Agricultural holdings — Arbitration — Whether arbitrator appointed when he received form of appointment or when he notified parties — Whether tenant complied with a notice to pay rent by a cheque received timeously but dishonoured on first presentation after time-limit and later honoured on second presentation but before notice to quit served
The respondent
tenant held an agricultural tenancy from the appellant landlord. The tenant
failed to pay the gale of rent due on March 25 1990 and on March 29 1990 the
landlord’s agent served on the tenant a notice to pay having regard to Case D
of Schedule 3 to the Agricultural Holdings Act 1986; the last date for receipt
of payment under the notice was May 29 1990. On May 22 or 23 the landlord’s
agent received a cheque from the tenant for the rent; it was presented for
payment on May 25 but returned marked ‘refer to drawer, please re-present’ on
June 1 1990. The cheque was subsequently
with a notice to quit relying on Case D. The tenant sought arbitration of the
notice to quit and the parties agreed upon an arbitrator who, by letter dated
August 31, accepted the appointment subject to the completion of a form of
appointment signed by both parties. A form was executed by both parties by
September 12 and received by the arbitrator on September 14, although he did
not acknowledge it until September 18 when he reminded them that, in accordance
with para 7 of Schedule 11 to the 1986 Act, their respective statements of case
were to be submitted to him within 35 days of his appointment. The landlord’s
case was submitted by October 10, but the tenant’s case had not been submitted
by October 19. On that date the arbitrator informed the tenant’s solicitors
that, because no case had been received within the time-limit, the tenant would
be precluded from putting forward any evidence at the arbitration. The tenant
purported to submit a case contending that the 35-day period ran from September
18, alternatively that the arbitrator had a discretion to extend the
time-limit. The arbitrator was asked to state a case on a number of questions
to the county court directed to the two principal issues: (1) whether the
arbitrator was appointed when he received the executed form of his appointment,
or when he informed the parties that he had been appointed; and (2) whether the
notice to pay rent had been complied with. The landlord appealed from the
decision of the judge, who had decided the principal issues in favour of the
tenant.
regard to the advance notice the parties had of the arbitrator’s consent to act
upon receipt of a form of appointment (a condition subsequent), the receipt of
that form by the arbitrator on September 14 completed the tripartite agreement:
the arbitrator was appointed and the tenant did not have to be informed of
that. The tenant’s statement of case was therefore not delivered within the
statutory time-limit of 35 days from the appointment of the arbitrator. The
arbitrator did not have power to extend the statutory time-limit.
dishonouring of the cheque on first presentation, the tenant failed to comply
with the notice to pay rent and the landlord became entitled to serve a notice
to quit relying on Case D in Schedule 3 to the 1986 Act. The second
presentation of the cheque before service of the notice to quit did not waive
the right to serve such a notice: Stoneman v Brown could not be distinguished.
The following
cases are referred to in this report.
Beevers v Mason (1978) 37 P&CR 452; 248 EG 781, [1978] 2 EGLR 3,
CA
Cohen v Hale (1878) 3 QBD 371
Hadley
(Felix) & Co v Hadley [1898] 2 Ch 680
Luttenberger v North Thoresby Farms Ltd [1993] 1 EGLR 3; [1993] 17 EG 102
Nicks
& Son Ltd v Taylor’s Bakery Ltd [1962]
NZLR 286
Romer
& Haslam, Re [1893] 2 QB 286
Stoneman v Brown [1973] 1 WLR 459; [1973] 2 All ER 225, CA
Tradax
Export SA v Volkswagenwerk AG [1970] 1 QB
537; [1970] 2 WLR 339
University
College, Oxford (Master & Fellows) v Durdy
[1982] Ch 413; [1982] 3 WLR 94; [1982] 1 All ER 1108, CA
This was an
appeal against the decision of Judge Darwall-Smith, who in Exeter County Court
made determinations on a number of questions in a case stated from the
arbitrator, Mr John Neason FRICS FAAV, in an arbitration on a notice to quit
served by the appellant, Mrs Betsy Pym Smallacombe, upon the respondent, Vivian
Reginald Hannaford.
