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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> St Ermins Property Company Ltd v Patel & Ors [2001] EWCA Civ 804 (25 May 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/804.html Cite as: [2001] L & TR 38, [2002] HLR 11, [2001] EWCA Civ 804, [2002] 1 P & CR 3, [2001] NPC 93

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR RECORDER HOCKMAN

		Royal Courts of Justice Strand, London, WC2A 2LL Friday 25th May 2001

SIR MARTIN NOURSE:

1. The question on this appeal is whether two notices given in purported pursuance of section 4(1) of the Landlord and Tenant Act 1954 were effective to terminate a tenancy to which Part I of that Act applied.
2. The premises in question are 16 Minster Road, London, N.W.2. By a lease made on 11^th February 1896 the premises were demised for a term of 99 years from 29^th September 1894 at a rent of £9 per annum. In 1981 the freehold reversion expectant on the determination of the lease was acquired by St Ermins Property Co. Ltd. ("the Landlord"), which is the applicant in these proceedings. By that time the premises had been divided into two self-contained and separately rated maisonettes, the lower consisting of the ground floor and basement and the upper of the first and second floors. On 19^th March 1992 the residue of the lease was acquired at auction by Jethalal Lalji Patel and the other three respondents to these proceedings ("the Tenants). The premises were described in the auction particulars as being divided into the two self-contained maisonettes described above.
3. It has throughout been common ground that the premises were held on a long tenancy at a low rent for the purposes of Part I of the 1954 Act. On 28^th September 1993 the lease expired by effluxion of time. On 28^th July 1994 the Landlord caused two notices to be served on the Tenants, purportedly pursuant to section 4 of the 1954 Act, terminating, in the first case, their tenancy of the lower maisonette and, in the second, their tenancy of the upper maisonette. Each notice was served under cover of a letter addressed to the Tenants and signed by the Landlord's solicitors. Since the lease granted a tenancy of the whole of the premises, it is the Tenants' contention that the two notices were ineffective for the purposes of section 4. That is the question we have to decide.
4. The two notices and the two covering letters respectively were in identical terms mutatis mutandis. I refer to those relating to the lower maisonette. The notice was headed "Landlord's notice proposing a statutory tenancy" and was in these terms:

"To [the Tenants], tenants of premises known as Basement and Ground Floor Flat, 16 Minster Road, London., NW2.

1. We, St Ermins Property Company Limited of [address], landlord of the above-mentioned premises, hereby give you notice terminating your tenancy of the premises on the 17th day of February, 1995."

The covering letter was headed "Re: Basement and Ground Floor Flat, 16 Minster Road, London, NW2" and was in these terms:

"We enclose by way of service upon you Notice pursuant to Section 4 of the Landlord and Tenant Act 1954 expressly without prejudice and without any admission as to the status of any or all of you, either now or at the date of termination of the previous Lease of the premises, namely 28^th September 1994.

In particular it is not accepted that the qualifying conditions were fulfilled under s.2 of the aforesaid Act on that date or at all."

5. On the footing that the Tenants were not willing to give up possession, and as indicated in the heading to each notice, the Landlord did not seek possession of either maisonette. Instead it proposed that the Tenants should continue their statutory tenancy of the premises and each notice proposed that they should do so on the terms therein specified. No terms having been agreed, on 15^th December 1994 the Landlord issued two applications in the Central London County Court for the settlement of the terms of statutory tenancies of the lower and upper maisonettes respectively. The Tenants put in answers asserting in each case that the address of the premises was wrongly stated and denying that the notice served identified the premises of which they were tenants or that it proposed a statutory tenancy or that it terminated their tenancy as alleged or at all.
6. The applications came before His Honour Judge Reynolds on 26^th October 1995, when, having decided that the validity of the notices should be determined as a preliminary issue, he held that they were invalid and dismissed the applications. The Landlord appealed to this court. On 16^th May 1997 Butler-Sloss and Aldous L.J.J. held that the judge had been wrong to decide the validity of the notices as a preliminary issue. They allowed the appeal and remitted the case to the County Court so that the material facts as to the occupation of the premises could be established. Their decision is reported at (1998) 75 P & CR 46.
7. The resumed hearing of the applications took place before Mr Recorder Hockman Q.C. between 7^th and 11^th February 2000. By his order made on the latter date he declared, first, that the Tenants qualified for protection under the 1954 Act "at the expiry of the long lease on 29^th September 1993, in respect of the whole of the dwelling house known as 16, Minster Road, London NW2"; and, secondly, that both section 4 notices served by the Landlord on the Tenants on 27^th (sic) July 1994 "were valid and effective to determine the continuation tenancy of the premises at 16, Minster Road, London, NW2 to which the [Tenants] were entitled." He also made an order as to the terms of the statutory tenancy of the premises. He said that he would thereafter prepare and circulate written reasons for granting the two declarations. When he came to give his (undated) written reasons, the recorder gave the Tenants permission to appeal on the following point, which he described as one of principle:

"Whether a notice under Section 4(1) of the Act (given after the term date) is necessarily invalid and ineffective if there is a difference between the premises in respect of which the notice is given and the premises qualifying for protection".

