Landlord and tenant — Landlord and Tenant Act 1954 — Whether notice under section 25 purported to terminate tenancy one day before expiration of contractual term
Whether plaintiff firm of solicitors instructed — Whether duty owed in contract
and/or tort
defendant, Raymond Hyland, acquired by assignment the lease of a shop at 33
Queen Street, Ramsgate, Kent — By a lease dated September 17 1976 the landlord,
Mr Nethercott, had demised to the tenant a term of 10 years from June 27 1976
at a rent to be paid by weekly payments in advance from Monday of every week,
the first of such payments to be made on June 27 1976 — The plaintiff firm of
solicitors, Whelton Sinclair, acted for the defendant on the assignment — On
December 9 1985 solicitors acting for Mr Nethercott served on the defendant by
post a notice under section 25 of the Landlord and Tenant Act 1954 giving him
notice terminating the tenancy of the premises on June 26 1986 — In the court
below, the judge found that the defendant intended to renew his lease, then to
dispose of it and use the premium he envisaged he would receive to pay off his
debts — Mr Nethercott’s solicitors also wrote a letter to the plaintiffs
informing them that a section 25 notice had been served on the defendant — On
December 17 1985 Mr Sinclair, of the plaintiffs, wrote to the defendant
recommending that he discuss the notice with him as soon as possible — There
was no further correspondence between the plaintiffs and the defendant until
April 3 1986 — Meanwhile, by a letter dated March 10 1986 Mr Nethercott’s
solicitors informed the defendant that, as no counternotice had been served to
the section 25 notice, his rights to a new lease had expired and they inquired
if it was the defendant’s intention to vacate the premises on June 26 — After
receipt of that letter the defendant took steps to instruct Mr Sinclair, who
got in touch with Mr Nethercott’s solicitors — However, Mr Nethercott decided
he did not wish to grant a new lease — Although Mr Sinclair advanced an
argument in correspondence with the landlord’s solicitors that the section 25
notice was invalid, the defendant vacated the premises and withdrew
instructions from the plaintiffs — The plaintiffs commenced the present
proceedings to recover the sum of £293.88 for fees incurred in work involved on
the defendant’s behalf after March 10 1986 — The defendant’s defence was that
the plaintiffs were instructed by the defendant in or about December 1985 to
act on his behalf in obtaining the grant of a new lease of the premises, that
it was an implied term of his instructions that they should carry out those
instructions with all reasonable skill and care, and that they had failed to do
so at all, let alone with reasonable care, because they totally failed to take
any steps to secure a new lease — Accordingly, the work done by the plaintiffs
after March 10 1986 was work which was rendered necessary by their own breach
of contract; it was abortive work and an attempt to avert their own liability
for damages which proved of no effect — There was also a counterclaim for
damages for the loss of the premium which the defendant would have obtained had
he been granted a new lease and resold it at a premium, which was, in due
course, agreed at £5,000 — The plaintiffs appealed from the decision of the
judge, who found that the defendant had telephoned the plaintiffs on a number
of occasions and that in the course of those telephone conversations a contract
was concluded between the parties — Alternatively, the plaintiffs were put
under a duty to take reasonable care on behalf of the defendant — The judge
also held that the term of the lease ran from the first moment of June 27 1976
balance of probabilities that telephone conversations did take place between
the defendant and the plaintiffs and he properly directed himself as to the
burden of proof — Given that the plaintiffs had earlier acted for the defendant
on the assignment three years earlier, the letter of December 17 1985 was, in
effect, an offer to accept instructions — When instructions were received by
way of the telephone conversation, a concluded contract to act on behalf of the
defendant arose — If that were wrong, since a professional person, if not
liable in contract, can be liable in the tort of negligence, given the
background of the previous instructions and the letter of December 17, when the
instructions to act for the defendant were received on a matter in which the
firm were well aware that there was a time-limit, there was a duty imposed upon
them either to indicate that they were not going to act, if that is what they
wanted to do or to take immediate steps to ensure that the defendant’s
interests were safeguarded — Since Mr Sinclair never got to know about the
instructions, he did not carry them out, and thus the plaintiffs were in breach
of their duty
proposition, that where a term is expressed to commence ‘from’ a specified day,
this day is in strictness not included in the term did not apply — There was a
mistake in the reddendum to the lease in that it required the first payment of
rent on Monday, June 27 1976 whereas that date was a Sunday — It was common
ground that the 1976 lease was granted on the expiry of an earlier lease
expressed to be for a term of 10 years from June 27 1966 wherein the rent was
expressed to be payable on the Monday of each week in advance commencing on
June 27 1966, a date which was a Monday — In circumstances where rent is
payable on a date which is expressed to be the date from which the term is
granted, the general proposition does not apply: see Ladyman v Wirral
Estates Ltd — In all the circumstances it was clear that the 1976 lease
must have been intended to commence, and did not commence, at the very moment
when the old lease terminated, ie at the last moment of June 26 1976 and the
first moment of June 27 1976, and accordingly the new lease did terminate on
the last moment of June 26 1986 and the section 25 notice was therefore a valid
notice
The following
cases are referred to in this report.
