Landlord and tenant — Landlord and Tenant Act 1954 — New tenancy application — Whether section 26 notice addressed to and served on landlord’s agent valid — Whether addressee of notice had general agency — Whether impliedly authorised to accept notice
In May 1992
the respondent tenants were granted a lease of business premises for a term
expiring on February 11 1995. On April 1 1994 the appellant landlord acquired
the reversionary interest in the premises from British Railways Board, who sent
the tenants a notice contained in a pro forma letter informing the change of
landlord as from April 1 1994. On March 31 1994 the tenants made a request for
a new tenancy under section 26 of the Landlord and Tenant Act 1954 addressed
and sent to the solicitors’ department of British Railways Board. The landlord
opposed the request for a new tenancy and no application for a new tenancy was
made within four months of this request. On January 5 1995 the tenants made a
second section 26 request for a new tenancy. The then tenants made an
originating application for a new tenancy. Dismissing the landlord’s
application to strike out the tenants’ originating application, the court below
upheld the tenants’ contention that the 1994 application was invalid in that it
had been wrongly served on British Railways Board, who was not the landlord
within the meaning of section 26(3) of the 1954 Act, nor was it an agent for
the landlord. The landlord appealed.
corporation created by the Transport Act 1962, and was the legal entity which
constituted the landlord’s agent after March 31 1994. Service of a document
intended to have legal effect was rightly effected on British Railways Board
and sensibly marked for the attention of its solicitors’ department. By virtue
of section 23(1) of the Landlord and Tenant Act 1927 the notice was validly
given. The pro forma letter relating to change of landlord was sufficient to
inform the tenants that British Railways Board was their agent. Far from
directing the tenants to make payments to the landlord, the letter told them
that the change would be notified to them at some future date.
The following
cases are referred to in this report.
Chiswell v Griffon Land & Estates Ltd [1975] 1 WLR 1181; [1975] 2
All ER 665; (1975) 30 P&CR 211; [1975] 2 EGLR 58; 236 EG 411, CA
Polyviou
v Seeley [1980] 1 WLR 55; [1979] 3 All ER
853; (1979) 39 P&CR 164; [1979] 2 EGLR 63; 252 EG 375, CA
This was an
appeal by the landlord, Railtrack plc, against the refusal by Judge Tibber, in
Edmonton County Court, to strike out as an abuse of process an originating
application by the respondents, Mr Tarlochan Singh Gojra and Miss Kamlesh
Neelem Gojra.
Philip Kremen
(instructed by Church Adams Tatham) appeared for Railtrack plc; David Hodge QC
(instructed by Dewar Hogan) represented Mr Gojra and Miss Gojra.
Giving the
first judgment, WILSON J said: Railtrack plc (Railtrack) appeal, with
leave of the single lord justice, against the refusal by Judge Tibber, sitting
in Edmonton County Court on March 21 1997, to strike out, as being an abuse of
process, an originating application issued against them by Mr and Miss Gojra
(the applicants). The originating application is brought under section 24(1)(b)
of the Landlord and Tenant Act 1954 and seeks the grant of a new tenancy of
premises on Victoria Station which, lawfully or otherwise, the applicants
occupy. There they run a sandwich bar.
On May 1 1992
the applicants took an assignment of the lease of the premises, which was for a
term expiring on February 11 1995. With effect from midnight between March 31
and April 1 1994, Railtrack became the statutory assignee from British Railways
Board of the reversionary interest in the premises.
Under section
24(1) of the Act of 1954 the tenant under a business tenancy
may apply to
the court for a new tenancy … (b) if the tenant has made a request for a
new tenancy in accordance with section twenty-six of this Act.’
Section 29(3)
provides:
No
application under subsection (1) of section [24] of this Act shall be
entertained unless it is made not … more than four months … after the making of
the tenant’s request for a new tenancy.
The applicants
contend that they have complied with these provisions. They rely on a request
for a new tenancy made by notice on January 4 1995 (the 1995 notice) and on the
fact that the originating application was issued in March 1995, not more than
four months after the request was made.
Railtrack
submits that the applicants cannot rely upon the 1995 notice. It contends that
the applicants made an earlier request for a new tenancy, namely by notice sent
by post on March 31 1994 and received on April 6 1994 (the 1994 notice); that
the 1994 notice was valid; that the applicants failed to make application under
section 24(1) within four months of April 6 1994; that a tenant cannot rely on
a second request if the first was valid: see Polyviou v Seeley
[1980] 1 WLR 55*; that in accordance with section 26(5), the tenancy terminated
immediately before the date specified in the 1994 notice for the beginning of
the new tenancy, namely February 12 1995; and that since then the applicants
have been trespassing upon the premises.
