Riverside Housing v White in the House of Lords  

Background

In a claim for possession based on rent arrears the tenants argued, as a preliminary issue, that a proportion of the rent claimed as arrears was not rent that was “lawfully due” on the basis that rent increases notified by the housing association were invalid since the notices issued to tenants did not conform to the contractual rent variation date contained in the tenancy agreement.

Riverside consulted with its tenant participation forum and having done so decided to change the rent variation (increase) date from the first Monday in June each year to the first Monday in April each year. The judge at first instance held that the rent increases were valid on the basis that this was a rent review clause and time was not of the essence. Mr and Mrs White appealed on the grounds that the presumption that time was not of the essence did not apply to the date of an increase merely the operation of a rent review mechanism and Riverside cross-appealed against the judge’s other findings including that they could not rely on estoppel by convention as they were seeking to use it to found a cause of action.

At the Court of Appeal, the tenant’s appeal was allowed. The presumption that time was not of the essence did not arise in a case such as this which was concerned with a clear contractual term stipulating the date that the rent could be increased from as otherwise the whole purpose of the clause would be negated. The cross-appeal was also dismissed on all ground including the estoppel point. The Court of Appeal, whilst expressing sympathy, for the housing association (who indicated that the decision would cost them £7-£10 million) were bound to do so as any other result would over-turn the long-standing law that estoppel by convention can only be used as a shield and not a sword.

House of Lords judgment

The House of Lords judgment found in favour of Riverside :

1. The House of Lords allowed Riverside’s appeal on the basis that an interpretation of their tenancy agreement as a whole allowed them to increase the rent in the way that they did. This leaves open the possibility that other tenancy agreements may not be so generously interpreted.
2. The House of Lords refused to interfere with the law on estoppel so that it remains available as a shield not as a sword.
3. They also refused to interfere with the Court of Appeal’s decision that time is of the essence of a rent review date.

Link to judgment is at: http://www.publications.parliament.uk/pa/ld200607/ldjudgmt/jd070425/river-1.htm

The tenants were be represented by Jan Luba QC and Adam Fullwood of Counsel instructed by Tony Fearnley of Stephensons Solicitors .

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Quick links

> Reasonable notice is required for rent rise in wrong month - The Times Law Reports, 7 May 2007

> The Court of Appeal hearing was also covered in our February 2006 Housing Legal bulletin .

> Click here to download the full judgment in White v Riverside Housing Association [2005] EWCA Civ 1385 (Court of Appeal).

> What is "estoppel"? Definition : English law defines it as: "a principle of justice and of equity. It comes to this: when a man, by his words or conduct, has led another to believe in a particular state of affairs, he will not be allowed to go back on it when it would be unjust or inequitable for him to so" Moorgate Mercantile v Twitchings [1976] 1 QB 225, CA at 241 per Lord Denning MR. [source: http://en.wikipedia.org/wiki/Estoppel_%28English_law%29 ]