Landlord and tenant — Rent — Whether section 48 of the Landlord and Tenant Act 1987 applies to an agricultural holding — Whether any notice given pursuant to that section — Whether effective notice to pay served pursuant to Case D under the Agricultural Holdings Act 1986
plaintiff, Dallhold Estates (UK) Pty Ltd, is the tenant of Upp Hall, a 940-acre
agricultural holding in Hertfordshire, holding under a five-year lease from
July 30 1987 at a yearly rent of £50,000 payable by equal quarterly payments in
advance on the four usual quarter days — The defendant,
lease — The plaintiff failed to pay rent in respect of the quarter days June 24
1990 to and including June 24 1991 — By a notice dated August 7 1991 the
defendant landlord’s solicitors gave notice pursuant to Case D, in Part I of
Schedule 3 to the Agricultural Holdings Act 1986 requiring the tenant to pay
the arrears of rent within two months — On October 9 1991 the defendant’s
agents gave to the plaintiff a notice to quit the holding on July 30 1993 on
the ground that the plaintiff had failed to comply with the notice to pay rent
— A provisional liquidator appointed in respect of the plaintiff challenged the
service of the notice to pay rent and requested the landlord’s agents to state
whether any notice under section 48 of the Landlord and Tenant Act 1987 had
been served — By a further notice dated December 3 1991 the landlord’s agents
confirmed for the purposes of section 48 their client’s address for service of
all notices, including notices in proceedings, and enclosed a further notice to
pay rent
originating summons the plaintiff tenant sought declarations (1) that by reason
of section 48 of the Landlord and Tenant Act 1987 no rent was due from the
plaintiff on August 7 1991 and December 3 1991; and (2) that the purported
notices to pay rent dated August 7 1991 and December 3 1991 were invalid and of
no effect
include a dwelling — The Upp Hall agricultural holding included a dwelling —
The expression ‘premises’ is intended to have a wider meaning than dwelling and
means the subject-matter of a letting and therefore applies to an agricultural
holding if it includes a dwelling — On the evidence, the defendant failed to
give any notice pursuant to section 48 of the 1987 Act until the letter of
December 3 1991 — In respect of an agricultural holding a notice to pay rent
must comply with the Agricultural Holdings (Forms of Notice to Pay Rent or to
Remedy) Regulations 1987 and require the tenant to pay within two months of the
date of service of the notice the rent due — The letter of December 3
1991 was a valid notice under section 48 of the 1987 Act and on that date, and
not before, rent in respect of earlier quarters became due — Accordingly the
notice to pay rent of December 3 1991 failed to comply with the 1987
regulations in stating that it was in respect of rent due on the quarter days
from June 24 1990 to September 29 1991
The following
cases are referred to in this report.
Bracey v Read [1963] Ch 88; [1962] 3 WLR 1194; [1962] 3 All ER 472
Dickinson v Boucher [1984] EGD 19; (1983) 269 EG 1159, [1984] 1 EGLR
12, CA
Maunsell v Olins [1975] AC 373; [1974] 3 WLR 835; [1975] 1 All ER 16,
HL
Official
Solicitor v Thomas [1986] 2 EGLR 1; (1986)
279 EG 407
Pickard v Bishop (1975) 31 P&CR 108; [1975] EGD 24; 235 EG 133,
[1975] 2 EGLR 1, CA
Whitley v Stumbles [1930] AC 544; 46 TLR 555
This was a
hearing of an originating summons issued by the plaintiff, Dallhold Estates
(UK) Pty Ltd, against the defendant, Lindsey Trading Properties Inc.
Edward
Bannister QC and Martin Rodger (instructed by Mills & Reeve) appeared for
the plaintiff; David Neuberger QC and Joanne Moss (instructed by Franks
Charlesly & Co) represented the defendant.
Giving
judgment, CHADWICK J said: The plaintiff, Dallhold Estates (UK) Pty Ltd,
is a company incorporated under the Companies (Western Australia) Code 1981. On
August 9 1991 a provisional liquidator of the plaintiff company was appointed
by an order of the Federal Court of Australia. On August 14 a provisional
liquidator was appointed in England by an order made in this court. On January
24 1992 I made an administration order for the purposes of achieving a more
advantageous realisation of the plaintiff company’s assets than would be
effected on a winding up. The circumstances in which that order was made appear
from a judgment which I delivered on that day. They form part of the background
to the present application.
