Livewest Homes Ltd (formerly Laverty Ltd) v Bamber

The Court of Appeal dismissed the tenant's appeal against an order that a possession claim brought by the landlord could proceed without the landlord having given six months' notice under section 21(1B) of the Housing Act 1988. The court held that the additional six‑month notice in s.21(1B) is directed to cases where a fixed term tenancy of at least two years expires by effluxion of time and is intended to give advance warning that the tenancy will not be renewed; it does not apply where the landlord has terminated a fixed term early by exercising a break clause during a probationary or starter period. The court also held that the phrase "term certain" in s.21(1A)(a) does not exclude a fixed term tenancy which contains a landlord's break clause. The Localism Act 2011 amendments to s.21 were therefore interpreted purposively so as to give effect to Parliament's objective without rendering the provisions inoperable.

Background and procedural history

The appellant, Ms Bamber, was a tenant under an assured shorthold tenancy containing a starter period and a landlord's break clause. Livewest, a private registered provider of social housing, served two months' notice pursuant to the break clause during the starter period and issued possession proceedings. The tenant challenged the notice as insufficient on the basis of s.21(1B) of the Housing Act 1988 which, as inserted by the Localism Act 2011, requires a landlord who is an RPSH to give at least six months' written notice in certain fixed term cases. At first instance a District Judge dismissed an earlier claim; a circuit judge gave a different decision on an earlier tenancy; for the 2017 tenancy HH Judge Mitchell and subsequently Dingmans J in the High Court ([2018] EWHC 2454 (QB)) held that s.21(1B) did not apply to a break clause exercised during a starter period. The tenant obtained permission to appeal to the Court of Appeal.

Nature of the claim and issues

• Nature of claim: possession proceedings brought by the landlord under s.21 HA 1988.
• Key issues: (i) whether s.21(1B) applies where a landlord exercises a contractual break clause during a fixed term (including during a starter period) or instead only where the fixed term expires by effluxion of time; (ii) whether the word "is" in s.21(1A)(a) should be read as referring to the nature of the tenancy at grant rather than the date of the possession hearing; and (iii) whether the phrase "term certain" excludes fixed term tenancies which are susceptible to early termination by a break clause.

Reasoning

The court examined statutory language, parliamentary material and comparable provisions concerning flexible tenancies in the Housing Act 1985. The Ministerial statements and the 2012 Tenancy Standard showed the purpose of the six‑month requirement was to give tenants approaching the end of a two‑year (or longer) fixed term time and assistance to re‑house. That purpose sensibly applies to expiry by effluxion of time but not to a landlord's early exercise of a break clause during a starter period, where the shorter break‑notice itself conveys the landlord's decision. A literal reading of "is" as requiring the tenancy still to be a fixed term at the hearing would make the provisions inoperable; purposive construction supported reading s.21(1B) as applying to the kind of fixed term described in s.21(1A) when it expires by effluxion of time. On "term certain" the court confirmed established authority that a term expressed to end at a particular date is a term certain even if liable to earlier determination by forfeiture or a break clause.

Subsidiary points and observations

• The court acknowledged but left open the consequential question whether a landlord who had failed to serve a timely s.21(1B) notice could cure that defect by late service; full argument was not heard on that point.
• The court rejected constructions that would render the six‑month notice either meaningless or inoperable and adopted an interpretation consistent with Parliamentary purpose.

Appeal dismissed. The court held that ss.21(1A) and (1B) of the Housing Act 1988 must be read so that the six‑month notice in s.21(1B) is directed to fixed term tenancies of two years or more when the fixed term is to expire by effluxion of time; it does not apply where the landlord has determined the fixed term by exercising a contractual break clause during a starter/probationary period. The phrase "term certain" includes a fixed term tenancy subject to a break clause.

District Judge: possession claim dismissed (date not specified in judgment); Circuit Judge (HH Judge Cotter QC) allowed landlord's appeal on an earlier tenancy (judgment 25 August 2016); parties compromised before a pending Court of Appeal hearing and a new tenancy was granted; County Court (HH Judge Mitchell) held that s.21(1B) did not apply to a break clause notice; appeal to the High Court (Dingmans J) dismissed ([2018] EWHC 2454 (QB)); permission to appeal to the Court of Appeal (Asplin LJ) and appeal dismissed by the Court of Appeal ([2019] EWCA Civ 1174).