Berrisford (FC) v Mexfield Housing Co-operative Limited

The Supreme Court allowed the appeal and held that the written "Occupancy Agreement" granted to Ms Berrisford could not be treated as determinable by Mexfield simply by service of a month’s notice. Applying ordinary principles of contractual construction, clauses 1, 5 and 6 restricted the means of determination to those provided in the Agreement. Although an agreement for an uncertain term cannot take effect as a term of years at common law, longstanding common-law rules treated such uncertain grants as tenancies for the life of the individual grantee. Section 149(6) of the Law of Property Act 1925 converts such a life tenancy into a legal term of 90 years determinable on the tenant’s death, subject to any contractual rights of earlier determination. Accordingly, Ms Berrisford’s occupation subsisted and Mexfield was not entitled to possession by simple notice to quit.

Background and parties: Mexfield Housing Co-operative, a fully mutual housing co-operative, purchased 17 Elton Avenue and granted an "Occupancy Agreement" to Ms Ruza Berrisford on 13 December 1993. The Agreement stated the letting was "from month to month until determined as provided in this Agreement" and contained clause 5 (tenant may determine by one month’s written notice) and clause 6 (landlord may re-enter only on specified grounds).

Procedural history: His Honour Judge Mitchell refused summary judgment for possession. On appeal Peter Smith J and the Court of Appeal ([2010] EWCA Civ 811) accepted Mexfield’s contention that the arrangement did not create a protected tenancy; Mexfield sought possession by notice to quit. The case reached the Supreme Court ([2011] UKSC 52).

Nature of the claim / relief sought: Mexfield sought possession of the premises relying on the argument that the Agreement either did not create a valid tenancy or, alternatively, created a periodic tenancy terminable by notice; Mexfield relied on common-law authorities culminating in Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386.

Issues framed:

1. Whether, as a matter of contractual construction, Mexfield could determine the Agreement by giving one month’s notice.
2. Whether an arrangement limited to determination only by the methods stated in the Agreement could be a tenancy as a matter of law.
3. If not, whether historic common-law treatment and section 149(6) of the Law of Property Act 1925 converted the arrangement into a 90-year term determinable on death.

Court’s reasoning: The Court first construed the Agreement and concluded that the parties had agreed that the Agreement could be terminated only under clauses 5 or 6. The Court then reviewed the long-standing rule that contracts for uncertain terms cannot create a term of years, and the related line of authorities dealing with fetters on notices to quit. The Court accepted the continuing validity of the certainty requirement but explained that, historically, uncertain grants to individuals were treated as tenancies for life. Section 149(6) of the 1925 Act converts such a life tenancy into a legal term of 90 years determinable on the tenant’s death. Applying that rule, the Agreement therefore gave rise to a tenancy for 90 years determinable on death, and Mexfield had no right to possession by simple month’s notice. The Court observed the incongruity of the rule and the potential desirability of reform but declined to change the rule itself.

Ancillary observations: The Court noted alternative contractual remedies and discussed differences with Scots law and with housing registration regimes for mutual housing associations; these observations bear on wider implications but did not affect the result.

Appeal allowed. The Supreme Court held that the Occupancy Agreement, properly construed, could only be determined under its clause 5 or clause 6 provisions; although agreements for uncertain terms cannot create a term of years, longstanding common-law rules treated such uncertain grants to individuals as tenancies for life and section 149(6) of the Law of Property Act 1925 converts that into a 90-year term determinable on death. Therefore Mexfield was not entitled to possession by serving a notice to quit.

First instance: His Honour Judge Mitchell (County Court) refused summary judgment. High Court (Chancery), Peter Smith J ([2009] EWHC 2392 (Ch)) — decision adverse to the appellant. Court of Appeal, [2010] EWCA Civ 811 — order for possession made against Ms Berrisford. Appeal to the Supreme Court allowed ([2011] UKSC 52).