26/04/2020

Not signed, not sealed, not delivered

Ratcliffe & Ratcliffe v Patterson & Porter. County Court at Luton, 17 March 2020 (Unreported elsewhere, we’ve seen an unofficial note of judgment. Grateful thanks to Clare Cullen of Field Court Chambers)

A first instance county court judgment on a possession claim, but with a range of interesting issues. The Ratcliffes were the landlords, Ms Patterson was the tenant and Mr Porter a guarantor, who played no part in proceedings. The tenancy was an assured shorthold tenancy with the most recent fixed term beginning in June 2018. Rent arrears accrued (on which more later) and the Ratcliffes brought a claim for possession under grounds 8, 10 and 11 Schedule 2 Housing Act 1988.

Ms P defended on and counterclaimed for disrepair and for breach of tenancy deposit requirements. Ms P also argued that the notice seeking possession was invalid and the possession claim was in breach of Equality Act 2010.

Validity of Section 8 Notice

Ms P argued that the notice seeking possession was invalid because:

a) A section 8 notice was a demand for rent within the meaning of s.47 Landlord and Tenant Act 1987 and therefore must include the name and address of the landlord and s.47(1).

b) The notice was signed by the landlords’ agents, your-move.co.uk Limited, but it was not signed in compliance with section 44 Companies Act 2006 which meant it was invalid as it was for a ‘formal legal purpose’.

The s.47 point was decided against Ms P. The court was prepared to accept that a section 8 notice was a demand for rent (citing C Y Property Mangement Ltd v Babalola. County Court at Central London, 24 January 2019 – our note – but apparently not having been taken to Lakhany v Prempeh, County Court at Central London, 16 December 2019, in the same note, which decided the opposite), however it didn’t follow that s.47 meant the notice was invalid for possession proceedings. The sanction for failing to comply with s.47(1) was as per s.47(2), that service or administration charges were not due. There was nothing about rent not being due, which was a sanction for breach of s.48. For this reason, a failure to comply with s.47 did not render a s.8 notice invlaid.

However, the Companies Act s.44 point was decided for Ms P by the Deputy District Judge. With reference to Bali v Manaquel Company Limited, County Court at Central London (HHJ Hand QC), 15th April 2016 (our note), the question was whether a section 8 notice was a document that must a) be signed by a corporate landlord (or corporate agent) and b) is required for some ‘formal legal purpose’.

A section 8 notice is in prescribed form and states that the signature of a landlord or licensor, or their agent, is required. It is also a document required for a formal legal purpose, as a step which much be taken before possession proceedings can be commenced. It is not just informative for the tenant but has serious legal consequences.

In the present case, the section 8 notice was signed by the landlords agent, but only one signature was present, rather that of two directors, or director’s signature and that of attesting witness. The section 8 notice was therefore not valid.

It was open to the court to dispense with notice, except for ground 8. Notice was dispensed with, as what had been served had provided the relevant information, but only in respect of grounds 10 and 11. Ground 8 could not be relied upon.

Deposit counterclaim

Ms P argued that she had not been given the prescribed information, as nothing she had been given had been signed by the landlord as per para 1(g)(vii) of article 2 of the Housing (Tenancy Deposits) (Prescribed Information) Order 2007.

None of the various documents put forward as being the prescribed information met that requirement, being either unsigned or signed only by an employee of the agents.

As well as the initial tenancy, there were breaches on a statutory periodic tenancy arising in June 2015 (as per Superstrike), and on the latest tenancy commencing in June 2018.

The deposit was £950. The minimum amount was awarded for each breach as the failures were formal not substantial, and the deposit had been protected. Total £2850.

Disrepair counterclaim

The single joint expert report identified:

Cracked and holed plaster
Defective toilet flush
Broken light fitting
Leaking bath
Leaking boiler
Failure to repair flooring in bathroom and toilet

The landlords claimed they had repaired everything of which they had been informed.

No damages were awarded for the plaster as the small cracks and rawlplug holes were de minimis.
No damages on the toilet flush as no evidence was found by the SJE and no historic evidence of this issue
The broken light fitting – while there was no evidence to support the tenant’s claim that it had been reported to the agents a few years ago and subsequently, it would be extraordinary for the tenant not to report something so risky. Damages awarded for two years at 10% of rent – £1920
The bath leak – the expert saw evidence of an historic leak, which supported the tenant’s claim it had leaked over a period of 5 years but was fairly minor. Damages at 3% of rent for 60 months – £1440
Boiler leak – the expert saw evidence of leaking. One year of damages awarded, but minor issue, so 2% of rent – £192
No damages awarded for the bathroom and toilet flooring. The covering was removed and not replaced but the expert found the floorboards to be entirely sound and adequate. There was no obligation to replace the covering as it was not part of the structure of the building.

Total disrepair damages £3552, plus the 10% Simon v Casle uplift – £3907.20
Specific performance ordered on the repairs.

Disability Discrimination

Ms P defended and counterclaimed for discrimination under section 15 Equality Act 2010:

(1) A person (A) discriminates against a disabled person (B) if—

(a) A treats B unfavourably because of something arising in consequence of B’s disability, and

(b) A cannot show that the treatment is a proportionate means of achieving a legitimate aim.

(2) Subsection (1) does not apply if A shows that A did not know, and could not reasonably have been expected to know, that B had the disability.

Ms P had medical evidence of her suffering a large number of health problems. The landlords accepted that she was disabled for the purposes of s.6 Equality Act.