Ladyman v Wirral Estates Ltd [1968] 2 All ER 197
R v Hampshire County Council, ex parte Ellerton [1985] 1 WLR
749; [1985] 1 All ER 599; [1985] 1 CR 317, CA
R v Secretary of State for the Home Department, ex parte Khawaja [1984]
AC 74; [1983] 2 WLR 321; [1983] 1 All ER 765, HL
This was an
appeal against the decision of Judge Griffiths, sitting in Dover County Court
on October 18 1990, who, on a claim by the plaintiffs, Whelton Sinclair (a firm
of solicitors), for fees, gave judgment for the defendant, Raymond William
Hyland, on his counterclaim in the sum of £5,000 with £3,000 interest.
Roy Warne
(instructed by Sinclairs, of Canterbury) appeared for the appellant plaintiffs;
Keigh Knight (instructed by J W Saunders & Co, of Bexleyheath) represented
the respondent defendant.
Giving
judgment, GLIDEWELL LJ said: This is an appeal against a decision of
Judge Griffiths given at Dover County Court on October 17 and 18 990 when, on
the claim of the plaintiffs, Whelton Sinclair (a firm of solicitors), he gave
judgment for the defendant, Mr Hyland, and on the defendant’s counterclaim he
gave judgment also for the defendant in the sum of £5,000 with £3,000 interest.
The facts
which led to this dispute can be expressed reasonably shortly. In 1983 Mr
Hyland took an assignment of a lease of a shop at 33 Queen Street, Ramsgate,
Kent. That was a lease made on September 17 1976 between a Mr Nethercott (whom
I shall call ‘the landlord’), who was the landlord at the time of the
assignment to Mr
a Mr Dashwood, the lessee in the lease. The lease was to hold the premises from
June 27 1976 for a term of 10 years at a rent to be paid by weekly payments in
advance from Monday of every week, the first of such payments to be made on
June 27 1976. One of the arguments both before the judge and before us depends
upon the wording of the lease, to which I shall return, but for the moment it
will be seen that the assignment that Mr Hyland took was of the residue of the
lease, which then had some three years to run.
Whelton
Sinclair acted for Mr Hyland on that assignment, the partner who dealt with the
matter for him being Mr Sinclair. Unhappily the business which Mr Hyland
carried on with his wife at those premises (that of a greengrocer) was not
successful, so that, according to the evidence, by the end of 1985 it was
trading at a loss and some debts had accumulated.
On December 9
1985 solicitors acting for Mr Nethercott served on Mr Hyland by post a notice
under section 25 of the Landlord and Tenant Act 1954, giving him notice
terminating the tenancy of the premises on June 26 1986. The notice in common
form informed Mr Hyland that:
If you are
not willing to give up possession of the property comprised in the tenancy on
the date stated in paragraph 3, you must notify me in writing within two months
after the giving of this notice.
That period is
laid down by the Act. And:
If you apply
to the court under Part II of the Landlord and Tenant Act 1954 for the grant of
a new tenancy, I will not oppose your application.
Mr Hyland,
although he was trading at a loss, did wish to apply for a new tenancy. It is
agreed that had he applied and been granted a new tenancy it would have been at
a rent which would have been less than the market rent and which would thus
have enabled him to assign the tenancy for a premium, and it was agreed before
the learned circuit judge that that premium would have been in the sum of
£5,000. So a new tenancy was a valuable asset for Mr Hyland.
