Lemmerbell Ltd and Another (Plaintiffs/Appellants) v Britannia Las Direct Ltd (Formerly Las Direct Ltd)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PETER GIBSON,LORD JUSTICE HUTCHISON,LADY JUSTICE BUTLER-SLOSS |
| Judgment Date | 08 October 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J1008-3 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | FC3 97/6904/3 |
| Date | 08 October 1998 |
[1998] EWCA Civ J1008-3
IN THE SUPREME COURT OF JUDICATURE
IN THE 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
Lady Justice Butler-Sloss
Lord Justice Peter Gibson
Lord Justice Hutchison
FC3 97/6904/3
CHANF 97/0854/3
JONATHAN GAUNT QC (Instructed by Sebastians, London, EC4Y 1DH) appeared on behalf of the Appellants
DAVID HODGE QC (& MR A MYERS, Solicitor Advocate, on 8 October 1998) I(Instructed by Travers Smith & Braithwaite, London, EC1A 2AL) appeared on behalf of the Respondent
The Plaintiffs, Lemmerbell Ltd. ("Lemmerbell") and Matthew Fraser Ltd. ("Fraser"), appeal from the order dated 22 May 1997 of Rattee J. by which he dismissed the proceedings brought by the Plaintiffs against the Defendant Britannia LAS Direct Ltd. ("Direct"). By those proceedings the Plaintiffs claimed that break notices served on them as landlords under two leases were ineffective to determine the leases.
By a Lease ("the Unit 6 Lease") made on 18 October 1990 between David Lines (therein called "the Lessor", which term was defined to include the person for the time being entitled to the reversion to the lease) and Direct (then called LAS Direct Ltd. and therein called "the Lessee", which term was defined to include the successors in title to the Lessee) Unit 6 Scirocco Close, Northampton (therein called "the Demised Premises") was demised for a term of 15 years from 29 September 1990. By clause 7(x):
"If the Lessee shall desire to determine this Lease on 28 th September 1995 and shall give to the Lessor not less than six months nor more than twelve months previous written notice of such desire then the Lessee shall upon that date deliver to the Lessor vacant possession of the whole of the Demised Premises and on such date the present demise shall cease and be void …."
Thus the conditions for the operation of this break clause are that the Lessee must have the desire to determine the lease and that the Lessee must give the break notice within the specified period. By clause 5(xxi)(d) the assignment of the Demised Premises without the Lessor's consent was prohibited. But it is not in dispute that an assignment without consent would be effective to pass the Lessee's interest to the assignee.
By another Lease ("the Unit 7 Lease") also made on 18 October 1990 between Fraser (then called Matthew Fraser Estates Ltd.) as lessor and Direct as lessee Unit 7 Scirocco Close was demised on similar terms, including a similar break provision in clause 7(x) of that Lease.
On 3 July 1991 Mr. Lines, as a director of Fraser, wrote to "The Life Association of Scotland" at the Edinburgh address given in the Unit 6 Lease for Direct, saying that Unit 6 had been sold to Lemmerbell, but that the rent was being collected by its parent company, Fraser. On 12 August 1992 the solicitors Amery-Parkes, expressing themselves as acting for The Life Association of Scotland Ltd. ("Life") and Direct, wrote to Sebastian Coleman & Co. ("Sebastians"), the solicitors for the Plaintiffs, giving notice that Units 6 and 7 would also be used by employees of Life. Amery-Parkes explained that that Life and Direct were wholly owned subsidiaries of LAS Holdings Ltd., and asked for confirmation that the Plaintiffs had no objection to that use. No response was received. Both leases remained vested in Direct, there being no request for consent to an assignment and no assignment. On 1 September 1993 Mr. Binnie of "The Life Association of Scotland" advised Mr. Lines by letter that "Chesterton" had been appointed managing agents to "The Life Association of Scotland". In fact, as we now know from evidence put in by Direct for this appeal, Life appointed Chesterton International Ltd. ("Chesterton") to provide advice and assistance to Life in relation to its property management activities, the principal object being to assist Life in the disposal of what were called Life's leasehold interests in respect of closed branches. The list appended to Life's agreement with Chesterton of such branches included Units 6 and 7. The agreement was expressed to come into force on 29 September 1993.
On 19 January 1994 Mr. Binnie wrote to Fraser, notifying it that Britannia Life had purchased "The Life Association of Scotland". Fraser was told that the new invoice address was "Britannia Life / Life Association of Scotland c/o Chesterton". Life's name was changed on 1 January 1994 to Britannia Life Association of Scotland Ltd.
