England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LUTON COUNTY COURT
(HER HONOUR JUDGE DAVIES)

		Royal Courts of Justice Strand London WC2A 2LL
		6 February 2014

1. LORD JUSTICE FLOYD: This is an appeal brought with the permission of Lady Justice Arden from the judgment and order of Her Honour Judge Davies, sitting in the Luton County Court. By her order, Her Honour Judge Davies dismissed an appeal from the order of District Judge Falvey, dated 6 November 2012, by which he had refused to set aside a possession order made by another District Judge, District Judge Ayers, dated 18 September 2012.
2. The possession order arose out of an assured shorthold tenancy of a house at 41 Henley Road, Bedford between the owner, Mr Yousaf, and a tenant, Miss Masih. At the relevant time the rent was £560 per month, due on the 12th of each month. Mr Yousaf claimed that no rent was paid in February, March and April 2012. In May 2012 he accepted that he began receiving Miss Masih's Housing Benefit direct from the council but this was in the sum of £392-odd, thereby leaving a shortfall. Accordingly, on 26 April 2012 Mr Yousaf served a notice under section 8 of the Housing Act 1988 ("the Act") on Miss Masih, seeking possession on ground 8 in schedule 2 of the Act. Ground 8, which is one of the so-called mandatory grounds, reads:

"Both at the date of service of the notice under section 8 of this Act relating to the proceedings for possession and at the date of the hearing --

(b) If rent is payable monthly, at least two months' rent is unpaid. And for the purposes of this ground 'rent' means rent lawfully due from the tenant."

3. The section 8 notice served by Mr Yousaf read in material part as follows:

"Your landlord intends to seek possession on ground(s) 8 in schedule 2 to the Housing Act 1988 as amended by the Housing Act 1996, which read(s): that the tenant owed at least two months' rent both when the landlord served notice that he wanted possession and still owes two months' rent at the date of the court hearing."

4. Ground 8 does not of course "read" the way the section 8 notice is drafted, but it is settled law that the notice does not have to recite verbatim the statutory words of the ground, see Mountain v Hastings, 25 Housing Law Reports 427, discussed below. Under the part of the notice which required the landlord to give a full explanation of the ground relied on, the landlord said:

"The tenant owes £1,680 which represents three months' rent."

5. A claim form was issued seeking possession and came before the court on 3 July 2012 when directions were given for the claim to be amended and reserved. On 7 August 2012, both Mr Yousaf and Miss Masih attended the adjourned hearing. It was adjourned again to 18 September. The landlord was directed to serve a witness statement specifying the rent that he had received. Both parties again attended court on 18 September 2012. After some argument, District Judge Ayers made a mandatory possession order giving possession on 2 October 2012. On 22 October Miss Masih applied to the court to set the possession order aside and to stay the warrant. The grounds of that application included the ground that the notice seeking possession was not in proper form. I will call this the defective notice point.
6. District Judge Falvey heard the application to set aside the possession order on 6 November 2012. Judge Falvey thought that the notice did not comply with the statutory requirement although it appears from the transcript of the judgment that he came to that obiter view because he thought that mandatory grounds had to be set out verbatim. He was not referred to Mountain v Hastings. However, he concluded that he did not have a power to set aside a possession order made in the presence of both parties. He therefore refused to set the order aside but granted permission to appeal.
7. It was from this order of District Judge Falvey that the appeal came before Her Honour Judge Davies. She concluded that District Judge Falvey was correct that he had no power to set aside the possession order. Although it was not necessary for her to do so, in her judgment she also opined that she did not agree with District Judge Falvey about the defect in the possession notice. She held that it was in proper form, having been referred, unlike District Judge Falvey, to Mountain v Hastings, and the principles which should be applied. She said at paragraph 17 of the judgment:

"That purpose [that is to say the purpose of the notice] in my judgment is to give the tenant the information which the provision requires to be given in the notice, to enable the tenant to consider what she should do, with or without advice, to do that which is in her power and which will best protect her against the loss of her home. I am satisfied that the notice I have seen does really set out the substance of the ground and that District Judge Ayers was correct to work on the basis that a valid notice has been served."

8. In the course of oral argument before her, but without any written application, counsel for Miss Masih had asked the judge in the alternative to hear and allow an appeal from the possession order of District Judge Ayers. However, in discussion after judgment, the judge indicated that Miss Masih would have to make a formal application for permission to appeal out of time and so directed in her order.
9. Following the hearing before Her Honour Judge Davies, Miss Masih made two applications. The first was the application for permission to appeal to this court and the second was an application for permission to appeal out of time from the possession order made by District Judge Ayers. The former application came before Her Honour Judge Kay QC in the Luton County Court on 26 June 2013. Her Honour Judge Kay refused permission to appeal out of time on the papers, referring to the fact that Her Honour Judge Davies had considered, so far as the county court's jurisdiction is concerned, the issue of the efficacy of the notice seeking possession. The application for permission was not renewed orally.
10. There are three grounds of appeal attached to the appellant's notice against the judgment of Her Honour Judge Davies:

1. The judge erred in refusing to set aside the order of District Judge Falvey, in turn refusing to set aside the order of District Judge Ayers.