There was some
discussion before us as to what his intentions truly were, but the judge
accepted that what he intended to do was to renew his lease, then to dispose of
it and use the premium he envisaged receiving to pay off his debts, and then no
doubt to set off on a new course. I say there was some discussion before us
because these matters were not put so clearly as they might have been in
certain correspondence, but that was the judge’s finding and I need say no more
about it.
The landlord’s
solicitors not merely served the section 25 notice on Mr Hyland, they also sent
at the same time a letter to him, saying:
. . . we
enclose in duplicate Notice to Quit
— that is
inaccurate, it should have been ‘notice to terminate’, but nothing turns on
that —
the premises
33 Queen Street, Ramsgate under the Landlord and Tenant Act 1954 and should be
obliged if you would kindly sign and return the duplicate to us by way of acknowledgement.
If you are in
any doubt as to the effect of this Notice could you please communicate as soon
as possible with your Solicitors requesting that they contact us.
The landlord’s
solicitors, of course, were aware that Whelton Sinclair had acted for Mr Hyland
three years before on the assignment and they also (although they were under no
obligation to do so) courteously wrote to Whelton Sinclair on the same date
enclosing a copy of their letter to Mr Hyland. They did not enclose a copy of
the notice, but they made it clear that they had served a section 25 notice.
That letter
came to the attention of Mr Sinclair and on December 17 1985 he wrote to Mr
Hyland, saying:
Dear Mr
Hyland,
I understand
from your Landlord’s Solicitors that they have served a Notice to Quit on you
and I recommend you discuss it with me as quickly as possible since if your
position is to be preserved there is action that must be taken on your behalf
within a short time limit.
He did not
spell out the time-limit. He did not really need to because Mr Hyland was not
reading the document with any clarity. There it was spelled out in the notice
he received.
At that stage
it is quite correct, as Mr Warne for the plaintiffs submits, that Whelton
Sinclair had no instructions to act in any way on behalf of Mr Hyland. He had
been their client three years before and that transaction had been completed.
They had no continuing retainer of any sort. Nevertheless they had been given
notification that a section 25 notice had been served and they had very
properly taken the step of writing to Mr Hyland, in effect advising him to
consult them about the notice that had been served upon them.
After the
letter from the plaintiffs to Mr Hyland on December 17 1985, there was no
further correspondence as between those parties until April 3 1986, by which
time the two months for the service of a counternotice indicating that Mr
Hyland was not willing to give up possession of the premises had expired. There
is not doubt that in March 1986, after the expiry of the two months, Mr Hyland
received from the landlord’s solicitors a letter of March 10, saying:
. . . [we] are
rather surprised not to have received from you any reply, nor from any
Solicitors acting on your behalf.
As no
counter-notice to the original Notice has been served on your behalf, we have
to advise you that your rights to a new Lease under the terms of the Landlord
and Tenant Act 1954 have now expired, and in the circumstances could you please
let us know if it is your intention to vacate the premises on the 26th June
this year, or, if you still hope to negotiate the terms of a new Lease with our
Client, Mr Nethercott.
At that point,
as a result of the receipt of that letter, Mr Hyland took steps to instruct Mr
Sinclair and Mr Sinclair got in touch with the landlord’s solicitors. After
some initial discussion, Mr Nethercott decided that he did not want to grant Mr
Hyland a new lease and, of course, by this time he was under no legal
obligation to do so. Mr Hyland, if the notice under section 25 was valid, had
lost the protection of the 1954 Act.
Mr Sinclair
then considered the matter and he advised Mr Hyland that there was a sensible
argument that the section 25 notice was not valid and thus was of no effect. If
that were correct, the effect of the 1954 Act was that Mr Hyland’s tenancy
would continue until a valid notice was served. At the stage when this was
being dealt with, the old lease was still in being because it was only April
and the old lease ran to June 8 1986. Mr Sinclair spent time and effort in
putting forward this argument in correspondence to the landlord’s solicitors.
Not surprisingly, they declined to accept the validity of the argument and, in
the end, Mr Hyland decided to solve the problem by vacating the premises,
withdrawing instructions from Whelton Sinclair, ceasing the argument with his
landlord and, of course, losing any prospect of selling the new lease, which he
had been hoping for at a premium.
Whelton
Sinclair then, in due course, sent Mr Hyland an account in the sum of £293.88
for fees incurred in work involved on his behalf after March 10 1986. That is
when he came to instruct them having received the letter from the landlord’s
solicitors telling him that he had lost his right under the Landlord and Tenant
Act 1954. All these fees were for work done after that date — none of them for
work done during the two months following the service of the section 25 notice.
