Landlord and Tenant Act 1954, Part II — Notice purporting to terminate tenancy under section 25 — Whether notice valid — Notice stated the name of one of the two joint landlords only — Whether it made any difference if the joint landlord whose name was mentioned was entitled to whole reversionary interest in equity — Definition of ‘the landlord’ in section 44(1) — Subsection concerned with legal interests only — Morrow v Nadeem followed — Notice invalid — Tenants’ point a good one, although ‘of extreme technicality’
purporting to be given under section 25 stated the name of the husband only
although he and his wife were registered at the Land Registry as joint
proprietors with title absolute — It appeared that the property in question, a
hotel, had been purchased by the husband with his own money but he had the name
of his wife added on his solicitor’s advice as to advantages to his wife if he
were to predecease her — The notice indicated that any application for a new
tenancy would be opposed under section 30(1)(a), (b) and (g) — The tenants, the
present appellants, gave a counternotice stating their unwillingness to give up
possession and applied to the county court for a new tenancy — The county court
judge decided that the section 25 notice was valid and that the respondent’s
ground of opposition under section 30(1)(g) was made out — The tenants appealed
of Appeal it became unnecessary to deal with the issue under section 30(1)(g)
owing to the view taken by the court as to the validity of the section 25
notice — They were in no doubt that the notice was invalid — The case of Morrow
v
Nadeem was in substance indistinguishable — A notice under section 25 must give
a tenant the information necessary to enable him to avail himself of his
statutory rights by serving a counternotice — The necessary information
included the identity of his landlord — The expression ‘the landlord’ was
defined in section 44(1) of the 1954 Act — In its application to the present
case it meant the respondent and his wife — The argument that the respondent
alone was within the definition because he was solely and absolutely entitled
to the property in equity was rejected by the Court of Appeal — Section 44(1)
was concerned only with legal owners; if it were otherwise the Act would be
unworkable — The matter could be tested by supposing that the joint landlords
were a husband and wife living apart or business partners who were not on good
terms with each other — The judge below had taken the view that neither the
appellants nor their solicitors were in any way misled by the section 25 notice
— It had, however, to be emphasised that the validity must be judged
objectively at the date when the notice is given — The question was not whether
the inaccuracy actually prejudiced the particular person to whom it was given,
but whether it was capable of prejudicing a reasonable tenant in the position
of that person
was that the respondent’s notice purporting to determine the appellants’
tenancy was void — Appeal allowed
The following
cases are referred to in this report.
Barclays
Bank Ltd v Ascott [1961] 1 WLR 717; [1961] 1
All ER 782
Morrow v Nadeem [1986] 1 WLR 1381; [1987] 1 All ER 237; (1986) 53
P&CR 203, [1986] 2 EGLR 73; 279 EG 1083, CA
Tegerdine v Brooks (1977) 36 P&CR 261; [1978] EGD 49; 245 EG 51,
[1978] 1 EGLR 33, CA
This was an
appeal by Raymond John Pearson and Fiona
London SW1, from the decision of Judge Lipfriend, at Westminster County Court,
dismissing their application for a new tenancy following a notice, purporting
to be under section 25 of the Landlord and Tenant Act 1954, by the respondent,
Dr Ahmad Alyo.
Timothy
Jennings (instructed by Witham Weld) appeared on behalf of the appellants;
Simeon Thrower (instructed by Mehrotra & Co) represented the respondent.
Giving
judgment, NOURSE LJ said: The question here is whether a notice under
section 25 of the Landlord and Tenant Act 1954 was invalidated by its omission
to state the name of one of the two joint landlords; cf Morrow v Nadeem
[1986] 1 WLR 1381*.
*Editor’s
note: Reported also at [1986] 2 EGLR 73.
On February 13
1981 the respondent, Dr Ahmad Alyo, and his wife, Asma Malki Alyo, were
registered at HM Land Registry as joint proprietors with title absolute of the
Brindle House Hotel, 1 Warwick Place North, London SW1. The respondent paid for
the property with his own money and added the name of his wife in the
proprietorship register on the suggestion of his solicitor, who advised him of
certain advantages which would or might accrue to his wife if he were to
predecease her. His wife always looked on the property as the respondent’s and
neither took nor intended to take any part in its management or control. I will
assume, although I certainly do not decide, that the effect of these
arrangements was to vest the property in the respondent and his wife in trust
for the respondent absolutely.
By a written ‘leasing
contract’ made in about March 1984 between the respondent (acting by his
brother under a power of attorney) as landlord of the one part and the
appellants as tenants of the other part it was agreed that the property should
be leased to the appellants from March 23 1984 to March 22 1987. After the
termination of that agreement the appellants’ tenancy was continued under the
provisions of Part II of the 1954 Act. By a notice dated November 3 1987 and
addressed to the appellants, the solicitors then acting on behalf of the
respondent purported to give them notice under section 25 of the Act
terminating their tenancy on May 20 1988. On the face of it the notice complied
with section 25 and in particular was in ‘the prescribed form’ required by
subsection (1), ie in the form prescribed by the Landlord and Tenant Act 1954,
Part II (Notices) Regulations 1983.