The plaintiff
is the tenant under a lease dated July 30 1987 of an agricultural and sporting
estate comprising some 940 acres in Hertfordshire. The estate includes a large
Elizabethan manor house known as Upp Hall and a number of cottages, some of
which are occupied by estate workers under service tenancies. Upp Hall itself
is occupied by Miss Suzanne Bond, the daughter of Mr Alan Bond, who was until
August 9 1991 a director of the plaintiff company. It is common ground that the
estate is an agricultural holding for the purposes of the Agricultural Holdings
Act 1986.
The defendant,
Lindsey Trading Properties Inc, is a company incorporated and having its
registered office in Panama. Lindsey is owned and controlled by Mr Jorg Bolag,
who is resident in Switzerland. Lindsey is entitled to the freehold reversion
expectant upon the determination of the lease.
The lease is
expressed to be for a term of five years from July 30 1987 at a yearly rent of
£50,000 payable by equal quarterly payments in advance on the four usual
quarter days to Franks Charlesly & Co, of Hulton House, London, or to such
other agent as the landlord shall from time to time notify to the tenant.
No rent was
paid by the tenant under the lease on June 24, September 29 or December 25
1990, or on March 25 and June 24 1991. On August 7 1991 Franks Charlesly,
acting as solicitors and authorised agents for Lindsey, gave notice to the
tenant requiring that rent be paid within two months of that date. The notice
was expressed to be given in accordance with Case D in Part I of Schedule 3 to
the 1986 Act. The notice dated August 7 1991 was served at the registered
office of the tenant at 201 Adelaide Terrace, Perth, Western Australia. Payment
of rent was not made in response to that notice or at all. No rent was paid by
the tenant on September 29 1991.
On October 9
1991, a little over two months after the date of the notice to pay rent, Franks
Charlesly, as agents for the landlord, gave notice to the tenant to quit the
estate on July 30 1993. The notice to quit was expressed to be given on the
grounds that the tenant had failed to comply with the notice to pay rent dated
August 7 1991.
Section 26(1)
of the Agricultural Holdings Act 1986 imposes a restriction on the operation of
a notice to quit an agricultural holding. Provided that the tenant gives the
appropriate counternotice within one month, the notice to quit shall not have
effect unless on an application by the landlord consent to its operation is
given by an agricultural land tribunal. That restriction does not apply in any
of the cases set out in Part I of Schedule 3 to the Act. In particular, it does
not apply in Case D; that is to say where, at the date of the giving of the
notice to quit, the tenant has failed to comply, inter alia, with a
notice to pay rent which satisfies the conditions in para (a) of that case. The
effect is that, on a failure to pay rent within two months of the service of a
valid notice to pay, the tenant will lose the protection of the Agricultural
Holdings Act 1986: see Pickard v Bishop (1975) 31 P&CR 108*
and, in particular, the remarks of Lord Denning MR at p 109.
*Editor’s
note: Reported also at (1975) 235 EG 133, [1975] 2 EGLR 1.
The tenant’s
initial response, through its provisional liquidator, was to challenge service
of the notice to pay rent. Subsequently, by letter dated October 31 1991, the
tenant’s solicitors asked Franks Charlesly whether any notice under section 48
of the Landlord and Tenant Act 1987 had been served and, if so, for a copy of
that notice. On the same day the tenant’s solicitors served a counternotice
under section 26(1) of the Agricultural Holdings Act 1986 in respect of the
notice to quit dated October 9. Neither party has sought to argue before me
that the service of that counternotice prevents this court from considering the
questions raised in these proceedings.
Section 48 of
the Landlord and Tenant Act 1987 is in these terms so far as material:
(1) A landlord of premises to which this Part
applies shall by notice furnish a tenant with an address in England and Wales
at which notices (including notices in proceedings) may be served on him by the
tenant.
(2) Where a landlord of any such premises fails
to comply with subsection (1), any rent or service charge otherwise due from
the tenant to the landlord shall, (subject to subsection (3)) be treated for
all purposes as not being due from the tenant to the landlord at any time before
the landlord does comply with that subsection.