Barry
Denyer-Green (instructed by Horwood & James, of Aylesbury) appeared for the
appellant; Dirik Jackson (instructed by Bond Pearce & Co, of Plymouth)
represented the respondent.
Giving the
first judgment at the invitation of Neill LJ, HENRY LJ said: Mr Vivian
Reginald Hannaford was, at the material time, the tenant of an agricultural
holding known as Lower West Kimber, Northlew, Devon. Mrs Betsy Pym Smallacombe
was his landlord. The rent was £1,700 pa, payable in arrears by half-yearly
instalments of £850 on September 29 and March 25 in each year of the tenancy.
Section 26(1)
of the Agricultural Holdings Act 1986 places restrictions on the ability of a
landlord of an agricultural holding to terminate the tenancy thereof. Generally
speaking, the tenant has the right to serve a counternotice in response to any
notice to quit, and if he does so the notice to quit is not to have effect
until the Agricultural Land Tribunal consents to its operation (which it may do
only in certain limited circumstances).
However,
section 26(2) of the Act makes an exception in certain cases which are
specified in Part I of Schedule 3. One of these cases is Case D, which applies
where:
At the date of
the giving of the notice to quit the tenant had failed to comply with a notice
in writing served on him by the landlord, being . . .
(a) a notice requiring him within two months from
the service of the notice to pay any rent in respect of the agricultural
holding to which the notice to quit relates.
Here the
tenant did not pay his half year’s rent on March 25 1990, the date when it was
due. The following day the landlord issued the statutory notice requiring the
tenant to pay the rent due within two months from the date of service of the
notice on him. That notice was served on March 29 1990. Therefore, the last
date for receipt of payment was May 29.
What in fact
happened was this. On May 21 the tenant sent the landlord’s agent a cheque for
£850 dated May 18. That was received on behalf of the landlord on May 22 or 23.
It was paid into the landlord’s agent’s client account at National Westminster
Bank in Tavistock on May 25. That bank, by notice dated June 1 1990, notified
the landlord’s agents that the cheque had been returned marked ‘refer to
drawer, please re-present’. That cheque was subsequently represented by the
bank and honoured on June 5 1990.
However, the
landlord’s agents issued a notice to quit dated June 8 1990 relying on Schedule
3, Part I, Case D of the Agricultural Holdings Act 1986, that at the date of
the giving of the notice the tenant had failed to comply with the notice dated
March 26 requiring payment of the outstanding rent within two months of service
thereof.
Where the
tenant seeks to challenge the effect of such a notice he must proceed by way of
arbitration under the provisions of Agricultural Holdings (Arbitration on
Notices Order) 1987. On June 20 1990 the tenant gave the landlord notice that
he wished to contest ‘all matters arising out of the reasons stated in the
notice to quit’ and that he required such questions to be determined by
arbitration. The parties agreed that Mr John Neason [FRICS FAAV], the senior
partner of Colvilles, chartered surveyors of Exeter, be appointed arbitrator,
and he was so appointed. The provisions of para 7 of Schedule 11 to the 1986
Act require the parties to the arbitration to submit their respective statement
of cases to him within 35 days ‘from the appointment of the arbitrator’.
Here the
parties prepared a document agreeing to the appointment of Mr Neason as
arbitrator, the execution of that document was completed on September 12 and it
was posted to the arbitrator the next day. He received it on September 14, but
did not acknowledge receipt of it until his letter dated September 18, sent to
both parties. In this letter he said:
I would
remind you that your Statements of Case should arrive with me not later than 35
days from the date of appointment and this is a mandatory requirement.
Thirty-five
days from September 14 would expire at midnight on October 19, but if his
appointment was not completed until his acknowledgment of it, the time would
not expire until midnight on October 23.
