applied whether or not the error is obvious…. In my view, the obviousness or otherwise of an error is simply a factor in deciding what the reasonable recipient would understand by the notice. The more obvious it is that a slip has been made, the less likely is the reasonable recipient to be in any doubt as to what was meant.
21. In this case, however, a good deal hangs upon the precise question which is to be asked. If the question is simply, what would a reasonable tenant understand by this notice, then a reasonable tenant would understand that the landlord wanted to regain possession on or after 4 January 2003. If the question is what is the purpose of requiring such notice, I would accept that one purpose is to give the tenant at least two month’s notice that the landlord will be starting the process of regaining possession once the relevant period of the tenancy has expired, so that the tenant can begin to make plans accordingly.
22. But if the question is, what does the statute require, the answer is that the statute requires the notice to specify a date which is the last day of the period. The statute does not require the landlord to specify a date on which he requires possession. This is not a notice to quit. The landlord will not get possession without the tenant’s consent unless he goes to court. That is why the statute requires the landlord to state that possession is required ‘after a date specified in the notice, being the last day of a period of the tenancy’.
23. This is not a case where the legislation permits a form to be ‘substantially to the same effect’. The subsection is clear and precise. Nor is it difficult for landlords to comply. They know when the period ends. Furthermore, this is not a case where the consequences of failure to comply are particularly serious for landlords: a defective notice can be cured the next day. Even if the defect is not noticed until the point is taken in court, a valid notice can then be given. The landlord is not unwillingly and unwittingly saddled with a tenant who has security of tenure, as would be the case with an invalid notice under section 20 of the 1988 Act. One purpose of the subsection may be to alert tenants to the need to look for alternative accommodation, but another is to give the courts a clear and simple set of criteria which trigger their mandatory duty to order possession. The notice in this case was only one day out, but …. (counsel for the landlord’s) alternative submission would leave room for all sorts of arguments, uncertainty and inconsistency up and down the country on a matter about which there should be no doubt at all.”

So, on the basis that the statutory requirement was clear and specific, the ‘reasonable recipient’ test did not apply. Moreover it was not clear that a ‘reasonable recipient’ would realise that the date given was an error.

But then came Spencer v Taylor (2013) EWCA Civ 1600. Lord Lewison, albeit obiter, found that Fernandez was actually concerning a notice under s.21(1) HA 1988, not s.21(4)(a) and then

In order to see whether the notice complies with the statutory requirement, one must see what it does. In our case the notice refers to two dates, the fixed date and the date calculated by reference to the formula. They are clearly alternatives, as the word ‘or’ separating them makes clear, so they are at least capable of leading to different results. In the event that they do, which one prevails?

In my judgement, the reasonable recipient of this notice would look at the back of the form which contains the notes and they say that the notice must specify the last day of a period of the tenancy. She would know that she paid her rent on the Monday and she would be able to see from the calendar that 1 January 2012 was a Saturday. So it obviously was not the last day of a period of the tenancy. Conformably with Fernandez v McDonald, that mistake, if such it was, cannot be corrected. But that leads to the conclusion that that part of the notice does not do what the notes on the back say it must do. So that part of the notice cannot be effective. Since that alternative is ruled out as being ineffective, the other alternative must prevail.”

The present Court of Appeal’s approach to Spencer was that

It can be seen from what Lewison LJ said at (32) that he read Hale LJ’s judgment in the same way that I do, namely as holding that the reasonable recipient of the notice in that case would interpret “on 4 January 2003” as meaning just that. Where I respectfully differ from Lewison LJ, however, is in relation to his statement in (28) that “the landlord argued that the tenant would have understood that 4 January was a mistake for 3 January” and his statement in (30) that Fernandez v McDonald decided that “in the case of a s.21(4) notice the court cannot correct obvious mistakes even if satisfied that a reasonable recipient would have realised that a mistake had been made and had also realised what information the server of notice had tried to convey”. For the reasons explained above, I do not consider that the first statement accurately characterises the landlord’s argument or that the second statement accurately characterises what the Court decided.

In view of the authorities, the Court of Appeal concluded:

i) A statutory notice is to be interpreted in accordance with Mannai v Eagle, that is to say, as it would be understood by a reasonable recipient reading it in context.

ii) If a reasonable recipient would appreciate that the notice contained an error, for example as to date, and would appreciate what meaning the notice was intended to convey, then that is how the notice is to be interpreted.

iii) It remains necessary to consider whether, so interpreted, the notice complies with the relevant statutory requirements. This involves considering the purpose of those requirements.

iv) Even if a notice, properly interpreted, does not precisely comply with the statutory requirements, it may be possible to conclude that it is “substantially to the same effect” as a prescribed form if it nevertheless fulfils the statutory purpose. This is so even if the error relates to information inserted into or omitted from the form, and not to wording used instead of the prescribed language.

In addition, in this case, there had been covering letters which stated “Proceedings will not be issued before 26 November 2018 but will be issued within 12 months of service of the notice.” As per York v Casey (1999) 31 HLR 209 “such covering letters may be taken into account in determining how the reasonable recipient would interpret a statutory notice.”

Appeal allowed.

Comment

An error in a s.8 notice might not invalidate it, so long as:

a) the ‘reasonable recipient’ would understand what it meant in context (including the content of any covering letters).

b) Which means that the error would be understood as such and the intended meaning be reasonably understood.

c) But the notice must still meet statutory requirements, when the purpose of those requirements are considered.

d) A failure to meet the precise requirements of statute may be excusable if the notice is ‘substantially to the same effect’ and fulfils the statutory purpose.

At one level, this is a good and practical decision – a simple and obvious error on a date should not invalidate a notice, particularly when a covering letter makes the position very clear.

On the other hand, the rather general findings on ‘substantially the same effect’ and ‘meeting the statutory purpose’ open up a whole range of fact specific disputes as to validity. And in the context of a statutorily prescribed form for notice, this is not necessarily helpful to anyone, landlord or tenant.