Mexfield Housing Co-operative Ltd v Berrisford [2012] 1 AC 9...

Facts

• Mrs. Berrisford occupied a property under an agreement with Mexfield Housing Cooperative Ltd.
• The agreement provided for weekly rent and allowed Mexfield to end the arrangement with notice but lacked a fixed end date.
• Mexfield sought possession of the property, contending the agreement was not a valid lease due to its uncertain duration.

Issues

1. Whether an agreement lacking a fixed term constitutes a valid lease at common law.
2. Whether the absence of a definite end date renders the tenancy invalid under established legal principles.
3. Whether, in cases of uncertainty, a lease to an individual can be construed as a 90-year lease terminable by notice.
4. Whether the distinction between uncertainty due to external events and uncertainty from notice provisions affects the lease's validity.

Decision

• The Supreme Court ruled the agreement was a valid lease, applying the rule from Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386.
• The Court held that, in such cases, the lease takes effect as a 90-year lease terminable by notice under common law if the tenant is an individual.
• The Court distinguished the case from Lace v Chantler [1944] KB 368, stating that uncertainty depending on parties' power to give notice differs from uncertainty based on an external event.
• The previous approach strictly invalidating leases with uncertain terms was relaxed, especially for modern housing agreements.

Legal Principles

• Leases must generally have certainty of term to be valid at common law.
• Where a lease to an individual contains uncertain duration but either party may end it by notice, the lease may be construed as a determinable 90-year term.
• The Prudential rule is not applicable to leases to companies or to arrangements where only the tenant may end the agreement.
• The parties’ intention to create a lease is assessed objectively, considering the agreement’s terms and context.
• The Mexfield rule does not apply where the agreement specifically states it is not intended to create a lease.

Conclusion

Mexfield Housing Co-operative Ltd v Berrisford significantly shifted the legal approach to leases with uncertain terms by allowing courts to treat certain indeterminate agreements as 90-year leases terminable by notice, thereby providing greater security for individual tenants and requiring careful examination of the agreement's intent and wording.