Landlord and Tenant Act 1954 — Whether where reversion severed between four landlords, four separate section 25 notices relating to separate properties within single tenancy valid — Whether copies of the same notices relying on para (g) served on tenant’s solicitors effective counternotices to section 26 request
By an
agreement dated March 10 1988 T Ltd made block bookings of two hotels owned by
the four defendant companies, one of which consisted of four adjoining
buildings; by a judgment in the High Court made on December 20 1990 the
agreement was held to be a tenancy, accepted on behalf of the landlords as a
single tenancy of the five buildings. The tenancy was assigned to the plaintiff
on February 11 1991. The landlords served four separate notices, each relating
to a separate building, dated March 6 1991 under section 25 of the Landlord and
Tenant Act 1954 on the tenant, accompanied by a single letter referring to the
five properties, determining the tenancy in each case on September 8 1991 and
relying on section 30(1) ground (g). Copies of these notices were
subsequently served on the tenant’s solicitors. The tenant served four notices,
also dated March 6 1991, on the landlords under section 26 of the 1954 Act
requesting a new tenancy; these notices were received by the landlords after
the service on the tenant of the section 25 notices, but prior to the receipt
of the copies of the section 25 notices by the tenant’s solicitors. The
landlord contended that: (1) the section 25 notices were effective
notwithstanding that each separate notice purported to terminate the tenancy
only of one building demised by the tenancy; and (2) if the section 25 notices
were ineffective, the copy section 25 notices, which relied on para (g)
were effective counternotices to the tenant’s section 26 request.
whole of the premises the subject of the demise. Although the four notices
might be construed as one notice contained within four, or together with the
covering letter five, documents, they were capable of prejudicing a tenant
because they did not make clear whether the tenancy which was bound to be treated
as a single tenancy was in fact being so treated and accordingly were invalid.
(2) The copies of the section 25 notices received by the tenant’s solicitors
after the landlords received the section 26 request were effective
counternotices allowing the landlords to rely on ground (g) in the
tenant’s application for a new tenancy.
The following
cases are referred to in this report.
Long
(Nevill) & Co (Boards) Ltd v Firmenich &
Co (1983) 47 P&CR 59; (1983) 268 EG 572, [1983] 2 EGLR 76, CA
Pearson v Alyo [1990] 1 EGLR 114; [1990] 25 EG 69, CA
Southport
Old Links Ltd v Naylor [1985] 1 EGLR 66;
(1984) 273 EG 767, CA
This was an
application by the defendants, Norfolk Square Hotels Ltd and three other
companies, to have determined two preliminary questions in an application by
the plaintiff, M&P Enterprises (London) Ltd, for a new tenancy of premises
owned by the defendants.
Kenneth Munro
(instructed by Graham Harvey & Co) appeared for the plaintiff (the
respondent to the preliminary issue); Philip Kremen (instructed by Georgiou
Nicholas) represented the defendants (the applicants to the preliminary issue).
Giving
judgment, JUDGE RICH QC said: This is a preliminary issue to be
determined under an order made by Master Dyson on October 25 1991 as to the
validity of certain notices under section 25 of the Landlord and Tenant Act
1954, served by the defendants in this case, and as to the effect of a notice
served under section 26 and the response thereto served by the plaintiff upon
the defendants. It is convenient to refer in cases of this sort to the
plaintiff as ‘the tenant’ and to the defendants as ‘the landlords’, although it
is necessary for me to explain at the outset what it is that the defendants are
in fact landlords of.
The tenancy,
which is the subject-matter of the proceedings in respect of which the
preliminary issue arises, arose out of an agreement made between the four
defendant companies and a company called Tours & Travel UK Ltd, which
agreement was made on March 10 1988, for what were called block bookings in the
hotels owned by the defendants. Each of the four defendants owned one building,
or in the case of the defendant called Norfolk Square Hotels No 2 Ltd two
buildings. Four of the buildings were contiguous in Norfolk Square, London W2,
and together were called the Continental Hotel. The fifth building at 92 Sussex
Gardens, London W2, owned by Sussex Gardens Hotels Ltd, was known as the
Classic Hotel.
The agreement
that was made for the block bookings at these hotels was claimed by Tours &
Travel UK Ltd to constitute a tenancy. That was disputed by the present
defendants, but the matter was determined by the judgment of Judge Sumner,
sitting as a High Court judge on December 20 1990, whereby he adjudged and
declared that the plaintiff did have a tenancy from the defendants of the
premises which he there described.
