When is a notice not a notice

Kerman & Co. website
March 2, 2020 Advisory

In a landlord and tenant claim for possession where, technically, there are two or more persons who are the landlord and who are entitled to possession, it is a requirement of the court rules that all of those persons join in the claim for possession and are named as claimants in the action.  The rule is that “…where a claimant claims a remedy to which some other party is jointly entitled with him, all persons jointly entitled to the remedy must be parties unless the court orders otherwise…”.  The use of the word “must” is definitive – there is no discretion – unless, as the rule says, the court orders otherwise.  Interestingly, the rule goes onto say that “…If any person does not agree to be a claimant, he must be made a defendant unless the court orders otherwise…”.  This therefore presents a curious scenario that if one of the joint landlords refuses to join in the claim (for whatever reason) he prospectively ends up on the receiving end of a court claim brought by one of his co-owners and can be technically liable for the legal costs of the claim.

In residential possession proceedings, just one joint landlord can serve the section 21 notice terminating the tenancy, but as we see, all joint landlords should be party to any subsequent possession proceedings.  In the circumstances, prudence dictates that the landlord should get “all its ducks in order” from the very beginning and we would recommend that all of the landlords are cited in the notice seeking possession and so they are all on board if and when the time comes to take a possession claim.

This scenario came to the fore recently when our Real Estates Disputes team were asked to comment on the validity of a landlord’s statutory notice terminating a commercial lease and refusing the grant of a new lease one account of landlord redevelopment.  The position there was that the landlord’s solicitor had stated only one of the two joint landlord’s names in the termination notice. When the lease had originally be granted there was only one single landlord but some time thereafter the property had been transferred to two co-owners.  An invalid termination notice has no effect and the consequences are that the landlord has to re-serve it. It has then a minimum six-months termination period and in the present circumstances (where the landlord wishes to redevelop) it could have averse consequential effects in terms of the landlord being unable to get on and implement redevelopment plans.

Something of a “get out of jail free card” was handed down by the House of Lords in the case of Mannai Investments Co Limited v Eagle Star Life Assurance Co Limited in 1997.  The Mannai principle established that minor defects in unilateral contractual notices would not necessarily invalidate the notice if the reasonable recipient, with knowledge of the factual and contextual background, would not be perplexed by the error.  Subsequent cases have established that the Mannai principle can apply to statutory (as well as contractual) notices.  That later case law established a two stage process for deciding whether a notice complies with the requirements of the provision pursuant to which it is given (whether statutory of contractual) – the two stages being as follows:

Stage 1:is a consideration of what the notice says on its true construction, and

Stage 2:involves a matching up of the notice against the relevant requirements for that notice (i.e. the requirements of statute or the requirements of the contract) to determine whether the notice meets the requirements.

Going back to our commercial lease termination scenario, the solicitors concerned held the view that the Mannai principle could be deployed and therefore it was not fatal to the validity of the notice that only one of the two joint landlords was named in the notice.  We disagreed; a notice under section 25 of the Landlord and Tenant Act 1954 terminating a commercial tenancy must be served by the “competent landlord”.  Section 44 of the 1954 Act makes it clear that “the landlord” in relation to the relevant tenancy “…means the person… who is the owner of that interest in the property comprised in the relevant tenancy…”.  In the circumstances, if the “owner” is two persons they must both be named in the notice, it will not do that only one of them is stated.  The notice will be invalid. The case of Pearson v Alyo (1990)established this very point, that the notice must state the names of, and be served by, all joint landlords who own the legal estate.  Even though that case preceded Mannaiby some seven years, the decision is clearly correct; a succession of cases following the Mannai decision in 1997 have determined that the principle is simply not relevant where there is incorrect or missing information in a statutory notice.

In the present case it is unfortunate that the position was not fully checked prior to service of the section 25 notice; a simple and inexpensive search of the public register at HM Land Registry would have revealed the joint ownership and prospectively saved the landlord half a year’s redevelopment time.

Originally published at Kermanco.com prior to the firm’s combination with Armstrong Teasdale in early 2021.

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