Avenue Properties (St John’s Wood) Ltd v Aisinzon

Fair rent–Notice of increase–Notice need not specify date which coincides with day on which rent due to be paid–Landlords entitled to apportioned increase in respect of a quarter during which notice was served This was an appeal by Avenue Properties (St John’s Wood) Ltd, owners of the freehold of Regency Lodge, Avenue Road, London NW3, from a judgment of Judge Llewellyn at Bloomsbury and Marylebone County Court on January 19 1975 dismissing the company’s claim against Mrs Susan Aisinzon, tenant of flat no 106 Regency Lodge, for £132 arrears of rent. Mr R Bernstein QC, Mr J S Colyer and Mr P de la Piquerie (instructed by Tobin & Co) appeared for the appellants, and Mr D Wood (instructed by Debenham & Co) represented the respondent. Giving a reserved judgment, MEGAW LJ said that the appellants owned a large number of flats like that occupied by the respondent, and no doubt the considerations raised in the appeal applied to these. The respondent’s flat was let to her for five years from March 25 1961 at £425 per annum, payable quarterly in advance on the usual quarter days. After the lease expired, the respondent held over, and it was common ground that she was and had at all relevant times been a statutory regulated tenant. In 1970 the rent was increased to £540 a year. On October 21 1973 the landlords applied to the rent officer for registration of an increased figure as the fair rent of the flat. On December 25 1973 a quarter’s rent in advance fell due. As the rent officer had not yet come to a decision on the landlords’ application, the tenant paid the landlords £135, a quarter of £540. On January 10 1974 the rent officer reached a decision to register £650 a year as the new fair rent. Following section 48 (1) of the Rent Act 1968, the registration was expressed to have effect from the date of the landlords’ application, October 21 1973. On January 21 1974 the landlords served on the tenant a prescribed notice showing an increase from £540 to £650 a year, with ‘date of new rent’ shown ‘as from 10.1.74,’ and in an accompanying letter they said that ‘as from 10.1.74 rent will be payable at the rate of £162.50 per quarter,’ adding that the additional amount for the period 10.1.74 to 24.3.74 was £22.30. The tenant claimed that the notice was invalid, and the landlords subsequently sued for arrears on the basis of the increase and for a declaration that they were entitled to increase the rent due under the tenancy by a notice which specified a date other than the date of the commencement of a rent period. This was the only point taken by the tenant, and on January 19 1975 the judge accepted the submissions advanced on her behalf, holding that section 22 of the Act did not permit an increase to become effective during the course of a rental period. Section 22 (2) of the 1968 Act provided that where a rent was registered in respect of a dwelling-house and the rent payable for any statutory period would be less than the registered rent, the rent payable could be increased up to the amount of the registered rent by a notice specifying the date from which the increase was to take effect. By subsection (3), the date specified was not to be earlier than the date on which the rent was registered, nor was it to be earlier than four weeks before service of the notice. Section 38 (1) defined ‘statutory period’ as ‘any rental period of a regulated tenancy which is not a contractual period,’ and ‘rental period’ as ‘a period in respect of which a payment of rent falls to be made.’  There was in the present case no ‘contractual period’ as defined by the same section, so that the statutory period was a quarter. Thus the relevant provisions of section 22 (2) could be rewritten as follows: Where a rent for a dwelling-house is registered . . . the following provisions shall apply with respect to the rent for any quarter . . . if the rent payable for any quarter would be less than the rent so registered, it may be increased up to the amount of that rent by a notice of increase . . . specifying the date from which the increase is to take effect. The quarter primarily relevant was that from December 25 1973 to March 24 1974. Certainly the rent payable for that quarter would have been less, but for the increase, than the apportioned amount of the registered rent, and in his (Megaw LJ’s) judgment there was nothing in subsection (2) which either expressly or by necessary implication limited a notice of increase so that it could be valid and effective only if the date specified in it was a date on which rent was due to be paid–a quarter day, or the start of a ‘statutory period.’  For these reasons, and for those in the judgments about to be delivered, he would allow the appeal. JAMES LJ said that Mr Wood, in a detailed and forceful argument, had submitted that ‘rent payable’ meant rent due and payable on a rental day. He relied on the principle that rent did not accumulate day by day during a rental period, but fell due for payment on the rental day as the rent for the period. He (his Lordship) was however of opinion that where a statute made express provision in relation to the date to be specified in a notice, the implication of a further provision relating to that date would have to65 be clearly necessary to fulfil the statute’s purposes or avoid unreasonable or absurd consequences. GEOFFREY LANE LJ said that the plain words of the section seemed on the face of them to entitle the landlords to do what they had done, and in his opinion Mr Wood’s approach overlooked the fact that the tenancy here in question was the creature of statute and was regulated by statute. The appeal was allowed, and judgment entered for the landlords for £132.29 with costs in both courts.