Galinski v McHugh

Landlord and tenant — Leasehold Reform Act 1967 — Landlord and Tenant Acts 1927 and 1954 — Service on tenant’s solicitors of notice under section 4(1) of the 1954 Act — Whether notice ‘given to the tenant’ — Appeal by tenant from decision of county court judge holding that the service was effective — Tenant had made a claim for enfranchisement under the 1967 Act, the claim had been admitted and the price agreed, but difficulties arose in respect of the subsequent procedure — Landlord’s solicitors had served on the tenant a notice to complete under para 6 of the Leasehold Reform (Enfranchisement and Extension) Regulations 1967 without getting any response — They then served a notice under para 10 requiring tenant to make good his default — A few days before this second notice was due to expire tenant informed landlord’s solicitors that he had instructed his own solicitors to complete the deal — Having received confirmation of this from the tenant’s solicitors, the landlord’s solicitors sent to them, instead of to the tenant himself, the documents which gave rise to the present litigation — By this time the two months allowed by the second notice under the regulations had expired — The documents were a letter recording that the landlord was freed from his obligations under the enfranchisement proceedings and a notice under section 4 of the 1954 Act proposing a statutory tenancy in place of the original tenancy which, under Part I of the 1954 Act, had continued after the expiry of the contractual term — The effect of this notice, if the service of it on the tenant’s solicitors was good, was to allow the tenant two months in which he could give formal notice once again of his claim to enfranchise — No such claim was made The sole question on the appeal was whether the service of the section 4 notice on the tenant’s solicitors was in all the circumstances good service — There was no dispute that the notice was in the prescribed form; the only issue was whether it was ‘given to the tenant’ — The tenant’s ‘powerful argument’ that it was not good was as follows — The 1954 Act, by section 66(4), applied the service of notices provisions of section 23 of the 1927 Act — Section 23(1) of the 1927 Act specifically provided that ‘in the case of a notice to a landlord, the person on whom it is to be served shall include any agent of the landlord duly authorised in that behalf’ — No corresponding provision was made as to service on an agent of the tenant and so the principle ‘expressio unius est exclusio alterius’ applied — In any case, service in a manner not expressly permitted by section 23 could be effective only if the notice was actually received by the person to whom it was addressed (the tenant here had denied receipt of the notice) Held by the Court of Appeal, affirming the decision of the county court judge, that the notice under section 4 of the 1954 Act was effectively served on the tenant — The tenant’s solicitors had ostensible authority to receive the notice — Section 23 of the 1927 Act was permissive; its object was not to protect the person on whom the right to receive the notice was conferred by other statutory provisions, but to assist the person obliged to serve the notice by offering him a choice of modes of service which would be deemed valid service even if the notice was not in fact received — Although the landlord could not invoke section 23(1) (service on the tenant’s agent not being mentioned in it), he could rely on the ordinary rules as to service of notices between landlord and tenant and the ordinary rules of agency — It was no concern of the landlord, and no matter for inquiry by the court, whether the agents did or did not fail to pass the notice to the tenant — As to the ‘expressio unius’ point, this was only a rule of construction and there were possible reasons why Parliament might have chosen to refer expressly to service on the landlord’s agent — Appeal dismissed The following cases are referred to in this report. Dean v Wiesengrund [1955] 2 QB 120; [1955] 2 WLR 1171; [1955] 2 All ER 432; [1955] EGD 294; (1955) 165 EG 568 CA Fagan v Knowsley Metropolitan Borough Council (1985) 50 P&CR 363; [1985] 2 EGLR 39; 275 EG 717; 25 RVR 176, CA Stylo Shoes Ltd v Prices Tailors Ltd [1960] Ch 396; [1960] 2 WLR 8; [1959] 3 All ER 901; [1960] EGD 112; (1959) 175 EG 591 Sun Alliance and London Assurance Co Ltd v Hayman [1975] 1 WLR 177; [1975] 1 All ER 135; (1974) 29 P&CR 422; [1975] EGD 72; 233 EG 927, [1975] 1 EGLR 63, CA Tanham v Nicholson (1871) LR 5 HL 561 Townsend Carriers Ltd v Pfizer Ltd (1977) 33 P&CR 361; 242 EG 813, [1977] 1 EGLR 37 This was an appeal by Mr Peter McHugh, tenant of a dwellinghouse at 129 Listria Road, London N16, from a decision of Judge McDonnell, at Shoreditch County Court, that a notice under section 4 of the Landlord and Tenant Act 1954 had been effectively given to the appellant by having been served on his