Saxon Weald Homes Ltd v Chadwick

A notice under paragraph 2 of Schedule 2A to the Housing Act 1988 takes effect according to its objective meaning. A clear written notification that a tenant is now an assured tenant sufficiently states that the tenancy is no longer an assured shorthold tenancy.

A prior possession notice which prevents contractual automatic conversion does not negate the statutory effect of a later, separately sent and unambiguous notice. The validity of a notice depends on what a reasonable recipient would understand. Background may clarify an ambiguity within a notice or documents served together, but it cannot make an otherwise clear notice ambiguous by importing an earlier declaration or extraneous material.

The landlord granted the tenant a probationary periodic assured shorthold tenancy. The agreement provided for conversion after 12 months unless the landlord had begun possession proceedings or served a notice requiring possession.

Shortly before the anniversary, the landlord served a section 21 notice and, alternatively, a notice seeking possession for alleged breaches. On the anniversary, a housing assistant sent a standard letter stating that the tenant had completed the starter tenancy and was now an assured tenant.

A Deputy District Judge held that the later letter had been sent in error and had no effect, and made an outright possession order. Judge Simpkiss, in Brighton County Court, allowed the tenant's appeal on 28 January 2011. He held that the letter was a notice under paragraph 2 of Schedule 2A to the Housing Act 1988. The landlord appealed that ruling.

Decision

1. The Court of Appeal unanimously dismissed the landlord's appeal. Davis LJ held, with whom Dame Janet Smith DBE and Mummery LJ agreed, that the letter of 11 August 2009 converted the tenancy into an assured tenancy.

2. The earlier notice requiring possession had prevented the tenancy from automatically converting under the parties' agreement. It did not prevent the later letter from operating as a statutory notice under paragraph 2 of Schedule 2A to the Housing Act 1988. Read naturally and objectively, the letter clearly informed the tenant that he was now an assured tenant. Its statement of the rights thereby acquired confirmed that meaning.

3. The objective approach to notices, endorsed in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1999] AC 749, did not assist the landlord. A tenant is not ordinarily expected to investigate a landlord's reasons for sending an otherwise unambiguous notice. The relevant error was not in the letter's wording but in its being sent at all. A prior statement of intention cannot, as an interpretative matter, defeat the clear terms of a subsequent written notice.

4. Barclays Bank plc v Bee [2001] EWCA Civ 1126 was distinguishable. In that case, conflicting documents were sent together and had to be read as a package. Here, the clear conversion letter was sent later and separately. The court applied the principle noted in Bee that an ostensibly valid notice cannot be invalidated by extraneous material.

5. The court left open the separate question whether the tenancy agreement alone could have produced automatic conversion under paragraph 3 of Schedule 2A. It was unnecessary to decide it because the paragraph 2 notice was effective. The unchallenged remittal of the alternative breach-based possession claim remained unaffected.

• Court of Appeal (Civil Division) — dismissed the landlord's appeal and upheld the conclusion that the tenancy had become assured.

• Brighton County Court — Judge Simpkiss allowed the tenant's appeal on 28 January 2011, holding that the 11 August 2009 letter was a paragraph 2 Schedule 2A notice. He remitted the alternative breach-based possession claim for reconsideration.

• Horsham County Court — a Deputy District Judge held that the letter had been sent in error and was ineffective, and made an outright possession order.