*Editor’s
note: Also reported at [1979] 2 EGLR 63
The response
of the applicants is to admit that a notice in purported compliance with
section 26 was sent by a firm of solicitors purportedly acting on their behalf
on March 31 1994. Nor do they challenge in this court a finding by the learned
judge that, in sending it, the solicitors had authority to act on their behalf.
They say, however, in a submission which found favour with the judge, that the
1994 notice
that:
A tenant’s
request for a new tenancy shall not have effect unless it is made by notice in
the prescribed form given to the landlord …
The applicants
submit that, because the 1994 notice was addressed to and received by the
‘Solicitor Department, British Railways Board’, it was not ‘given to the
landlord’ in that, as from midnight on March 31 1994, the landlord was
Railtrack.
At some date
prior to March 31 1994 the applicants, along with many other lessees, received
notice about the change in the identity of their landlord. The notice was
contained in a pro forma letter from British Rail Property Board, which was a
division of British Railways Board. In the letter it was stated:
As you may be
aware, the Government’s proposals for the privatisation of British Rail are now
well advanced and, following the Railways Act 1993, major organisational
changes will come into effect on 1st April 1994 …
The property
at the above address, currently the subject of an arrangement between you and
British Railways Board, will, as from 1st April 1994, be owned by Railtrack Plc
and managed by Railtrack Property (a part of Railtrack Plc). Please let me
assure you that this change in your landlord will not affect or alter your
rights under the existing tenancy, lease, licence or other arrangement; your
legal position will remain unchanged.
However, in
future, your rent, acknowledgement and/or other payments will be collected by
Railtrack rather than British Railways Board and when appropriate this change
will be notified to you by way of the relevant invoice or bill … Please note
that you should not take any action at present and all payments should be made
in the usual way until further notification.
After the 5th
April 1994 you may find that you will have a new contact in Railtrack Property
but, in the meantime, if you have any queries whatsoever please do not hesitate
to call your current Property Board contact who will be pleased to assist in
any way possible.
It is unclear
whether the applicants passed this letter to their solicitors. At all events
the purported notice under section 26, which was made in the form prescribed by
the Landlord and Tenant Act 1954, Part II (Notices) Regulations 1983, named
British Railways Board as the landlord. It requested a new tenancy beginning on
February 12 1995 on the terms of the present lease and was signed by the
solicitors as agent for the applicants. The printed part of the form included a
notice, reflective of section 26(6) and section 30(1) of the Act, that, if the
landlord wanted to oppose any application to the court for a new tenancy, it
had within two months of the making of the request to give notice of the ground
of opposition.
The
solicitors’ letter, which enclosed the notice, and apparently the envelope in
which both were despatched, was addressed to ‘The Solicitor Department, British
Railways Board’. Despatch was by ordinary post. The date of posting, namely
March 31 1994, was Maundy Thursday and so, whichever class of post was used,
the fact that the notice was not received until April 6 is not altogether
surprising.
By letter
dated April 25 1994 notice was given to the applicants’ solicitors that
Railtrack would oppose an application for a new tenancy. The proposed ground of
opposition is irrelevant. Of greater relevance is that the letter was written
by British Rail Property Board on behalf of Railtrack. There was no
acknowledgement of that letter by the applicants’ solicitors and so the
property board wrote a chasing letter dated July 14 1994, which attracted a response
from the solicitors that they had received the earlier letter and had given it
to the applicants and that they no longer acted for them. No application for a
new tenancy was made within four months of the making of the 1994 request.
Paras 8 and
9(1) of Schedule 8 to the Railways Act 1993 provide as follows:
8.– (1) This paragraph applies where, in the case of any transfer to
which this Schedule applies, any rights or liabilities transferred are rights
or liabilities under an agreement to which the transferor was a party
immediately before the transfer date, whether in writing or not, and whether or
not of such nature that rights and liabilities under the agreement could be
assigned by the transferor.
(2) So far as
relating to property, rights or liabilities transferred to the transferee, the
agreement shall have effect on and after the transfer date as if —
(a) the
transferee had been the party to it;
(b) for any
reference (whether express or implied and, if express, however worded) to the
transferor there were substituted, as respects anything falling to be done on
or after the transfer date, a reference to the transferee; …
9.– (1) Except as otherwise provided in any provision of this Act
(whether expressly or by necessary implication), paragraph 8 above shall, so
far as applicable, apply in relation to —
(a) any
statutory provision,
(b) any
provision of an agreement to which the transferor was not a party, and
(c) any
provision of a document other than an agreement,
if and so far
as the provision in question relates to any of the transferred property, rights
and liabilities, as it applies in relation to an agreement to which the
transferor was a party.