By their notice of appeal dated 17^th April 2000, the Tenants raised that question for the determination of this court and other questions which have not been pursued.

8. I refer to the material statutory provisions. Section 1 of the 1954 Act provides that on the termination, in accordance with the provisions of Part I, of a tenancy to which that section applies, the tenant shall be entitled to the protection of the Rent Act subject to and in accordance with those provisions. The provisions of the 1954 Act on which the question at issue essentially depends are those of Sections 2(1), 3(1), (2) and (3) and 4(1)(omitting the proviso). They are in the following terms:-

"2(1) The foregoing section applies to any long tenancy at a low rent, being a tenancy as respects which for the time being the following condition (hereinafter referred to as "the qualifying condition") is fulfilled, that is to say that the circumstances (as respects the property comprised in the tenancy, the use of that property, and all other relevant matters) are such that on the coming to an end of the tenancy at that time, the tenant would, if the tenancy had not been one at a low rent, be entitled by virtue of the Rent Act to retain possession of the whole or part of the property comprised in the tenancy.

3(1) a tenancy which is current immediately before the term date and is then a tenancy to which section 1 of this Act applies shall not come to an end on that date except by being terminated under the provisions of this Part of this Act, and if not then so terminated shall subject to those provisions continue until so terminated and shall, while continuing by virtue of this section, be deemed (notwithstanding any change in circumstances) to be a tenancy to which section 1 of this Act applies.

(2) Where by virtue of the last foregoing subsection a tenancy is continued after the term date, then

(a) if the premises qualifying for protection are the whole of the property comprised in the tenancy, the tenancy shall continue at the same rent and in other respects on the same terms as before the term date;

(b) if the premises qualifying for protection are only part of the property comprised in the tenancy, the tenancy while continuing after the term date shall have effect as a tenancy of those premises to the exclusion of the remainder of the property, and at a rent to be ascertained by apportioning the rent payable before the term date as between those premises and the remainder of the property, and in other respects on the same terms (subject to any necessary modifications) as before the term date.

(3) In this Part of this Act the expression "the premises qualifying for protection" means the aggregate of the premises of which, if the tenancy in question were not one at a low rent, the tenant would be entitled to retain possession by virtue of the Rent Act after the coming to an end of the tenancy at the term date.

4 (1) The landlord may terminate a tenancy to which section 1 of this Act applies by notice given to the tenant in the prescribed form specifying the date at which the tenancy is to come to an end (hereinafter referred to as "the date of termination"), being either the term date of the tenancy or a later date….."

9. It is necessary to examine the wording of these provisions with some care, an exercise which has not, it appears, been undertaken by any of the judges who have so far considered the case. Before I examine them for myself, I must advert to the underlying reason for the Tenants' opposition to the Landlord's applications, as explained to us by Mr Gaunt QC for the Landlord. On the face of it, the Landlord having accepted that the Tenants should have statutory tenancies of both maisonettes, the opposition achieves nothing. The explanation lies in the provisions of the Leasehold Reform Act 1967, Section 1(1)(b) of which provides that one of the conditions that a tenant must satisfy before he can acquire the freehold or an extended lease of the demised premises is that, at the time when he gives notice of his desire to acquire it, he shall have been tenant of the premises under a long tenancy at a low rent, and occupying it as his residence, for the last three years. In the present case the Tenants did not start to occupy the premises before they acquired the residue of the lease on 19^th March 1992 and the two section 4 notices were served on 28th July 1994, less than three years later. Accordingly, if the notices were valid, the tenants have irretrievably lost their right to acquire the freehold or an extended lease of the premises under the 1967 Act. Conversely, if the notices were invalid, and while the Landlord can always start again by serving a fresh section 4 notice, the Tenants, having now occupied the premises as their residence for more than nine years, would be able, within the following two months, to serve a notice of acquisition under the 1967 Act, in which event the fresh section 4 notice would not operate.
10. I return to the essential provisions of the 1954 Act. The first point to be noted is that "the qualifying condition" in section 2(1) is fulfilled if, on the coming to an end of the tenancy, the tenant would, if the tenancy had not been one at a low rent, be entitled by virtue of the Rent Act to retain possession of the whole or part of the property comprised in the tenancy. It follows that, when you get to section 3(1) "a tenancy to which section 1….applies" includes a tenancy where the tenant would be entitled to the protection of the Rent Act in respect of part only of the property comprised in it. On the plain wording of section 3(1), such a tenancy is continued in respect of the whole.
11. Passing by section 3(2) and (3) at this stage, I go next to section 4(1), which provides that the landlord may terminate a tenancy to which section 1 of the Act applies (including one where the tenant would be entitled to the protection of the Rent Act in respect of part only of the property comprised in it) by notice given to the tenant in the prescribed form specifying the date at which the tenancy is to come to an end, being either the term date of the tenancy or a later date. It is therefore clear, if the provisions of section 3 (2) and (3) are disregarded, that if a landlord wishes to terminate a tenancy where the tenant would be entitled to the protection of the Rent Act in respect of part only of the property comprised in it, he must give a notice to the tenant specifying the date at which "the tenancy", i.e. the tenancy of the whole of the property, is to come to an end. This view of section 4(1) is confirmed by the prescribed form of the notice, which (see above) is addressed: "To…, tenant of premises known as ….." and proceeds: "I, …….of………, landlord of the above-mentioned premises, hereby give you notice terminating your tenancy of the premises on ………". So in the present case, irrespective of whether the Tenants would have been entitled to the protection of the Rent Act in respect of the whole or part of the premises, the Landlord ought to have given a single notice terminating the tenancy of the whole.
12. What then is the effect of section 3(2) and (3)? They must be read in the light of section 3(1), whose plain effect is to continue the tenancy as a whole. That indeed is confirmed by section 3(2)(a) in a case where the whole of the premises qualify for protection, in which event "the tenancy shall continue at the same rent and in other respects on the same terms as before the term date". The difficulty is caused by section 3(2)(b), which applies to a case where the premises qualifying for protection are part only of the property comprised in the tenancy. In that event, it is provided that "the tenancy while continuing after the term date shall have effect as a tenancy of those premises to the exclusion of the remainder of the property". It must, I think, have been those words which, when this case was last before this court, prompted Aldous L J. to say at (1997) 75 P & CR, 56:

