Garston and Others v Scottish Widows' Fund and Life Assurance Society

JurisdictionEngland & Wales
JudgeLORD JUSTICE NOURSE,LORD JUSTICE MUMMERY,SIR JOHN VINELOTT
Judgment Date25 June 1998
Judgment citation (vLex)[1998] EWCA Civ J0625-10
Docket NumberCHANF 96/1034/3
CourtCourt of Appeal (Civil Division)
Date25 June 1998

[1998] EWCA Civ J0625-10

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

(Mr Justice Rattee)

Royal Courts of Justice

Strand, London WC2

Before:

Lord Justice Nourse

Lord Justice Mummery and

Sir John Vinelott

CHANF 96/1034/3

(1) Eric Michael Garston
(2) Alan Kilsha Toulson
(3) Paul Denzil Nicholas
(4) Charles Edward Cameron Gardner
Plaintiffs/Appellants
and
Scottish Widows Fund And Life Assurance Society
Defendant/Respondent

MR D HODGE QC and MR P MORGAN QC (instructed by Messrs Reynolds Porter Chamberlain, London WC1) appeared on behalf of the Appellant Plaintiffs.

MR K LEWISON QC (instructed by Messrs Freshfields, London EC4) appeared on behalf of the Respondent Defendant.

1

Thursday, 25th June 1998

LORD JUSTICE NOURSE
2

The primary question on this appeal is whether a notice which before the decision of the House of Lords in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 would have been ineffective to determine a lease must now, by virtue of that decision, be held to have been effective. In the company of the man on the Clapham omnibus, the officious bystander and the man skilled in the art there has now been established the reasonable recipient, a formidable addition to the imagery of our law. There is a further question as to the true construction of the proviso to section 26(2) of the Landlord and Tenant Act 1954.

3

By a lease dated 10th July 1985 and made between Merchant Navy Officers Pension Fund Trustees Ltd as landlord of the one part and Manufacturers Hanover Finance Ltd as tenant of the other part office premises comprising the seventh floor of Lincoln House, 296/302 High Holborn, London WC1 were demised to the tenant "from the 24th day of June 1985 for a term of twenty years" at a yearly rent of £47,000 subject to upwards only rent reviews at the end of every five years of the term. Clause 7 of the lease provides:

"IF the Tenant shall desire to determine the term hereby granted at the expiration of the tenth year of the term and shall give to the Landlord at least six months' previous notice in writing of such his desire then immediately on the expiration of the tenth year of the term hereby granted the demise and everything herein contained shall cease and determine but without prejudice to the rights and remedies of either party against the other in respect of any antecedent claim or breach of covenant."

4

On 29th September 1988 the lease was assigned by Manufacturers Hanover Finance Ltd to the plaintiffs, the first being a former partner and the other three partners in the solicitors' firm of Reynolds Porter Chamberlain, who have occupied the demised premises as an annexe to their principal offices nearby. At all material times the reversion expectant on the determination of the lease has been vested in the defendant.

5

By the late summer of 1994 Reynolds Porter Chamberlain had resolved to exercise their power to determine the lease at the expiration of the tenth year thereof. That being a power to determine it at the expiration of the tenth year of a term which ran from 24th June 1985, the date on which it had to be determined was 23rd June 1995. On 14th September 1994 Reynolds Porter Chamberlain wrote a letter to the defendant, stating that they did so on behalf of the firm and referring to the lease and the assignment. The letter continued:

"Pursuant to clause 7 of the Lease the Lessee hereby serves Notice on the Lessor to determine the Lease and this Notice shall expire on the 9 July 1995.

The Lease is governed by the provisions of the Landlord & Tenant Act 1954. Accordingly on behalf of the tenant we enclose the tenant's request for a new tenancy of business premises under section 26 of the Landlord & Tenant Act 1954."

6

Enclosed with the letter was a request under section 26 of the 1954 Act requesting the defendant to grant a new tenancy beginning on 10th July 1995, the day following the date specified in the letter for the expiry of the notice. The request stated the name of the tenant as Reynolds Porter Chamberlain.

7

The notice contained in the letter of 14th September and the enclosed request having been served on behalf of Reynolds Porter Chamberlain, on 4th October 1994 they wrote a further letter to the defendant in terms identical to those of the letter of 14th September, except that it was expressed to be written on behalf of the plaintiffs. Enclosed with the letter was an identical request for a new tenancy under section 26, except that the name of the tenant was stated to be those of the plaintiffs.

8

It is clear and accepted on both sides that the writer of the letters of 14th September and 4th October 1994 made the mistake of thinking that the time for determining the lease under clause 7 was the expiration of the tenth year from the date of the lease (9th July 1995) instead of the expiration of the tenth year of the term (23rd June 1995). Subject to that point, both letters having been received by the defendant more than six months before 23rd June 1995, it is agreed that that of 4th October, if not that of14th September, was a valid notice under clause 7 of the lease.

9

The defendant having maintained that the lease had not been validly determined, on 29th June 1995 the plaintiffs issued an originating summons in the Chancery Division claiming a declaration that the lease had been validly determined by one or other of the letters of 14th September and 4th October 1994, alternatively by one or other of the requests for a new tenancy under section 26. The summons came before Mr Justice Rattee who, on 21st March 1996, dismissed it; see [1996] 1 WLR 834.

10

At that time the effect of the notices given in the letters of 14th September and 4th October was governed by the decisions of this court in Hankey v Clavering [1942] 2 KB 326 and Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1995] 1 WLR 1508. In the latter case I summarised the effect of the previous authorities at p. 1513F:

"If a notice clearly and specifically purports to determine a demise for a fixed term on a date not authorised by the lease, the date cannot be corrected simply because it is clear, first, what the correct date ought to be, secondly, that the wrong date was inserted by a slip and, thirdly, that the recipient might guess or even be certain that that was what happened. An exception can only be made where the date specified is an impossibility, either because it has passed or because it is on some other ground inconceivable that it was the date intended."

11

On that state of the law the plaintiffs accepted, correctly, that...

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