Subsection (3)
has no application to the present case.
Failure to
serve a notice under section 48 of the 1987 Act in cases to which that section
applies has the effect that rent which would otherwise be due is to be treated
for all purposes as not being due. It would follow in such a case that the
landlord would be unable to rely upon a notice to pay rent for the reason that
the court would be
Faced with the
tenant’s request for a copy of the notice under section 48 of the 1987 Act upon
which the landlord relied, and without admitting that no such notice had been
served, the landlord’s solicitors served a further notice to pay rent dated December
3 1991. The notice was served under cover of a letter of that date. The final
paragraph of that letter is in these terms:
We would
confirm on behalf of our client and for the purposes of section 48 aforesaid
that our client’s address for service of all notices, including notices in
proceedings, is care of this firm.
It is common
ground that that letter does itself constitute an effective notice for the
purposes of section 48 of the 1987 Act. It is not, however, accepted by the
tenant that the notice to pay rent served on the same day is in a form upon
which the landlord can rely for the purposes of Case D in Part I of Schedule 3
to the Agricultural Holdings Act 1986.
In these
circumstances, shortly after the making of the administration order, on January
24 1987, the tenant commenced proceedings by originating summons for a
declaration that no notice under section 48 of the Landlord and Tenant Act 1987
had been served by the landlord prior to the service of the notice to pay rent
dated December 3 1991. The originating summons was subsequently amended and the
declarations now sought are in these terms:
(1) a declaration that on a true construction of
section 48 of the Landlord and Tenant Act 1987 no rent was due from the
plaintiff to the defendant under the lease dated 30th July 1987 . . . on (a)
7th August 1991 and (b) 3rd December 1991.
(2) a declaration that on a true construction of
section 48 of the Landlord and Tenant Act 1987 and of Case D of Schedule 3 to
the Agricultural Holdings Act 1986 and/or of the Agricultural Holdings (Forms
of Notices to pay Rent or to Remedy) Regulations 1987, notices dated 7th August
1991 and 3rd December 1991 purporting to be notices to pay rent served on the
plaintiff by the defendant were invalid and of no effect.
Section 48 of
the Landlord and Tenant Act 1987 is contained in the group of six sections
which forms Part VI to that Act. The first of those sections, section 46, is in
these terms:
(1) This Part applies to premises which consist
of or include a dwelling and are not held under a tenancy to which Part II of
the Landlord and Tenant Act 1954 applies.
(2) In this Part ‘service charge’ has the meaning
given by section 18(1) of the 1985 Act.
In this context
the 1985 Act means the Landlord and Tenant Act 1985.
The primary
question in these proceedings is whether the word ‘premises’ in section 46(1)
of the 1987 Act is to be given what Lord Diplock and Lord Simon described, in
their dissenting judgment in Maunsell v Olins [1975] AC 373 at p
392, as the meaning which it bears in ordinary legal parlance, namely the
subject-matter of a letting, or whether it is to be given a more limited
meaning which would not extend to the agricultural holding let under the lease
dated July 30 1987.
It is I think
clear that the word ‘premises’ is capable of a wide range of meanings. In
strict conveyancing language it means ‘. . . everything in a deed which
precedes the habendum . . .’ — see per Lord Wilberforce in Maunsell
v Olins at p 386B; or ‘. . . the subject matter of the habendum in a
lease . . .’ per Viscount Hailsham in Whitley v Stumbles
[1930] AC 544 at p 546; per Cross J in Bracey v Read [1963]
Ch 88 at p 92; and per Lord Diplock and Lord Simon in Maunsell v Olins
at p 392B.
In a popular
sense, in the appropriate context, the word may mean ‘buildings’ or
‘dwelling-houses’, including in the latter expression houses let with a garden
or yard, garage or paddock — see per Viscount Dilhorne in Maunsell
v Olins at p 384B-D and per Lord Wilberforce at p 389A-B. Both of
those members of the House of Lords had no doubt that the word would never be
used in a popular sense to mean or include farmland — see at p 383H and p
386G-H. Cross J took a similar view in Bracey v Read at p 92,
where he said:
I do not think
that in the popular sense anybody would say that some gallops on a downland
with no building on or near them could be described as premises.