In retrospect the plaintiffs may feel that perhaps it would have been better if
they had not started the action for their fees, but, nevertheless, nobody knows
what would have happened if they had not.
The original
defence was ‘homemade’, so to speak. It was drafted by Mrs Hyland on her
husband’s behalf. As is not infrequently the case, in this marriage it seems
that Mrs Hyland is the party who is the more accustomed to writing letters and
drawing up any documents which have to be prepared on behalf of both of them.
Later, solicitors came on the scene and the defence was reformulated by
counsel, together with a counterclaim.
The defence is
that the plaintiff firm was instructed by Mr Hyland in or about the month of
December 1985 to act on his behalf in obtaining the grant of a new lease of the
premises, that it was an implied term of his instructions that they should carry
out those instructions with all reasonable skill and care, and that they failed
to do so at all, let alone with reasonable care, because they totally failed to
take any steps to secure a new lease. The real allegation is that, having
received the instructions, the plaintiff firm was under a duty either to serve
a counternotice themselves within the two-month period, which would have kept
Mr Hyland’s right to apply for a new tenancy alive, or to take steps to ensure
that Mr Hyland himself served such a counternotice. They did neither. The
defence is that the work done by the plaintiffs after March 10 was work which
was rendered necessary by their own breach of contract, that it was abortive
work, an attempt to avert their own liability for damages which proved of no
effect, and thus the defendant is under no liability to them for any such fees.
The counterclaim is for damages for the loss of the premium which Mr Hyland
would have been able to obtain had he been granted a new lease and had resold
it. It was agreed between the parties at some stage prior to the hearing before
the circuit judge that the premium had a value of £5,000. So the damages,
subject to liability, were agreed at the sum of £5,000.
Before us, as
before the learned judge, the following issues arose. First, did Mr Hyland give
Whelton Sinclair any instructions in or about December 1985 in connection with
the negotiation of a new lease? That
divides itself into two subquestions. The evidence given by Mr Hyland was that
after he had received the notice and the letter from the landlord’s solicitors
on or about December 11 1985, and also after he had received the letter of
December 17 1985 from Whelton Sinclair, he telephoned Whelton Sinclair on a
number of occasions. I will come back to this evidence in a little more detail,
but in effect it was that, in those telephone conversations, although he asked
to speak to Mr Sinclair he never succeeded in doing so, but that in one of the
telephone conversations, which was with a lady at Whelton Sinclair, he gave the
firm instructions by telling her who he was, what the matter was that he was
telephoning about, and that he wished Mr Sinclair to take steps on his behalf
to ensure that he obtained a new lease.
The first
subquestion is: as a matter of fact did such telephone conversations take
place? There was a direct denial. The
plaintiffs’ case is that there were no such telephone conversations at any
material time. The second point — which, of course, arises only if, as a matter
of fact, it is found that the telephone conversations did take place — is: did
they amount to the conclusion of a contract between the plaintiffs and the
defendant that they would act on his behalf (in other words, did they amount to
instructions which the plaintiffs accepted) or, alternatively, did they put the
plaintiffs under a duty to take reasonable care in the conduct of this matter
on behalf of Mr Hyland?
Both those
points were concluded in favour of the defendant. There then arose a second and
totally different question, because Mr Sinclair in March and April 1986 sought
to argue that the section 25 notice was invalid and of no effect. It was thus
argued on behalf of his firm that that being so, even if his firm were in
breach of contract or duty at all, nevertheless Mr Hyland had suffered no
damage because if the notice was invalid he could still have secured a new
tenancy.
I come to the
first of those matters, that is to say, did the telephone conversations take
place at all? The evidence of Mr Hyland
as contained both in his evidence-in-chief and in his cross-examination was to
much the same effect. He said that he did not remember the exact date when he
telephoned Mr Sinclair’s office; he telephoned on several occasions; it was
about four in total; on two or three occasions he merely said that he wanted to
speak to Mr Sinclair and was told that Mr Sinclair was not available; on one
occasion he was told that Mr Sinclair was out; and he tried to make an
appointment and was told that Mr Sinclair had his appointments diary with him.
But, importantly, he said that on one occasion:
I spoke to a
woman. Said I’m Hyland of 33 Queen Street, Ramsgate — received notice to quit.
