Northwood Solihull Ltd v Darren Fearn
| Jurisdiction | England & Wales |
| Judge | Mr Justice Saini |
| Judgment Date | 21 December 2020 |
| Neutral Citation | [2020] EWHC 3538 (QB) |
| Court | Queen's Bench Division |
| Date | 21 December 2020 |
| Docket Number | Claim No: D3PP2043 |
[2020] EWHC 3538 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE COUNTY COURT AT BIRMINGHAM
ORDER OF HIS HONOUR JUDGE WILLIAMS
DATED 14 JANUARY 2020
Birmingham Appeal Centre
Priory Courts, 33 Bull Street
Birmingham B4 6DS
THE HONOURABLE Mr Justice Saini
Claim No: D3PP2043
Appeal Ref: BM00014A
and
and
James Byrne (instructed by The Community Law Partnership) for the Second Appellant
James Browne (instructed by Dutton Gregory LLP) for the Respondent
Hearing date: 8 December 2020
This judgment is in 6 main parts as follows:
I. Overview: paras. [1–8]
I. Overview
This appeal concerns the question whether company law relating to execution of documents applies to certain statutory notices served by a corporate landlord upon its tenants in possession proceedings.
More specifically, the issue on appeal is the nature of the formal requirements for service of a notice by a limited company landlord seeking possession of residential premises under section 8 of the Housing Act 1988 (“the 1988 Act”). Must such a notice be “executed” by the company in accordance with section 44 of the Companies Act 2006 (“the CA 2006”), as a condition of validity under the 1988 Act?
In summary, section 44 of the CA 2006, requires two authorised signatories or a director to sign in the presence of a witness when a company executes a document. The notice in issue in this appeal was not executed in this way, but was merely signed by the corporate landlord's property manager, who was not a director. I will call this “the Section 8 Issue”.
The separate, but related, issue which arises on the application for permission to cross appeal, is whether a confirmatory certificate signed by a corporate landlord under The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 SI 2007/79, also has to be executed in accordance with section 44 of the CA 2006, as a condition of validity. The certificate in this case was not so executed. It was only signed by a single director of the landlord company. I will call this the Confirmatory Certificate Issue.
For reasons given in a detailed judgment dated 14 January 2020, HHJ Williams (“the Judge”) sitting in the County Court at Birmingham, held in the landlord's favour on the Section 8 Issue, but in the tenants' favour on the Confirmatory Certificate Issue. In other words, he held section 44 of the CA 2006 did not apply to a notice seeking possession but did apply to a confirmatory certificate. The former was accordingly valid, and the latter was invalid.
By a consequential order dated 14 January 2020 (“the Order”), the Judge made an order for possession and awarded the tenants certain sums by way of a penalty for breach of section 214(4) of the Housing Act 2004 (in respect of the failure by the landlord to provide them with a confirmatory certificate), such sums to be set off against rent arrears.
Both aspects of this Order are appealed. The Second Appellant (“the tenant”) argues in her appeal that the Judge was wrong in law on the Section 8 Issue, but right on the Confirmatory Certificate Issue. The landlord says the opposite: the Judge was right in law on the Section 8 Issue but wrong on the Confirmatory Certificate Issue (and therefore the financial penalty falls away). By way of a Respondent's Notice, the landlord also seeks possession on alternative grounds, if they fail in relation to the Section 8 Issue.
The order for possession has been stayed pending this appeal. The First Appellant (a former tenant) has taken no part in this appeal. The Third Defendant below (the tenants' guarantor) did not participate in the proceedings at any stage.
II. The Facts
The Order appealed from was made in a claim for possession of a residential property as 48 Gilliver Road, Shirley, West Midlands, B90 2DB (“the Property”). The Property was let by the Respondent (“the landlord”) to the First and Second Appellants (“the tenants”) under an Assured Shorthold Tenancy dated 25 July 2014 (“the Lease”).
The Lease provided for: (i) a term of twelve months from and including 6 August 2014; (ii) rent of £695 per calendar month payable in advance on the sixth day of the month; (iii) a deposit of £1,025 (“the Deposit”) to be protected with the government approved Tenancy Deposit Protection Scheme (“the Scheme”), as detailed in Appendix A to the Lease.
It was common ground before the Judge that the tenants paid the Deposit on or around 25 July 2014, which in turn was protected under the Scheme. A Confirmatory Certificate under the 2007 Order was served on the tenants on 25 July 2014.