2. In deciding not to set aside that order the judge wrongly took account of her view that the notice seeking possession did not comply with section 8.2 of the Housing Act 1988 in that it did not properly specify the ground relied on.

3. Had the judge correctly held that the notice was defective she ought to have held that District Judge Falvey did have jurisdiction to set aside the possession order. Alternatively, should have allowed the appellant to amend her appellant's notice to include a substantive appeal against the order of possession.

11. It is no longer contended by Mr Carrott, who appeared on behalf of the appellant before us, that District Judge Falvey had jurisdiction to set aside the previous order made by District Judge Ayers. That concession is in my view quite plainly correctly made in the light of authorities including authorities in this court, including Lloyds Investment (Scandinavia) v Christen Ager-Nanssen [2003] EWHC, 174 (Ch), approved in Collier and Williams [2006] EWCA Civ 20. Roult v Northwest Strategic Health Authority [2009] EWCA Civ 444 and Thevarajah v Riordan and others [2014] EWCA Civ 14.
12. This is not a case where the defendant did not attend the hearing in which the possession order was made where the different principles explained in London Borough of Hackney v Findlay [2011] EWCA Civ 8 might apply depending on the facts. That must therefore be the end of any appeal from the order of District Judge Falvey.
13. The remaining substance of Miss Masih's appeal must therefore lie in an attack on the decision of Her Honour Judge Davies not to give Miss Masih permission to appeal the different and separate order of District Judge Ayers. Mr Carrott submitted for Miss Masih that the judge ought to have recognised that the defective notice point was arguable, given permission to appeal the order of District Judge Ayers and allowed the appeal. He submitted in essence that the judge had gone wrong in principle by making the order which he did effectively directing a formal application for permission.
14. Mr Carrott refers by way of example to the decision of His Honour Judge Cryan in Islington London Borough Council v Markland dated 13 July 2010. We have only seen a summary of that decision in the journal Legal Action Law and Practice. In that case the judge had granted a possession order, ignoring a defence which a litigant in person had put before him. The tenant applied to set aside the possession order before another judge but that judge held, no doubt applying the principles to which I have already referred, that he had no jurisdiction to set aside that order.
15. On appeal, His Honour Judge Cryan dismissed the appeal against the second judge's determination. However, he granted permission to appeal the possession order and ultimately allowed the appeal on the basis that the tenant had had no opportunity to present his defence. The procedure had been manifestly unfair and fatally flawed. Mr Carrott submits that this is how Her Honour Judge Davies ought to have proceeded in the present case. He adds that the course adopted by Her Honour Judge Davies, effectively deciding the defective notice point and then directing a separate application for permission to appeal, had led to unfairness because Her Honour Judge Kay was influenced to refuse permission based on the observations already made by Judge Davies.
16. Subject to one point which I will mention, I am unable to accept that the decision to direct a formal application for permission to appeal is open to challenge in this court as being wrong in principle. It was a case management decision of the kind with which this court has always been unwilling to interfere. It would be quite wrong for this court to lay down principles as to when county courts should direct separate permission applications and when if ever they should take steps to bring on an appeal from possession proceedings. Everything will depend on the circumstances of the particular case.
17. It could, however, be said as Mr Carrott submits that Judge Davies's view that the defective notice point was wrong underlay the exercise of her discretion. Had she thought that there was force in the point she might not have taken the course which she did and the point would then have had a fairer wind in due course before Her Honour Judge Kay. The defective notice point is that on which Arden J gave permission to appeal to this court, notwithstanding that this would be a second appeal. I therefore propose briefly to consider it.

Section 8 of the Act is in the following terms:

(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 F2 in accordance with subsections (4) to (4B) below; and

. . .

(5) The court may not exercise the power conferred by subsection (1)(b) above if the landlord seeks to recover possession on Ground 8 in Schedule 2 to this Act.

18. I have set out ground 8 and the section 8 notice served by Mr Yousaf earlier in this judgment. The complaint about the notice of the present case is that it did not include the words "rent means rent lawfully due from the tenant". In Mountain v Hastings, 35 HLR 7, the landlord had given a notice which purportedly summarised rather than set out verbatim the statutory (Inaudible) of the ground. For ground 8 he wrote, "At least three months' rent is unpaid". Later in the notice the landlord said:

"The monthly rent is £560. No payment has been received since November 2, 1991. The total arrears due payable amount to..."

And then a further sum is set out.