"It is section 3 which provides the tenant's protection. It is, in my view, clear from that section that a tenancy is continued by the Act after the contractual tenancy has determined, but only in so far as the premises qualify for protection."

13. That view of section 3, in the circumstances in which it was expressed, must be regarded as having been interlocutory. Although, as will appear, the point is not decisive of this case, I cannot agree with it. It is at variance with the plain effect of section 3(1). Moreover, it is not even supported by the wording of section 3(2)(b) itself, if closely examined. The words " the tenancy while continuing after the term date" themselves recognise that the tenancy continues as a whole. It is then provided that the tenancy "shall have effect as" a tenancy of the premises qualifying for protection to the exclusion of the remainder of the property. That is a deeming provision, one which acknowledges that the deemed state of affairs does not represent reality. Further, the restricted purpose of the provision is explained in the ensuing words "and at a rent to be ascertained by apportioning the rent payable before the term date as between those premises and the remainder of the property etc.."
14. In my view the purpose of section 3(2) is to spell out the consequences of section 3(1), with paragraph (b) providing for an apportionment of the rent etc. in a case where the premises qualifying for protection are part only of the property comprised in the tenancy. In any event, and while I would accept that the wording of paragraph (b) leaves something to be desired, I cannot regard it as a provision cutting down the clear effect of section 3(1) and thus restricting the premises in respect of which a notice under section 4(1) must be given.
15. I have already intimated that the view I take of section 3(2)(b) is not decisive of this case. That is because Mr Recorder Hockman found as a fact (see his first declaration above referred to) that the Tenants qualified for protection under Part I of the 1954 Act at the expiry of the lease on 28^th September 1993 in respect of the whole of the premises. In other words, the facts of this case have been found to fall, not within paragraph (b) of section 3(2), but within paragraph (a), which expressly provides for the tenancy to continue at the same rent and in other respects on the same terms as before the term date. In the circumstances, it is in my judgment clear that the continuation tenancy could only have been and can only be, terminated by a single notice given in respect of the whole of the premises. The two notices given on 28^th July 1994 were ineffective and the Tenants' tenancy of the premises continues.
16. The primary argument of Mr Gaunt in this court was, like the decision of the recorder, based on section 4(3) of the 1954 Act, the first part of which provides:

"A notice under subsection (1) of this section shall not have effect unless it specifies the premises which the landlord believes to be, or to be likely to be, the premises qualifying for protection…."