On 7 October 1994 Amery-Parkes sent purported break notices in the form of letters in respect of Units 6 and 7 respectively to Mr. Lines, but the letter in respect of Unit 7 was addressed to "David Lines Esq. Matthew Frazer Limited." Each of the two letters said:
"We act on behalf of [Life], successors in title to … Direct…
We therefore give notice of our Clients intention within clause 7(x) of the lease dated 18th October 1990 between David Harry Lines and … Direct … to determine this lease on 28th September 1995."
Mr. Lines was asked to acknowledge receipt to confirm his acceptance by returning a copy duly signed. Apart from the misspelling of Fraser, the notices contained two errors. One was that Life was not the successor in title to Direct. The second was that to the Unit 7 Lease Fraser, not Mr. Lines, was a party. No copy notice was signed or returned by Mr. Lines or by Fraser.
Also on 7 October 1994 Amery-Parkes wrote letters to Sebastians in respect of Unit 6 and Unit 7 respectively. In each they said that they enclosed out of professional courtesy a notice sent to Mr. Lines, as Sebastians had been acting for him on the grant of the lease, and they asked for receipt to be acknowledged. A chasing letter was sent on 25 October. On 27 October Sebastians wrote thanking Amery-Parkes for their letters of 7 and 25 October and saying:
"This letter is not intended nor should it be taken as signifying anything other than the fact that we have received your letters."
On 14 November 1994 Amery-Parkes wrote again in respect of Unit 6 and Unit 7 respectively. They enclosed notices under s.27(1) Landlord and Tenant Act 1954, purporting to terminate the tenancies on 29 September 1995. Such notices were unnecessary if the earlier notices were valid (s.24(2)ibid.). Each notice was addressed to Mr. Lines of "Matthew Frazer Limited", expressed to be given by Life as "the tenant of the above premises holding under a tenancy granted by a Lease dated the 18 th day of October 1990 and made between DH Lines of the one part and [Direct] of the other part", was signed by Amery-Parkes as solicitor and agent for "the Tenant" and gave as the name of the Tenant Life "as successor in title to [Direct]". Thus those s.27 notices contained the same errors in respect of the lessee as the break notices. Also on 14 November 1994 Amery-Parkes wrote to Sebastians, enclosing the s.27 notices and asking for an acknowledgement. They added a postscript:
"In view of your letter of 27 th October 1994 we must press you to let us know if you find anything wrong with the contracted [sic] notice to determine referred to in that letter. If we do not hear from you on this we shall assume the notice to determine is valid."
No acknowledgment was sent by Sebastians and on 15 March 1995 Amery-Parkes sent a reminder. Sebastians replied on 22 March, thanking Amery-Parkes for their letters of 14 November and 15 March and saying:
"As for your earlier letters, this letter is not intended nor should be taken as signifying anything other than the fact that we have received your letters."
On 23 March Amery-Parkes faxed their response, saying:
"In view of the terms of your letter on 27th October and 22nd March if you have any queries in not accepting what has been served as due notice could you please let us know within the next two working days otherwise we shall take your letter as meaning that the notices are duly accepted and our Client can therefore vacate on 29th September 1995."
This provoked a faxed reply from Sebastians on 24 March:
"Whilst we thank you for your fax of late yesterday, we must say that we are getting a little tired of this correspondence.
We have no standing whatsoever in this matter and we would remind you that when you initially wrote to us it was "out of professional courtesy"……"as you had been acting for (David Lines) on the grant of this Lease"."
On 27 March Amery-Parkes wrote back pointing out that it was the failure of Sebastians to reply to earlier letters which had necessitated their letter, and asking for confirmation as to whether or not they acted for the landlords. Sebastians replied on 3 April 1995 that they were not instructed in the matter. In the meantime on 28 March the time for giving any further notices under clause 7(x) expired.
On 14 April Mr. Lines, as a director of the Second Plaintiff, wrote to Chesterton, saying that the break clause had not been operated by Chesterton's clients. Chesterton replied on 4 May 1995 that its clients had exercised their option to break the leases at the September quarter day. Sebastians on 6 June 1995 wrote on behalf of the Plaintiffs, saying that the break notices were ineffective because they were not served on Lemmerbell in respect of Unit 6 or on Fraser in respect of Unit 7. Only on 25 July 1996 did the Plaintiffs take the point that the notices had not been served by the tenant of each lease, Direct.
On 28...
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