New Judgment: Berrisford v Mexfield Housing Co-operative Ltd  UKSC 52
09 Wednesday Nov 2011
On appeal from:  EWCA Civ 811
Mexfield Housing Co-Operative Ltd is a fully mutual housing co-operative association founded by a bank as part of a mortgage rescue scheme with a view to buying mortgaged properties from borrowers in difficulty and letting the properties back to them. In the Court of Appeal, Mexfield had successfully argued that its “Occupancy Agreement” could not be a valid express tenancy because it was of uncertain duration. However, it was an implied periodic tenancy, by virtue of the payment and acceptance of rent since 1993, and, pursuant to well established principles, Mexfield was therefore entitled to determine such a tenancy by notice to quit. Berrisford appealed. Held, unanimously allowing the appeal.
The purpose of the Occupancy Agreement was to provide Berrisford with a home; Mexfield’s ‘mortgage rescue’ background tended to support the notion that Berrisford’s right of occupation was not intended to be precarious. Despite the fact that the Agreement was expressed to be a tenancy “from month to month”, it seemed clear from the language that the parties intended that the arrangement should only be determinable pursuant to clauses 5 or 6.
On a review of the authorities, such an agreement cannot take effect as a tenancy according to its terms as it is for an uncertain duration. While there is no apparent justification for the rule that an agreement for a term of uncertain duration cannot give rise to a tenancy and the law was not in a satisfactory state, this rule had been established for many centuries and should not be jettisoned. However, before the Law of Property Act 1925, the common law treated an agreement for an uncertain terms as a tenancy for the life of the tenant, determinable before the tenant’s death according to its terms. The effect of s 149(6) of the 1925 Act was that the Occupancy Agreement, as a tenancy for life at common law, was to be treated as a term of 90 years determinable on the death of Ms Berrisford, subject to the rights of determination in clauses 5 and 6.