17. The recorder found as a fact that it was the belief of the Landlord, in particular in 1994, that the two maisonettes were separately occupied and qualified separately (if at all) for protection under the 1954 Act. Adopting that finding and relying on section 4(3), Mr Gaunt submitted that each of the notices satisfied section 4(1) in that it specified premises which the Landlord believed had qualified for protection.
18. In my view it is impossible to give section 4(3) that extended effect. To begin with, by referring to "a notice under subsection (1) of this section", it recognises that it has no part in determining what is required for the essential validity of such a notice. Further, it does not say that the notice shall have effect if it specifies the premises which the Landlord believes to be, or to be likely to be, the premises qualifying for protection; only that it shall not have effect unless it specifies those premises. Finally, subsection (3) like subsections (2) and (4) of section 4, is a subsidiary provision which, on normal principles of construction, cannot be taken to affect the essential nature of the notice required under subsection (1). Indeed, it would be a very odd state of affairs if a notice to terminate a tenancy which would otherwise be invalid could be validated simply because the landlord believed it to be valid.
19. The purpose of section 4(3) is made clear by section 7, which provides for the settlement of the terms of the statutory tenancy, either by agreement or by the court. In particular, section 7(4) provides that any proposals for a statutory tenancy (a) shall be made on the assumption that the dwelling-house will be the premises specified in the landlord's notice in accordance with section 4(3), and (b) shall not be treated as failing to satisfy the requirements of section 4(3) by reason only of the difference between the premises to which the proposals relate and the premises subsequently agreed or determined to be the dwelling-house.
20. Reliance was also placed on other provisions of the 1954 Act, in particular on section 22(3), but in my view none of them can affect the true construction and effect of the essential provisions to which I have referred. In the alternative, Mr Gaunt, again like the recorder, sought to invoke the principle of the decision of the House of Lords in Mannai Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749. If that principle is to be applied to this case, the Landlord must establish that a reasonable recipient in the position of the Tenants and with knowledge of the true nature of the continuation tenancy and the essential provisions of the 1954 Act would, on reading the two notices given on 28th July 1994, have been left in no doubt that the Landlord wished to determine the tenancy by a single notice in respect of the premises as a whole but had wrongly done so by two notices in respect of the lower and upper maisonettes respectively. That statement of what the Landlord must establish is a sufficient demonstration of its inability to bring this case within a principle which was invented in order to cure a wrong date inserted in a notice determining a lease in circumstances where it was obvious both that the date had been inserted by mistake and what the date intended to be inserted was. I am unable to see how a recipient of the notices, reasonable or unreasonable, could have been left in any doubt that what the Landlord wished to do was to do what he did and serve two notices and not one. Accordingly I reject Mr Gaunt's alternative argument based on the Mannai principle.

I would allow the Tenants' appeal and dismiss the Landlord's applications.

LADY JUSTICE ARDEN:

21. I agree with the judgment of Nourse LJ save that I express no view on the effect of section 3(2)(b) of the Landlord and Tenant Act of 1954, which does not fall for decision in this case.

LORD JUSTICE CHADWICK:

22. On 28 July 1994 the appellants were served with two notices in respect of premises at 16 Minster Road, London NW2. Each of the notices was served on behalf of the respondent, St Ermins Property Company Limited; and each was addressed to all four of the appellants. Each notice purported to be a notice given under section 4 of the Landlord and Tenant Act 1954. One of those notices was addressed to the four appellants as "tenants of premises known as First and Second Floor Flat, 16 Minster Road . . ."; the other was addressed to them as "tenants of premises known as "Basement and Ground Floor Flat, 16 Minster Road . . ."
23. As those notices suggest, the property at 16 Minster Road comprises a basement, a ground floor and two upper floors. It is common ground that, from 19 March 1992, the property had been held by the four appellants under a single lease granted on 11 February 1896 for a term of 99 years from 29 September 1894; and that that lease was a long lease at a low rent for the purposes of Part I of the 1954 Act. In those circumstances the tenancy under the lease was a tenancy to which section 1 of the Act applied if it were a tenancy in respect of which, at the relevant time, "the qualifying condition" set out in section 2(1) of the Act was fulfilled. And, in that case, the tenancy did not come to an end on 28 September 1993 (the term date) by effluxion of time; but was continued under the provisions of section 3 of the Act until terminated by a notice or notices given under section 4. It is common ground, also, that the property had, for some time prior to March 1992, been divided physically into two self-contained maisonettes; the one comprising the basement and ground floor and the other the first and second floors.
24. The qualifying condition set out in section 2(1) of the Act is that:

"the circumstances (as respects the property comprised in the tenancy, the use of that property, and all other relevant matters) are such that on the coming to an end of the tenancy at that time the tenancy would, if the tenancy had not been one at a low rent, be entitled by virtue of the Rent Act to retain the whole or part of the property comprised in the tenancy."

That provision should be read in conjunction with the definition, in section 3(3) of the Act, of the "the premises qualifying for protection":

". . . The expression 'the premises qualifying for protection' means the aggregate of the premises which, if the tenancy in question were not one at a low rent, the tenant would be entitled to retain possession by virtue of the Rent Act after the coming to an end of the tenancy at the term date."

25. The "Rent Act", to which the provisions in sections 2(1) and 3(3) refer, is the Rent Act 1977 – see section 22(1) of the 1954 Act as amended by paragraph 16 of schedule 23 to the 1977 Act. Protection under the Rent Act extends to tenancies under which a dwelling-house (which may be a house or part of a house) is let as a separate dwelling – see section 1(1) of that Act. It follows that "the premises qualifying for protection" for the purposes of the provisions in Part I of the 1954 Act are that part or those parts of the property comprised in the contractual tenancy let as a separate dwelling. In those circumstances, the respondent took the view, understandably perhaps, that it should treat the two maisonettes as separate dwellings. It was that view which led to the service of two notices.
26. The judge held that the whole of the property at 16 Minster Road qualified, as a single unit, for protection under Part I of the Act. He did so because he accepted the appellants' evidence that they had, since acquiring that property, "occupied it jointly and in its entirety as in effect a single extended family, and that this remained the position on 29^th September 1993." The judge was satisfied that "if the Rent Act 1977 had applied, it would have been appropriate to conclude that the property in its entirety was let as a separate dwelling for the purpose of that Act, and each of the [appellants] occupied it as his (or her) residence." He made a declaration accordingly. There is no appeal from that part of his order.
27. The effect of the judge's decision as to the extent and identity of the premises qualifying for protection under Part I of the 1954 Act was (i) that the qualifying condition was fulfilled, (ii) that tenancy granted by the 1894 lease was a tenancy to which section 1 (and so the other provisions in Part I) of the 1954 Act applied, (iii) that that tenancy did not come to an end by effluxion of time on the term date (28 September 1993), but continued until terminated by notice under section 4 of the Act, and (iv) that the case fell within section 3(2)(a) of the Act. Section 3(2)(a) is in these terms:

"Where by virtue of the last foregoing subsection a tenancy is continued after the term date, then –

(a) if the premises qualifying for protection are the whole of the property comprised in the tenancy, the tenancy shall continue at the same rent and in other respects on the same terms as before the term date;"

28. It was in those circumstances that the judge went on to consider whether the notices served on 28 July 1994 were effective to terminate the tenancy. He held that they were. The question on this appeal is whether he was right.
29. Section 4 of the 1954 Act provides, so far as material, that:

"(1) The landlord may terminate a tenancy to which section one of this Act applies by notice given to the tenant in the prescribed form specifying the date at which the tenancy is to come to an end (hereinafter referred to as 'the date of termination'), being either the term date of the tenancy or a later date: Provided that this subsection has effect . . . subject to . . . the interim continuation of tenancies pending the disposal of applications to the court.

(2) A notice under the last foregoing subsection shall not have effect unless it is given not more than twelve nor less than six months before the date of termination specified therein.

(3) A notice under subsection (1) of this section shall not have effect unless it specifies the premises which the landlord believes to be, or to be likely to be, the premises qualifying for protection and either -

(a) it contains proposals for a statutory tenancy, as defined by subsection (3) of section seven of this Act; or

(b) it contains a notice that, if the tenant is not willing to give up possession at the date of termination of the tenancy, of all the property then comprised in the tenancy, the landlord proposes to apply to the court, on one or more of the grounds mentioned in section twelve of the Act, for possession of the property comprised in the tenancy, and states the ground or grounds on which he proposes to apply.

(4) A notice under subsection (1) of this section shall invite the tenant, within two months after the giving of the notice, to notify the landlord in writing whether he is willing to give up possession as mentioned in paragraph (b) of the last foregoing subsection."

A notice is "in the prescribed form" if, and only if, it is in the form prescribed for the purposes of section 4(1) of the Act by regulations made under section 66(1). The relevant regulations are those contained in the Landlord and Tenant (Notices) Regulations 1957 (SI 1157/1957) as amended by the Landlord and Tenant (Notices) Regulations 1967 (SI 1831/1967). Regulation 4 requires that a landlord's notice proposing a statutory tenancy, given under section 4 of the Act shall be in Form 1 in the Appendix, or in a form "substantially to the like effect".

30. Before a landlord's notice can be effective to terminate a tenancy to which Part I of the Act applies, there are, as it seems to me, six essential requirements. First, the notice must specify the date at which "the tenancy" is to come to an end. In that context "the tenancy" means the tenancy which is being terminated. At the date when the notice is given the term date of the contractual tenancy may not have been reached; alternatively, the tenancy may have continued beyond its term date by virtue of section 3(1) of the Act. It is convenient to describe the tenancy which continues beyond the term date of the contractual tenancy as a "continuation tenancy". Second, the date specified must not be earlier than the term date. Third, subject to that, the date specified must be a date not more than twelve nor less than six months after the date on which the notice is given. Fourth, the notice must specify the premises (if any) which the landlord believes to be, or to be likely to be, the premises qualifying for protection. Fifth, the notice must either contain proposals for a statutory tenancy of the premises which are, or which are likely to be, the premises qualifying for protection (in which case it is referred to in the Act as 'a landlord's notice proposing a statutory tenancy'); or it must contain a notice that, if the tenant is not willing to give up possession at the date of termination of the contractual tenancy of all the property then comprised in the contractual tenancy, the landlord proposes to apply to the court ('a landlord's notice to resume possession'). Sixth, the notice must contain an invitation to the tenant to notify the landlord in writing, within two months after the giving of the notice, whether he is willing to give up possession at the date of termination of the tenancy of all the property then comprised in the tenancy.
31. The meaning to be given to the expression "all the property then comprised in the tenancy" (in the context of section 4(3)(b) and (4) of the Act and for the purposes of the fifth and sixth requirements identified in the previous paragraph) is plain enough. The "property then comprised in the tenancy is the property comprised in the contractual (or continuation) tenancy on the date of termination specified in the notice given under section 4(1). If notice is given in order to bring the contractual tenancy to an end on the term date - as, plainly, it may be – the property comprised in the contractual tenancy on the date of termination will be the whole of the property. If notice is given in order to bring the continuation tenancy to an end after the term date, the property comprised in the continuation tenancy on the date of termination will be determined by the provisions of section 3(2) of the 1954 Act. In a case within section 3(2)(a) of the Act, the property comprised in the continuation tenancy will be the property comprised in the contractual tenancy immediately before the term date. But, in a case within section 3(2)(b) of the Act, the better view - as it seems to me - is that 'all the property then comprised in the tenancy' means the premises qualifying for protection to the exclusion of the remainder of the property. Section 3(2)(b) of the Act is in these terms:

"Where by virtue of . . . [section 3(1)] a tenancy is continued after the term date, then –

...