I wanted something done about it as I hadn’t heard anything from anyone. She
said she’d tell Mr Sinclair, ie leave a message for him and he would get on
with it.
He said much
the same in cross-examination.
The one
difference between his evidence-in-chief and his evidence under
cross-examination was that in-chief he appeared to be saying that that
conversation was the last of the series, having earlier telephoned two or three
times and asked to speak to Mr Sinclair without success, whereas in
cross-examination he appeared to be saying that it was one of the earlier
conversations in the series. In cross-examination he said:
I didn’t ever
speak personally to Mr Sinclair. I spoke to a female, I said I wanted to renew
my lease. My name was Mr Hyland and would Mr Sinclair do something about it
basically . . .
She said ‘I
will leave a message for Mr Sinclair when he comes in’.
I thought
then I had done all I needed to do.
The evidence
of Mr Sinclair was that he had not been given information of any telephone call
at all and it is quite clear that the judge believed that. The judge accepted
that Mr Sinclair personally had no idea that there had been any response at all
to his letter of December 17. That, of course, is not an end of the matter
because Mr Sinclair is responsible as a partner in the firm for the whole
conduct of the firm and the firm’s staff. He gave evidence of the system that,
when telephone calls are received, the telephonist or receptionist who receives
the call noted the order in which the calls were received, the name of the
caller and sometimes a little more information, and noted also the initials of
the person or persons in the firm whom she had informed about the call so as to
show that the matter has been handed on to a responsible person.
Mr Sinclair
produced in evidence at the trial the log sheets of telephone calls over the whole
of the period from mid-December 1985 to March 10 1986 and they do not reveal a
single telephone call from Mr Hyland. On the other hand, after March 10 1986,
when there is no doubt that Mr Hyland was telephoning, the log sheets do show
telephone calls which everybody agrees were made. Therefore, Mr Sinclair
invited the judge to conclude that he had done all that was necessary to show
that no such telephone call had been received. He did not call any member of
his staff who might have taken the telephone call, even supposing that he or
she was still in the employment of the firm, but no doubt, if he had, all the
telephonist or telephonists would be able to say would be:
This is the
record I made and I cannot recall what happened four years ago, but I made the
record accurately to the best of my ability and in accordance with my
instructions.
Faced with
that contradictory evidence, the judge had to make a finding on the facts. I
should say that he dealt with the matter at the request of the parties in two
halves. He dealt first on October 17 with the question: did the firm receive
instructions? Having concluded they did
and given judgment to that effect, he then went on to the second question about
the validity of the notice under section 25.
The judge’s
conclusion at the end of his first judgment was to remind himself of one piece
of evidence to which I have not referred. It seems that the landlord, Mr
Nethercott, collected the rent of these premises himself. Although he was not
under any obligation to do so, there was evidence from Mr Hyland, and from Mr
Nethercott himself, who gave evidence for Mr Hyland, that on at least one
occasion, if not more, Mr Nethercott said to Mr Hyland: ‘You know, you really
have to do something if you want your lease renewing, and I have not heard
anything formally either from you or from your solicitors or my
solicitors.’ So in a sense he was acting
against his own interests. He gave evidence, which the judge clearly accepted,
that he had said this to Mr Hyland. He also gave evidence that on one occasion
when he said this, or maybe it was the only occasion, Mr Hyland said: ‘I will
telephone my solicitor immediately’, and went to the telephone and made a
telephone call. Mr Nethercott said he did not hear the call and could not give
affirmative evidence that he did telephone his solicitor, but certainly he
indicated his intention to do so.