solicitors. The respondent was Mr Simon Galinski, the landlord, whose solicitors had served the notice in question. Geoffrey Zelin (instructed by Lebor & Co) appeared on behalf of the appellant; Jonathan Ferris (instructed by H M Rose & Co) represented the respondent. Giving the judgment of the court, SLADE LJ said: With the leave of the judge, Mr Peter McHugh appeals from a decision of His Honour Judge McDonnell given in the Shoreditch County Court on May 11 1987 whereby he decided that a notice dated March 5 1985 proposing a statutory tenancy was validly served on or about March 6 1985. The history of the matter is briefly as follows. Mr McHugh was the tenant of a dwelling-house, 129 Listria Road, London N16. The respondent, Mr Simon Galinski, was the landlord. In September 1978 Mr McHugh made a claim for enfranchisement under the Leasehold Reform Act 1967 (‘the 1967 Act’) which was ultimately admitted, though at that stage the price still remained to be agreed or determined through the statutory procedure. Under that procedure the price payable is, in default of agreement, determined by a leasehold valuation tribunal. In October 1984 a price of £4,500 was agreed. The process of deducing title and completing the conveyance then began. The scheme of the 1967 Act and the regulations made thereunder provides for the landlord or tenant to be able to serve what amounts to a notice to complete if the other party is dilatory. The landlord is|page:110| required to serve two such notices, the first under para 6 of the Schedule to the Leasehold Reform (Enfranchisement and Extension) Regulations 1967 [SI 1967, no 1879] and the second under para 10 of the Schedule to those Regulations. If there is a failure to comply with the second notice, the landlord is discharged from further performance of his obligations under the Act, ie the tenant’s application to enfranchise fails. On or about November 30 1984 H M Rose & Co, Mr Galinski’s solicitors, served on Mr McHugh a notice pursuant to para 6(1) requiring him to complete the purchase on the first working day after the expiration of four weeks from the giving of the notice. Mr McHugh failed to complete the purchase as required. On January 3 1985 Mr Galinski’s solicitors served on him a notice pursuant to para 10 requiring him within two months from the date of the service of the notice to make good his neglect or default. At that stage Mr McHugh, who had previously had solicitors acting for him, did not appear to have any. However, later on January 3, after H M Rose & Co had written their letter of that date, Mr James Glyn, a clerk in their employ, received a telephone call from Mr Maddison of the firm of Wayne Leighton & Co, solicitors of Turnpike Lane, saying that he had been instructed to act for Mr McHugh in connection with the claim to enfranchise. This was confirmed by a letter of January 9 1985, written by Wayne Leighton & Co to H M Rose & Co, which read as follows: Re 129 Listria Park We refer to our telephone conversation last week and confirm that we have been instructed by Mr McHugh in this matter. Our client has handed over to us your letter and Notice of November 30, together with the following letter and Notice of January 3. We are looking into this matter as soon as possible. On March 1 1985, that is three days before the notice to complete of January 3 1985 would expire, Mr McHugh wrote to the plaintiff’s solicitors a letter, wrongly dated March 1 1984, and reading as follows: Re: Buying of the freehold of 129 Listria Park N16 Yesterday my wife and I called in to my solicitors office to complete the above deal. Mr Maddison told us you were claiming legal costs and surveyors fees, and as he was awaiting your bill, he could not complete, and hoped to be in a position to complete on Monday next. My surveyor, Mr P Tobin, in a letter to me dated Oct 25 1984, confirmed to me he agreed, with your surveyor Mr Glyn the day before, the price for the above freehold would be £4500, this would include your legal costs, and surveyors fees, on this letter I instructed my solicitors. Please check with Mr Glyn, and confirm to me by return post that this agreement stands, otherwise I will have to instruct my surveyor to take the matter to the tribunal. The tribunal referred to was, of course, the leasehold valuation tribunal. The judge did not accept Mr McHugh’s evidence that Mr Maddison had told him that Mr Galinski’s solicitors were claiming legal costs and surveyors’ fees. He was far from convinced that there was any misunderstanding as to whether surveyors’ and legal fees were included in the price. On March 4 1985 the plaintiff’s solicitors wrote to Wayne Leighton enclosing a copy of Mr McHugh’s letter of March 1 and saying: We suppose that letter was written before we ‘phoned you on the 1st instant providing you with the completion figures which were repeated in our letter to you of the 1st instant. We do not wish to correspond