Saxon Weald Homes Limited v Dayne Chadwick – There but for the grace of god…

Why social landlords need to make sure that all of their staff are kept in the loop...

The Court of Appeal held last week that a letter from a landlord’s housing assistant to a tenant telling him that his probationary assured shorthold tenancy (AST) had successfully converted into an assured tenancy (AT) was sufficient notice under the Housing Act 1988 for that purpose.  This was despite the fact that only a week before the letter was sent the landlord’s solicitors had served a NOSP and NRP on the tenant, telling him that his tenancy hadn’t converted.

Facts of the case

On 11 August 2008 Saxon Weald Homes Limited (S) granted Dayne Chadwick (C) a probationary tenancy in the form of an AST.  The main terms of this agreement were:

• for the first 12 months it would be an AST
• if at the end of 12 months S hadn’t taken steps to terminate the tenancy (e.g. by serving a NOSP or NRP), it would  automatically convert into an AT
• if steps were taken to terminate the tenancy the tenancy would continue as an AST until S recovered possession; and
• if the tenancy converted to an AT then S would write to C informing him of the change.

Shortly after the tenancy started S received complaints from other tenants in the block of flats about C’s anti-social behaviour.  Despite meeting C and sending him warning letters his behaviour didn’t improve and on 7 August 2009 S’s solicitors served a NOSP and an NRP on him. The letter accompanying the notices stated that as notices had been served, C would remain at the property as an assured shorthold tenant under his AST.

However, on 11 August 2009 S’s housing assistant, who was unaware of the service of the notices, wrote to C telling him that he had successfully completed his probationary period and that he was now an assured tenant of the property. S carried on with a possession claim against C, arguing that the 11 August letter was just a routine letter, sent in ignorance of the notices, and that S was therefore still an assured shorthold tenant.

The appeals

At the first County Court hearing the Deputy District Judge accepted S’s argument.  He found that C’s tenancy had not converted to an AT and therefore S was entitled to an order for possession.  C appealed.

On appeal, the judge overturned the Count Court decision and found that the 11 August letter was a sufficient notice, that the tenancy had converted and therefore C was now an assured tenant.  S appealed to the Court of Appeal.

At the Court of Appeal S argued that the judge had failed to take into account the context and background in which the 11 August letter had been sent.  S relied on the case of Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd (1997) and argued that the “reasonable recipient” of the 11 August letter would have been in some doubt as to what that letter meant to convey and it couldn’t have therefore operated as a notice under the Housing Act. If that was right C’s tenancy would not have converted from an AST to an AT.

The decision

The Court of Appeal dismissed S’s appeal.  It held that the 11 August letter was not ambiguous and it could operate as a notice under the Housing Act.  S’s attempt to rely on the background (i.e. the letter having been sent in error) to dispute that conclusion was wrong.  A tenant was not expected to enquire into, or think about, a landlord's reasons for serving an unambiguous notice.  In any event a tenant might well think that a landlord had simply changed its mind from its previous position.

Learning points

The obvious points that social landlords need to take away from this case are the following:

1. That all relevant staff are aware of the expiry dates for probationary/starter tenancies well in advance
2. That decisions on whether to extend or convert them, or issue notices or proceedings to end them, are communicated to all concerned; and
3. That those staff liaise with external advisors, such as solicitors, so that nothing they do risks undermining or affecting legal action already underway against tenants