Bridgers (a Company With Unlimited Liability) and Another v Clive Austin Norman Stanford
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE LLOYD,LORD JUSTICE NOURSE,LORD JUSTICE RALPH GIBSON |
| Judgment Date | 24 April 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J0424-2 |
| Docket Number | 91/0369 |
| Court | Court of Appeal (Civil Division) |
| Date | 24 April 1991 |
[1991] EWCA Civ J0424-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EPSOM COUNTY COURT
(HIS HONOUR JUDGE COOK)
Royal Courts of Justice
Lord Justice Lloyd
Lord Justice Nourse
Lord Justice Ralph Gibson
91/0369
MR NIGEL MEARES, instructed by Messrs Tussauds, appeared for the Appellant (Respondent).
MR DAVID ELVIN, instructed by Messrs Frere Cholmeley, appeared for the Respondents (Applicants).
We are grateful for the arguments which counsel addressed to us yesterday.
In this case we are concerned with the validity of a notice given by a landlord to determine a business tenancy under part 2 of the Landlord and Tenant Act 1954. The tenancy agreement is dated 28th February 1986. It relates to the ground floor and first floor office premises at 70 High Street, Epsom, Surrey. The landlords named in the tenancy agreement are John Edwin Marchington of Tavistone, Bookham Common, Great Bookham, Surrey and Clive Norman Austin Stanford of 70 High Street, Epsom, Surrey. The tenant is a company called Bridgers. The tenant's registered office is given as 10 North Street, Leatherhead, Surrey. The term of the lease was from 1st January 1986 until 20th March 1990. It will have been noticed that one of the two named landlords, the respondent to these proceedings, occupied premises at the same address as the subject-matter of the tenancy. We are told that he occupied the second floor.
On 23rd June 1989 the landlord gave notice under section 25 of the Act to terminate the tenancy on 21st March 1990, the day after the contractual date of termination. The notice was in the prescribed form then current, as required by section 25(1) of the Act. It is said by the tenant that the notice is invalid for three separate reasons. First, it does not name Bridgers as the tenant, but a company called Hamptons. Secondly, it relates to the whole of the premises at 70 High Street, and not just to the ground and first floors. Thirdly, it does not comply with the requirements of section 25(5) of the Act. Section 25(5) provides:
"A notice under this section shall not have effect unless it requires the tenant, within two months after the giving of the notice, to notify the landlord in writing whether or not, at the date of termination, the tenant will be willing to give up possession of the property comprised in the tenancy."
The notice in the present case, though on the prescribed form, does not follow the precise language of section 25(5). Paragraph 4 of the notice reads:
"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 us in writing within two months after the giving of this notice."
Thus the notice requires the tenant to notify the landlord in writing within two months if he is not willing to give up possession, which has conveniently been called a "negative counter notice". It does not require the tenant to notify the landlord whether or not he is willing to give up possession, in other words, to notify the landlord if he is willing to give up possession. This has been conveniently called a "positive counter notice". It is said by the tenant that this is a fatal flaw and that as a consequence the landlord's notice is invalid, though it was in the prescribed form.
His Honour Judge Michael Cook, sitting in the Epsom County Court, decided the first two issues in favour of the landlord. But with evident reluctance he decided the third issue in favour of the tenant. The last sentence of his judgment reads, "If the matter goes to the Court of Appeal I hope they will be able to say that I am wrong."
The landlord now appeals on the third issue. The tenant has issued a respondent's notice on the first and second issues.
The third issue is a question of some importance, since it reveals a prima facie inconsistency between the requirements of section 25(5) of the Act and the form prescribed by the regulations in force at the relevant time under section 66 of the Act. We are told that a number of County Court judges have had to grapple with this problem. Some have gone one way, some the other, so our decision is said to be eagerly awaited. Moreover there must have been many notices given by landlords on the form then current which, if the judge is right, are now shown to have been invalid. There is only one High Court decision on the point, namely, the decision of His Honour Judge Paul Baker Q.C. sitting as a judge of the High Court in a case called Baglarbasi and another v. Deedmethod Ltd. He came down in favour of the landlords. Unfortunately the case is only very briefly reported in [1990] E.G.C.S. 155. There is no relevant decision in the Court of Appeal.