The transfer
from British Railways Board to Railtrack of the reversionary interest in the
premises is a transfer to which Schedule 8 applies. So the effect of para 8(1)
and (2)(a) is that the lease took effect on April 1 1994 as if Railtrack was
the landlord. More important for present purposes is the effect of para
9(1)(c). Mr David Hodge QC, on behalf of the applicants, concedes that it
prevents him from complaining that, as a matter of construction, the
identification of the landlord in the 1994 notice became incorrect prior to its
receipt. For the notice is ‘a document other than an agreement’. The assertion
as to the identity of the landlord is a provision of it. And so, although, in
my view, the requisite intellectual exercise is not entirely straightforward,
the notice took effect on April 1 1994 as if Railtrack was the addressee
landlord and as if a reference to Railtrack was substituted for the reference
to British Railways Board as respects anything falling to be done on or after
that date, such as the giving of notice of opposition under section 26(6) and
in particular the making of application for a new tenancy under section 24(1).
The 1994
notice is therefore not invalid as a matter of construction. Since paras 8 and
9 yield that conclusion, there is no need to look at the matter more broadly
and to reflect on whether, again as a matter of construction, its validity
would have been saved by the fact that, until after the time when it was
committed to the post, the identification of the landlord in the notice was
entirely correct.
The nub of the
appeal relates to service of the 1994 notice and, specifically, to whether the
judge was right to conclude that it was not ‘given to the landlord’ within the
meaning of section 26(3). Section 66(4) of the Act of 1954 provides that ‘s23
of the Landlord and Tenant Act 1927 (which relates to the service of notices)
shall apply for the purposes of this Act’. Mr Philip Kremen, on behalf of
Railtrack, raises arguments under each of the subsections of section 23, which
provides as follows:
(1) Any notice,
request, demand or other instrument under this Act shall be in writing and may
be served on the person on whom it is to be served either personally, or by
leaving it for him at his last known place of abode in England or Wales, or by
sending it through the post in a registered letter addressed to him there, or,
in the case of a local or public authority or a statutory or a public utility
company, to the secretary or other proper officer at the principal office of
such authority or company, and in the case of a notice to a landlord, the
person on whom it is to be served shall include any agent of the landlord duly
authorised in that behalf.
(2) Unless or
until a tenant of a holding shall have received notice that the person
theretofore entitled to the rents and profits of the holding (hereinafter
referred to as ‘the original landlord’) has ceased to be so entitled, and also
notice of the name and address of the person who has become entitled to such
rents and profits, any claim, notice, request, demand, or other instrument,
which the tenant shall serve upon or deliver to the original landlord shall be
deemed to have been served upon or delivered to the landlord of such holding.
Mr Kremen’s
argument under section 23(1) is based on the final words, namely ‘and in the
case of a notice to a landlord, the person on whom it is to be served shall
include any agent of the landlord duly authorised in that behalf’. But a
preliminary reflection, based on the earlier words, would not be amiss. The
earlier words provide for three
[1975] 1 WLR 1181, at pp1188G–1189B, Megaw LJ said:
Section 23 of
the Landlord and Tenant Act 1927 lays down the manner in which service of a
notice can be effected. It is provided, as what I may call at any rate the
primary means of effecting service, that it is to be done either by ‘personal’
service or by leaving the notice at the last-known place of abode, or by
sending it through the post in a registered letter, or (as now applies) in a
recorded delivery letter. If any of those methods are adopted, they being the
primary methods laid down, and, in the event of dispute, it is proved that one
of those methods has been adopted, then sufficient service is proved. Thus, if
it is proved, in the event of dispute, that a notice was sent by recorded
delivery, it does not matter that that recorded delivery letter may not have
been received by the intended recipient. It does not matter, even if it were to
be clearly established that it had gone astray in the post. There is the
obvious, simple way of dealing with a notice of this sort. But, as I think may
be assumed for the purposes of this appeal, if the person who gives the notice
sees fit not to use one of those primary methods, but to send the notice
through the post, not registered and not by recorded delivery, that will
nevertheless be good notice, if in fact the letter is received by the person to
whom the notice has to be given. But a person who chooses to use that method
instead of one of the primary methods is taking the risk that, if the letter is
indeed lost in the post, notice will not have been given.