(b) if the premises qualifying for protection are only part of the property comprised in the tenancy, the tenancy while continuing after the term date shall have effect as a tenancy of those premises to the exclusion of the remainder of the property, and at a rent to be ascertained by apportioning the rent payable before the term date as between those premises and the remainder of the property, and in other respects on the same terms (subject to any necessary modifications) as before the term date."

The latter point does not call for a decision in the present case; and I express no concluded view upon it. What is not, I think, open to doubt is that in a case (such as the present) which falls within section 3(2)(a) of the Act the expression 'all the property then comprised in the tenancy' means the whole of the property comprised in the contractual tenancy immediately before the term date.

32. At first sight, therefore, it would seem clear that neither of the notices served on 28 July 1994, taken in isolation from the other, could satisfy the requirements of section 4 of the Act. There are two reasons which lead to that conclusion. The first is that neither notice purported to terminate the continuation tenancy which was then subsisting. The tenancy then subsisting, in the light of the facts found by the judge, was a tenancy of the whole of the property at 16 Minster Road. Each notice purported to terminate a tenancy of part only of that property; in the one case, a tenancy of the basement and ground floor - in the other case, a tenancy of the first and second floors. The second reason is that neither notice complied with the requirement in section 4(4) of the Act. The appellants (as tenants) were not invited to notify the landlord whether they were willing to give up possession "of all the property then comprised in the tenancy". The property then comprised in the tenancy was the whole of the property at 16 Minster Road. Each notice invited the appellants to notify the landlord whether they were prepared to give up part (but not all) of that property.
33. Nor, as it seems to me, could it be held that the two notices, taken together, satisfied the requirements of section 4 of the Act. For my part, I would accept that, reading the two notices together, the appellants could be in no doubt (a) that the landlord did wish to terminate whatever tenancy or tenancies there were of the whole of the property at 16 Minster Road and (b) that they were being invited to notify the landlord whether they were willing to give up possession of the whole of that property. If the two notices are read together, the defects to which I have referred in the preceding paragraph can be overcome. But reading the two notices together produces another – and, to my mind, an insurmountable - difficulty for the landlord. If the two notices are read together it is impossible to avoid the conclusion that the landlord's stated belief is that all four appellants are occupying, as separate dwellings, (i) the basement and ground floors and (ii) the first and second floors. The notices cannot be read together in such a way as to lead to the conclusion that the landlord's stated belief is that, say, two of the appellants are occupying the basement and ground floors as a separate dwelling and the other two are occupying the first and second floors. But a belief that all four appellants are occupying as a separate dwelling each of the supposed separate units in the same property is, to my mind, incredible. Counsel for the landlord did not suggest otherwise. So, if the two notices are read together, the stated belief that each of the supposed separate units qualifies for protection on the grounds that each is occupied by all four appellants as a separate dwelling must be rejected; and, if rejected, section 4(3) of the Act is not satisfied.
34. The judge found it possible to overcome these difficulties. He accepted the argument put to him on behalf of the landlord, which he summarised in these terms (at paragraph 23 of his judgment):

"Miss Padley [counsel for the landlord] points out that under section 4(1) the notice must specify, as the date at which the tenancy is to come to an end, either the term date of the tenancy or a later date. If a later date is specified (as was the case here) then it is the continuation tenancy which is to come to an end on that date. Accordingly the landlord has no alternative but to refer in his notice to the premises which he believes qualify for protection. There may of course be cases (of which the present is one) in which the landlord's belief turns out to be wrong, and the premises which qualify for protection are different from those which he believed to qualify for protection, but this does not undermine the validity of the notice itself."