The landlord
submitted her case in good time, it being dated October 10. The tenant had not
submitted his by October 19, and on that date the arbitrator wrote to the
tenant’s solicitors, Bond Pearce & Co, stating:
Messrs Bond
Pearce had not submitted a statement of case and they should note that they
will therefore be precluded from putting forward any evidence at the hearing.
On receipt of
this letter, the tenant’s solicitors denied that they were out of time, and
enclosed a case stated dated October 22 1990.
There were
then two separate categories of issue before the arbitrator. The first related
to the statutory rules, and the consequences of breach of them.
Question 1:
had the tenant submitted his statement of case in time?
Question 2: if
he had not, had the arbitrator power to extend that time?
Second, and
quite separately, there were the various issues arising under the arbitration
proper, relating to the question whether the delivery of a cheque for rent was
payment on the date of delivery if that cheque were dishonoured on the first
presentation, but subsequently met before the notice to quit was served.
In these
circumstances, the arbitrator sensibly decided to state a case on agreed facts
for the opinion of the court. Such a case was prepared with the assistance of
the parties and is dated May 13 1992. It came for hearing before Judge
Darwall-Smith in Exeter County Court, judgment was given on January 26 1993.
His findings on the 10 questions posed are now the subject of appeal to us.
Question 1
reads, ‘Was the tenant’s Statement of Case delivered within the statutory
period allowed by para 7 of Schedule 11 to the 1986 Act?’
As will
already be clear, the answer to this question depends on whether the date of
appointment is the date when the arbitrator received the document appointing
him (September 14), or the date when he notified the parties that he had
received it and was acting on that appointment (his letter of September 18).
The facts as
disclosed by the documents are these. Bond Pearce & Co, solicitors, were
acting for the tenant and Kivells, estate agents, were acting for the landlord.
By letter of August 16 Bond Pearce put three possible names forward and by
letter of August 17 Kivells agreed to the appointment of Mr Neason. Bond Pearce
then telephoned Mr Neason and he confirmed that he would accept the appointment
as arbitrator. They notified Kivells of this. Mr Neason then wrote (August 31)
a letter stating:
I confirm that
I would be willing to act as arbitrator in this case, subject to receiving a
properly completed form signed by both parties within the appropriate
time-limit.
My charges
will be based upon a rate of £65 per hour exclusive of VAT, travelling costs
and disbursements, and I reserve the right to appoint a legal assessor if this
is necessary having seen the respective parties’ Statement of Case . . . .
Upon receipt
of a properly completed form of appointment, I will write to the parties
further specifying arrangements for the conduct of the case.
Bond Pearce
then prepared a draft form of appointment which they sent to Kivells. Kivells
duly signed that document and the executed copy, dated September 12, was sent
to Mr Neason by Bond Pearce in a letter dated September 13. The document reads:
We Kivells . .
. agents for . . . the landlord . . . and Bond Pearce . . . agents for . . .
the tenant . . . appoint J S Neason . . . as sole arbitrator under the above
Acts . . . to settle and determine all claims questions and differences arising
between the landlord and the tenant . . . concerning the matters specified in
the schedule below.
We further
agree that no objection shall be raised by the issue of the arbitrator of one
award determining all matters so referred to him which shall be final and
binding on the landlord and the tenant and the persons claiming under them
respectively in accordance with the above provisions.
We undertake
and agree to sign any further submissions appointments or other documents and
to any other acts or things which may be required by the arbitrator in his
opinion to empower him legally and effectively to hear settle and determine the
above matters or any of them.
The arbitrator
received this document on September 14 and on September 18 wrote to the parties
in the following form:
I acknowledge
with thanks receipt of your form of appointment, dated 12th day of September
1990. I would remind you that your Statements of Case should arrive with me not
later than 35 days from the date of appointment and that this is a mandatory
requirement.
