Judgments - Riverside Housing Association Limited (Appellants) v. White (FC) and another (FC) (Respondents)

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    35.  On a fair reading, I consider that the combined effect of the centrally relevant clauses 2(6) and 2(7) amounts to this. Riverside is entitled to increase the rent once a year on 28 days notice, which notice can take effect any time on or after the first Monday in June. In this connection, it seems to me that clause 2(6) imposes one condition, namely that Riverside must give the tenant four weeks notice before the reviewed rent becomes payable, and that clause 2(7) imposes another condition, in that it provides that the reviewed rent cannot become payable earlier than the first Monday in June. It is true that the words "with effect from…" could be taken as meaning "with immediate effect from…" but they can mean "on or at any time after…" As usual, it all depends on context. If I were to say to a friend that I would be arriving for dinner "with effect from" 8 o'clock, the natural meaning would be not that I would be arriving at 8 pm precisely, but that I would be arriving at or some time after 8 pm (albeit that, because I was coming for dinner, there would presumably be an implied term that I would be arriving before, say, 9.30 pm at the latest).

    36.  The contention that a late notice would not deprive Riverside of the right to a rent review is also supported by the statement that the rent "will be increased" in clause 2(7). Of course, the words could mean "may be increased" but that is not their primary meaning. The notion that the date on which a rent increase takes effect does not have to be the first Monday in June is further reinforced, in my view, by the fact that there is nothing in clause 2(6) to indicate that the four weeks notice referred to has to expire by any particular date.

    37.  There is nothing in clause 2(8) which assists much, save that the use again of the word "will", which, as mentioned, suggests that the parties anticipated that there would be a review of the rent; this tends to undermine the interpretation advanced by the respondents, which would have the effect of depriving Riverside of an annual rent review altogether if it fails to serve the notice in time.

    38.  Clause 2(9) seems to me to provide some support for the view that the parties cannot have envisaged that, if Riverside failed to serve a notice by early May in any year, it would lose the right to review the rent for that year. If clause 2(9) came into play, the independent expert might need a substantial amount of time to determine the appropriate rent increase. He would not be under the control of the parties, and there would therefore be an obvious risk that, through no fault of Riverside, or indeed of anyone else, the level of reviewed rent would not have been determined by early May, as a result of which it would be impossible for Riverside to serve a notice in time. Although a small point, I think it is significant and casts doubt on the view that Riverside would lose the right to review the rent for the year if it did not serve its notice by early May.

    39.  Clauses 6(1) and 6(3) do not seem to me to take matters any further in the present connection. Clause 6(2), however, is of some relevance. Particularly in the light of its very unsatisfactory drafting, to which I have already made reference, I consider that the clause is perfectly capable of meaning that two conditions have to be satisfied before Riverside can have an increase in rent in any particular twelve months, namely the arrival of the first Monday in June and the expiry of at least four weeks following the service of an appropriate notice. Quite apart from the fact that it purports to define a date by reference to an increase, it refers to a date which "will" occur each year, and that date is "the first Monday in June with four weeks prior notice". If four weeks prior notice is not given, then, if one reads the clause absolutely literally, the date does not exist, and yet the word "will" indicates that the date must exist. In my opinion, by far the most satisfactory way of solving this dilemma is by interpreting clause 6(3), consistently with the natural meaning of the earlier clauses 2(6) and 2(7), that is to say on the basis that it identifies two cumulative requirements, both of which have to be satisfied before Riverside is entitled to review the rent in any particular twelve month period.

    40.  It is for these reasons that your Lordships decided that the four notices were valid and that in those circumstances it was unnecessary to hear argument on the other issues.

    41.  That leaves the question of costs. Although the issue on which Riverside has won was not in the forefront of the case before us or, it would appear, in the forefront of its case in the Court of Appeal, it was always a point which, in one form or another, Riverside was running. It may seem a little harsh on the respondents, and indeed the Community Legal Service, which has funded the respondents' case throughout, that they should be ordered to pay, not only the respondents' costs, but also Riverside's costs in relation to all the issues which were argued at first instance and in the Court of Appeal in relation to which full written cases have been prepared for your Lordships' House. However, as I see it, that is the inevitable consequence of allowing the appeal on what should always have been the primary basis upon which Riverside's case was put, namely that the four notices were valid in that they complied with the requirements of the tenancy agreement under which they were served. The fact that wisdom of hindsight now suggests that the parties might usefully have agreed that this point should proceed as a preliminary issue does not persuade me that the respondents should not be ordered to pay all Riverside's costs. First, bitter experience in other cases renders it difficult to criticise parties for not having agreed to have a preliminary issue. Secondly, it was no more Riverside's fault than that of the respondents that all issues were determined at one hearing at first instance and in the Court of Appeal.

    42.  In these circumstances, I would allow this appeal and would order the respondents to pay Riverside's costs.

 
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Prepared 25 April 2007