35. The fallacy in that argument, as it seems to me, lies in the word "Accordingly", by which the third sentence is linked to what has gone before. It is not because the tenancy which is to come to an end on the date specified is a continuation tenancy that the landlord has to refer in his notice to "the premises which he believes qualify for protection". He has to specify the premises which he believes to be the premises qualifying for protection because that is what section 4(3) requires. The requirement in section 4(3) has to be met whether or not the tenancy is a continuation tenancy. What section 4(1) requires is that the landlord should identify the contractual or continuation tenancy which he intends to terminate. What section 4(4) requires is that the landlord should invite the tenant to state whether or not he is willing to give up possession of all the property that will be comprised in the contractual or continuation tenancy on the (future) date specified in the notice. It is important to have in mind that – in many, if not most, cases - the tenant will be in possession of the whole of the property comprised in the contractual tenancy at the time that the notice is given. If, in a case where the notice is given after the term date under the contractual tenancy, the tenant has gone out of possession of part of the property comprised in that tenancy immediately before the term date, that is likely to be in circumstances that the parties have agreed that the premises qualifying for protection are only part of the property comprised in the contractual tenancy, and have agreed an apportionment of rent for the purposes of section 3(2)(b). If the parties are not agreed as to the extent of the property qualifying for protection that question will have to be resolved by the court on an application under section 3(4) or under section 7(2).
36. Section 4 of the 1954 Act has to be construed in such a way that an effective notice can be given under section 4(1) notwithstanding that the parties are in dispute. A notice under section 4(1) will not be invalid if it identifies the contractual or continuation tenancy in such a way as to leave no reasonable doubt what tenancy it is that the landlord seeks to terminate. Nor will a notice be invalid under section 4(4) of the Act if it leaves no reasonable doubt that the tenant is being asked to notify the landlord whether he is willing to give up possession of the whole of the premises which he claims to be entitled to occupy under the contractual or continuation tenancy.
37. It is relevant, in this context, to have the terms of the prescribed form of notice in mind. The prescribed form provides for the notice to be addressed to "[X] tenant of premises known as [Y]". Paragraph 1 of the prescribed form – reflecting the requirement in section 4(1) of the Act – gives notice "terminating your tenancy of the premises" on a specified date. Paragraph 2 – reflecting the requirement in section 4(4) of the Act - requests the tenant to notify the landlord whether he is willing to give up possession of "the premises" on that date. Paragraph 5 contains the statement of the landlord's belief as to the extent of the premises qualifying for protection. There is, as it seems to me, no requirement that "the premises qualifying for protection" should be identified in either paragraph 1 or paragraph 2. Nor is there any reason why the landlord should be required to identify, under either of those paragraphs, "the premises which he believes qualify for protection".
38. In a case where there is a dispute – or even a doubt – as to what part of the property subject to the contractual tenancy has, since the term date, been comprised in the continuation tenancy under section 3(2)(b) of the Act, it would be sufficient, in my view, for the notice to refer, in paragraph 1 of the prescribed form, to the addressee as "tenant of premises at [Y] comprised in a lease/tenancy agreement dated . . ."; and to request, in paragraph 2 of the prescribed form, the tenant to notify the landlord "whether you are willing to give up possession of the premises which you occupy under that lease/tenancy agreement".
39. The position in the present case, of course, is that the information provided in paragraph 1 of either of the notices served on 28 July 1994, taken alone, does not fulfil the need to identify the contractual or continuation tenancy which the landlord seeks to terminate. Nor does the information provided in paragraph 2 of either of those notices, taken alone, leave the tenants in no reasonable doubt that they are being asked to notify the landlord whether they are willing to give up possession of the whole of the property at 16 Minster Road. As I have already mentioned, those defects can be overcome if the notices are read together; but reading the notices together gives rise to an insurmountable difficulty under section 4(3) of the Act.
40. After referring to the argument advanced on behalf of the landlord (in the passage which I have set out above) the judge went on to say this, at paragraph 24 of his judgment:

"I accept Miss Padley's argument. In my view it is consistent with the views of the Court of Appeal which I have cited, and with the scheme of Part I of the Act. I note in particular section 7(4)(b) under which proposals for a statutory tenancy made in a notice under section 4(1) shall not be treated as failing to satisfy the requirements of section 4(3) by reason only of a difference between the premises to which the proposals relate and the premises subsequently agreed or determined to be the dwelling-house. It is difficult to see the purpose of this provision if, in a case (like the present) where there is a difference between the premises to which the proposals relate and the premises determined to be the dwelling-house, the notice is nevertheless susceptible to challenge under Section 4(1)."

In that context, the judge's reference to "the views of the Court of Appeal which I have cited" is to the judgment of Lord Justice Aldous on the interlocutory appeal in the present case, (1998) 75 P&CR 46, at pages 47-48 and at page 54, and to observations of Lord Justice Buxton in De Rothschild v Bell [1999] 1 WLR 1237, at page 1249. I find nothing in those judgments which determines the point which falls for decision on this appeal.