Nevertheless,
Cross J held in Bracey v Read that property of that nature was
within the meaning of ‘premises’ for the purposes of section 23(1) of the
Landlord and Tenant Act 1954.
The question
which I have to decide is what, within the wide spectrum of meanings which the
word ‘premises’ can bear, is the meaning which it was intended to have for the
purposes of Part VI of the Landlord and Tenant Act 1987. That question must be
answered by construing the language which Parliament has used in that Act. It
is wrong to start from the position that the word ‘premises’ has some prima
facie meaning which must prevail in the absence of sufficient reason to the
contrary: see per Lord Wilberforce in Maunsell v Olins at
p 386. It is necessary, first, to look at the Act as a whole, in order to see
whether some overall statutory purpose can be identified, from which the word
‘premises’ in section 46(1) may take its meaning.
The long title
to the Act of 1987 describes its purpose in these terms:
An Act to
confer on tenants of flats rights with respect to the acquisition by them of
their landlord’s reversion; to make provision for the appointment of a manager
at the instance of such tenants and for the variation of long leases held by
such tenants; to make further provision with respect to service charges payable
by tenants of flats and other dwellings; to make other provision with respect
to such tenants; to make further provision with respect to the permissible
purposes and objects of registered housing associations as regards the
management of leasehold property; and for connected purposes.
As that long
title suggests, Parts I, II and III apply only to flats or to premises which
consist of the whole or part of a building and which contain flats. In Parts I,
II and III of the Act premises has a defined meaning which is clearly limited
in this way. For example, in section 1(2) it is provided that:
. . . this
Part applies to premises if —
(a) they consist of the whole or part of a
building; and
(b) they contain two or more flats held by
qualifying tenants;
. . .
Sections 21(2)
and 25(2) contain similar provisions in relation to Parts II and III of the
Act.
Part IV of the
Act (variation of leases) applies primarily to flats but extends to dwellings
other than flats: see section 40 of the Act.
Part V applies
not only to flats but also to other dwellings. The first section in that Part
(section 41) is in these terms so far as material:
(1) Sections 18 to 30 of the 1985 Act (regulation
of service charges payable by tenants) shall have effect subject to the
amendments specified in Schedule 2 (which include amendments —
(a) extending the provisions of those sections to
dwellings other than flats, . . .)
Sections 18 to
30 of the Landlord and Tenant Act 1985 do regulate service charges payable by
tenants of flats. Section 18(1) of the 1985 Act defines service charge (so far
as material) to mean an amount payable by a tenant of a flat as part of or in
addition to the rent which is payable directly or indirectly for services,
repairs, maintenance or insurance for the landlord’s cost of management.
The effect of
Schedule 2 to the 1987 Act is to substitute the word ‘dwelling’ for ‘flat’ in
section 18(1) and in each of the other relevant provisions in sections 18 to 30
of the 1985 Act. ‘Dwelling’ in this context means a building or part of a
building occupied or intended to be occupied as a separate dwelling, together
with any yard, garden, outhouses and appurtenances belonging to it or usually
enjoyed with it: see section 38 of the 1985 Act. ‘Dwelling’ has the same
meaning in the 1987 Act: see section 60(1).
The effect,
therefore, of Part V of the 1987 Act is to extend the regulation of service
charges introduced by the 1985 Act in respect of flat-tenants to a wider class
of tenant, including tenants of buildings let with land which fall within the
definition of ‘dwelling’.
Part VI of the
1987 Act is concerned, in part, also with tenants who are liable to pay service
charges, as section 46(2) itself indicates. In that subsection ‘the meaning
given by section 18(1) of the 1985 Act’ must be the meaning in section 18(1) as
amended by section 41 of, and para 1 of Schedule 2 to, the 1987 Act, that is to
say ‘service charge’ includes amounts payable by tenants of dwellings.
Sections 47
and 48 of the 1987 Act are directed towards ensuring that the tenant shall know
the identity of his landlord and shall have a definitive address in England and
Wales for the service of notices, including notices in proceedings, on his
landlord. The sanction against the landlord who fails to comply with his
obligation to provide that information is, in the case of failure to comply
with section 47, that the tenant will not have to pay the service-charge
element of any amount demanded under the terms of the tenancy; and, in the case
of failure to comply with section 48, that the tenant will not have to pay rent
or service charge — at least until the landlord does provide the information
which the section requires him to provide.