Following non-payment of rent, the landlord served a notice on the tenants seeking possession on 27 March 2017 (“the Notice”). At that time arrears of rent amounted to £3,533.46. I was informed at the hearing that arrears currently stand at £2,425.00 (and net of the Counterclaim the sum due is £375.00).
On 11 April 2017, the landlord issued the claim for possession, which was based upon alleged arrears of rent and made pursuant to Grounds 8, 10 and 11 of Schedule 2 of the 1988 Act (explained below).
The tenants opposed the making of a possession order, primarily on the basis that the County Court lacked jurisdiction to make such an order because the Notice was defective.
In addition, they made a Counterclaim for payment of penalties as a result of the landlord's alleged failure to comply with the requirements to provide the tenants with a valid certificate confirming the accuracy of any such information.
III. The Section 8 Issue
Section 7 of the 1988 Act provides that a court may not make an order for possession of a property let on an assured tenancy, save on one or more of the grounds set out in Schedule 2 to the 1988 Act.
Part 1 of Schedule 2 contains “mandatory” grounds where the court must make an order for possession if the ground is proven to apply. As explained above, Ground 8 was relied upon by the landlord and was held by the Judge to have been made out.
Part 2 of Schedule 2 contains “discretionary” grounds. In such cases a landlord must not only prove that the ground applies to the facts of the case but must also persuade the court that it is reasonable to order possession.
In the present case the landlord relied upon discretionary Grounds 10 and 11. The Judge did not decide that issue because he found that the landlord was entitled to possession on the (mandatory) Ground 8 basis.
Section 8 of the 1988 Act provides for a notice seeking possession to be served by the landlord before issuing possession proceedings.
A number of requirements are set out, but the requirement most relevant to the appeal is at section 8(3) which requires the notice to be “in the prescribed form”.
The material parts of Section 8 are as follows (with my underlined emphasis):
“8 Notice of proceedings for possession.
(1) The court shall not entertain proceedings for possession of a dwelling-house let on an assured tenancy unless—
(a) the landlord or, in the case of joint landlords, at least one of them has served on the tenant a notice in accordance with this section and the proceedings are begun within the time limits stated in the notice in accordance with subsections (3) to (4B) below; or
(b) the court considers it just and equitable to dispense with the requirement of such a notice.
(2) The court shall not make an order for possession on any of the grounds in Schedule 2 to this Act unless that ground and particulars of it are specified in the notice under this section; but the grounds specified in such a notice may be altered or added to with the leave of the court.
(3) A notice under this section is one in the prescribed form informing the tenant that—
(a) the landlord intends to begin proceedings for possession of the dwelling-house on one or more of the grounds specified in the notice; and
(b) those proceedings will not begin earlier than a date specified in the notice in accordance with subsections (3A) to (4B) below; and
(c) those proceedings will not begin later than twelve months from the date of service of the notice.
…”
It will be noted that by section 8(1)(b), the court has the power to dispense with a notice seeking possession if it considers it “just and equitable” to do so.
However, by Section 8(5) the court may not dispense with a notice seeking possession in connection with Ground 8. Accordingly, a defective notice seeking possession is fatal to a possession claim brought under Ground 8 but may be dispensed with under Grounds 10 and 11.
In its Reply the landlord invited the court to dispense with the notice seeking possession in the event that the Notice relied upon was held to be invalid.
The Regulations
The Assured Tenancies and Agricultural Occupancies (Forms) (England) (Amendment No. 2) Regulations 2016 SI 2016/1118 (“the Regulations”) provide that a landlord wishing to serve a notice pursuant to section 8 of the 1988 Act must use Form 3 in the schedule to those regulations, or (paragraph 2) “a form substantially to the same effect”.
Form No. 3 in the Regulations provides at section 6 a signature clause, which is in the following terms:
“6 Name and address of landlord/licensor:
To be signed and dated by the landlord or licensor or the landlord's or licensor's agent (someone acting for him). If there are joint landlords each landlord or the agent must sign unless one signs on...
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Northwood (Solihull) Ltd v Vicky Cooke
...required by section 44; but that the second was valid although it had only been signed by the landlord's agent. His judgment is at [2020] EWHC 3538 (QB), [2021] 1 WLR 3 The tenant appeals against the second of these conclusions; and the landlord cross-appeals against the first. The judge ......