directly with your client but will TOMORROW be writing directly to him serving a Notice upon him under the Landlord and Tenant Act 1954 unless you telephone us to say that you are authorised to accept service of the Notice on his behalf. We shall send you a copy of our letter to your client and of the Notice that will be enclosed with it. Also on March 4 the plaintiff’s solicitors dictated, but did not send, a letter addressed to Mr McHugh stating that because of his failure to complete the purchase, Mr Galinski was discharged from further performance of his obligations in that regard and enclosing a landlord’s notice proposing a statutory tenancy pursuant to the provisions of the Landlord and Tenant Act 1954 (‘the 1954 Act’). This letter was not sent because in a telephone conversation, on March 5 1985, Mr Maddison of Wayne Leighton told Mr Glyn of the plaintiff’s solicitors that Wayne Leighton had full authority to act for the defendant and to accept service of the notice. This telephone conversation was recorded in a letter written later that day, March 5 1985, by the plaintiff’s solicitors to Wayne Leighton & Co in which, after referring to the history of the matter and the defendant’s past defaults, they said: Accordingly, our client now regards himself as discharged from any obligations which might have arisen from your client’s Leasehold Reform Act Notice. To finally dispose of the Leasehold Reform Act claim, our client now requires that your client should pay our costs in the matter and our client’s Surveyors’ fees. We were proposing to write directly to your client claiming such fees and costs and serving your client with a Landlord and Tenant Act Notice proposing a statutory tenancy. You telephoned us earlier today apologising that your client should have written to us confirming that he was mistaken about the question of fees and costs. You said that you preferred that we should presently only correspond with your firm and that you are authorised to accept service on behalf of your client of a Notice under the last-mentioned Act proposing a Statutory Tenancy. Accordingly, we enclose herewith, by way of service upon your client, such a Notice under the said Act. Enclosed with that letter was a notice by Mr Galinski under section 4 of the 1954 Act (‘the section 4 notice’) proposing a statutory tenancy in place of the original tenancy which, under the provisions of Part I of that Act, had continued after the expiry of the contractual term. Thereafter, if the service was effective, Mr McHugh had two months in which to give formal notice once again of a claim to enfranchise. No claim to enfranchise was made by him during that crucial two-month period, which ended on May 5-6 1985. On June 7 1985 Mr Galinski applied to the court for settlement of the terms of a statutory tenancy. Mr McHugh served an answer resisting this application on a number of grounds, in particular the ground that the notice of March 5 1985 was invalid as it had not been duly served in accordance with sections 4(2) and 66(4) of the 1954 Act. In due course, by direction of the registrar, the question whether the section 4 notice was validly served came on for hearing on December 6 1985 before Judge Stuckley, when the case was adjourned part heard. Following his untimely death, the preliminary issue came back for hearing before Judge McDonnell and the hearing was restarted. On May 11 1987 the learned judge gave a judgment in which he found that (i) the section 4 notice was served on Wayne Leighton, the solicitors then acting for Mr McHugh; (ii) Mr McHugh had represented that those solicitors had authority to accept the section 4 notice; (iii) as a matter of law, service of the section 4 notice upon them was good service. The learned judge accordingly decided the preliminary issue in favour of the plaintiff. As to (ii), he said: It was served on the solicitors whom the defendant had represented were acting in the matter on his behalf. He says that it never came to his notice — whether that is so or not I don’t have to decide, perhaps fortunately — and he says that he expressly limited his instructions to his solicitors dealing with the conveyancing but in my judgment he certainly represented by his actions and letter — he represented to the plaintiffs that Mr Maddison in particular and his firm, Wayne Leighton & Co, were authorised to deal with matters on his behalf and in these circumstances I find that service on them was effected and I would hold as a matter of law that that service was effective in law so the preliminary question must be decided in favour of the plaintiffs. The first two of the three findings mentioned above are not challenged on this appeal. Accordingly, the sole question with which we are concerned is the question whether the service of the section 4 notice upon the solicitors of Mr McHugh was in all the circumstances good service. Section 4(1) of the 1954 Act provides: The