Uncertain term not saved in equity

The case of Berrisford v Mexfield Housing Co-operative Ltd [2010] EWCA Civ 811 runs up against the fundamental landlord and tenant rule of certainty of term, and explores whether there is a difference between the tenancy agreed to be created by an occupation agreement, and the agreement itself.

In this case, a “tenancy” was granted on by Mexfield on the following terms: “The Association shall let and the Member shall take the [property] from the 13th day of December 1993 and thereafter from month to month until determined as provided in this Agreement." The agreement provided for the tenant to terminate it by one month’s notice in writing. However, the only ability for the landlord to terminate was in clause 6 of the agreement which provided for termination in the event of a breach of the agreement by the tenant (e.g. arrears of rent). The fact that the tenancy would continue until termination at an uncertain future date therefore rendered it uncertain as a term, and void as a legal estate. (See Prudential Assurance Co Ltd v London Residuary Body [1992] AC 386).

However, could the contract between the original parties survive in equity, and be capable of specific performance, even though the tenancy arising out of the contract was void? The Court of Appeal held, by majority that it could not. Aikens LJ said that “in my view if the object of the original contract between the parties is to create an interest in land and that object is not achievable at law because the interest of land created would be of an uncertain term, then neither law nor equity should be able to enforce the contract between the original parties.” The tenancy agreed to be granted was therefore void. In its place was an implied periodic tenancy which Mexfield had properly terminated by common law notice to quit. Ms Berrisford could not rely upon the contractual right apparently given to her to occupy the property until either she terminated the agreement, or committed a breach of it.