Levett-Dunn and Others v NHS Property Services Ltd
| Jurisdiction | England & Wales |
| Judge | HHJ David Cooke |
| Judgment Date | 26 April 2016 |
| Neutral Citation | [2016] EWHC 943 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: 3BM30515 |
| Date | 26 April 2016 |
[2016] EWHC 943 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
Birmingham Civil Justice Centre
Bull Street, Birmingham B4 6DS
HHJ David Cooke
Case No: 3BM30515
John Brennan (instructed by Hadgkiss Hughes & Beale) for the Claimants
Adam Rosenthal (instructed by Bevan Brittan) for the Defendant
Hearing dates: 22–23 February 2016
Introduction
This case concerns the validity of notices served by the defendant as tenant of leasehold office premises, by which it sought to exercise a contractual break clause. The claimant landlords seek declarations that the notices were not properly served on them and that in consequence the relevant leases still subsist.
There are three leases, but as the terms in issue are identical in all three I shall refer to them without distinction. They relate between them to all three floors of a building called Coniston House at Chapel Ash on the Wolverhampton Ring Road. The leases were dated 27 September 2010 and the premises were let for a term of 10 years from 11 July 2010 at a combined rent in excess of £200,000pa, subject to the break provisions referred to below.
The leases were registered, and so consisted of a Land Registry form setting out prescribed particulars and a deed of lease executed by the parties. It is not suggested there is any material discrepancy between the two. The first party is described thus in the Deed of Lease:
" Frederick Levett-Dunn, Simon Levett-Dunn, Howard Evans and Barnett Waddingham Trustees Ltd, all of 75 Tyburn Rd Erdington Birmingham B24 8NB (hereinafter called "the Landlord" which expression shall where the context so admits include the person or persons for the time being entitled to the reversion of the premises hereby demised immediately expectant on the term hereby granted)…"
The address referred to is central to the case. The four named parties were at the time the trustees of the Howard Evans Roofing Ltd Retirement Benefit Scheme, a Small Self Administered Pension Scheme (or "SSAP"), established to provide benefits for the directors of Howard Evans Roofing Ltd ("the company"). The freehold of Coniston House is an asset owned by that scheme. The three individuals were all beneficiaries of the scheme and were or had been directors of the company. 75 Tyburn Rd was at the time the trading address of the company. Barnett Waddingham Trustees Ltd is a professional trustee company associated with the well known firm of actuaries and pension advisers.
The named tenant was Wolverhampton City Primary Care Trust ("the PCT"). It is common ground that the defendant is the statutory successor in title to the PCT.
Clause 6.1 of the Deed of Lease contains the break clause. It provides:
"If the Tenant wishes to determine this lease at the end of the third, sixth or ninth year of the Term and gives the Landlord not less than six months prior written notice of that wish… then on expiry of the said notice ("the Break Date") the Term will cease and determine…".
Clause 5.9 deals with service of notices and provides as follows:
"For the purpose of service of all notices hereby or by statute authorised to be served the regulations as to service of notices contained in section 196 of the Law of Property Act 1925…shall be deemed to be incorporated herein but service on any one of the parties comprising the Landlord shall be deemed to be service on all and notices to be served on the Tenant are to be sent to the Director of Facilities at Coniston House…or such other address as the Tenant shall notify to the Landlord in writing."
Section 196 provides:
" 196 Regulations respecting notices
…(3) Any notice required or authorised by this Act to be served shall be sufficiently served if it is left at the last-known place of abode or business in the United Kingdom of the lessee, lessor, mortgagee, mortgagor, or other person to be served…
(4) Any notice required or authorised by this Act to be served shall also be sufficiently served, if it is sent by post in a registered letter addressed to the lessee, lessor, mortgagee, mortgagor, or other person to be served, by name, at the aforesaid place of abode or business…"
Four separate notices, one addressed to each of the parties named as landlord, were delivered by recorded delivery on 19 December 2012 to 75 Tyburn Rd. Their receipt was recorded on an electronic terminal on which some individual made a signature using a stylus on a screen. The signature is wholly illegible. Four forms of receipt have been printed, one for each letter and showing their different registered mail numbers. The form of signature is identical, so presumably was only made once and copied electronically. Each has a printed name of the recipient: "Howard Evans". It is not known whether this was typed by the Royal Mail employee or the recipient, though one suspects it is more likely to have been the former, and again copied electronically to all four items.