Section 49 of
the 1987 Act has the effect that an address furnished by the landlord under
sections 48 or 47 shall be treated as the last-known place of abode or business
of the landlord for the purposes of section 196(3) and (4) of the Law of
Property Act 1925 (regulations respecting notices required or authorised to be
served under that Act).
Section 50 of
the 1987 Act extends section 3 of the 1985 Act. Section 3(1) of the 1985 Act
required (so far as material) that, if the interest of the landlord under a
tenancy of premises which consist of or include a dwelling is assigned, the new
landlord shall give notice in writing of the assignment and of his name and address
to the tenant. The effect of the new sections 3(A) and 3(B), introduced by
section 50 of the 1987 Act, is that the old landlord remains liable in certain
cases to the tenant in respect of breaches of landlord’s covenants under the
tenancy.
The language
of section 3(1) of the 1985 Act — namely ‘premises which consist of or include
a dwelling’ — has been adopted in section 46(1) of the 1987 Act. When enacting
the 1985 Act, Parliament was careful to distinguish between the concepts
‘premises occupied as a dwelling’ in section 1(1) and ‘premises which consist
of or include a dwelling’ in section 3(1). It is the latter concept that has
been adopted in section 46(1) of the 1987 Act.
Section 51 of
the 1987 Act, which is the last of the group of sections in Part VI, introduced
a new section, section 112C, into the Land Registration Act 1925. The new
section gave to a tenant of premises to which the section applied the right to
inspect the register relating to those premises. The premises to which the new
section applied were described in the same terms as those used in section 46(1)
of the 1987 Act.
The definition
of statutory tenant in section 112C(4) includes a statutory tenant within the
meaning of the Rent (Agriculture) Act 1976. So the premises to which the new
section 112C applied might include premises occupied by agricultural workers.
Examination of section 9(3) of the Rent (Agriculture) Act 1976 shows that a
dwelling-house which is itself subject to a statutory tenancy within the
meaning of that Act may form part of premises which are let as an agricultural
holding. This suggests, at the least, that Parliament was aware, when it
enacted Part VI of the 1987 Act, that the phrase ‘premises which consist of or
include a dwelling’ could refer to an agricultural holding on which there were
cottages occupied by agricultural workers.
I conclude
from this examination of the Landlord and Tenant Act 1987 that it is impossible
to regard that Act as a whole as having a single theme or purpose which should
colour the court’s approach to the word ‘premises’ in section 46(1). Parts I to
III of the 1987 Act apply only to flats, but this is made clear by the limited
terms in which ‘premises’ is defined for the purposes of those Parts. Parts IV
and V extend to dwellings other than flats. Part VI, notwithstanding that the
long title to the Act might suggest otherwise, extends beyond flats and other
dwellings; it extends to ‘premises which consist of or include a dwelling’. In
my view, the words ‘or include’ in section 46(1) of the 1987 Act must have been
used with the intent that ‘premises’ for the purposes of Part VI should have a
wider meaning than simply ‘dwelling’.
Further, I am
unable to identify any context in Part VI itself which points to a particular
meaning of the word ‘premises’ other than the definition in section 46(1). The
purpose of Part VI is to enable a tenant of premises which consist of or
include a dwelling to take practical steps — and, in particular, to serve
notices including notices in proceedings — for the purposes of enforcing his
landlord’s obligations. It may well be that these provisions are of particular
benefit to tenants holding undertenancies which require the landlord to provide
services — for example, repairs, maintenance and insurance — in that it is in
respect of tenancies of this nature that the landlord may have a particular
incentive to conceal his identity or his address so as to avoid enforcement of
his obligations. But, although the provisions are likely to be of particular
benefit to those holding undertenancies of this nature, I can see nothing in
Part VI of the Act which restricts its application to tenancies under which a
service charge is payable. The requirement is, simply, that the premises
consist of or include a dwelling. Further, I can see no reason of policy
apparent in Part VI of the Act which suggests why some tenants holding
undertenancies which include a dwelling and not others should have the benefit
of knowing the identity and address of their landlord. There is, after all,
nothing in section 46(1) which restricts the operation of Part VI to cases in
which the tenant is in occupation of the dwelling which comprises or forms part
of the premises or, indeed, is himself in occupation of the premises at all.
