Trafford Housing Trust Ltd v (1) Louise Rubinstein (2) Said Farid Ahmed Wardak (3) Wong Wai Tang (4) Fazil Ahmad Sediqi (5) Amin Ullah Kashify (6) Emma Caireen Nicola Rice (7) Katharine Susan Gregory (8) Raffaela di Sipio [2013] UKUT 0581 (LC)

The building subject of the dispute was at Bold Street, Old Trafford, in Manchester. The landlord, Trafford Housing, consulted on a Qualifying Long Term Agreement under Schedule 1 of the Regulations. It used the commercial postal carrier, TNT, to deliver its notices of intention.

The notices, dated 11 March, were posted on 16 March. 15 April was specified as the expiry date of the 30 day period for making observations.

By Schedule 1, paragraph 1:

(1) The landlord shall give notice in writing of his intention to enter into the agreement —

(a) to each tenant; and …

(2) The notice shall — …

(d) invite the making, in writing, of observations in relation to the proposed agreement; and

(e) specify —

(i) the address to which such observations may be sent;

(ii) that they must be delivered within the relevant period; and

(iii) the date on which the relevant period ends.”

By regulation 2: “relevant period”, in relation to a notice, means the period of 30 days beginning with the date of the notice.

The parties found themselves before the LVT in its pre-Daejan v Benson days. The LVT held that:

(1) The notices of intention were served upon those lessees who were occupying their flats at the relevant period, but not on those who were not;

(2) The notices were not however compliant with Regulations because they failed to allow a sufficient period of consultation, and

(3) Dispensation should not be granted under section 20ZA.

The LVT’s decision on the 30 day notice point in more detail

The LVT held that it was reasonable to assume that the notices of intention arrived – and notice was accordingly “given” – on 18 March, the second day after posting. That was only 28 days before 15 April.

Turning to the law, the LVT said that the phrase in paragraph 2 of Schedule 1 to the Regulations – “30 days beginning with the date of the notice” – could bear four meanings:

(i) the date on the notice,

(ii) the date it is posted;

(iii) the date it is actually received; or

(iv) the date it is deemed received.

Opting for the fourth of these, the LVT referred to Moskovitz v 75 Worple Road RTM Company Limited [2010] UKUT 393 (LC), a case on the service of a notice under the Right to Manage provisions, in which the Upper Tribunal held that the time that a notice spends in the postal system must be taken into account in calculating time frames.

Permission to appeal was granted on the LVT’s first two findings, but not on the refusal of dispensation. In the event, the landlord presented no evidence on the first finding and HHJ Huskinson therefore dismissed that element of the appeal.

This meant that the LVT’s second finding was the only issue before the Upper Tribunal. Only the landlord made representations on the merits of the appeal.

The question before HHJ Huskinson was whether the LVT erred in concluding that Trafford Housing’s notice of intention failed to comply with the Regulations because it did not allow the lessees the requisite 30 days for the making of observations.

The landlord argued that the LVT had erred for two reasons:

1)    It was wrong to consider this point at all (the “Keddie point”), and

2)    It had wrongly determined the date on which the notice of intention had been given to the lessees.

The landlord argued that Birmingham City Council v Keddie [2012] UKUT 323 (LC) was authority for the proposition that the LVT had exceeded its jurisdiction by raising the point of its own motion at the hearing.

HHJ Huskinson put the Keddie point firmly back into its box for no less than five reasons.

1) The lessees’ application expressly raised the issue of compliance with the consultation requirements under section 20. It was not necessary for them specify whether and how the landlord had failed to comply;

2) The landlord’s representatives addressed the issue of whether the full 30 day period had been given when it was raised by the LVT at the hearing. It was not a point taken by an LVT in its written decision without any prior warning to a party, as had been the case in Keddie;

3) The landlord did not appear to have objected to the point being raised at the hearing, nor was any adjournment sought to deal with the point;

4) The landlord had not sought permission to appeal on the point. Keddie was not published until after the LVT’s determination, but it did not change the law: it merely recognised what the law already was, and

5) No notice had been given to the lessees that the landlord wanted to raise the new point.

“I conclude that there is no merit in the argument based upon the Keddie case and that the point is in any event not open to the appellant”, said HHJ Huskinson. 

HHJ Huskinson began his consideration of the landlord’s second argument by setting out the fundamental purpose of a notice, which “is to inform (i.e. to notify) the recipient of certain matters”.

He continued: “Paragraph 1 of schedule 1 to the Regulations provides that:

“”The landlord shall give notice in writing of his intention to enter into the agreement —

“(a) to each tenant;”

“A piece of paper headed “notice” is of no value to a recipient before it is given to the recipient”.