landlord may terminate a tenancy to which section one of this Act applies by notice given to the tenant in the prescribed form specifying the date at which the tenancy is to come to an end (hereinafter referred to as ‘the date of termination’), being either the term date of the tenancy or a later date: . . . The notice thus has to be ‘given to the tenant in the prescribed form’. There is no dispute that the notice of March 5 1985 was in the prescribed form. The question is whether it was ‘given to the tenant’ within the meaning of section 4(1). In this context two points are common ground. First, no distinction is to be drawn between the giving and service of notices: see Sun Alliance & London Assurance Co Ltd v Hayman [1975] 1 WLR 177 at p 183 per Stephenson LJ. Second, under the general law of landlord and tenant it is possible for good service of notices to be|page:111| effected by serving them on the agent of the landlord or tenant as the case may be: see Townsend Carriers Ltd v Pfizer Ltd (1977) 33 P&CR 361 at p 365 per Sir Robert Megarry V-C. Section 66(4) of the 1954 Act provides that section 23 of the Landlord and Tenant Act 1927 (‘the 1927 Act’), which relates to the service of notices, shall apply for the purposes of the 1954 Act. Section 23(1) of the 1927 Act provides: Any notice, request, demand or other instrument under this Act shall be in writing and may be served on the person on whom it is to be served either personally, or by leaving it for him at his last known place of abode in England or Wales, or by sending it through the post in a registered letter addressed to him there, or, in the case of a local or public authority or a statutory or a public utility company, to the secretary or other proper officer at the principal office of such authority or company, and in the case of a notice to a landlord, the person on whom it is to be served shall include any agent of the landlord duly authorised in that behalf. Put very shortly, Mr McHugh’s case, ably presented by Mr Zelin, is as follows. The closing limb of section 23(1) expressly permits service on any agent of the landlord duly authorised in that behalf. There is no corresponding limb permitting service on an agent of the tenant. Expressio unius est exclusio alterius. By necessary implication the subsection renders impermissible service on an agent of the tenant, even if duly authorised to accept service. Otherwise the last part of the subsection would be otiose. To this extent, so the argument runs, the subsection displaces the ordinary rules of common law. There is no doubt that, in some instances, a statute on its true construction will mandatorily require the service of a notice in a particular manner, and no other manner, if the notice is to be valid. Subject to the possible operation of estoppel, this court held that to be the effect of section 30(1) of the Compulsory Purchase Act 1965 (‘the 1965 Act’) in Fagan v Knowsley Metropolitan Borough Council (1985) 50 P&CR 363*. Section 30(1) reads as follows: Notices required to be served by the acquiring authority on any person interested in or entitled to sell any of the land — (a) shall be served personally, or left at his last usual place of abode; or (b) if he is absent from the United Kingdom or cannot be found after diligent inquiry has been made, may be left with the occupier of the land or, if there is no occupier, shall be affixed upon some conspicuous part of the land. *Editor’s note: Also reported at [1985] 2 EGLR 39. Balcombe LJ, with whom Parker and Oliver LJJ agreed, described the effect of section 30(1) thus (at p 366): . . . In section 30 of the 1965 Act, Parliament enacted a complete code for the service of notices under that Part of that Act, and unless there is something in the nature of estoppel (which, as I have already said, is expressly ruled out in this case) in my judgment it is not possible to escape from the express provisions of that section by providing for service on an agent, as was suggested here. There are at least some obvious distinctions between the wording of section 23(1) of the 1927 Act, which prefaces the modes of service therein referred to with the permissive word ‘may’, and the wording of section 30(1) of the 1965 Act, which in two places uses the imperative word ‘shall’. It would seem that in Fagan this court might have held that the service was ineffective even if the agent had passed on the notice to the owner of the land, since the question whether he had or had not passed it on was apparently never canvassed. The position under section 23(1) is different, at least to this extent. Mr Zelin accepted that a notice under section 23(1) will be effectively served if in the end it comes into the hands of the person entitled to receive it, even if it is not served in any of the modes expressly authorised by section 23(1). That was held by Wynn-Parry J as one of the alternative grounds for his decision in