I agree with
the tentative conclusion in Woodfall’s Law of Landlord and Tenant, vol
2, para 22.068, that, since the primary methods of service do not depend on
receipt, the date of receipt is irrelevant and, to take the third method, that
the notice is served — and given — on the date when it is sent by registered
post or recorded delivery. When, however, as here, notice is sent by ordinary
post instead of by a primary method, it is served — and given — on such date,
if any, as it is received. Therein lies an irony: for it would follow that, had
the applicants’ solicitors adopted the primary method of postal service, namely
by registered post or recorded delivery, a notice sent on March 31 1994 would,
on any view, have been correctly given to the then landlord.
Mr Kremen
makes out a formidable case under the final words of the subsection that, on
April 6 1994, British Railways Board was the agent of Railtrack, duly
authorised to accept service. In its pro forma letter, British Rail property
board, which was a division of British Railways Board and responsible for the
management of the premises, had indicated that, from April 1 1994 until further
notice, the applicants should continue to pay rent to British Railways Board
and should raise any query with their current contact at the Property Board. It
is an agreed fact that, following March 31, the property board continued to
deal with the management of the premises. It is further agreed that, when
British Railways Board passed the 1994 notice to Railtrack, the latter passed
it on (or, in another sense, back) to British Rail Property Board to deal with
as its managing agent; and that it was the property board which, as agent of
Railtrack, gave the notice of opposition under section 26(6) of the Act of
1954.
The judge
rejected the agency argument on the basis that the 1994 notice was addressed to
British Railways Board as landlord, not as agent for the landlord. But it has
already been noted that the form of address to the landlord contained in the
notice is, on any view, validated by Schedule 8 to the Act of 1993. As at April
6 1994 the notice must be taken to address Railtrack as the landlord. And the
only question is whether British Railways Board, upon whom it was served, was
Railtrack’s agent, authorised to accept it.
Mr Hodge
concedes that, had the notice been served on British Rail Property Board in
Euston Road (or even the solicitors’ department there), service would have been
validly effected on Railtrack’s agent. In fact, however, service was effected
on the solicitors’ department of British Railways Board at Paddington Station.
He says that a landlord’s time for giving notice of opposition runs from when
he is given notice and that it is essential that a tenant’s notice is served at
the right place. He asks rhetorically: is service on the catering department or
on the board’s North West England division to suffice? I do not consider that
the question poses an apt analogy. British Rail Property Board was but a
division of British Railways Board. The latter was the statutory corporation,
created by the Transport Act 1962, and was the legal entity which constituted
Railtrack’s agent after March 31 1994. Service of a document intended to have
legal effect was rightly effected on the British Railways Board and sensibly
marked for the attention of its solicitors’ department. I conclude that, by
virtue of section 23(1) of the Act of 1927, the notice was validly given to
Railtrack.
This
conclusion renders it unnecessary for me to consider Mr Kremen’s argument under
section 23(2) of the Act of 1927. It is enough to say that he contends that the
pro forma letter to the applicants did not amount to such notices to them as
are referred to in the protasis of the subsection, with the result (says he)
that service of their notice upon British Railways Board, being the original
landlord, should be deemed to be service upon Railtrack. He submits, with a vigour
that seemed almost to stifle dissent, that no notice can be given to a tenant
for the purpose of this provision until after the change of landlord has
occurred. I do not regard the matter as so clear cut and am happy to put it to
one side.
It follows that
I would allow the appeal.
Agreeing, EVANS
LJ said: The proceedings have the puzzling feature that it is the
respondents, who were the tenants, who assert that the request for a new
tenancy which was sent on their behalf on March 31 1994 was invalid or was not
given to the landlord as required by section 26 of the 1954 Act. This is
because they or the solicitors then acting for them failed to follow up that
request and they now seek to rely upon the further request made on January 4
1995.
The reasons
given by Wilson J, with which I entirely agree, make it unnecessary to decide
the issue raised as to the meaning of section 23(2) of the 1927 Act. Mr Kremen
contends that a notice cannot be given for the purposes of the subsection until
after the original landlord has ceased to be entitled to the rent. This, he
says, is the strictly literal meaning of the words ‘notice that the [original
landlord] has ceased’ to be entitled to receive the rents. This construction
could give rise to great difficulties in practice, where the change of landlord
occurs at about the same time as the rent becomes due. The purpose of section
23(2), as it seems to me, is to validate a payment made to the original
landlord before the required notice is given and has taken effect. Moreover,
the notice must state that the new landlord has become the person entitled to
receive the rents. Far from directing the tenants to make payments to
Railtrack, the pro forma letter told them that the change would be notified to
them ‘when appropriate’ at some future date. It seems to me, therefore, that
notices, etc, could continue to be given to British Rail Board, the original
landlord, after April 1, in any event.
Appeal
allowed with costs.
