Riverside Housing Association Ltd v White and Another
| Jurisdiction | England & Wales |
| Judge | SIR PETER GIBSON,Lady Justice Hallett,Sir Peter Gibson,Lord Justice Auld |
| Judgment Date | 06 December 2005 |
| Neutral Citation | [2005] EWCA Civ 1385 |
| Docket Number | Case No: B2/2004/1587 |
| Court | Court of Appeal (Civil Division) |
| Date | 06 December 2005 |
[2005] EWCA Civ 1385
Lord Justice Auld
Lady Justice Hallett and
Sir Peter Gibson
Case No: B2/2004/1587
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LIVERPOOL COUNTY COURT
H H JUDGE STEWART QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Jan Luba QC and Mr Adam Fullwood (instructed by Stephensons, St Helens) for the Appellant
Mr Andrew Arden QC and Mr Iain Colville (instructed by Bremners, Liverpool) for the Respondent
The Defendants appeal, and the Claimant seeks permission to cross-appeal, against parts of an order made by His Honour Judge Stewart QC in the St. Helen's County Court (sitting at Liverpool County Court) on 9 July 2004. The Judge thereby determined certain preliminary issues arising out of a claim to possession of a residential property owned by the Claimant subject to an assured tenancy held by the Defendants, the claim being based on arrears of rent. In resisting the claim to possession the Defendants challenged for the first time the validity of certain increases in the rent payable by the Defendants which, they claimed, were introduced in a manner not permitted by the tenancy agreement. If the Defendants are correct, the consequences for the Claimant, which had many other tenants from whom like rent increases have been demanded, may be very serious. The Defendants claim that four annual notices of rent increases are invalid and that the rent currently payable is that of which notice was given in 1999. Six separate arguments in favour of the validity of the rent increases were deployed before the Judge by the Claimant. Only one of them succeeded. The Defendants, with the permission of this court (Waller LJ), appeal against the Judge's decision on that argument and against the Judge's costs order, whereby he directed that the Defendants should pay an amount, to be determined by a District Judge, not to exceed two thirds of the full costs incurred by the Claimant on the preliminary issues. The Claimant seeks to uphold the Judge's order on the issue of the validity of the rent increases but on different or additional grounds, viz. the five other arguments which the Judge had rejected. It also seeks permission to appeal against the costs order.
The Facts
The Claimant, Riverside Housing Association Ltd. ("Riverside"), is a large registered social landlord and a charitable housing association with 20,000 tenants in all. It allows its tenants to participate in its decisions through a tenants' association, the Central Tenants' Association ("the CTA"), through a forum attended by tenants and its officers, the Tenant Participation Forum ("the TPF"), and through tenants being represented on its board of directors.
The Defendants are a married couple, Gary White and Ellen White ("the Whites"). Riverside first granted them a tenancy in 1996, but on 8 February 1999 they signed a revised form of assured tenancy agreement. That form of agreement is applicable to approximately 5,000 of Riverside's tenants.
The Whites' agreement states that the tenancy is a weekly assured non-shorthold tenancy for the purposes of the Housing Act 1988. By the agreement Riverside let 20 Brampton Court, St Helens to the Whites at the rent of £54.10 per week with a weekly service charge of £1.39. In Section 2, headed "Riverside's Duties", the grounds for possession contained in Sch. 2 to the Housing Act 1988 are summarised. They include, as a ground on which the court may order possession:
"Some rent lawfully due from the tenants –
(a) is unpaid on the date on which the proceedings are begun; and
(b) ….. was in arrears at the date of the service of the notice under [section 8 requiring the giving of notice of proceedings for possession] relating to those proceedings."
(Ground 10, Part II, Sch. 2 to the Housing Act 1988)
The following provisions of Section 2 of the tenancy agreement are particularly material:
"(6) Net Rent
Riverside may increase the rent by giving the tenant four (4) weeks notice in writing as set out in accordance with the provisions of this Agreement.
The notice will specify the net rent payable and any additional payment for the service charges, both of which may be varied each year in accordance with the provisions of this Agreement.
(7) Rent Variation Date
The rent payable will be increased annually with effect from the first Monday of June each year.
