Leeds City Council v Broadley

A tenancy agreement may create a single tenancy comprising an initial fixed period followed by a periodic period. Such a tenancy is not invalid for uncertainty merely because its term has those successive characteristics. The uncertainty rule is directed to a term whose duration depends on an event that may never occur, leaving the parties unable to determine when the tenancy will end. A contractual term of six months followed by a monthly continuation can therefore constitute a material interest for council tax purposes under the Local Government Finance Act 1992.

This was a statutory appeal on a question of law under regulation 43 of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009. The Valuation Tribunal had decided that standard tenancy agreements used by the defendant created a single tenancy for an initial term of six or twelve months, thereafter continuing monthly.

The tenants had left the properties during the disputed periods. The central issue was whether the agreements created a leasehold interest granted for a term of six months or more, so that the defendant remained outside the statutory definition of owner liable for council tax.

1. The appeal was dismissed. The Tribunal had correctly held that the agreements created a single tenancy whose term consisted of an initial fixed period followed by a monthly continuation.
2. The agreement had to be construed as a written contract, giving effect to the intention apparent from the document and its relevant background. Its express intention was to create one assured shorthold tenancy under the Housing Act 1988.
3. The uncertainty rule, as preserved and stated in Mexfield Housing Co-Operative Ltd v Berrisford [2011] UKSC 52, invalidated a tenancy only where a party was prevented from determining it except on the occurrence of an event which might never happen. The rule was not to be extended merely because the agreement used a modern contractual structure.
4. The agreement was not perpetual. Its termination depended on notice under the agreement, and both a fixed term and a periodic tenancy were recognised forms of term capable of being created under the Law of Property Act 1925. There was no principled basis for treating a single term with both characteristics as uncertain when the alternative constructions proposed by the claimant would have the same practical and legal effect.
5. Accordingly, the tenancy was not void for uncertainty and constituted a material interest for the purposes of section 6 of the Local Government Finance Act 1992. The Tribunal’s decisions stood.

The judgment does not state any further appellate history. This court dismissed the statutory appeal from the decision of the Vice President of the Valuation Tribunal for England dated 27 January 2016.