The landlord made three points, all of which were directed at the “the date of the notice” equating to the date of posting. That was the only way that it could bring service of its notice within the 30 day observation-making period required by the Regulations.

A “standard” four weeks

First up, the landlord suggested that 30 days were given because the lessee was intended to have a “standard” 28 days/four weeks to make observations, the extra two days being given for the notice to arrive.

HHJ Huskinson identified a key practical difficulty with the landlord’s argument. If the date of the notice was taken to be the date of posting, the date of the notice would be the same, irrespective of whether the notice was sent first or second class; by private or commercial postal carrier, or by guaranteed next day or ordinary course of post.

He was not persuaded.

Deemed service

The landlord’s next point was that service of the notice could not be deemed to have taken place because:

• There were no provisions deeming service in the Landlord and Tenant Act 1985, and
• Section 7 of the Interpretation Act 1978 fell out of the equation, because it was relevant to the date on which a notice was to be taken to be served, whereas the Regulations were concerned with “the date of the notice” itself.

HHJ Huskinson carried out a comprehensive review of the options for deemed service.

The leases

He could find no provisions for deemed delivery in the leases before him.

Section 196 Law of Property Act 1925

He spent a couple of paragraphs noting that section 196 of the Law of Property Act 1925 could not rescue the landlord. That section governs only letters sent by registered letter. None of Trafford Housing Association’s letters had been so sent.

Section 7 Interpretation Act 1978

In tones which suggested that he had found the answer however, he continued: “proper service can still be effected even though the document is sent by post without either the registered or recorded delivery service being used, see Chiswell v Griffon Land and Estates Ltd [1975] 1 WLR 1181.”

So saying, he turned to section 7 of the Interpretation Act 1978, which reads:

“Where an Act authorises or requires any document to be served by post (whether the expression “serve” or the expression “give” or “send” or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.”

“Assuming (but without deciding)” the following points:

• The Regulations can be taken to authorise or require the notice to be served by post, and
• The use of a commercial postal carrier such as TNT constitutes posting the document,

he determined that the landlord could not derive any support from section 7 because neither the LVT nor the Upper Tribunal had been supplied with any evidence as to TNT’s delivery time frames.

The principle of deemed service was therefore not discounted, although the absence of evidence in this case extinguished Trafford Housing’s prospects of success on this point.

Consistency with Moskovitz

Trafford Housing submitted that Moskovitz v 75 Worple Road RTM Co Limited [2010] UKUT 393 (LC) was distinguishable because it dealt with the date from which time is calculated.

HHJ Huskinson disagreed:

“In my judgment the reference in the Regulations to the date of the notice is a reference to the date on which the notice performs its crucial function, namely notifies the recipient of the contents of the notice, by which I mean the date of service (whether deemed or actual) or receipt, not the date of posting. I consider this conclusion is consistent with the analysis of this Tribunal (George Bartlett QC, President) in Moscovitz v 75 Worple Road RTM Company Limited [2010] UKUT 393 (LC))”.

Having dealt with the landlord’s three points on the law, and the appeal being by way of re-hearing, HHJ Huskinson moved on to the facts.

Ultimately, he could “see no reason for disagreeing with the LVT’s finding that it was reasonable to assume that the letters arrived on the second day after posting. Doing the best I can on the material before me, I myself find that the letters did arrive on that date in the ordinary course of TNT’s postal service. I therefore find that the date of the notice was Friday, 18 March 2011.

“The period of 30 days beginning with 18 March 2011 is a period which ends on 16 April 2011. The notice specified that the consultation period ended on 15 April 2011. Accordingly the notice failed to comply with the Regulations because it gave one day too short a period for the making of observations”.

The landlord had an alternative position up its sleeve:

• If the date of the notice was the date of service of the notice on the lessee, and
• The period given for making observations was only one day too short,

such a finding would justify the Upper Tribunal remitting the matter to the LVT for it to reconsider the question of dispensation. Why? Because the LVT had held that the period specified in the notice was two days short, as opposed to one day short.

That argument flew about as far as Monty Python’s parrot.

The grant of permission had envisaged that the case could be remitted to the LVT if the landlord succeeded on either of the grounds of appeal in respect of which permission had been granted. Both grounds of appeal had however failed. HHJ Huskinson therefore declined to remit the case.