19. The Court of Appeal held that the grounds in schedule 2 of the Act may be validly specified in the notice in words different from the statutory language, provided that the words are adequate to achieve the legislative purpose of giving the tenant the information which the provision requires to be given in the notice to enable the tenant to consider what he should do and to do that which is in her power to put things right and to best protect her against the loss of her home.
20. Ralph Gibson LJ said that it was adequate to specify the ground in the notice in terms which set out all the necessary information, ie the substance of the ground. The notice was nonetheless held defective in that case because the notice did not include the requirement that the rent was unpaid at both the date of the service of the notice and the date of the hearing and that "rent" meant rent lawfully due.
21. The Court of Appeal rejected the submission that the notice in fact gave the information required for ground 8 because the notice in the defective form could give the impression that the ground was already established and that nothing could be done to rectify it. The notice in the present case firstly specified ground 8 and secondly specified that two months' rent was owing both at the date of the notice and at the date of the hearing. This is a significant distinction from the notice in Mountain v Hastings. The only point open to Miss Masih is the absence of the words "rent lawfully due".
22. Is a statement that "rent is owed" different in substance from a statement that rent is lawfully due? A statement that rent is unpaid is plainly not the same as a statement that rent is lawfully due. The party served with a notice stating that rent is unpaid would not appreciate that it would be open for him to say that although the rent is indeed unpaid, it was not lawfully due. Although it is true that in Mountain v Hastings the notice went on to state the total amount due and payable, this was still only in relation to what was due at the date of the notice. It did not contain the assertion that the amount was lawfully due or owed at the date of the hearing. Mountain v Hastings does not assist on the different question which arises here.
23. Mr Carrott submits that the words "lawfully due" do bring additional meaning. A notice merely stating that rent is owed is not sufficient to alert a tenant to the fact that she may have, for example, a counter claim based on the cost of repairs which the landlord should have carried out, which she might claim to set off against the rent. He also pointed out a further example where the landlord had failed to comply with the statutory duty to give the tenant particulars of his address, see section 48 of the Landlord and Tenant Act 1987, which prevents a landlord from recovering rent where he has failed to supply an address in England and Wales at which notices may be served on the landlord by the tenant.
24. It was particularly important here, submitted Mr Carrott, that the words "lawfully due" were present in the notice because Miss Masih disputed that the rent was due on the grounds that the rent had been waived by the landlord and on the ground that she was entitled to set off a sum by way of counter claim for repairs. He submitted further that a strict approach to the requirements of section 8 was essential in the case of mandatory grounds unlike discretionary grounds where a more liberal approach to notices might be applied.
25. I cannot accept those submissions. In contrast to a statement that rent is unpaid, a statement in a section 8 notice that the rent was owed in my judgment is sufficient notice to enable a recipient to appreciate that it would be an answer to the claim to show that the rent was not lawfully due, thus the recipient of a notice using the word "owe" is aware that he or she must find some basis for showing that the rent is not owed. Thus Miss Masih's defence of waiver is a defence that the rent is not owed. Miss Masih's desire to counter claim for repairs is, if she is right that she is able to set it off against the rent, equally a claim that the rent is not owed. Of course if she is wrong about the set-off then it is not an answer whether the notice is phrased with the word "owed" or "lawfully due". The same can be said of Mr Carrott's example based on section 48 of the Landlord and Tenant Act 1987. Although section 48(2) says that rent otherwise "due" shall be treated as not being due, the effect of it not being due is also that it is not owed.
26. In order for this submission to succeed, it would be necessary to find an example of a case where rent is owed but is not lawfully due. For my part I am unable to think of any such case and none has been suggested to us in argument.
27. So far as taking a more strict approach in the case of mandatory grounds is concerned, I would only observe that section 8(2) applies to all the grounds in schedule 2 of the Act. It would be an odd result to say the least if a different meaning was to be attached in the case of mandatory grounds than that to be attached in relation to discretionary grounds.
28. If follows that in my judgment Her Honour Judge Davies did not misdirect herself when she concluded that the notice was not defective. Her exercise of discretion to direct a formal application for permission to appeal is therefore beyond reproach, as was Her Honour Judge Kay's decision to refuse permission to appeal on that ground. Further, even if Her Honour Judge Davies had taken the course advocated by Mr Carrott of hearing and determining that appeal from the possession order, she should, on this point at least, have dismissed it.
29. I would add only one observation. As Ralph Gibson LJ pointed out in Mountain v Hastings:

"It is difficult to think of any good reason why a person given the task of settling a form of notice should choose to use words differently from those in which the Crown has stated in the schedule."

That is and remains sound advice.

30. While paying tribute to Mr Carrott's sustained and able advocacy I would nevertheless dismiss this appeal.
31. LORD JUSTICE DAVIS: I also would dismiss the appeal for reasons given by Floyd LJ. Given the circumstances, these proceedings should have been regarded as conclusively brought to an end once Judge Kay refused permission to appeal out of time from the order of District Judge Ayers. Given also the circumstances recounted by my Lord, there cannot be said to be any residual injustice as a result caused to Miss Masih.
32. LADY JUSTICE HALLETT: I too agree that the appeal should be dismissed for the reasons given by my Lord but I am indebted to you, Mr Carrott, for your submissions.