That decision
I construe as meaning that there was a single tenancy of all five buildings
from the four landlords to Tours & Travel UK Ltd and it has been accepted
by Mr Philip Kremen, who appears for the landlords who are before me, that that
is the effect of the judgment, which has not been appealed. That appears to me
to be binding as between the landlords and the present plaintiff, to whom these
premises and that tenancy was assigned on February 11 1991.
Immediately
following that assignment, the landlords were minded to bring that tenancy to
an end under the terms of the Landlord and Tenant Act 1954. For that purpose,
they served four separate notices upon the defendant. Each notice followed a
similar form, in that each referred to one — or in the case of the landlord who
owned two buildings two — of the buildings the subject of the agreement and
gave notice terminating the tenancy in each case on the same date more than six
months ahead from the date of service, namely September 8 1991. Each gave as
the address of its agent the name of
all correspondence in regard to the notice.
These notices,
when served on the defendant, were accompanied by a single letter from the
landlords’ solicitors, addressed to the defendant tenant, referring to the
premises by title, 36 to 42 Norfolk Square and 92 Sussex Gardens, and saying
‘We refer to the above matter and enclose herewith notices under section 25 of
the Landlord and Tenant Act 1954’. The notice was said to be served without
prejudice to an appeal in respect of the order of December 20 of the previous
year (to which I have referred), but nothing, I think, turns upon that
qualification upon the service of the notices for the purposes of this present
issue. It is, I think, probably helpful before turning to the effect of those
notices, to take the history forward a little so that the nature of the issues
between the parties can be more fully understood. Each of those notices recited
the intention of the landlord, if the recipient of the notice applied for a new
tenancy under the Landlord and Tenant Act 1954, to oppose such application on
the grounds mentioned in para (g) of section 30(1) of the Act.
The service of
these notices, as it were, crossed an attempt to serve a request under section
26 of the 1954 Act on behalf of the tenant for a new tenancy. The service of
such request was, I think, complicated by the desire of those who were wishing
to serve it to serve each one of the four landlords separately, but they were
each served with a copy of a request in identical form, which referred to all
five of the properties and requested all four of the landlords to grant a new
tenancy under the Act.
That form of
notice, dated likewise March 6 1991, is agreed to have been served on the
landlords only later than the service of the section 25 notice, but prior to
the receipt by the tenant’s solicitors of copies of the section 25 notices. The
section 26 request, in the same way as the section 25 notices, stated the name
and address of the tenant’s agent — namely their solicitors, Graham Harvey
& Co — and invited the recipient to address all correspondence about the
request to that agent. There was no response to that notice of request
specifically relying upon a ground of opposition to the grant of a new tenancy
under the Act, save the effect (if any) of the service upon the tenant’s solicitors
of copies of the notices served already on the tenant himself, subsequent to
the receipt by the landlords of the section 26 request.
The section 26
request, to which I have referred, contained a typographical error in the
reference to one of the properties, in that the Sussex Gardens property,
instead of being referred to as no 92 as was its true address, was by
typographical error referred to as a half-bracket and 2 Sussex Gardens. It has
been accepted on both sides that such error in no way misled the recipients of
the document and therefore in no way affected its validity, and so, although as
a precaution a yet further version of the section 26 request was served on the
landlords, it is agreed that that is unnecessary for me to consider, because,
if the section 25 notices had been valid, both section 26 requests would be
invalid; and, if the section 26 request is not invalidated by the typographical
error to which I have referred, the second section 26 request was unnecessary
and therefore of no further effect.
The first
question which I am called upon to determine is whether or not notices in this
form on behalf of a group of landlords in respect of a group of properties is
an effective form of notice to comply with the terms of section 25 of the Act.