By para 4 the
notice stated that, if the appellants were not willing to give up possession of
the property on the date specified, ‘you must notify me/us in writing within
two months after the giving of this notice’. By para 5 it stated that, if the
appellants applied to the court for the grant of a new tenancy, ‘I/we will
oppose it on the grounds mentioned in paragraphs (a) (b) & (g)
of section 30(1) of the Act’. By para 6 it stated that all correspondence about
the notice should be sent to the landlord’s agent at the address given below.
Underneath it was dated and signed by the respondent’s then solicitors as his
agents. Below that there appeared: ‘Name of landlord Dr Ahmad Alyo’, with an
address in Damascus, and then the address of his solicitors in London W1.
On November 12
1987 the appellants duly served a counternotice stating that they would not be
willing to give up possession of the property on the date of termination. On
January 6 1988 they applied to the Westminster County Court for the grant of a
new tenancy. The respondent filed an answer opposing the grant, in which it was
again stated that he intended to rely on the grounds mentioned in paras (a),
(b) and (g) of section 30(1) of the Act. On June 26 1988 the
registrar ordered by consent that there should be a trial of the preliminary
issues raised by the respondent under paras (a) and (g) of
section 30(1) and that at the same time the respondent’s application for an
interim rent should be heard.
The matter
came on for the trial of the preliminary issues and the determination of an
interim rent before His Honour Judge Lipfriend in November 1988. But Mr
Jennings, for the appellants, then sought leave to amend the originating
application so as to seek a declaration that the respondent’s section 25 notice
was invalid on the ground that it stated the name of the landlord to be that of
the respondent alone and not those of him and his wife. That point had occurred
to Mr Jennings on the previous evening only when he noticed the joint entry in
the proprietorship register. The judge gave leave to amend but granted an
adjournment so that the respondent’s advisers could consider the position.
The matter
came back before Judge Lipfriend on January 13 1989, at which stage the
validity of the section 25 notice had in reality become a pre-preliminary
issue. The learned judge evidently thought that he had been asked to deal with
the original preliminary issues at the same time. They had by then been reduced
to one, namely whether the respondent intended to occupy the property for the
purposes of a business to be carried on by him within section 30(1)(g)
of the Act. Evidence was given by the respondent and also by his wife, his
brother and an accountant. No evidence was called on behalf of the appellants.
The judge decided that the section 25 notice was valid and that the
respondent’s ground of opposition under section 30(1)(g) was made out.
The appellants’ application for a new tenancy was accordingly dismissed.
By their
notice of appeal to this court the appellants contend, first, that the learned
judge erred in law in holding that the section 25 notice was valid and, second,
that he ought not to have decided the issue under section 30(1)(g)
without hearing evidence and submissions on behalf of the appellants. If the
appellants succeed on the first question, the notice and the subsequent
proceedings will have been a nullity and the tenancy will continue unless and
until it is validly terminated. If they fail on the first question but succeed
on the second, the appellants will be entitled to a new trial of the issue
under section 30(1)(g). In regard to the second question, Mr Jennings
has told us that his understanding was that the judge was to be concerned only
with the validity of the section 25 notice. He thought that the respondent’s
witnesses were giving evidence only in relation to that question. He did not
cross-examine them in relation to the issue under section 30(1)(g) nor
did he call the evidence or make the submissions which he would or might have
wanted to call or make in relation to that issue. The understanding of Mr
Thrower, who has appeared for the respondent both here and below, differed from
that of Mr Jennings. Unfortunately, counsel are not agreed as to what the judge
was or was not asked to decide. That might well have put this court in a
difficulty. On the view which I take of the first question it will not be
necessary to resolve it.
Mr Jennings relied
on Morrow v Nadeem (supra), where the landlord was a
limited company but the section 25 notice incorrectly stated the name of the
landlord to be that of its sole director and 99.9 per cent shareholder. In
holding that the notice was invalid, this court applied the test stated by
Barry J in Barclays Bank Ltd v Ascott [1961] 1 WLR 717 at p 722,
and approved by another division of this court in Tegerdine v Brooks
(1977) 36 P&CR 261. That test can be summarised by saying that the notice
must give the tenant the real substance of the information which is necessary
to enable him to deal with the situation, whatever it may be, referred to in
the notice. Both Nicholls and Slade LJJ pointed out that the tenant must know
the true identity of the landlord in order to serve the requisite counternotice
pursuant to section 29(2) of the Act and to make his subsequent application to
the court under section 24(1); see [1986] 1 WLR at pp 1386C-D and 1392D.
The meaning of
‘the landlord’ for the purposes of Part II of the 1954 Act is stated in section
44(1) of that Act as amended by section 14(1) of the Law of Property Act 1969.
