On 30 August 2019, Black Antelope Law acted for the successful appellant in a County Court appeal on the correct interpretation of s.41(3) Deregulation Act 2015. The decision will be of assistance to those representing both landlords and tenants in possession claims.
The Respondent landlords (R) granted the Appellant (A), a 6-month fixed term AST of a flat on 20 June 2011. On the same date, A was also served with a s.21(1)(b) notice, which expired on 19 December 2011.
On the 20 December 2011, A’s tenancy became a statutory periodic tenancy under s.5(2) Housing Act 1988. Thereafter A continued to occupy the property under the periodic tenancy.
On 6 February 2019, R issued a claim for possession under the accelerated possession procedure which was defended. At a possession hearing on 15 April 2019, DDJ Wright in the Clerkenwell and Shoreditch County Court granted R an order for possession on the basis that s.36 and s.41 Deregulation Act 2015 did not invalidate the s.21 notice relied upon by the landlords as it refers to ASTs and not periodic tenancies. However, DDJ Wright granted permission to appeal as she considered that the law required clarification as landlords were routinely arguing in possession claims that pre-1 October 2015 tenancies were not caught by s.41(3) Deregulation Act 2015.
The appeal was listed before HHJ Roberts on 30 August 2019, who allowed the appeal and set aside the order for possession. HHJ Robert gave judgment as follows:
The Appellant’s submissions were that the purpose of the Deregulation Act was to offer greater protection to tenants and the Respondent did not argue to the contrary.
The Appellant submitted that the notice was invalid under s.21(1D) as it was served more than 6 months before the claim for possession commenced.
It was submitted that s.41(2) of the Deregulation Act 2015 contains a conjunctive “and” and so two scenarios are covered, periodic tenancies which came into being after 1 October 2015 and periodic tenancies which came into being before 1 October 2015.
s.41(3) says after 3 years, it will apply to any AST otherwise exempt.
The Appellant says that an AST includes a contractual or periodical AST under Housing Act 1988.
Applying the law, between 1 October 2015 and 30 September 2018, s.21(4D) would not have applied on the facts of this case. Then on 1 October 2018, s.41(3) Deregulation Act 2015 came into force and any tenancy that was excluded as of 1 October 2015 would be subject to the Deregulation Act 2015.
It was common ground that the notice was not served within 6 months of commencing possession proceedings.
It was also submitted that if there is a lacuna in the Deregulation Act 2015 because it does not cover periodic tenancies before 1 October 2015, it was permissible to apply a purposive construction applying Wentworth Securities v Jones. Section 41(3) was a longstop provision intended to cover all tenancies and the court should adopt a construction to enable periodical tenancies to be caught by the legislation.
The Respondents says the section 21 notice was valid back in 2011. They say that s.41(3) only applies to ASTs in existence on 1 October 2018 and this tenancy was a periodic tenancy. The Respondents say that subsection (2) of the Deregulation Act 2015 does not deal with periodic tenancies prior to 1 October 2015.
If it was the intent for the legislature that s.41(3) should apply to all tenancies, then s.41(2) would not differentiate between prior to 1 October 2015 and after 1 October 2015 and this means that it was intended for periodic tenancies which came into being before 1 October 2015 to be excluded.
The court cannot identify a mischief as the Deregulation Act 2015 already differentiates between periodic tenancies.
In my judgment, this is a pure case of construction and the Appellant’s submissions are sound and the learned judge did err.
s.41(3) is a long stop. It gave landlords 3 years to prepare for the full application of the Deregulation Act 2015. As a matter of pure construction, the provision applies to “any” AST, whether contractual or periodic.
Looking at s.41(1), it refers to tenancies after 1 October 2015. Subsection (2) is expressly subject to subsection (3).
Contrary to the Respondent’s argument, subsection (2) is dealing with two separate scenarios: s.5(2) tenancies after 1 October 2015 and an AST granted before 1 October 2015.
Section 41(3) says any AST, and this includes any AST, howsoever created. Whether periodic or contractual.
I allow the appeal and set aside the order of possession”
The Appellant, Mr Adesegun Majiyagbe, was represented by Mr Simao Paxi-Cato of Counsel and Black Antelope Law.
A summary of this case appears in the October 2019 edition of Legal Action Magazine.