On the face of
it, each separate notice could not be a valid notice under the Act, because
each separate notice purports to determine the tenancy — which is a single
tenancy of the five hotels — in respect of only one, or in one case two, of the
buildings, and it is common ground that the Act does not permit the
determination of part only of a tenancy or of a tenancy in respect of part only
of the demise. Authority for that proposition can be found, if nowhere else, in
the decision of the Court of Appeal in Southport Old Links Ltd v Naylor
[1985] 1 EGLR 66. But it is said on behalf of the landlords that it is wrong to
consider each notice separately and the combined effect of the four notices was
to determine the tenancy in respect of all five buildings, and therefore
service in that manner constituted a valid notice. Indeed it is said,
persuasively, that service in that form was contemplated by the Court of Appeal
in what is accepted to be really a parenthetic observation in the course of the
judgment in Nevill Long & Co (Boards) Ltd v Firmenich & Co
(1983) 47 P&CR 59*. In that case Fox LJ gave the judgment of the Court of
Appeal in respect of the application of the 1954 Act to a situation where there
was a severed reversion such that the property held by the tenant was in part
held from a landlord called Meek and in part — the relevant part being in fact
the incorporeal hereditament of a right of way — from the defendant in that
case. Fox LJ, having decided that in that case the right of way was held upon
terms which were protected under the 1954 Act, went on to consider how the
tenancy could be determined. He added, at the bottom of p66:
We should add
that it seems to us that the defendants and Meek together could constitute ‘the
landlord’ for the purposes of section 25 (either by serving a single notice or
separate notices operating at the same time) since together they are entitled
to the entirety of the land comprised in the relevant reversion.
*Editor’s
note: Also reported at (1983) 268 EG 572, [1983] 2 EGLR 76.
Mr Philip
Kremen, for the landlords in the present case, draws my attention to the
proposition that the Court of Appeal were contemplating in such circumstances
the serving of separate notices operating at the same time. He points out that
the four notices served in this case were indeed operating at the same time, in
the sense that they all bear the same date and all gave notice for termination
of the respective parts of the demise to which they referred on the same date,
namely September 8 1991.
I am not sure
whether that is what was in the mind of the Court of Appeal in making this
parenthetic observation. It may well be, with the greatest of respect to the
court, that they had not actually considered the mechanics of notice in the way
that it has been necessary for me to do after hearing argument on this present
issue. But I think that it is at least possible that in the circumstances of
that case the problem that here arises would not have arisen, because, in that
case, the description of the property, which was the subject of the demise,
would have been effectively the same whether as described by the landlord of
the buildings, which were held by the tenant in that case, or by the defendant in
that case who held only the reversion upon a right of way attached to those
same buildings. Whether or not the Court of Appeal had in mind the possibility
that the description of the premises to be the subject of the notice was to be
the same or different, I have come to the conclusion that a valid notice must
be a notice in respect of the whole of the premises the subject of the demise
and one can construe the four notices, which are before me, as being a notice
in respect of all five buildings only if one reads them as if they were in fact
a single notice, that is to say not treating them as, in the Court of Appeal’s
words, separate notices operating at the same time, but as a single notice
contained within four, or maybe with the combination of the covering letter
five, documents.
In order to
discover whether that is the way in which these particular notices should be
construed, I think, I am entitled to look at the letter under cover of which
they were in fact served upon the tenant. That refers to ‘the notices’ not as a
single notice but as notices, and that is indeed what they purported to be,
each and every one of them separately operating in respect of part only of the
demise under the single tenancy. That leaves, of course, the possibility that
cumulatively the four invalid notices might effect a valid termination of the
tenancy under section 25. If that is the only way in which those four, or with
the letter five, documents could be construed by a reasonable tenant receiving
them, that is a result which would follow from the service of such documents.
That it must, however, be the necessary conclusion does, I think, follow, as Mr
Kenneth Munro [who appears for the tenant] has submitted, from the decision of
the Court of Appeal in Pearson v Alyo [1990] 1 EGLR 114. At p116,
Nourse LJ in the leading judgment, with which Bingham LJ agreed, said:
it must be
emphasised that the validity of a section 25 notice is to be judged,
and judged objectively, at the date at which it is given. The question is not
whether the inaccuracy actually prejudices the particular person to whom the
notice is given, but whether it is capable of prejudicing a reasonable tenant
in the position of that person.
I think that
this combination of notices was capable of prejudicing a reasonable tenant in
the position of the tenant in this case, because it did not make clear whether
or not the tenancy which was bound to be treated as a single tenancy was in
fact being so treated. It would have been a perfectly logical conclusion to
draw from the notices in fact served that the tenant was being invited to
consider the situation in regard to each of the four lots of property
separately, and to apply perhaps in respect of one, but not in respect of
another of those properties, for a new tenancy. That was not, if it were a
single tenancy, an application that was open to him to make and in that sense
the notices as served were misleading or capable of being misleading. For that
reason the defect of serving four notices without sufficient further explanation
to convert them into a single notice was, in my judgment, an invalidating
defect.