So far as material, section 44(1) reads:
Subject to the
next following subsection, in this Part of this Act the expression ‘the
landlord’, in relation to a tenancy (in this section referred to as ‘the
relevant tenancy’), means the person (whether or not he is the immediate
landlord) who is the owner of that interest in the property comprised in the
relevant tenancy which for the time being fulfils the following conditions,
that is to say —
(a) that it is an interest in reversion expectant
(whether immediately or not) on the termination of the relevant tenancy, and
(b) that it is either the fee simple or . . .
and is not
itself in reversion expectant (whether immediately or not) on an interest which
fulfils those conditions.
There can be
no doubt that the landlords thus defined are the respondent and his wife. They
are the joint owners of the legal estate in fee simple in the property, being
the interest in reversion immediately expectant on the termination of the
appellants’ tenancy. Mr Thrower advanced an elaborate argument to the effect
that it is the respondent alone, as the person solely and absolutely entitled
to the property in equity, who is the landlord for the purposes of section
44(1). That argument was misconceived. The subsection is concerned only with
legal owners. The Act would be unworkable if it were otherwise.
Then Mr
Thrower sought to rely on this observation of Nicholls LJ in Morrow v Nadeem
[1986] 1 WLR 1381 at p 1387G-H:
There might
perhaps be an exceptional case in which, notwithstanding the
reasonable tenant would have known that that was a mistake and known clearly
what was intended.
I respectfully
agree with that observation, but it does not assist the respondent. No
reasonable tenant would or could have known that the respondent’s wife was a
joint landlord with him. There was no right to inspect the register before the
tenancy was granted. The leasing contract was entered into by the respondent
alone, to whom alone the rent was paid.
Although the
facts of this case are different, I cannot hold that it is distinguishable from
Morrow v Nadeem. It is true that here the section 25 notice did
correctly name one of the two joint landlords. It is also true that the other
joint landlord, being the wife of the first, could be expected to receive
effective notice of the tenants’ actions via her husband. Accordingly, it could
be argued, service of the appellants’ counternotice on the respondent was
effectively service on his wife as well, so that the section 25 notice did
indeed give the appellants the real substance of the information which was
necessary to enable them to deal with the situation. But suppose that the joint
landlords had been husband and wife living apart or business partners who were
not on good terms with each other, and suppose the following course of events.
A section 25 notice is given by one of the two landlords who is stated to be
‘the landlord’. The tenant duly serves a counternotice within the two-month
period on that landlord and then makes an application to the court. Later, the
other landlord, who has so far been ignorant of what has been going on, finds
out about the application, is joined as a respondent and objects to the grant
of a new tenancy on the ground that the counternotice did not duly notify ‘the
landlord’ pursuant to section 29(1) of the Act. The tenant’s application cannot
be entertained. But the section 25 notice, if valid, still takes effect and the
tenancy is terminated. Manifestly, in those circumstances, the section 25
notice did not give the tenant the information necessary to enable him to deal
with the proposed termination of the tenancy.
The example
given in the preceding paragraph was suggested during argument in this court
and it may well be that Mr Thrower did not have a proper opportunity of dealing
with it. As at present advised, I am unable to see what answer the tenant would
have had to the objection raised by the other joint landlord. But, whether that
be right or wrong, the difficulties which could have been caused to the tenant
are sufficient ground for saying that the section 25 notice did not give him
the information which it ought to have done. And a distinction cannot be made
between a husband and wife who are living together and persons whose
relationship is distant or even hostile. I think that we must hold, as a
general rule, that a section 25 notice which does not state the names of all
joint landlords is invalid.
Judge
Lipfriend took the view that neither the appellants nor their solicitors were
in any way misled by the section 25 notice and that the only possible
disadvantage to them was that the respondent might not have been in a position
to grant or to procure the grant of a new tenancy. That objection went when it
was made clear to the judge that the respondent’s wife would join in the grant
if a new tenancy were ordered. These considerations, going as they do to the
general merits of the case, are very persuasive. If they could be detached from
the material provisions of the Act and the authorities which have preceded us,
they might well be conclusive. But 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.
For these
reasons, I would allow this appeal and make a declaration that the respondent’s
notice dated November 3 1987 purporting to terminate the appellants’ tenancy of
the property on May 20 1988 was void and of no effect.
Agreeing, BINGHAM
LJ said: It seems to me plain that the court cannot make an order for a new
tenancy under section 29 of the Act save against ‘the landlord’ as defined in
the Act, which on the facts here means Dr Alyo and his wife. Such an order must
be preceded by notice from landlord to tenant under section 25 and
counternotice from tenant to landlord under section 29. The landlord must at
each stage be the same and must, save perhaps in a most exceptional case, be
the landlord named in the section 25 notice served by or on behalf of the
landlord. In any ordinary case the statutory machinery can operate fairly and
effectively only if the landlord as defined is correctly identified at the
outset. Here he was not, and the defect cannot be cured by undertakings or
concessions offered later.
Although the
point taken for the tenant is one of extreme technicality, it is in my opinion
a good one, and I agree that the appeal must be allowed.
The appeal
was allowed with costs. So far as the costs in the county court were concerned,
no order was made down to the conclusion of the hearing in November 1988. From
then the appellants to have the costs taxed on Scale 2.