The notices stated that the tenant wished to exercise the break to bring the leases to an end on 10 July 2013, being the end of the third year of the term. To be valid the notice would have had to be "given" before 11 January 2013, ie six months before the break date.
The claimants' position is that these notices were ineffective, because:
i) Although the lease states that all the parties comprising the landlord are "of 75 Tyburn Rd…" that was not in fact the "place of abode or business" of any of the claimants.
ii) Simon Levett-Dunn had by that date ceased to be a trustee of the SSAP and transferred his interest in the reversion to the claimants. Although it is accepted that no notice of this had been given to the tenant, he was no longer a person comprised in "the landlord". Accordingly, even if the notice had been served or was deemed served on him (for example because 75 Tyburn Rd was his place of business) that did not bind "the landlord".
iii) The individual who received the letters and made the on-screen signature was not Howard Evans, who on that day was at various on-site meetings around Heathrow Airport. Mr. Evans gave evidence to that effect, and Mr. Rosenthal said in closing that he did not suggest this was untrue. I accept that evidence. Someone else must have given his name, and there is no way of telling who it was or why, save that one may speculate the person delivering may have required a name to be given that corresponded with at least one of the addressees.
iv) The notices did not come to their attention by any other means until after 10 January 2013.
The notices would not have been a surprise to the landlord. It is accepted that there had been at least one meeting beforehand in September 2012, and possibly another in December, at which the tenant had stated its intention to exercise the break. It is not however suggested that anything said or done at these meetings was sufficient to constitute notice for the purposes of the break clause.
The notices were followed up by Mr. Tara, the property manager of the PCT, in an email to Mrs Peers, a director of the company that managed Coniston House for the claimants. In an email sent at 10.38 on Wednesday 9 January 2013 he said:
"As you are aware the PCT have given notices on all the floors for Coniston House, however Mike Goodwin from the Royal Wolverhampton Hospital Trust would like to meet [to discuss] the possibility to take a re-lease of part of the building. Are you available on [various dates]…
"
There was no reply until 9.48 on Monday 14 January 2013, by which time of course the deadline for notice had expired. Mrs Peers then said:
"We have not received any notices and I have now spoken to our clients and they cannot trace having received any. At this time it is not appropriate to convene a meeting until the position is clarified."
Somewhat to my surprise, it appears that little or no enquiry has been made as to what Mrs Peers did when she received Mr. Tara's email and whether, for instance, she contacted any of the landlords to tell them about it. Had she done so before 11 January, the existence of the notices would have been brought to their attention and, as Mr. Brennan accepted, they would have been effective. This issue seems not to have been raised by the defendants, as far as I can see. The claimants' pleading arguably skates around it—it is pleaded that the notices "were not personally delivered" and were not "served in accordance with the terms of the leases". The same may, in my view, be said of their subsequent correspondence. No point is however taken about the email or actual knowledge in the Defence. Mrs Peers gave evidence, but neither her witness statement nor that of any of the claimants makes reference to Mr. Tara's email or what she did on receipt of it. Nor do those witness statements expressly state that the notices did not come to the attention of Mr. Levett-Dunn or Mr. Evans, as might perhaps have been expected. It does not appear that any disclosure has been sought of, for instance, any email or other records of Mrs Peers that might show when and how she communicated Mr. Tara's email to her clients.
After I expressed my surprise that the witness statements did not cover this point, Mr. Levett-Dunn was asked whether he was the person to whom Mrs Peers had spoken, and if so when. He accepted that he was the usual point of contact for pension fund matters rather than Mr. Evans, and that it was possible Mrs Peers had spoken to him, but said he could not recall any such conversation or say when it may have taken place between 9 th and 14 th January. He was not pressed further on the point, and no similar questions were asked of Mrs Peers. In closing, Mr....
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