41. In my view section 7(4)(b) of the Act – which was not considered by this Court on the interlocutory appeal in the present case, nor in De Rothschild v Bell – provides no assistance. On a proper understanding of the statutory scheme, sections 4(3) and 7(4)(b) are not directed to the identification of the contractual or continuation tenancy which the landlord seeks to terminate, nor to the need to know whether the tenant is willing to give up possession of the premises of which he is in occupation under that tenancy. Section 4(3) requires that the notice under section 4(1) will contain proposals as to the terms of the new statutory tenancy which will arise if the tenant remains in possession after the termination of the contractual or continuation tenancy. Section 7(4)(b) is ancillary to section 4(3).
42. It is necessary to examine the inter-relation of section 4 with sections 6 and 7. Section 6(1) of the Act provides that where a tenancy to which Part I of the Act applies is terminated by a landlord's notice proposing a statutory tenancy the Rent Act shall apply as if the former tenancy had been a tenancy of "the dwelling-house" and had not been a long tenancy at a low rent. In that context, in a case where the agreement or determination is made after the term date of the former tenancy, the "dwelling-house" means the premises which as respects that tenancy are the premises qualifying for protection. So in case (such as the present) which falls within section 3(2)(a) of the Act – that is to say, where the premises qualifying for protection are the whole of the property comprised in the former tenancy – the statutory tenancy which arises under section 6 of the Act is a tenancy of the whole of the property comprised in the former contractual tenancy.
43. Section 7(1) of the Act provides for the terms of the statutory tenancy to be determined by agreement between the parties or, in default of agreement, by the court. In order to ensure that steps are taken promptly, either to agree the terms of the statutory tenancy or to have the terms determined by the court, section 7(2) of the Act provides that unless, not later than two months before the date of termination specified in the notice proposing a statutory tenancy, the matters specified in that subsection - being the identity of the premises which are to comprise the dwelling-house, the rent (and when it is to be paid), and matters relating to repairs – have been agreed, or are the subject of an application to the court for determination made by the landlord, the notice under section 4(1) proposing a statutory tenancy shall cease to have effect. The result will be that the notice will be ineffective to terminate the contractual or continuation tenancy on the date of termination specified in the notice. Sections 7(3) and 7(4) of the Act are in these terms:

"(3) In paragraph (a) of subsection (3) of section four of this Act, the expression 'proposals for a statutory tenancy' means proposals as to the rent of the dwelling-house during the period of the statutory tenancy, proposals as to the matters specified in paragraphs (b) to (e) of the last foregoing subsection, and such other proposals (if any) as to the terms mentioned in subsection (1) of this section as the landlord may include in his notice.

(4) Any such proposals –

(a) shall be made, and be expressed to be made, on the assumption that the dwelling-house will be the premises specified in the landlord's notice in accordance with subsection (3) of section four of this Act;

(b) shall not be treated as failing to satisfy the requirements of the said subsection (3) by reason only of a difference between the premises to which the proposals relate and the premises subsequently agreed or determined to be the dwelling house,

and in the event of any such difference the landlord shall not be bound by his proposals notwithstanding that they may have been accepted by the tenant."

44. The importance of section 4(3)(a) in the statutory scheme is that it provides a basis upon which the tenant can decide, on receipt of the notice under section 4(1) terminating the contractual or continuation tenancy at a date which is not less than six months in the future, whether (i) to give up possession, or (ii) to agree the landlord's proposals for a statutory tenancy, or (iii) to reject the landlord's proposals and seek the determination of the court on the terms of the statutory tenancy (including the identity of the premises which are to be the subject of that tenancy). The proposals must include proposals as to the matters which section 7(2) requires to be brought before the court in default of agreement - see section 7(3) of the Act. Section 7(4)(a) requires that the proposals must be made on the assumption that the dwelling-house (when determined by agreement or by the court) will be the premises specified in accordance with the requirement in section 4(3) in the notice to terminate the contractual or continuation tenancy served under section 4(1). Indeed, it is difficult to see how proposals could be made on any other assumption. But section 7(4) recognises that that assumption will be falsified if the court subsequently determines that the premises qualifying for protection differ from the premises specified in accordance with section 4(3). If it were not for section 7(4)(b), the consequence of requiring proposals to be made on an assumption that might subsequently turn out to be false would or might be that a notice under section 4(1) which was treated as effective at the time it was served would be rendered ineffective by a subsequent agreement or decision that some premises other than the premises specified in accordance with section 4(3) were the premises which qualified for protection. The Act meets that problem in two ways. First, it requires, in section 4(3) itself, only that the premises specified in accordance with that subsection should be "the premises which the landlord believes . . . to be the premises qualifying for protection." Second, it provides, in section 7(4)(b) that the proposals (which, on this hypothesis, will relate to premises which are not agreed or determined to be the dwelling-house) shall not be treated as failing to satisfy the requirements of section 4(3)(a) by reason only that they do not relate to the dwelling-house.
45. So understood, section 7(4)(b) has a necessary and rational place in the statutory scheme. It is directed to the problem of retrospective invalidity which would (otherwise) arise in relation to the notice served under section 4(1) of the Act if the proposals for a statutory tenancy made in that notice (in accordance with section 4(3) of the Act) were subsequently held to have been made in relation to premises which were not the relevant dwelling-house. There is no reason why that subsection should be pressed into service in order to meet a different problem – that is to say, the problem of how to identify the tenancy which the landlord seeks to determine in a case which may, arguably, fall within section 3(2)(b) of the Act. As I have already pointed out, that is a problem which can readily be met without recourse to section 7(4)(b) of the Act.
46. For those reasons, I am satisfied that the judge reached the wrong conclusion. The notices served on 28 July 1994 were not effective to terminate the continuing tenancy of 16 Minster Road.
47. I agree that this appeal should be allowed.
ORDER:
48. Application dismissed.
49. Appeal allowed with costs.
50. Applicants to pay respondents their costs of applications excluding costs already ordered to be paid but including costs previously reserved.
51. Detailed legal aid assessment of the costs of the 1^st, 2^nd and 3^rd respondents.
(Order does not form part of approved Judgment)