Staring the exit of the last chance saloon squarely in the eyes, the landlord indicated to the Upper Tribunal that it might make a second application to the (now) FTT for dispensation in the light of:

• Daejan Investments Limited v Benson [2013] UKSC 14, and
• The Upper Tribunal’s finding that the LVT was wrong in finding that the consultation period was two days too short – albeit still short, even if by one day.

“If the appellant does make any such application”, observed the inscrutable HHJ Huskinson, “it will be for the LVT to consider whether such an application can be entertained and, if so, what decision should be reached upon it. It would be wrong for me to say anything in this decision upon these topics”.

The appeal was dismissed. The landlord did not oppose the making of a section 20C order.

(In)definite questions

We know from BDW that there may be issues of consistency with the drafting of the Regulations.

For that reason, although HHJ Huskinson has not given us a decision predicated on the most natural reading of Schedule 1 to the Regulations, I am with him on his conclusion.

It seems to me that the slightly forced reading is due to the definition of “relevant period” in regulation 2, and the use therein of:

• “a” before “notice” in the phrase “in relation to a notice”, and
• “the” before “notice” in the phrase “the date of the notice”.

The presence of the definite and indefinite article suggests that the parliamentary draftsman homed in on the date borne by the notice itself, rather than on the act of giving notice, which does not, in my experience, need to be immediately preceded by any article, definite or otherwise.

The result is that the eye is naturally drawn to the description of “the notice” in paragraph 1(2), as opposed to the act of giving notice in paragraph 1(1).

If the Regulations were to be amended, perhaps a more accurate definition of the “relevant period” in regulation 2 would be “in relation to notice, 30 days beginning with the date when notice is given”.

A cottage industry?

In English v Emery Reimbold & Strick Ltd, D J & C Withers (Farms) Ltd v Ambic Equipment Ltd, Verrechia v Commissioner of Police of the Metropolis, Practice Note [2002] EWCA Civ 605, Lord Phillips of Worth Matravers MR made the following observations at the outset of his judgment:

1. “In Flannery v Halifax Estate Agencies Ltd (trading as Colleys Professional Services) [2000] 1 WLR 377 this court allowed an appeal on the sole ground that the judge had failed to give adequate reasons for his decision.
2. “Flannery’s case has inspired a large number of applications for permission to appeal on the ground of inadequate reasons. In granting permission to appeal in one of the appeals before us, Sedley LJ remarked that they were becoming a cottage industry. It is an industry which is an unwelcome feature of English justice. The rights of appeal that are afforded under statute reflect the fact that no judge is infallible … the rash of applications for permission to appeal based upon the decision in Flannery’s case … reflects uncertainty on the part of litigants and judges alike as the extent to which a judgment should detail the chain of reasoning which has led to the order made by the judge.”

The Court of Appeal’s judgment in English became a Practice Note on the adequacy of judicial reasoning.

I wonder whether a similar cottage industry is developing in the Upper Tribunal in respect of decisions where the LVT raises issues of its own volition.

In 2012 the Upper Tribunal it dealt with a number of cases where certain LVT panels had, ahem, abandoned some of the basic principles of the administration of justice by determining points that neither party had raised or had an opportunity to address. Keddie was the paradigm case.

Whereas however Keddie is a reminder of the minimum parameters of the gateway through which the LVT must pass to be procedurally fair, in his reasons for rejecting the landlord’s arguments here, HHJ Huskinson outlines its boundaries.

Those boundaries were also referred to by HHJ Mole QC in Regent Management Ltd v Jones  [2012] UKUT 369 (LC), whose judgment HHJ Gerald cited in Keddie. I think that it is worth repeating HHJ Mole QC:

“29. The LVT is perfectly entitled, as an expert tribunal, to raise matters of its own volition.  Indeed it is an honourable part of its function, given that part of the purpose of the legislation is to protect tenants from unreasonable charges and the tenants, who may not be experts, may have no more than a vague and unfocussed feeling that they have been charged too much.  But it must do so fairly, so that if it is a new point which the tribunal raise, which the respondent has not mentioned, the applicant must have a fair opportunity to deal with it.”

We may not have the benefit of a Practice Note from the Court of Appeal, but a synthesis of Upper Tribunal’s decisions over the past year or so shows that we do now have a decent amount of guidance on whether, when and how a Tribunal can raise points ignored – or unnoticed – by the parties.

Postal service

HHJ Huskinson assumed, but did not decide that:

• The Regulations can be taken to authorise or require the notice to be served by post, and
• The use of a commercial postal carrier such as TNT constitutes posting the document.

The points remain open for future appeals.

There are more cliff hangers in the world of residential service charges than in the best of soap operas.

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