Authored By: Mishaal Amjad
Pakistan College of Law
Case Summary:
Mexfield Housing Co-Operative Ltd v Berrisford [2011] UKSC 52
Citation
Mexfield Housing Co-Operative Ltd v Berrisford [2011] UKSC 52
On appeal from: [2010] EWCA Civ 811
Court
The case was decided by the United Kingdom Supreme Court
Judge(s)
The matter was heard and decided by a full panel of seven Justices of the Supreme Court: Lord Hope (Deputy President), Lord Walker, Lady Hale, Lord Mance, Lord Neuberger, Lord Clarke, and Lord Dyson.
Facts
Mexfield Housing Co-Operative Ltd (“Mexfield”) was a fully mutual housing co-operative designed to support mortgagors in financial distress by buying their homes and allowing them to remain in the properties as tenants. In 1993, Ms Ruza Berrisford sold her property at 17 Elton Avenue, Barnet to Mexfield and entered into an “occupancy agreement” with them on 13 December 1993. The agreement allowed her to occupy the property “from month to month until determined as provided in this Agreement.” Importantly, Clause 5 gave her the unilateral right to end the agreement by giving one month’s notice. Mexfield, on the other hand, could only terminate the agreement under Clause 6, which specified limited grounds for termination—such as non-payment of rent, breach of terms, cessation of co-operative membership, or dissolution of Mexfield.
Rent was to be paid weekly, and Mexfield retained the right to increase it annually with proper notice. Ms Berrisford remained compliant with the agreement and paid her rent as agreed, with a short period of arrears in early 2008 which she cleared promptly. Despite this, Mexfield served a notice to quit on 11 February 2008 and initiated possession proceedings, asserting that the agreement constituted a periodic tenancy that could be terminated by notice under common law rules.
At first instance, the County Court found in favour of Ms Berrisford and dismissed Mexfield’s possession claim. However, this decision was reversed by the High Court and later upheld by the Court of Appeal, which reluctantly agreed that the arrangement must be treated as a monthly tenancy terminable on notice by either party. Ms Berrisford then appealed to the Supreme Court.
Issues
The appeal raised five key legal issues. First, whether Mexfield could lawfully terminate the occupancy agreement by giving one month’s notice under general common law principles, despite the agreement’s wording that limited Mexfield’s termination rights. Second, whether the agreement constituted a valid legal lease under common law given the uncertain duration of the term. Third, whether such an agreement, had it been made before 1926, would have amounted to a tenancy for life under the old common law rules. Fourth, whether section 149(6) of the Law of Property Act 1925 applied to convert a tenancy for life into a lease for a term of 90 years determinable on the tenant’s death. Fifth, whether, on either a statutory or contractual basis, Ms Berrisford was entitled to remain in occupation of the property.
Legal Reasoning
The Supreme Court began its analysis by focusing on the central legal rule concerning certainty of term. Drawing from cases like Lace v Chantler [1944] KB 368 and Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386, the Court reiterated the longstanding common law rule that a lease must be for a certain or determinable period. In this case, the agreement lacked a definite end date and did not allow Mexfield to terminate it on notice without cause. Therefore, the Court agreed that it was not a valid lease at common law due to uncertainty of term.
However, rather than ending the analysis there, the Court proceeded to consider whether the agreement could be interpreted as a tenancy for life. The Court examined earlier authorities including Doe d. Warner v Browne (1807) and Re Carne’s Settled Estates [1899] 1 Ch 324, and held that, prior to 1926, a tenancy that granted exclusive possession indefinitely (but only determinable in certain ways) would have been classified as a tenancy for life. Provided the agreement was in writing, as in this case, such a tenancy would have been valid under common law.
The next question was whether the effect of section 149(6) of the Law of Property Act 1925 would apply. That section states that a lease granted for life is to be treated as a lease for a term of 90 years, determinable upon the tenant’s death. Applying this statutory provision, the Court concluded that the agreement must be interpreted as granting a 90-year lease determinable on Ms Berrisford’s death. This reasoning avoided invalidating the agreement entirely and gave legal effect to the parties’ intentions, while respecting the legislative framework introduced by the 1925 Act.
In addition to the statutory argument, the Court also considered whether the agreement could be upheld as a binding personal contract. Even if it failed to create a legal lease, the Court reasoned, it remained a valid and enforceable agreement between the parties. The agreement gave Ms Berrisford exclusive possession of the property, and there was clear intention to create legal relations. As established in Street v Mountford [1985] AC 809, the grant of exclusive possession for rent is normally treated as a lease, and the label used by the parties is not determinative.
Therefore, even in the absence of a valid lease, the contractual relationship remained enforceable, which meant that Mexfield could not unilaterally evict Ms Berrisford in breach of its own terms.
This multi-layered approach, covering both statutory conversion and contractual enforceability, demonstrated the Court’s willingness to give effect to the parties’ expectations while adhering to the established legal framework.
Held
The Supreme Court allowed the appeal. It held that the agreement did not create a valid lease at law because of the uncertainty of its term. However, since it would have amounted to a tenancy for life under pre-1926 common law, it was deemed to be a lease for a term of 90 years determinable on the tenant’s death, pursuant to section 149(6) of the Law of Property Act 1925. Accordingly, Mexfield had no legal right to terminate the agreement except under the limited conditions set out in Clause 6. Because those conditions were not met, the notice to quit was invalid, and the possession claim failed. Even had the statutory analysis not applied, the agreement would have been enforceable as a contract, which still would have prevented Mexfield from evicting Ms Berrisford in breach of its terms.
Ratio Decidendi
The legal rule (ratio decidendi) derived from this case is that an agreement granting exclusive possession for an uncertain term cannot constitute a valid lease at common law. However, if the agreement would have qualified as a tenancy for life under the pre-1926 common law, section 149(6) of the Law of Property Act 1925 converts it into a 90-year lease, determinable on the death of the tenant. This provides legal enforceability to otherwise uncertain tenancy agreements, particularly where they contain express conditions limiting the landlord’s termination rights. Additionally, even where a lease fails at law, such an agreement may still be enforceable as a personal contract between the parties.
Obiter (if any)
Lord Hope delivered a concurring judgment that included important obiter dicta on the comparative treatment of similar tenancies under Scots law. He observed that, unlike in England, fully mutual housing co-operatives in Scotland are classified as “registered social landlords” under the Housing (Scotland) Act 2001. This designation gives their tenants statutory protections regardless of the lease’s legal classification. In Scottish law, a lease is treated as a contract creating personal rights, and those rights can be enforced even if no real right arises unless the lease is registered or has a certain term. Furthermore, he discussed the doctrine of “tacit relocation,” under which leases that have technically expired may continue automatically unless either party gives proper notice. Lord Hope concluded that while no real right might have arisen under Scottish law in similar circumstances, a continuing contractual relationship, much like the one recognised by the English Court in this case, would have afforded the tenant protection. These comparative insights, though non-binding, suggest the need for greater statutory security for tenants in the English context and may serve as a reference point for legislative reform.