It seems to
me, therefore, that the proper approach is to construe the words which appear
in section 46(1) of the 1987 Act on the basis that there is nothing elsewhere
in Part VI, or in the Act as a whole, which points to those words having some
particular meaning which they might not otherwise bear.
Adopting this
approach, I conclude that premises are intended to have a wider meaning than
dwelling, that is to say, that the word ‘premises’ is intended to mean more
than a building or part of a building together with any yard, garden, outhouses
and appurtenances belonging to it or usually enjoyed with it. So, ‘premises’
can include land which is the subject-matter of the same letting. The question
is — how much land? The difficulty which
I see in giving the premises a meaning which is narrower than the subject
matter of the letting is that there is no guide in section 46(1) which would
enable the court to say where the limit is to be drawn.
Section 46(1)
of the 1987 Act does, of course, contain an express exclusion in relation to
business tenancies. It must have been thought that, but for the express
exclusion, the word ‘premises’ could include premises which were held under a
tenancy to which Part II of the Landlord and Tenant Act 1954 applies. Part II
of the 1954 Act does not apply to tenancies of an agricultural holding: see
section 43(1) of that Act. So, as it appears to me, Parliament must have
appreciated that, if tenancies of an agricultural holding were to be excluded
from the definition in section 46(1) of the 1987 Act, an express provision
would be required to put the matter beyond doubt. Some indication of
Parliament’s awareness in this area can be derived from section 9(3) of the
Rent (Agriculture) Act 1976, which contains an express provision reversing the
effect of the House of Lords decision in Maunsell v Olins and
section 137(3) of the Rent Act 1977 as amended by para 60 of Schedule 14 to the
Agricultural Holdings Act 1986. No provision excluding agricultural holdings
has been introduced into section 46(1) of the 1987 Act and I do not think that
it is appropriate to construe ‘premises’ in a way which introduces such a
restriction by implication.
Accordingly, I
construe section 46(1) of the 1987 Act in the sense that premises means the
subject-matter of a letting. I do not think that I am precluded from reaching
this conclusion by the decision of the House of Lords in Maunsell v Olins
[1975] AC 373. That was a decision on the meaning of the word ‘premises’ in
section 18(5) of the Rent Act 1968; a statute dealing with a particular
subject-matter. There is no reason in principle why the application of the
process of reasoning indicated by Lord Wilberforce — which I have sought to
follow — will necessarily lead to the same construction of the word ‘premises’
where it appears in a different statute dealing with different subject-matter.
As I have said, the fact that the word ‘premises’ would not normally be used in
popular parlance to include a large sporting and agricultural estate is not, of
itself, a bar to giving to the word the meaning which I have indicated in the
context of a statute dealing with landlord and tenant matters: see Bracey
v Read [1963] Ch 88.
In construing
section 46(1) of the 1987 Act as I do, I take some comfort from the fact that
sections 47 and 48 are said to apply to agricultural holdings in one of the
standard textbooks on that subject: see Scammell & Densham’s Law of
Agricultural Holdings, 7th ed (1989) at pp 176 and 177. A decision, therefore,
that those sections do apply to agricultural holdings, if they include a
dwelling, ought not to cause difficulty in practice. It has been foreseen.
The second
question, then, is whether a notice under section 48(1) of the 1987 Act was
given prior to December 3 1991. To comply with the subsection, the notice must
furnish the tenant with an address in England and Wales at which notices,
including notices in proceedings, may be served on him by the landlord. The
notice must be in writing: see section 54(1) of the 1987 Act.
With those two
requirements in mind I look at the candidates which have been suggested by the
landlord. They are summarised in a letter dated December 2 1991 from Franks
Charlesly.
First,
reliance is placed on the notice to pay dated August 7 1991. That notice is
signed over the text ‘Solicitors and authorised agents for Lindsey Trading
Properties Inc of Hulton House, 161/166 Fleet Street, London EC4A 2DY’. There
is nothing in that notice which indicates that the address of the solicitors is
the address at which notices, including notices in proceedings, may be served
on the landlord by the tenant.