He then went
on to deal with arrangements for the arbitration. Those then were the facts.
Both the
learned judge and this court were referred to the authorities. Certain general
rules were laid down in the La Loma (Tradax Export SA v Volkswagenwerk
AG [1970] 1 QB 537). That was dealing with a very different factual
situation, namely the appointment by each side of their own arbitrator. Closer
to this case is the case of University College, Oxford (Master &
Fellows) v Durdy [1982] Ch 413. That concerned an arbitration under
this legislation. But there the parties could not agree on the arbitrator.
Where this occurs the parties must now apply to the president of the RICS to
make an appointment. Then it was to the minister. He must then seek the consent
of his proposed appointee to act. The question then arose as to whether that
appointment was complete with the minister’s execution of the document of
appointment, or his notification of the appointment to the parties. This court
there held that the former was the correct construction, but sought to temper
the potential injustice of the time running against a party who knew nothing of
the event which had started time running by adopting
a benevolent
construction in accordance with natural justice . . . by reading into the
paragraph the requirement that a party must have notice before time [for the
delivery of his statement of case] begins to run against him
— see Eveleigh
LJ at p418.
But by a
subsequent amendment to the Schedule, resort to such a construction was
prevented, the new para 31 of the Schedule making it clear that in cases of
third-party appointments time for the purposes of paras 7 and 14 shall run from
the time of execution of the instrument of appointment. Any ‘benevolence’ shown
was by the extension of the time from 28 days to 35 days.
Both the judge
and the editor of Muir Watt on Agricultural Holdings distinguish that
case from the appointment of an arbitrator by agreement. The judge quoted a
passage from p278 of the 13th ed of Muir Watt:
An agreement
that an arbitrator should be appointed in the future, however, is not the same
thing as the actual appointment of an arbitrator, a point which may be
important where there are time limits in question . . . the appointment of an
arbitrator by agreement, as distinct from an appointment by the President,
requires co-operation and communication between the parties. It clearly
involves agreement between the parties as to the arbitrator, the arbitrator’s
consent to act and the parties’ knowledge that he has consented. It would seem,
therefore, that the date of appointment must be the date when the following
requirements have been fulfilled: (a) the agreed appointment has been made in
writing; (b) the proposed arbitrator has been notified of the appointment and
has consented to act (he might have signified consent before the appointment);
and (c) the arbitrator’s acceptance has been notified to the parties (unless
they had advance notice of acceptance before the formal appointment). It is
desirable that the arbitrator should accept his appointment in writing,
although this is not prescribed by the Act, and the appointment will be
effective if he does in fact proceed under it without the formality of writing.
In my
judgment, that passage rightly identifies the necessity for the parties’
knowledge that the arbitrator has consented to act, unless they had advance
notice of his acceptance before the formal appointment. This was the
question that had to be asked in the light of the letter of August 31 in which
he indicated his acceptance of the post ‘subject to receiving a properly
completed form signed by both parties within the appropriate time limit’.
The learned
judge found that the arbitrator’s appointment was complete only when the
parties received his letter of September 18 acknowledging receipt of the form
of appointment. He found this for the following reasons:
(i) the arbitrator was not bound to act until he
had received and approved the written form of appointment; and
(ii) the tenant was informed of that fact.
In my
judgment, the judge was right on the first proposition in (i): undoubtedly the
arbitrator was not bound until he received the notice
his letter of August 31. But what he then received was in fact a properly
completed appointment form. I doubt whether his formal approval of it was
necessary.
But the
learned judge was, in my opinion, wrong on (ii): the parties had notice from
the arbitrator’s letter of August 31 at the time at which he would consider
himself bound. They had bound themselves by signing the notice of appointment
and sending it to him — his receipt of that document completed the tripartite
agreement.