Mr Munro has
sought to rely additionally upon another defect to which he has drawn
attention, that in respect of that notice served on behalf of Norfolk Square
Hotels No 2 Ltd, the name of the landlord is given merely as Norfolk Square No
2 Ltd, omitting the word ‘hotels’. In the absence of any evidence that Norfolk
Square No 2 Ltd is the name of an actual company, rather than what it appears
to be and has been treated as by the parties — merely a misdescription of the
company with its full name — I do not think that such misdescription is in any
sense more invalidating of such a notice than is the mistyping of the ‘9’ in 92
Sussex Gardens by its replacement by a bracket in the section 26 request served
on behalf of the tenant.
It is right to
say that, although I hold that this was a potentially misleading series of
documents, it does not appear in actuality to have misled — at least if one
judges the matter by the actions of the solicitors for the tenant, who did
issue within the statutory period an application for a single new tenancy on
behalf of the tenant and served the single application upon all four of the
landlords. But, as was decided in the Pearson v Alyo case, to
which I have already referred, I must judge the matter as at the date of the
service of the document, and as viewed then it appears to me to contain
sufficient of a potential misleading nature as to invalidate the section 25
application.
I have invited,
in the course of argument, the canvassing of the question as to whether or not
these notices may not be further misleading in their reference merely to para (g)
of section 30(1), which I would construe in the context of this situation as
being properly satisfied only if the landlords together form an intention that
each of the properties the subject of the demise should be occupied by at least
one of them on behalf of all in the furtherance of the business, being a single
business, of all. It may well be that the form of separate notices served under
section 25, referring merely by reference to the paragraph, would not make
clear to the recipient whether that is the allegation upon which the separate
landlords were proposing to rely should an application be made under the Act.
That is a potentiality certainly of confusion, but I am not satisfied — nor
does it arise so far as the consideration of the section 25 notice — that that
would of itself be a sufficient reason for holding these notices to be invalid.
Rather, it is an example of the difficulty of construing the four documents, as
completed, as together forming a single notice and thus being in effect a
single document sufficient to operate section 25 in respect of this particular
tenancy.
I have indicated
already that there was a request made under section 26 of the Act immediately
after the effective service of these four notices; indeed so immediately that
the copies of the notices together with a covering letter addressed to the
tenant’s solicitors, arrived after the service of the section 26 notice,
although it was despatched, as appears from the covering letter, before the
effective service of the section 26 request. The covering letter indeed from
the landlords’ solicitor to the tenant’s solicitor, which is dated March 7,
refers to a letter which was apparently concerned with the proposal on behalf
of the tenant to serve such a request, but went on to say, ‘As at the time of
writing this letter we have been advised by your client that they have not yet
been served with your letters’ — that is to say the letters containing the
section 26 request. ‘In any event your clients were served by hand’ — I must
insert ‘at’ — ‘their registered office with section 25 notice this morning’.
The letter goes on to make clear that the copies of the letter addressed to the
tenant together with the section 25 notices enclosed are being sent only for
information and not for the purpose of operating as a counternotice to the
request made under section 26 for a new tenancy.
But I have to
consider whether, under section 30 of the 1954 Act, the ground of opposition
referred to in those notices is a ground of opposition open to the landlord to
rely upon in an application for a new tenancy made on behalf of the tenant
following the section 26 request. Section 30 provides that the grounds on which
a landlord may oppose an application are such of the following grounds as may
be stated either in the landlord’s notice under section 25 where that is
applicable or as the case may be under subsection (6) of section 26. Subsection
(6) of section 26 provides that within two months of the making of a tenant’s
request for a new tenancy a landlord may give notice to the tenant that he will
oppose an application to the court for the grant of a new tenancy, and any such
notice shall state on which of the grounds mentioned in section 30 of the 1954
Act the landlord will oppose the application. It was after the making of the
tenant’s request and within the period of two months thereafter that there was
received by the agent referred to in the notice containing the section 26
request the series of notices, which stated in terms that, if the tenant
applied to the court for the grant of a new tenancy, the individual landlords
each would separately oppose such application on the grounds mentioned in para
(g) of section 30(1) of the Act.
That appears
to me to be clearly a notice which satisfies the terms of section 26(6). It
follows therefore that the ground so mentioned — namely para (g) of
section 30(1) — is a ground upon which the landlord may in the proceedings
begun following the service of such section 26 request rely upon by virtue of
section 30(1) and thus I would answer the first of the two preliminary issues
that are ordered to be tried by me in favour of the tenant, but the second in
favour of the landlords.
