Rent review — Counternotice — Tenant serving counternotice at appellant landlord’s old address — New address communicated to tenant’s solicitor — Whether knowledge of new address to be imputed to tenant — Whether counternotice valid — Appeal allowed
In March 1999, the respondent tenant took an assignment of the unexpired residue of a 20-year lease, dated April 1997, of a ground-floor retail unit with two residential flats above. In July 2000, he applied to the appellant landlord for consent to a proposed subletting of the ground-floor shop. The landlord refused consent, and, as a result of the delay, the prospective sublessee withdrew. The tenant brought proceedings against the landlord for damages, alleging that the landlord had unreasonably withheld its consent.
Meanwhile, in August, the landlord served a rent notice on the tenant, stating that the rent was to be increased to £30,000 from December, that being the date of the first rent review under the lease. The tenant served a counternotice at the address given for the landlord in the lease. However, by that time, the landlord had changed its address, and had, by letter, notified the solicitor acting for the tenant in the subletting matter.
The landlord disputed the validity of the counternotice, and the tenant brought county court proceedings on the basis that it was valid, which contention was upheld by the judge, who held that the tenant was not bound by the £30,000 rent. He found that the tenant had not personally known of the landlord’s change of address, and that his solicitor’s knowledge could not be attributed to him because the solicitor had not been instructed to act in the rent review. He further held that the landlord had unreasonably withheld consent to the subletting, and he awarded damages. The landlord appealed.
Held: The appeal was allowed in part.
1. The counternotice had not been validly served. The tenant’s solicitor had known that the landlord’s place of business had moved, and had received that knowledge in the course of acting for the tenant in relation to the lease of the property. The fact that, at the time when the landlord’s letter was received, the solicitor had been instructed to act in respect in the subletting matter did not, in the circumstances, prevent that knowledge from being imputed to the tenant. The counternotice had not been served in accordance with the lease and the tenant could not dispute the amount of the rent set out in the landlord’s rent notice.
2. The judge had been entitled to find that the landlord had acted unreasonably in withholding consent to the subletting.
Jonathan Gaunt QC and Lawrence Caun (instructed by Straiton & Co) appeared for the appellant; Charles Douthwaite (instructed by Kingsley Napley) appeared for the respondent.
Sally Dobson, barrister