It is true
that that conclusion produced the untidy result that the parties to the
arbitration will (unless the document is delivered by fax) be unaware of the
precise time when their 35 days begin to run against them. However, they could
avoid this untidiness by making the appointment complete only on the
arbitrator’s faxed acceptance. This they did not do.
Accordingly,
in my judgment, the tenant’s statement of case was not delivered within the
statutory period and question 1 should therefore have been answered ‘no’.
Question 2
relates to whether the arbitrator has power to extend that 35-day time-limit.
The general rule is that a statutory time-limit cannot be extended unless
either the statute expressly so provides or unless the requirement can be
considered to be merely directory and not mandatory: even though the word
‘shall’ is used. In Durdy’s case (supra) Griffiths LJ (at p923G)
held (albeit obiter) that the time-limits were fixed. That has been the
view of both leading text books, and has been the conventional view taken in
the county court over the history of this Act and its predecessor, a view
allowed to stand through various amendments of the Act and rules. And, in my
judgment, the wording of the rule makes that long-accepted conclusion clear
beyond doubt; under that rule the parties shall deliver their statement
of case within the statutory period and no amendment of it shall be
allowed after the expiry of that period except with the consent of the
arbitrator. This makes it abundantly clear that the arbitrator cannot consent
to an extension of the original time. The learned judge answered this question
‘no’, the tenant reserving their submissions for this court. The judge was
clearly right in his answer.
The second
major legal question relates to the sequence of events whereby the cheque for
the rent was presented within the two-month period, dishonoured after expiry of
that period, and then was represented and honoured on the second presentation
before service of the notice to quit relied on.
The starting
point is the payment of the rent by cheque. The law is set out in a decision of
this court dealing (coincidentally) with the tenancy of an agricultural holding
— Beevers v Mason (1978) 37 P&CR 452*, where Shaw LJ said [at
p458]:
On general
principles, the landlord should have the rent in cash in his hand by the due
date. This requirement may, however, be waived by express arrangement, or by
necessary implication where the facts are sufficiently strong to establish that
the landlord has shown that he is content to accept payment by cheque posted by
the date of payment.
*Editor’s
note: Also reported at (1978) 248 EG 781, [1978] 2 EGLR 3.
In this case
it is conceded that the landlord was content to accept payment by cheque.
The
authorities make it clear that payment by cheque is conditional payment. Thus,
Lord Esher MR in Re Romer & Haslam [1893] 2 QB 286 said at p296:
It is
perfectly well-known law, which is acted upon in every form of mercantile
business, that the giving of a negotiable security by a debtor to his creditor
operates as a conditional payment only, and not as a satisfaction of the debt,
unless the parties agree so to treat it. Such a conditional payment is liable
to be defeated on non-payment of the negotiable instrument at maturity, . . .
Where such a
conditional payment is made, the creditors’ remedies are suspended pending the
resolution of that condition — see Cohen v Hale (1878) 3 QBD 371 per
Cockburn CJ at p373:
It is very
true that a man who takes a cheque may be estopped from proceeding to enforce
payment of the debt until presentment of the cheque, and if the cheque is
ultimately paid the debt is extinguished. All that happens in the meantime is
that the right of action is suspended. But when the cheque is presented and
dishonoured, the debt, the remedy for which was suspended until presentment of
the cheque, may be treated as a debt subsisting all along, just as if the
cheque had not been given.
And, where the
cheque is honoured, the date of payment of that cheque relates back to the time
of the giving of the cheque: Felix Hadley & Co v Hadley
[1898] 2 Ch 680 at p682 per Byrne J:
In this case
I think what took place amounted to a conditional payment of the debt; the
condition being that the cheque or bill should be duly met or honoured at the
proper date. If that be the true view, then I think the position is exactly as
if an agreement had been expressly made that the bill or cheque should operate
as payment unless defeated by dishonour or by not being met; and I think that
that agreement is implied from giving and taking the cheques and bills in
question . . . Of course, had these bills and cheques not been duly met, then
the debts would have revived, and would have been debts due to the vendor, but,
inasmuch as they have been met, I consider that, the condition having been
observed, there was a payment as from the time of giving the bills and cheques.