(This is known as the 'Rent Variation Date')
(8) Rent Formula
Riverside will calculate the annual increase in weekly rent by reference to the publication of 'The General Index of Retail Prices' and "The Index of Average Earnings' for the twelve (12) month period to the 31 st December immediately prior to the next rent variation date.
The increase in weekly rent will be whichever of the following two methods of calculation gives the highest weekly net rent. (This is known as the 'Rent Formula')
i) 2% increase above 'The General Index of Retail Prices'.
ii) 2% increase above 'The Index of Average Earnings'.
In this Agreement the indices i) and ii) above shall mean 'The General Index of Retail Prices' and 'The Index of Average Earnings' as published by Her Majesty's Stationery Office.
If either of the said indices in this Agreement are not published or the methods used to compile the said indices change after the date of this Agreement or if for any other reason whatsoever it is not possible to calculate the annual increase in rent by reference to either or both indices (the decision of Riverside shall be conclusive)) Riverside will stop using either or both indices to calculate the annual increase in rent under the terms of this rent formula.
Where Riverside stops using either or both indices the next rent payable from the next rent variation date (and successive rent variation dates until further notice by Riverside) will be Ten Percent (10%) above the previous weekly net rent.
(12) Changing this Agreement
i) With the exception of any changes in Rent or service charges, or as a result of Government Legislation, this Agreement may only be altered by the consent in writing of both the Tenant and Riverside, or under the procedure set out below.
a) Riverside will consult with an approved tenant consultation body (at present the Tenant Participation Forum) about the proposed variation.
b) Riverside will give that body notice in writing of the proposed change and its effect, and invite the Tenant Participation Forum to comment on it within a reasonable specified time.
c) Riverside will consider any comments made by the approved tenant consultation body before making its decision.
d) Riverside will then give individual tenants at least 4 weeks notice before the change takes place, together with information explaining the new terms and their effects."
In Section 6, headed "General Terms", para. (2) provides:
"(2) Rent Variation Date
In this Agreement the term 'Rent Variation Date' refers to the annual increase in rent which will occur each year on the first Monday in June with four (4) weeks prior notice."
Para. (6), headed "Variable Service Charge", provides that the service charge may be altered every 12 months to reflect the costs incurred or to be incurred in the provision of services each year to the homes which share them, but that Riverside will give four weeks' notice in writing before there is any change in the service charge.
Soon after the Whites entered into their tenancy agreement, Riverside gave notice of a rent increase to take effect from the first Monday in June 1999. Thereby the rent was increased to £56.21. That, the Whites say, was the last valid notice which they received of a rent increase.
The rents which Riverside demanded from its tenants were influenced by the limits suggested each year by the regulator of registered social landlords, the Housing Corporation, limiting the rent increases of such a landlord to a fixed percentage of all the rents. Riverside's assured tenancy rents were higher than secure tenancy rents of comparable properties. It wished to harmonise the rents for all its properties. To that end on 3 February 2000 the Riverside Board decided not to increase its assured tenancy rents in its financial year commencing 1 April 2000 but to increase the rents under other tenancies to bring them closer to the assured tenancy rents. Accordingly, Riverside gave no notice to assured tenants of any increase in their rents to take effect on the first Monday in June 2000.
Later in 2000 a Housing Green Paper was published. In it the suggestion was made that Housing Associations should be limited to increasing rents only by the inflation figure. Riverside estimated that if that suggestion were implemented, it would lose around £42 million over the next 10 years. It looked at what it could do. One possibility was to increase its total income in its then current financial year ending 31 March 2001 by changing the annual date of increase from the first Monday in June to 1 April. Riverside also wanted to change the date for increasing rents to the beginning of April so that the period for the increased income would accord with its financial year and so that its financial arrangements would be brought more into line with those of the Housing Corporation and the local authorities with which Riverside worked. Over 75% of Riverside's tenants receive housing benefit to help pay their rents and many of the local authorities assessed housing benefit twice a year on 1 April and 1 October.
Riverside's head of housing policy, Caroline Field, produced a report by way of "background information"...
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