Stylo Shoes Ltd v Prices Tailors Ltd [1960] Ch 396, where he said (at pp 405-406): . . . On the reasoning of the members of the Court of Appeal in Tennant v London County Council [(1957) 55 LGR 421] I feel constrained to construe section 23(1) as being permissive so far as the mode of service is concerned. It is perfectly true, as was pointed out by Mr Holdsworth, that the requirement that the notice, etc is to be in writing is imperative — ‘Any notice, request, demand or other instrument under this Act shall be in writing’; but then when the subsection goes on to deal with service the permissive verb ‘may’ is used, and that is in clear contradistinction to the imperative ‘shall’. I can see no canon of construction which would entitle me to qualify the nature of the verb ‘may’ by anything that has gone before in the subsection. It follows that, although there are certain modes set out in the subsection they are not to be regarded as being exhaustive. Mr Zelin did not challenge the correctness of this decision, which has stood unchallenged for 27 years and is cited in the notes to Halsbury’s Statutes (4th ed) vol 23 at p 72 as an authority for the proposition that: as [section 23(1)] is permissive only, it is clear that where a notice is served in a different manner and is received this constitutes good service. To this extent he accepted that section 23(1), unlike section 30(1) of the 1965 Act, does not afford a ‘complete code’. Nevertheless, he submitted, the general purpose of section 23(1) of the 1927 Act is to ensure that a notice is received by the person who is entitled to receive it. A mode of service on such person not expressly permitted by the subsection will suffice if, but only if, it results in his actually receiving the notice. Any mode of service not expressly permitted by the subsection which does not have this result, so the argument runs, will be invalid. For the purpose of the subsection an ‘agent of the landlord duly authorised in that behalf’ is, by virtue of the closing words, deemed to be a ‘person on whom it is to be served’. An agent of the tenant is not, so that service on an agent of the tenant is not a mode of service permitted by the subsection. On the contrary, Mr Zelin suggested, it is implicitly prohibited. In our judgment, this last submission involves a misunderstanding of the nature and purpose of section 23(1) of the 1927 Act. This is a subsection appearing in an Act which, like the 1954 Act, contains a number of provisions requiring the giving of notice by one person to another and correspondingly entitling that other person to receive it. In our judgment, the object of its inclusion in the 1927 Act, and of its incorporation in the 1954 Act, is not to protect the person upon whom the right to receive the notice is conferred by other statutory provisions. On the contrary, section 23(1) is intended to assist the person who is obliged to serve the notice, by offering him choices of mode of service which will be deemed to be valid service, even if in the event the intended recipient does not in fact receive it. The subsection makes special provision for the case where the intended recipient is a local or public authority or a statutory or public utility company. Where the intended recipient is an individual, the modes of service alternative to personal service so specified and authorised are: (a) leaving the notice for the intended recipient at his last known place of abode in England and Wales, or (b) sending it through the post in a registered letter addressed to him there, or (c) in the case of a notice to a landlord, serving it on the agent of the landlord duly authorised in that behalf. As appears above, the original intention of Mr Galinski or his solicitors was to effect service of the section 4 notice on Mr McHugh by post. If this had been done, Mr Galinski would have been in a position to invoke section 23(1) to establish valid service. He or his solicitors were deflected from this course by: (i) Mr McHugh’s representation that Wayne Leighton had authority to accept the section 4 notice; (ii) Wayne Leighton’s confirmation that they had such authority. Mr Galinski cannot himself now invoke section 23(1) to establish valid service of the section 4 notice, because service on the tenant’s agent is not a mode of alternative service authorised by the subsection. However, for the reasons already stated, we would reject the suggestion that section 23(1) itself operates in any sense to place mandatory obligations on the landlord to effect service of the section 4 notice in a particular manner or that it gives the tenant a form of statutory protection, in regard to mode of service, which he would not otherwise enjoy by virtue of the substantive statutory provisions entitling him to receive notice. In the circumstances we can see no good reason why section 23(1) or anything else should prevent the ordinary rules as to service of notices as