Second,
reliance is placed on a statutory demand dated August 6
asserts that the demand is served by the creditor, Lindsey Trading Properties
Inc. It gives the registered office in Panama and includes an address ‘care of’
Franks Charlesly at Hulton House in London. The statutory demand, at Part A,
indicates that any communication regarding that demand is to be addressed to
Franks Charlesly. It does not anywhere contain notice that Franks Charlesly are
authorised to receive notices which may be served by the tenant on the landlord
in connection with matters under the lease other than the rent which is the
subject-matter of the statutory demand.
Third,
reliance is placed on section 93 of the Agricultural Holdings Act 1986.
Subsection (1) provides that any notice, request, demand or other instrument
under that Act shall be duly given to or served on the person to or on whom it
is to be given or served if it is delivered to him or left at his proper
address or sent to him by post in a registered letter or by the recorded
delivery service. Subsection (3) provides that any such instrument to be given
or served on a landlord or a tenant shall, where an agent or a servant is
responsible for the control of the management or farming as the case may be of
the agricultural holding, be duly given or served if given to or served on that
agent or servant.
In my
judgment, section 93 of the Agricultural Holdings Act 1986 does not assist the
landlord. That section, as it indicates, applies only to notices given under
that Act. Section 48 of the 1987 Act requires a notice to be furnished which
gives an address for all purposes.
Finally,
reliance was placed on an affidavit sworn on November 26 1991 by Delores
Caboshe, the secretary of the plaintiff company in Australia. She deposed on
November 26 1991 that on or about the beginning of August 1987 she was
contacted by telephone by Mr Bolag on behalf of Lindsey and told that, although
the provisions of the plaintiff company’s lease required payment of the rent to
Franks Charlesly, the rents payable under the lease should in fact be paid to
Strutt & Parker at Salisbury, whom Lindsey had appointed to act as its
managing agents for the property. She goes on to say that, on the same
occasion, Mr Bolag told her that all formal communications, including any and
all notices which might have to be given from time to time by the plaintiff
company to Lindsey in relation to the property — not being in the nature of
day-to-day management issues — should be addressed to Lindsey c/o Franks
Charlesly.
It is not
necessary to decide whether section 48 requires a single address capable of
covering both day-to-day management issues and formal communications, because
it is clear from Miss Caboshe’s affidavit that she was given no notice in
writing as required by section 54 of the 1987 Act. Accordingly, her affidavit takes
the landlord no further.
In those
circumstances, I hold that on the true construction of section 48 of the
Landlord and Tenant Act 1987 no notice giving the tenant an address in England
and Wales at which notices, including notices in proceedings, may be served on
him by a tenant was furnished by the landlord to the tenant prior to the letter
of December 3 1991.
The effect of
that failure to give a notice under section 48(1) must be that, in accordance
with section 48(2), rent which would otherwise have been due from the tenant to
the landlord must be treated for all purposes as not being due from the tenant
to the landlord at any time before the receipt by the tenant of the letter
dated December 3 1991. There is, I think, no reason to give a more extensive
construction to section 48(2). In particular, I reject the argument, put
forward (albeit faintly) on behalf of the tenant, that failure to give a notice
under section 48(1) had the effect that rent which would otherwise have been
due was irrecoverable for all time.
That leads to
the third question, namely whether there has been service of an effective
notice to pay under Case D in Part I of Schedule 3 to the Agricultural Holdings
Act 1986.
The
Agricultural Holdings (Forms of Notice to Pay Rent or to Remedy) Regulations
1987 (SI 1987 No 711) require that a notice to pay rent for the purposes of
Case D in the 1986 Act shall be in Form 1 to those regulations. Form 1 appears
in the Schedule to the 1987 regulations. Para 1 is in these terms:
I hereby give
you notice that I require you to pay within two months from the date of service
of this Notice the rent due in respect of the above holding as set out below:
Then there is
a note which reads:
This Notice
may not be served before the rent is due.
Then appear the
words ‘Particulars of rent not paid’ under which there are two columns: ‘Date
when due’ and ‘Amount due’. The effect of the 1987 regulations read
in conjunction with para 10 of Part II of Schedule 3 to the Agricultural
Holdings Act 1986 is that the prescribed form must be used. There will be no
compliance with the regulations if the information which is required to be
included in the prescribed form is inaccurate.