I have referred already to the regulations then in force. The history of the regulations is as follows. Paragraph 4(7) of the Landlord and Tenant (Notices) Regulations 1957 provides that a notice under section 25 of the Act shall be in Form 7. Form 7, with minor amendments, goes back to the original regulations made under the Act in 1954. Paragraph 2 of Form 7 reads:
"You are required within two months after the giving of this Notice to notify me in writing whether or not you will be willing to give up possession of the premises on that date."
So there is no inconsistency between that form and section 25(5) of the Act. But then came the Landlord and Tenant Act 1954 Part II (Notices) Regulations 1983. Those regulations came into force on 1st April 1983. The relevant form is Form 1, which contains as paragraph 4 the paragraph which I have already read. Finally there are the Landlord and Tenant Act 1954 Part II (Notices) (Amendment) Regulations 1989. They came into force on 29th September 1989. Instead of paragraph 4 of the 1983 form, it goes back to paragraph 2 of the 1957 form. Otherwise there are no relevant changes.
What prompted the change back in 1989 we do not know. Equally we do not know what prompted the change in 1983. But the other changes made in 1983 appear to have been designed to make the form simpler. The draftsman may have thought, with some justification, that the landlord would only be interested in knowing if the tenant did not want to give up possession and that section 25(5) was intended in somewhat inelegent language to achieve that end. But whatever the reason, two things are clear: first, that if there is any inconsistency, the subordinate legislation must yield to the statute: see Price v. West London Investment Building Society Ltd [1964] 1 W.L.R. 616 at 625; and secondly, the fact that the form has been changed back in 1989 can throw no light at all on the solution to our present problem.
What then does section 25(5) mean? Until that question has been resolved, it is not possible to say whether there is indeed any inconsistency between section 25(5) and the 1983 form and whether, as a consequence, the notice in the present case was invalid. On the face of it, I would accept that on its literal construction, section 25(5) provides that a notice shall not have effect if the landlord fails to require the tenant to give a positive counter notice, if he is willing to give up possession, as well as a negative counter notice, if he is not. But we are not bound to go by the literal construction of section 25(5). We can adopt a purposive approach, as Lord Diplock pointed out in the leading case on Part II of the Landlord and Tenant Act, Kammins Ballrooms Co. Ltd v. Zenith Investments (Torguay) Ltd [1971] A.C. 850 at 880. We can ask ourselves what was the overall object which Parliament was intending to achieve in this part of the Act.
Applying that approach, it is at first sight difficult to see that any purpose at all was served by requiring the tenant to give a positive counter notice. However, Mr Meares in opening the appeal referred us helpfully to the decision of Brightman J. (as he then was) in In re 14 Grafton Street, London W1, De Havilland (Antigues) Ltd v. Centrovincial Estates (Mayfair) Ltd [1971] Ch. 935. In that case the tenants gave a positive counter notice. Thereafter they wished to change their mind in order to put themselves in the position of claiming compensation under some supervening legislation. It was held that the positive counter notice, once given, was irrevocable. So the actual decision does not help us. But Brightman J. in the course of his judgment asked himself the same question which we ask ourselves, what purpose does a positive counter notice serve? I quote from his judgment at page 943.
"In my view the purpose of section 25(5) is to introduce an element of certainty into the relationship between the landlord and the tenant. A tenant is not bound to serve a negative counter notice before the end of the two month period allowed to him. He may pause for that period of time while he makes up his mind. If however he does serve a positive counter notice the two month period, I think that he must abide by what he has done. If that were not the case, the positive counter notice would serve no purpose whatever compared with complete inaction, for in either case the landlord would not know where he stood until the end of the two month period. If a positive counter notice is revocable the tenant serving the same would be able to serve a negative counter notice right up to the end of the two month period. If on the other hand the tenant does nothing, he may likewise serve a negative counter notice right up to the end of the two month period. It follows that a positive counter...
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