Landlords, tenants and their advisers should take note of a recent Court of Appeal decision on errors in notices and their validity. Here is what you need to know:
The background
The case of OG Thomas Amaethyddiaeth Cyf and another v Turner and others centres around a dispute over a notice to quit (NTQ) from the landlord (Turner) to the tenant (Thomas).
Mr Thomas had an oral tenancy of a farm which fell within the Agricultural Holdings Act 1986. The tenancy had been granted by Mr Turner who had since died. The current landlord was Mr Owen.
OG Thomas Amaethyddiaeth Cyf (OG Thomas Agriculture Ltd in English) had been incorporated at the end of October 2019 with Mr Thomas as the sole shareholder and secretary, and his home address being the company's registered office.
On 1 November 2019, the oral tenancy was assigned to the company as there was no restriction on Mr Thomas’ his ability to assign, and Mr Thomas managed the farm on behalf of the company. This, however, was not brought to the landlord’s attention.
Shortly after, Mr Owen (who was unaware of the assignment to the company) served an NTQ by recorded delivery post. This was addressed to Mr Thomas, rather than the company, and was sent to his home address – as above, the company’s registered office. No counternotice was served under the Agricultural Holdings Act 1986.
Mr Thomas subsequently challenged the validity of the notice.
The Mannai Test
The County Court had decided that the NTQ was valid, as did the High Court on appeal, following the application of the Mannai Test – an outcome of Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd.
This concludes that minor defects will not necessarily invalidate a notice if the reasonable recipient, with knowledge of the factual and contextual background, would not be misled by the error and would be in no doubt as to the meaning of the notice.
In applying the test, it was considered that a reasonable recipient would have understood the NTQ as conveying an intention on the part of the landlord to require the tenant, whoever that was, to deliver up possession of the land.
What was the outcome at the Court of Appeal?
The tenant company successfully appealed to the Court of Appeal whose conclusion differed to the previous decisions in that the NTQ was invalid.
An NTQ has to be ‘given’ by a landlord to its tenant - a “formal condition” required by the common law. Here, the landlord could not have intended to give the NTQ to the tenant – they were unaware of the assignment and the NTQ was clearly addressed to Mr Thomas. This could not be saved by Mannai as it cannot save notices where there has been failure to satisfy a formal condition.
Implications
Whilst potentially a harsh outcome on the landlord, others should take note to avoid landing in a similar situation. The key takeaways from this include:
- The first, and perhaps most obvious, is that that it is important to get notices right first time. Mannai may not always assist where issues arise;
- As things stand, it appears that a notice addressed to and received by X should not be taken as having been given to Y, even if X is aware that it should have gone to Y;
- The landlord could have addressed the NTQ to 'the tenant' rather than name the tenant. If the position is unclear and the lease/relevant statute says nothing to assist, this may well be the preferred option.
For further advice The Thrings Property Litigation Team is experienced in reaching resolution in property disputes, often without recourse to court proceedings, and with an excellent track record when cases do go to Court. Contact us for more information.