Basing himself
in part on that evidence of Mr Nethercott, the judge found on the balance of
probabilities that there had indeed been such telephone calls as those to which
Mr Hyland gave evidence, and in particular he believed the evidence about the
telephone call in which Mr Hyland had said that he had indicated to the lady to
whom he spoke the nature of his business and that she had said she would speak
to Mr Sinclair and the matter would be looked after. Mr Warne argues that,
although this was a matter with which the judge had to deal on the civil burden
of proof (that is to say, the balance of probabilities), nevertheless the
burden varies according to the importance of the particular matter in issue. He
relies for that proposition upon R v Hampshire County Council, ex
parte Ellerton [1985] 1 WLR 749, a decision of this court. That in turn
referred back to the decision of the House of Lords in R v Secretary
of State for the Home Department, ex parte Khawaja [1984] AC 74. With the
greatest respect to Mr Warne, in my view neither of those authorities has
anything to do with the standard of proof to be applied in an action for
professional negligence. The Hampshire County Council case was a case of
disciplinary proceedings under the fire services discipline regulations, and
the question at issue was whether the criminal standard of proof was to be
applied, since they were quasi criminal proceedings, or whether, as the judge
found and this court held, it was the civil standard of proof, but a
particularly rigid or high standard of the balance of probabilities. Khawaja,
of course, was a case of detention of an illegal immigrant to this country. It
involved the liberty of the subject, and on that basis the House of Lords said
that the importance of the liberty of the subject meant that the standard of
proof to be applied was the civil burden and on the balance of probabilities it
had to be a strong balance in favour of the Home Secretary if the immigrant
were to be detained and deported. Neither of those cases, in my judgment, has
any impact upon the burden of proof to be applied in cases of professional
negligence. Professional negligence cases are in this respect no different from
negligence in any other field. It is the straightforward balance of
probabilities. I do not enter into the question whether it is 51% and 49%. It
is simply the balance of probabilities. The judge correctly directed himself in
that respect.
The second
question is: did what was said by the defendant amount to instructions? Having found that the telephone call had been
received and having also found that Mr Sinclair himself was not
not say this) having found that there must have been a breakdown of
communication inside the firm, the judge went on to find that that amounted to
the firm’s receiving and accepting instructions.
Mr Knight for
Mr Hyland argues succinctly that there are two ways in which the judge could
properly arrive at that conclusion. He says that the judge had to take into
account the fact that, although Mr Sinclair did not have any current
instructions from Mr Hyland, Mr Hyland had been his client three years earlier
in relation to the assignment of the same lease and that his letter of December
17 1986 was in effect an offer to accept instructions if he received them. So,
when the firm did receive instructions, there was, submits Mr Knight, a
concluded contract. But, even if that be wrong, since a professional person, if
not liable in contract, can be liable in the tort of negligence, Mr Knight
submits in the alternative that at the very least, given the background of the
previous instructions and the letter of December when the instructions to act
for Mr Hyland were received in a matter in which the firm was well aware that
there was a time-limit, there was a duty imposed upon them either to indicate
that they were not going to act, if that is what they wanted to do, or to take
immediate steps to ensure that Mr Hyland’s interests were safeguarded. Whether
one formulates it thus as a contract or a duty in tort, submits Mr Knight, is
irrelevant on either basis. Since Mr Sinclair unfortunately never got to know
about the instructions, he did not carry them out and thus his firm was in
breach of their duty. I agree with that formulation and I thus agree that the
judge was entirely right in coming to the conclusion to which he did come on
the first and second of the two matters he had to decide on October 17.
That brings me
to the separate question of the validity of the notice to terminate. I have
already indicated the terms of the lease and that the notice to terminate
purported to terminate the tenancy on June 26 1986. Section 25(4) of the
Landlord and Tenant Act 1954 provides that:
In the case
of any other tenancy
— which I
interpolate means a tenancy other than one which can be brought to an end by a
notice to quit —
a notice
under this section shall not specify a date of termination earlier than the
date on which apart from this Part of this Act the tenancy would have come to
an end by effluxion of time.
The argument
advanced on behalf of the plaintiffs is that this 1976 lease created a tenancy
which endured until June 27 1986. The notice purported to bring it to an end on
June 26. Thus the notice did not comply with section 25(4) and was invalid.
That requires consideration of the question: what was the term of this tenancy? Was it from the first moment of June 27 1976
until the last moment of June 26 1986 or was it all 24 hours later? The judge held that it was the earlier of
those pairs of dates.
The tenancy
was expressed to be for a term from June 27 1987 for a term of 10 years. We
were referred to both Woodfall and Hill and Redman on Landlord and
Tenant. At the moment I content myself with looking at Hill and Redman
(18th ed) at para A[219]. Para 219(3) reads:
Where the
term is expressed to commence ‘from’ a specified day, this day is in strictness
not included in the term, and generally the term therefore, lasts during the
whole anniversary of the day thus specified; while if it commences ‘on’ a
specified day, that day is included. But the deed must be interpreted so as to
give effect to the substantial rights of the parties, and for practical
purposes this distinction can usually be ignored. Though the term commences
from the date specified the tenant’s interest commences from the date of the
lease.