Applying those
authorities to the facts of this case, it is clear that, had the tenant’s
cheque been cleared on its first presentment, then the date of payment would
have related back to the posting of the cheque (see Beevers v Mason,
supra), and so would have been made within the two-month period. And that
same principle was perhaps more controversially applied where payment of the
cheque was not stopped, but was delayed for a short time at the request of the
drawer (see Nicks & Son Ltd v Taylor’s Bakery Ltd [1962] NZLR
286, but note at p 288):
. . . that
there was ever only the one lodgment and presentation of the cheque which was
never ‘stopped’ by being marked to that effect or returned to the payee so as
to require re-presentation.
The situation
where a rent cheque was posted within the two-month period but required to be
re-presented after expiry of the period was dealt with at first instance in Luttenberger
v North Thoresby Farms Ltd [1993] 1 EGLR 3. There, Ferris J identified
the ratio of Beevers v Mason (supra at p460):
When the
cheque was put into the post, then, subject only to its being honoured, the
rent was paid.
There the rent
cheque had not been signed in the way required by the mandate. It needed
another signature. That signature was added after the period had expired, and
after the collecting bank had been told that the paying bank would not honour
it until that signature had been added, and indeed after the collecting bank had
asked for its return. In fact, the extra signature was added, and the cheque
therefore honoured, but both occurred after the two-month period had expired.
Ferris J held this to be too late, and explained and distinguished Beevers
v Mason as follows [at p9A]:
It seems to
me that in saying ‘subject only to [the cheque] being honoured’ the Court of
Appeal in Beevers v Mason must have been envisaging that the
cheque would be honoured without further intervention on the part of the
tenant. If, for example, a tenant sends by post an unsigned cheque which the
landlord presents for payment, not noticing the absence of a signature, it
seems to me that that does not constitute any kind of payment on any date. If,
when asked to pay the cheque, the tenant’s bank notices the absence of a
signature and, instead of returning the cheque, contacts its customer and gets
him to sign the cheque, which it then pays, the resulting transfer of money is
undoubtedly a payment, but in my view it is a payment made only when the tenant
signs the cheque or when the cheque is then paid.
He then found
that the transfer of the money when the cheque was honoured was not as a result
of the mandate constituted by the original cheque, but resulted from the new
mandate given by the second signature after the period had expired. That case
was rightly decided in my view.
In the case
before us, at the moment when the cheque was returned marked ‘refer to drawer,
please re-present’, the position is quite clear. There had been no payment
within the statutory period, and a notice to quit served then by the landlord
would be effective. And so the judge
However, on
discovering that it was not honoured, instead of serving a notice to quit, the
landlord re-presented the cheque which was then honoured. He did that before he
served a notice to quit. In so doing, he is still accepting the cheque as
conditional payment, and once honoured, it becomes actual payment ab initio,
ie the date of payment reverts back to the time he received the cheque. The
time he received the cheque was May 23, and therefore within the two-month
limit set by the notice to pay rent, dating from March 29. It seems to me that
if the landlord had re-presented the cheque after he had served his notice to
quit, he would be entitled to say that the tenant had failed to pay within the
two months; therefore the notice to quit was valid and the subsequent
representation of the cheque, which was honoured, was simply payment he was
entitled to for rent owing to him. By serving the notice to quit, he has
demonstrated that he has not accepted the cheque as payment under the notice to
pay rent, which if dishonoured, he is entitled to do. However, in re-presenting
the cheque before serving the notice to quit, he is accepting the cheque as
conditional payment in satisfaction of the notice to pay rent.
There the
learned judge is saying that all depended on the order of events: if the notice
to quit was served before the cheque was represented, the notice to quit was
valid, but if the notice to quit was served after then, he was accepting
payment as if the cheque had been honoured on its original presentation.