Ms P’s medical evidence supported the argument that her rent arrears arose in consequence of her disability, both in terms of initial sick leave and then her ability to manage financial matters, due to inability to work, dealing with constant health-related crises, difficulty with concentration, poor an interrupted sleep and cognitive deficits. The court accepted that on the balance of probabilities  the arrears were in consequence of the disability.

The possession proceedings brought because of those arrears amounted to unfavourable treatment.

Following A Ltd v Z (2019) UKEAT 0273_18_2803, it was for the landlords to show that it was unreasonable for them to be expected to know that Ms P suffered an impediment to her physical or mental health and that it had a substantial and long term effect. The landlords need not have actual or constructive knowledge of the causal link.

The landlords had known of Ms P’s mobility difficulties in 2018 as they had agreed to social services’ request to install handrails at the property. Ms P had also informed the agents of a long stay in hospital and ongoing health issues in January 2019. The Court fond that the landlords either knew or could be reasonably expected to know that Ms P had the disability which caused her to fall into arrears.

This left the issue of whether the possession proceedings were a proportionate means of achieving a legitimate aim. Following Akerman-Livingstone v Aster Communities Ltd (2015) UKSC 15:

The objective – to restart an income stream from the property – was sufficiently important to justify limiting a fundamental right.

The possession claim was rationally connected to the objective.

However, the means chosen are more than was necessary. The landlords should have requested direct payment of the housing element of Universal credit, and should have sought a meeting with the tenant to discuss bringing the rent account back into order. Proceedings at the earliest opportunity to possession proceedings on the mandatory ground was disproportionate without having taken those steps. Alternatively possession proceeding could have been commenced on the discretionary grounds only. This would not have been disproportionate as it would allow the court to exercise its discretion as appropriate.

The possession proceedings on ground 8 failed on this ground too.

Ms P had counterclaimed for compensation for injured feelings for the discrimination. There was no evidence that the discrimination was deliberate, and it was only the inclusion of the mandatory ground that was disproportionate. However the threat to Ms P’s home had caused significant stress, which the mandatory ground could only have made worse. Damages at the less serious end of the Vento guidelines of £2000, plus Simmons v Castle uplift of 10% totalling £2200.

Possession claim

On the possession claim on grounds 10 and 11, the rent arrears as of 20 January 2020 was £8017.98. The total counterclaim was £8957.20, so the arrears were wholly set off with £939.22 payable to Ms P by the landlords.

It would be unreasonable to make a possession order. If there were any arrears remaining they were not significant. The rent could be recovered directly from Universal Credit and Ms P had a standing order in place for the remainder. There had been a long history of timely rent payments before the recent arrears

 

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

12 Comments

  1. Ben Reeve-Lewis

    I’m confused “It was open to the court to dispense with notice, except for ground 8. Notice was dispensed with, as what had been served had provided the relevant information, but only in respect of grounds 10 and 11. Ground 8 could not be relied upon”

    I thought if a notice was invalid it all stopped there but this seems to suggest its only relevant for mandatory grounds? The notice is still ok for discretionary?

    Reply
    • Giles Peaker

      The court has the power to dispense with the requirement for notice, but not for ground 8.

      Reply
  2. Loda

    First time I ever heard of a deposit claim succeeding on the basis of the landlord not having signed the PI. Good to see it actually worked, even though the court said it wasn’t a substantial breach.

    Reply
    • Giles Peaker

      Bali v Manaquel is (non-binding) precedent for the prescribed info requiring signature, although a possession claim.

      Reply
  3. Ben Reeve-Lewis

    Perfect, thanks

    Reply
  4. Luke Ridge

    I’ve been summarily rebuffed on many of these points at first appearance possession proceedings. I’ve argued at length on the executed by deed point for the Section 8 notice when signed by agenty to no avail. Hoping for binding precedent on that point. I’m surprised more letting agents aren’t getting Directors signatures on notices as a matter of course.

    Reply
  5. Olivia Crowther

    How did an EA 2010 defence work where there was a private landlord??

    Reply
    • Giles Peaker

      Because it applies to private landlords…. The PSED doesn’t, but the discrimination sections certainly do.

      Reply
      • Olivia Crowther

        Thanks for this. I’ll have to research the nuances, because I remember a higher court case dealing with the issue of EA 2010 and private tenancies…

        Reply
        • Giles Peaker

          See para 24 of Akerman-Livingstone in the Supreme Court 2015 – https://www.bailii.org/uk/cases/UKSC/2015/15.html

          “The first and most obvious difference between article 8 and the Equality Act is that section 35 of the Equality Act applies to both private and public sector landlords, whereas only public authorities are obliged by section 6(1) of the Human Rights Act 1998 to act compatibly with the Convention rights. (It has been assumed for the purpose of this case that social landlords providing accommodation to enable local authorities to fulfil their duties towards the homeless are public authorities.) Thus no landlord, public or private can adopt a discriminatory policy towards eviction, for example, by evicting a black person where they would not evict a white. Thus also no landlord, public or private, can evict a disabled tenant “because of something arising in consequence of [his] disability” unless the landlord can show that this is a proportionate means of achieving a legitimate aim.”

  6. Michael Barnes

    This appears to give disabled tenants carte blanche not to pay their rent.

    Is not letting to disabled person in the first place also not allowed?

    Reply
    • Giles Peaker

      No, it isn’t giving carte blanche. Do try reading again.

      Reply

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