Landlord and tenant – Termination of lease – Service of notice – Defendant leasing business premises – Deed of lease containing claimant landlords’ address – Defendant purporting to serve claimants with notice of intention to exercise break clause at address stated in lease – Claimants seeking declarations that notices not validly served as address not place of abode or business – Whether notices being properly served – Claim dismissed
Three floors of a building called Coniston House at Chapel Ash on the Wolverhampton Ring Road were let on three leases for terms of 10 years at a combined rent in excess of £200,000 per annum, subject to break provisions. The claimant landlords were described in the deed of lease as F, S H and B Ltd, “all of 75 Tyburn Road, Erdington Birmingham B24 8NB”. The named tenant was a primary care trust and the defendant was its statutory successor.
Clause 6.1 of the deed of lease contained a break clause at the end of the third, sixth or ninth year of the term. Clause 5.9 dealt with service of notices, incorporated section 196 of the Law of Property Act 1925, and provided that: “service on any one of the parties comprising the landlord shall be deemed to be service on all and notices to be served on the tenant are to be sent to the Director of Facilities at Coniston House…or such other address as the tenant shall notify to the landlord in writing”. Four separate notices, one addressed to each of the parties named as landlord, were sent by recorded delivery to 75 Tyburn Rd. The notices stated that the defendant wished to exercise the break to bring the leases to an end.
The claimants applied for declarations that the notices were not properly served on them so that the relevant leases still subsisted. They argued that the notices were ineffective because, although the leases stated that all the parties comprising the landlord were “of 75 Tyburn Rd…”, that was not in fact the “place of abode or business” of any of the claimants. Further, since 2002, H (the second claimant) had had no connection with any business at 75 Tyburn Rd and F, the first claimant, had not been to the premises since about 1999. S had, by the relevant date, transferred his interest in the reversion to the other claimants and, as S was no longer a person comprised in “the landlord”, even if the notice had been served or was deemed served on him, it did not bind the claimants.
The defendant argued that it was entitled to rely on service on S, notwithstanding that he no longer had any interest in the demised property, by virtue of section 23(2) of the Landlord and Tenant Act 1927 which, it submitted, was of general application to any sort of notice to be served by a tenant and applied to any “claim” that the defendant might serve.
Held: The claim was dismissed.
(1) Parliament could not have intended to make a provision of general effect in section 23(2) of the 1927 Act. A party wishing to serve a notice at a particular address selected by him bore the burden of showing that it fitted the statutory or contractual criteria he relied upon. Provisions for service under rules of court necessarily contemplated service on a party who had not volunteered or agreed to be served and might have no prior connection or relationship with the person seeking to serve him. Those rules had to reflect a balance between ensuring, so far as possible, that potentially adverse documents actually came to that person’s attention and providing an effective method for an opposing party to proceed against a possibly recalcitrant party. Where the notice was served in the context of an existing contractual relationship, the terms of the contract might themselves regulate service of notices, and might do so by incorporating statutory service provisions. In cases based on contractual provisions for service particularly, the court might take account of the fact that the parties had an existing relationship and should be taken to have agreed practicable arrangements by which it could be conducted.
(2) In construing the terms used in the statutory provisions it was clear that a purposive approach was adopted. The language often referred to the place of abode of a person (see section 23), which most obviously applied to the place at which an individual had his home and slept. The principal purpose of a service provision was to set out a practicable method by which a party serving a notice could be reasonably sure how he should do so, and the party to be served could be reasonably sure he would receive it. The address given by a party as his own address served both those purposes. If circumstances changed, he had it in his own power to inform the other party of a new address. Looked at apart from the provisions of the contract, an address might not be considered to be a place of abode or business. Such terms were to be construed in the context they were used. There was no reason why the term “abode” should not extend to an address nominated by a person. Whether he nominated a residential or non-residential property, it was a matter for him what connection he had with it, and whether it related to any business of his or not. A person might have more than one place of business, and he might carry out more business activities at some than others. A person might choose to describe one place as his place of business for a particular purpose. If he did so, the person he told was not required to look behind that statement and investigate the extent and nature of the business activity carried on there: Investors’ Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28; [1998] 1 WLR 896 applied. Price v West London Investment Building Society Ltd [1964] 1 WLR 616, National Westminster Bank Ltd v Betchworth Investments Ltd (1975) 234 Estates Gazette 675, Cranfield v Bridgegrove Ltd [2003] EWCA Civ 656; [2003] PLSCS 113, O’Hara v McDougal [2005] EWCA Civ 1623; [2005] PLSCS 214, Collier v Williams [2006] EWCA Civ 20; [2006] PLSCS 22 and Brooks v AH Brooks & Co (a firm) [2010] EWHC 2720 (Ch) considered.
(3) In the present case, the service provision was to be construed as part of a contract, including the words imported from the statute; as used or deemed to be used in the contract they were to be construed in the light of the contract as a whole with the aim of determining objectively what a reasonable person would understand the contract to mean. The leases conveyed two relevant pieces of information: (i) that the landlord might be served at his last known place of abode or business, and (ii) that the landlord’s address was 75 Tyburn Rd. Describing the landlord as “of” an address plainly meant that that was his address. Any reasonable person considering those two statements would understand them to mean that the address given was being stated to be a place of abode or business for the purpose of the service clause. At the date of the leases in 2010, S had been the only one of the persons comprising the landlord with any active business connection with the premises at 75 Tyburn Rd, in the sense of business activities carried on by him. Those were on behalf of the company which he owned and controlled rather than a business owned by him personally. Such activities had been sufficient to make the premises a “place of business” for him. The address given was an “abode or place of business” because the landlord had, on the true construction of the leases, nominated it as such, and not because in any other sense, the landlord actually abided there or carried on any business there. It had remained such a place until the landlord nominated some other address or, perhaps, the tenant acquired actual knowledge that it could not be an address at which the landlord could be reached. Until then, no question arose as to whether it was the last known place of abode or business, because that question necessarily contemplated that it had, at some time ceased to be a current place of abode or business. Accordingly, the tenant was entitled to a declaration that the leases had been terminated.
John Brennan (instructed by Hadgkiss Hughes & Beale, of Birmingham) appeared for the claimants; Adam Rosenthal (instructed by Bevan Brittan LLP) appeared for the defendant.
Eileen O’Grady, barrister
Click here to read transcript: Levett-Dunn and others v NHS Property Services Ltd
