Business tenancy – Request for new tenancy – Section 26 of Landlord and Tenant Act 1954 – Claimant tenant serving notice requesting new tenancy to start on day at end of which existing tenancy expiring – Whether complying with section 26(2) – Whether otherwise valid notice having impermissible effect by virtue of section 26(5) – Summary judgment for defendant landlords – Appeal allowed
The claimant held a business tenancy under a 12-year lease that was expressed to run “from the 9th day of December” 1994. In January 2006, the claimant served notice on the defendant landlords requesting a new tenancy, pursuant to section 26 of the Landlord and Tenant Act 1954. The notice was in the prescribed form and requested a new tenancy “beginning on 9 December 2006”; the defendants responded with a counternotice opposing the grant of a new tenancy. The claimant then applied to the court to determine his entitlement to a new tenancy.
The defendants argued that the claimant’s notice was invalid since it contravened the requirement in section 26(2) not to specify a date for the commencement of the new tenancy that was “a date earlier than the date on which apart from this Act the current tenancy would come to an end by effluxion of time”. They submitted that, on a strict construction of the current lease, a term running “from” 9 December 1994 meant a term commencing at the first moment of 10 December, such that the contractual term of the tenancy expired by effluxion of time at the end of 9 December 2006. They argued, therefore, that the claimant’s notice seeking a new tenancy commencing at the first moment of 9 December effectively requested a tenancy commencing one day earlier than the expiry of the current term. They contended that the claimant’s request, if valid, would, by virtue of section 26(5), prematurely terminate the existing contractual tenancy and supplant it with the statutory continuation under section 24(1), which would be an unjustified statutory interference with the lease and could not have been intended by parliament.
Opposing the application, the claimant submitted that the date specified in a section 26 notice can be the last day of the contractual term, and that where that last day was 9 December 2006, specifying a start date of 9 December for the new tenancy was not to specify a “date earlier than” that upon which the contractual term expired. The district judge accepted the defendants’ arguments and struck out the claimant’s claim. The claimant appealed.
Held: The appeal was allowed.
Where the existing lease expired by effluxion of time at the very end of 9 December 2006, a request specifying a new tenancy beginning on 9 December did not contravene section 26(2) because that date was not earlier than the date upon which the current tenancy came to an end. A section 26 notice specifying the last day of the existing lease was doing no more than asking for a new tenancy at the end of the lease. There was no reason to assume that the tenant was asking for a tenancy starting at the first moment of 9 December. The claimant had served a notice that satisfied the relevant statutory provisions.
Moreover, a minor mistake of no practical importance in a section 26 notice would not invalidate the application for a new tenancy or prevent it from being made “in accordance with” section 26. The purpose of a section 26 request was to ensure that the landlords received notice of the tenant’s wish for a new tenancy and of his proposed terms and were able to consider and respond to that request. If a section 26 request was merely putting forward proposals for consideration and negotiation, the precise date specified for the beginning of the new tenancy had no particular significance. Any reasonable recipient of the claimant’s notice would have realised that he wanted a new tenancy to run from the expiry of the contractual term.
Furthermore, the application of section 26(5) would not create an impermissible situation so as to invalidate the claimant’s request. Parliament had not intended section 26(5) to have the effect of ending the existing lease prematurely or altering the dividing line between the lease and the statutory continuation of the tenancy. Section 26(5) was not intended to operate unreasonably and unnecessarily so as to deprive a tenant of the right conferred by statute to apply for a new tenancy on the basis of a request that was in all other respects valid. The potential problem identified by the defendants was unimportant and would have no effect on the working of the statutory scheme or the rights of the parties: Bristol Cars Ltd v RKH Hotels Ltd (in liquidation) [1979] 2 EGLR 56 considered.
Mr Maynard appeared for the claimant; Dr Roger Smithers (instructed by Clerey’s of Aldershot) appeared for the defendants.
Sally Dobson, barrister