I had a recent result in court defending a possession claim brought by a landlord using a technical defence that not a lot of people seem to know about, because it relied on something not immediately related to housing law.
It was one of those legal points that I knew of years ago and simply forgot about until the opportunity arose afresh.
It is the vexed question of how legal documents are signed where the landlord is a limited company. Section 44 of the Companies Act 2006 states:-
“Execution of documents:-
(1) Under the law of England and Wales or Northern Ireland a document is executed by a company—
(a) by the affixing of its common seal, or
(b) by signature in accordance with the following provisions.
(2) A document is validly executed by a company if it is signed on behalf of the company—
(a) by two authorised signatories, or
(b) by a director of the company in the presence of a witness who attests the signature.
(3) The following are “authorised signatories” for the purposes of subsection (2)—
(a) every director of the company, and
(b) in the case of a private company with a secretary or a public company, the secretary (or any joint secretary) of the company.”
A previous case
Those with clearly better memories than my shaky old one may recall back in 2016 the case of Bali v Manaquel Company Limited, ably covered by Nearly Legal here where a s21 was held to be invalid because the service of the prescribed information of the deposit scheme being used had not been executed in accordance with the requirements of the Companies Act.
The appeal judge quoted by Giles said:-
“it was a certification of the accuracy of the information for a ‘formal legal purpose”, meaning it had to be Companies Act compliant.
My case put forward
My recent argument, using the same logic, was that the s21 served on the tenant was similarly invalid because the landlord issuing it was a limited company and therefore bound by s44. A point that the judge on the day agreed with.
Only later did I do a bit of digging on this to see if I was actually on the money or just got a good judge in a good mood on a good day. I found the case of Hilmi & Associates Ltd v 20 Pembridge Villas Freehold Ltd , where a notice was served by leaseholders on a freeholder, notifying that they wanted to purchase the freehold under the Leasehold Reform, Housing and Urban Development Act 1993.
One of the leaseholders was a company and the notice was therefore not considered to have been properly executed.
In a recent issue of Legal Action magazine March 2018 veteran housing judge Nic Madge, co-author of the Housing Law Casebook suggested that there is a “Strong argument” that notices served by landlords on tenants could be invalidated in the same way and it certainly worked in my case.
Giles Peaker, in his article on the Bali judgement, goes further and suggests that this may well also be the case where prescribed information notices or notices seeking possession are signed by letting agents who are themselves a company.
A word of advice
While I use this knowledge to help defend possession applications landlords would also be wise to bear it in mind, particularly when instructing letting agents. In his legal Action article Nic informs us that this defence is proving very common with court duty advisers, of which I am evidently a late-comer.
I doubt he ever reads my stuff but I’ll just add my congrats to Nic who I hear is finally retiring. When I was a freshly minted housing adviser (with hair) in about 1989, Nic ran the first legal training course I ever attended, back in the days of SHAC. I remember a warm amiable guy who took great delight in pointing out several times throughout the day, that I wasn’t as knowledgeable as my cocky, younger self thought he was.
Like everyone in this game, I’m still learning Nic.