Then, against
the phrase ”from’ a specified day’, there is a note which reads:
. . . the
circumstances (eg that the first payment is to be on the day from which the
term is expressed to run) may lead to the conclusion that the true intention of
the parties was that that day is to be included in the term: Ladyman v Wirral
Estates [1968] 2 All ER 197.
One of the
pleasures of sitting in this court is that from time to time one comes up
against a novel point which one would have thought had been decided about 150
years ago; but this point apparently has never been decided at Court of Appeal
level. If the general proposition expressed in Hill and Redman is
correct, as I accept it is, and there is no qualification to it, then this term
did not commence until the first moment of June 28 1976 and it did not
terminate until the last moment of June 27 1986 and the notice was one day too
early and it was invalid.
There are two
possible reasons why that general proposition did not apply. The first stems
from the decision in Ladyman v Wirral Estates Ltd [1968] 2 All ER
197. That was a decision of Fisher J. It was another 1954 Act case and the
issue was exactly the same as that now under consideration. The lease was for a
tenancy:
‘. . . for
the term of three years from May 1, 1963’, at a rent payable quarterly in advance
on May 1,
— and other
dates thereafter —
the first of
such payments to become due on May 1, 1963.
The learned
judge’s conclusion was that when the rent is payable in advance and the first
payment of rent is due on the very date from which the term is said to
commence, then it is inconceivable that rent is to be paid before the
commencement of the term. Therefore, that is a fact from which it can be
deduced that, despite the otherwise normal interpretation, the term commences
at the beginning of the day on which the first rent is to be paid, ie on May 1
in that case.
In this case
the rent was expressed to be payable by weekly payments in advance on Monday in
every week, the first of such payments to be made on June 27 1976. On the face
of it, following Ladyman v Wirral Estates Ltd, one would look at
June 27 and say: ‘The rent was payable on 27th June and therefore the term
commenced at the first moment of 27th June and terminated at the last moment of
26th June 1986.’ The flaw in that is
that the whole clause is ‘weekly payments in advance on Monday of every week,
the first such payment to be made on 27th June’, and June 27 was not a Monday.
It was a Sunday in 1976.
So clearly
there is a mistake in the reddendum to the lease and it is submitted that we
should not place any real reliance upon it. Indeed, Mr Knight effectively
accepts that. But he says that there is other material which we should take
into account in deciding the true intention of the parties in interpreting this
document. It is common ground that the 1976 lease was granted on the expiry of
an earlier lease for 10 years. That lease was expressed to be for a term of 10 years
from June 27 1966. In that lease also the rent was expressed to be payable on
the Monday of each week in advance commencing on June 27 1966, and June 27 1966
was a Monday. So it is agreed on all sides that the 1966 lease undoubtedly was
for a term commencing at the first moment of June 27 1966 and terminating at
the last moment of June 26 1976.
The 1976 lease
was not executed until nearly three months after the date of its commencement,
that is to say on September 17 1976. In the meantime, there is no doubt that Mr
Dashwood (the then tenant) had been holding over under the common law, paying
the rent either weekly or under the Act, whichever it may be, and Mr Knight
submits that it is quite clear that he and Mr Nethercott were simply agreeing a
lease which was a continuation of the former lease without any intermission. It
is inconceivable, he says, that a new lease was entered into that meant that
there was no tenancy of these premises for one day. It is clear that the new
lease must have been intended to commence, and did commence, at the very moment
when the old lease terminated, ie at the last moment of June 26 1976 and the
first moment of June 27 1976, and the fact that when the solicitors came to
draft the new lease in September 1976 they forgot that they could not simply
repeat the words of the old lease when Monday was the 27th is nothing to the
point.
In my
judgment, that argument also is correct and the judge was correct in coming to
the conclusion that this lease did terminate on the last moment of June 26 1986
and the section 25 notice was therefore a perfectly valid notice. For those
reasons I would dismiss this appeal.
One further
point was argued about mitigation of damage, but it arose only if the judge was
wrong on his conclusion about the validity of the section 25 notice, and
therefore I do not find it necessary to say anything about it.
BRACEWELL J agreed and did not add anything.
Appeal
dismissed with costs; legal aid taxation of respondent’s costs.