It is
necessary to go back to the statute. Under section 26(1) the general rule is
that a notice to quit an agricultural holding shall not have effect unless the
tribunal consent. But that rule does not apply in any of the cases set out in
Part 1 of Schedule 3. This was Case D.
That case
deals with the situation where:
At the date
of the giving of the notice to quit the tenant had failed to comply with
. . . a notice requiring him within two months from the service of the notice
to pay any rent [due] . . .
That was this
case: the cheque had not been honoured on its original presentation and so there
had been a breach. That was not in contention. What was in contention was what
happened when the rent was accepted before service of the notice to quit. This
court considered that point in Stoneman v Brown [1973] 1 WLR 459.
There Lord Denning MR said [at p462]:
In an attempt
to avoid the notice to quit, the tenant claimed that he had paid the rent on
September 1 when he posted his letter with the cheque in it. He said that the
landlord had authorised him to make payment by cheque by post. So on this occasion
he said that the rent was paid on September 1 1970 and this payment was before
notice to quit was served; because the notice to quit did not get to the tenant
until September 2. I will assume that the tenant paid the rent on September 1
when he sent the cheque. Nevertheless I am afraid that was too late to save
him. The two months had already expired on August 29 1970. Once the tenant
allowed the two months to expire without payment, the payment thereafter could
not save him. Even if he paid the rent after the two months, but before the
notice to quit was given, he would still have to quit. The words of the statute
are plain.
Then, by way
of further explanation, he said:
If the tenant
does not pay his rent within the two months required by the notice, then the
tenant has no further right to be there; the landlord can serve his notice to
quit; and even though the tenant should pay the rent before the landlord
actually serves his notice to quit, still it does him no good; it does not get
him out of his troubles, because he was already in breach, and the landlord’s
right to serve a notice to quit has accrued. If the landlord serves a notice to
quit, the tenancy is ended. It does not survive even if the tenant pays the
rent for a subsequent period unless the proper inference is that there was an
implied agreement for a new tenancy.
Here, on the
agreed facts and on the material before the arbitrator, there was no basis for
inferring an implied agreement for a new tenancy.
Nor, on that
material, was there any legal basis for finding that the landlord had, by the
mere acceptance of the rent due more than two months earlier, waived his
entitlement to claim possession by his notice to quit. It is trite law that
forfeiture is not waived by the acceptance of rent accrued due before that
forfeiture. Therefore, there are no grounds for distinguishing this case from Stoneman
v Brown and the fact that the rent was paid before the notice to quit
was served does not assist the court. Against that background I turn to
consider the specific questions asked.
Question 4:
‘Is evidence by the tenant of discussions and dealings between him and his bank
relevant and admissible on the issue as to whether or not the tenant failed to
comply with the notice to pay rent?’
My answer to
this question would be ‘no’. As a matter of principle, the debtor must seek out
his creditor and pay cash. Here the landlord had softened that general rule by
permitting payment of the rent by cheque sent in the post. That was conditional
payment, conditional upon the cheque being cleared in the ordinary course of
banking. The risk of the bank wrongly refusing to honour that cheque is borne
by the debtor and not by the creditor in such circumstances.
Question 5:
‘Is delivery of a cheque for rent by a tenant to a landlord payment on the date
of delivery if the cheque is afterwards presented for payment and dishonoured
on the first presentation but met on the subsequent presentation?’
The answer to
this question is ‘no’. When the cheque has been dishonoured, the condition on
which it was accepted has not been met. No subsequent presentation and
honouring of the cheque could relate back to the date of its original delivery
unless the landlord was waiving his right which had accrued on the first dishonour.
Such a finding is not possible on the agreed facts alone. And it follows from
what I have said that questions 8 and 10 (which the learned judge had answered
in the negative) should both be answered ‘yes’.
BELDAM and NEILL LJJ agreed and did not add anything.
