Lease of commercial premises — Rent review provisions — Time limit for service of tenant’s counternotice — Judge finding time not of the essence for service — Appeal dismissed
The appellant was the landlord and the respondent was the tenant under a lease of commercial premises. The rent review provisions, set out in a schedule to the lease, provided for service on the tenant of a rent notice specifying an amount of rent. The tenant could, within one month of receipt, serve a counternotice calling upon the landlord to negotiate the rent, failing which it would be deemed to have agreed to pay the sum specified in the rent notice. In the absence of agreement, a surveyor was to be appointed to determine the rent. A further clause provided that time was deemed to be of the essence of all periods of time referred to in the schedule, with a proviso that the landlord or tenant could, notwithstanding, always require the appointment of a surveyor to determine the question of new rent, and any delay by either party in that respect would not deprive them of their right to have a new rent determined by a surveyor.
The appellant sent a rent notice to the respondent’s premises by recorded delivery, proposing a rent that was more than twice the existing rent. Although the notice arrived the following day, the respondent did not serve a counternotice until more than a month later. The appellant brought proceedings for a declaration that the respondent was consequently deemed to have agreed the rent set out in the rent notice. Dismissing the claim, the judge held that time was not of the essence with respect to the counternotice, since a tenant could still require the appointment of a surveyor under the proviso. However, he rejected the respondent’s argument that the term “receipt” was distinct from “service” of the rent notice, so that the one-month period ran from the date upon which the respondent, or someone with authority to receive documents on his behalf, actually saw the rent notice. The appellant appealed, and the respondent also challenged the finding as to the meaning of “receipt”.
Held: The appeal was dismissed.
1. The general presumption that time was not of the essence with regard to rent review provisions was not rebutted. The deeming provision in the lease, when limited by the proviso, was an insufficiently clear and explicit contra-indication to have that effect. The proviso could not be applied selectively, and, consequently, it overrode the deeming provision in respect of the entire process of a stipulated rent review that could lead to the determination of the rent by a surveyor.
2. Clear and explicit words would have been required had it been intended that service of a rent notice on the tenant was not to be effected until the tenant himself, or his authorised agent, saw the document. Certainty was important and would not be satisfied were the relevant date moveable to the extent claimed by the respondent.
Gary Blaker (instructed by Mishcon de Reya) appeared for the appellant; Edward Francis (instructed by Wellers) appeared for the respondent.
Sally Dobson, barrister