between landlord and tenant, and the ordinary rules of agency, from operating in the present case. As we have already said, it is common ground that, under the general law of landlord and tenant, it is possible for good service of a landlord’s notice to be effected by serving it on the duly authorised agent of the tenant (and vice versa). The judge made no finding that Mr McHugh had in fact duly authorised Wayne Leighton to receive service of the section 4 notice. However, that makes no difference, since the judge found that he had represented that they had authority to receive it; in other words, that he had given them ostensible authority to receive it, and that finding is not challenged. The relevant principles relating to ostensible authority are well stated in Bowstead on Agency (14th ed) at p 235: |page:112| Where a person, by words or conduct, represents or permits to be represented that another person has authority to act on his behalf, he is bound by the acts of such other person with respect to anyone dealing with him as an agent on the faith of any such representation, to the same extent as if such other person had the authority that he was represented to have, even though he had no actual authority. In the present case, after Mr McHugh represented that Wayne Leighton had authority to receive the section 4 notice on his behalf, that firm invited Mr Galinski’s solicitors to serve the notice on them. Mr Galinski’s solicitors acted on this representation and this invitation, instead of serving the notice on Mr McHugh as they had originally intended. The judge made no finding that Wayne Leighton had passed the notice on to Mr McHugh, who denied that he had received it. In our judgment, however, that assertion does not avail him. Once it is established that Wayne Leighton were his agents for the purpose of receiving the section 4 notice, it was of no concern to the landlord, and is not a matter for inquiry by the court, whether the agents did or did not fail in their duty to pass on the notice to Mr McHugh. In this context, Mr Jonathan Ferris, on behalf of Mr Galinski, drew attention to the decision of the House of Lords in Tanham v Nicholson (1872) LR 5 HL 561. In the course of his speech in that case Lord Hatherley LC said (at p 568): . . . if once you have constituted your servant your agent for the purpose of receiving such a notice, the question of fact as to whether that servant has performed his duty or not, is not one which is any longer in controversy. When once you constitute your servant your agent for that general purpose, service on that agent is service on you — he represents you for that purpose — he is your alter ego, and service upon him becomes an effective service upon yourself. In the present case Mr Galinski was in all the circumstances entitled to assume that the section 4 notice would be passed on by Wayne Leighton to Mr McHugh. For the reasons which we have stated, we think the learned judge reached the right conclusion. In the end our answer to Mr Zelin’s powerful argument, based on the principle expressio unius est exclusio alterius, is twofold. First, if it had been the intention of Parliament, in enacting section 23(1), to render impermissible service on an agent of the tenant duly authorisd to accept service, we would have expected the subsection expressly so to state. As we have already indicated, we regard the subsection as drafted as being of a permissive, not of a prohibitory, nature. Second, the expressio unius principle ‘is after all no more than an aid to construction, and has little, if any, weight where it is possible . . . to account for the inclusio unius on grounds other than an intention to effect the exclusio alterius’: see Dean v Wiesengrund [1955] 2 QB 120 at pp 130-131 per Jenkins LJ. While this must be a matter for speculation, we can think of certain reasons why Parliament, in drafting section 23(1), might have chosen to make express reference to service by the tenant upon the landlord’s duly authorised agent and not vice versa. Landlords are more likely to have agents than are tenants. Furthermore, in many cases the tenant may be more accustomed to deal with the landlord’s agent than with the landlord himself. It appears to us by no means improbable that in extending the ‘deemed service’ provisions of section 23(1) to the duly authorised agent of a landlord, the legislature regarded a similar extension to the agent of a tenant as simply unnecessary. Be this as it may, for the reasons already stated, we are of the opinion that this omission does not operate to render actual service on the duly authorised agent of a tenant invalid service on the tenant. The mode of service of the section 4 notice was valid in the present case, even though it did not fall within the permissive provisions of section 23(1). We dismiss this appeal. The appeal was dismissed with costs; leave to appeal to the House of Lords was refused.