In the notice
dated August 7 1991, the dates when rent due was said to be due were June 24
1990, September 29 1990, December 25 1990, March 25 1991 and June 24 1991. I
have held that no notice under section 48(1) of the 1987 Act had been served at
any time before those five dates. Section 48(2) requires that the rent which
would otherwise have been due from the tenant on those dates is to be treated
for all purposes as not being due from the tenant to the landlord. In those
circumstances it seems to me that the notice served on August 7 1991 could not
be valid, on the ground that, when served, no rent was due from the tenant.
The position
in relation to the notice dated December 3 1991 is different. The notice to pay
rent was served under cover of a letter of that date which has itself been
accepted as a valid notice under section 48 of the 1987 Act. It follows that on
December 3 1991 the landlord did comply with section 48(1).
An interesting
argument was advanced on behalf of the tenant as to the exact time at which the
suspension imposed by section 48(2) ceased to have effect. I can see no reason
why it should continue beyond the time when the letter dated December 3 1991
was actually received by the tenant. But it is not necessary to decide the
point, because, in my view, examination of the notice to pay shows that it
fails to comply with the 1987 regulations. The provisions of section 48(2)
require only that rent be treated for all purposes as not being due from the
tenant to the landlord before receipt of the letter dated December 3 1991.
In the notice
of December 3 1991, under the heading ‘Particulars of rent not paid’, the rent
is said to have been due on the quarter days from June 24 1990 to September 29
1991. I have already held that the language of section 48(2) requires me to
hold that the rent was not due on those quarter days. It did not become due
until receipt of the letter dated December 3 1991. Accordingly, the information
which is required to be included in the prescribed form is inaccurate and the
notice to pay rent of December 3 1991 does not comply with the 1987
regulations.
That there is
need for strict compliance with regulations in this field was emphasised by the
Court of Appeal in Pickard v Bishop (1975) 31 P&CR 108, to
which I have already referred. In that case the defect in the notice to pay was
that it did not state that it was served on behalf of the persons who were the
landlord.
A similar
point arose in Dickinson v Boucher (1983) 269 EG 1159, [1984] 1
EGLR 12. There the misstatement in the notice to pay was as to the amount of
the rent due; £650 was demanded when only £625 was due. The Court of Appeal
followed Pickard v Bishop and held the notice to be invalid. The
court held that the notice to pay was, in effect, the foundation of a
forfeiture of an agricultural tenancy and that, in connection with forfeiture,
strict compliance with the requirements of statute was required.
The Court of
Appeal considered the matter again in Official Solicitor v Thomas
[1986] 2 EGLR 1. The defect was in a notice to remedy, under para (b) in
Case D of what was then section 2(3) of the Agricultural Holdings (Notice to
Quit) Act 1977. The court affirmed the need for strict compliance with the
statutory requirements in respect of notices to pay under this legislation but
held that, on the particular facts of that case, the notice did specify with
sufficient accuracy the source of the obligation which was said to require
remedy. Sufficiency of description was a question of degree and the description
given in the notice was such that the tenant could not reasonably have been
misled.
In the present
case, the defect in the notice to pay is not in the nature of a misdescription;
it is a statement as to the date when rent was due, which — in the light of the
provisions of section 48(2) of the 1987 Act — is simply inaccurate. It is, I think,
immaterial that the tenant would not, in fact, have been misled. In my
judgment, the notice to pay rent of December 3 1991 does not satisfy the
requirement in the 1987 regulations and, therefore, must be treated as invalid.
Accordingly, I
answer the questions raised in the originating summons in the following terms:
I declare that
on the true construction of section 48 of the Landlord and Tenant Act 1987 no
rent was due from the plaintiff to the defendant under the lease on August 7
1991.
I declare that
on the true construction of that section no rent was due from the plaintiff to
the defendant at any time before receipt of the letter dated December 3 1991.
And I declare
that on the true construction of section 48 and of Case D in Part I of Schedule
3 to the 1986 Act and of the 1987 regulations the notices of August 7 1991 and
December 3 1991 are invalid and of no effect.
Declaration
accordingly. Plaintiff entitled to its costs.
