Siemens Hearing Instruments Ltd v Friends Life Ltd
| Jurisdiction | England & Wales |
| Judge | Mr N Strauss |
| Judgment Date | 12 July 2013 |
| Neutral Citation | [2013] EWHC B15 Ch |
| Docket Number | Claim no. HC13B01751 |
| Court | Chancery Division |
| Date | 12 July 2013 |
[2013] EWHC B15 (Ch)
In the High Court of Justice
Chancery Division
Mr. N Strauss Q.C.
(sitting as a deputy judge)
Claim no. HC13B01751
Mr. Timothy Fancourt Q. C. and Mr. Tom Weekes, instructed by Manches LLP, appeared for the claimant.
Mr. Mark Wonnacott Q.C., instructed by S.J. Berwin, appeared for the defendant.
Hearing date: 20 th June 2013.
Mr N Strauss QC:
Introduction
By a lease dated 27th January 1999 ("the Lease"), made pursuant to an agreement for a lease dated 14th August 1997, Sun Life Assurance Society Plc (later Friends Life Assurance Society Ltd) let to the claimant (then A&M Hearing Ltd) premises at Site 1, Vector 2, Manor Royal, Crawley ("the premises") for a term of 25 years from and including 24th August 1998 at an initial rent of £224,000 p.a. (now £325,000 p.a.).
Clause 19 of the Lease provided the tenant with a break option:
"19.1 In this clause the Termination Date means 23 August 2013.
19.2 Subject to the pre-conditions in clause 19.3 being satisfied on the Termination Date, and subject to clause 19.4 the Tenant may determine the Term on the Termination Date by giving the Landlord not more than 12 month's and not less than six month's written notice, which notice must be expressed to be given under section 24(2) of the Landlord and Tenant Act 1954. The term will then determine on the Termination Date, but without prejudice to any rights of either party against the other for any antecedent breach of its obligations under this Lease. ( my emphasis).
19.3 The pre-conditions are that:
19.3.1 vacant possession of the whole of the Premises is given to the Landlord; and
19.3.2 all Rent and other sums due under this Lease up to the Termination Date have been paid in full; and
19.3.3 the Tenant has paid to the Landlord on or prior to the Termination Date (in addition to the Rent and other sums due under this Lease) a sum equal to one-half of the annual Rent payable by the Tenant under this Lease as at the date of service of the Tenant's notice pursuant to clause 19.2
194. The Landlord may waive any of the pre-conditions set out in clause 19.3 at any time before the Termination Date by written notice to the Tenant.
19.5 The Tenant will cancel any registration it has made in connection with this clause within 5 Working Days of the Termination Date.
19.6 Time will be of the essence for the purposes of this clause. …"
On about 28th September 2012 (that is within the notice period provided for by clause 19), the claimant's solicitors served the following notice:
" Site 1, Vector 2, Manor Royal, Crawley (the "Premises")
We act for Siemens Hearing Instruments Limited (Company No.00203774) (the " Tenant") whose registered office is Alexandria House, Newton Road, Manor Royal, Crawley, West Sussex, RH10 9TT.
We write regarding the lease of the Premises between Sun Life Assurance Plc and A&M Hearing Limited, dated 17 January 1999 (the " Lease").
We, Manches LLP, Solicitors and Agents for the Tenant, of 9400 Garsington Road, Oxford Business Park, Oxford, OX4 2HN, HEREBY GIVE YOU NOTICE, for and on behalf of the Tenant, that the Tenant intends to terminate the Lease 23 August 2013 in accordance with clause 19 of the Lease so that the Lease will determine on that date.
We have served this notice on you at your registered office in accordance with clause 17 of the Lease.
…. We should be grateful if you would acknowledge receipt by signing and returning the enclosed duplicate of this letter in the enclosed pre-paid envelope."
The question that I have to decide is whether this was a valid notice, taking effect (subject to the due fulfilment of the pre-conditions) so as to terminate the lease on 23rd August 2013. The issue is whether the notice was effective even though it was not, as the lease required, expressed to be given under section 24(2) of the Landlord and Tenant Act.
Mr. Fancourt Q.C. on behalf of the claimant submitted that the notice was effective despite the absence of the required formula for 3 reasons:
(a) There was no such thing as a notice under section 24(2), and the required formula was meaningless. Therefore, all that was required on the proper construction of clause 19 was a straightforward notice, such as the one that was given, which did not claim a tenancy under the Act.
(b) Even if clause 19 did require the stipulated words to be stated, on its proper construction the failure to state meaningless words did not render the notice invalid.
(c) In any event, the stipulation was rendered void by section 38 of the Landlord and Tenant Act 1954.
It is common ground between the parties that the provisions of the Landlord and Tenant Act 1954, and a then unresolved issue relating to section 26(2) of that Act which I can conveniently call the Garston point, form the essential background to the construction of clause 19 of the Lease.
The relevant provisions of the Act are those which relate to business tenancies, and in particular the following (emphasis added):
"23. Tenancies to which Part II applies
(1) Subject to the provisions of this Act, this Part of this Act applies to any tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by him or for those and other purposes.
(2) In this Part of this Act the expression "business" includes a trade, profession or employment and includes any activity carried on by a body of persons, whether corporate or unincorporated.
(3) In the following provisions of this Part of this Act the expression "the holding", in relation to a tenancy to which this part of this Act applies, means the property comprised in the tenancy, there being excluded any part thereof which is occupied neither by the tenant nor by a person employed by the tenant and so employed for the purposes of a business by reason of which the tenancy is one to which this Part of this Act applies …
24 Continuation of tenancies to which Part II applies and grant of new tenancies
(1) A tenancy to which this Part of this Act applies shall not come to an end unless terminated in accordance with the provisions of this Part of this Act; and, subject to the provisions of section 29 of this Act, the tenant under such a tenancy may apply to the court for a new tenancy —
(a) if the landlord has given notice under section 25 of this Act to terminate the tenancy, or
(b) if the tenant has made a request for a new tenancy in accordance with section 26 of this Act.
(2) The last foregoing subsection shall not prevent the coming to an end of a tenancy by notice to quit given by the tenant, by surrender or forfeiture, or by the forfeiture of a superior tenancy, unless—
(a) in the case of a notice to quit, the notice was given before the tenant had been in occupation in right of the tenancy for one month.
(b) in the case of an instrument or surrender, the instrument was executed before, or was executed in pursuance of an agreement made before, the tenant had been in occupation in right of the tenancy for one month.
…
24A Rent while tenancy continues by virtue of s.24
(1) The landlord of a tenancy to which this Part of this Act applies may, —
(a) if he has given notice under section 25 of this Act to terminate the tenancy; or
(b) if the tenant has made a request for a new tenancy in accordance with section 26 of this Act; apply to the court to determine a rent which it would be reasonable for the tenant to pay while the tenancy continues by virtue of section 24 of this Act, and the court may determine a rent accordingly.
(2) A rent determined in proceedings under this section shall be deemed to be the rent payable under the tenancy from the date on which the proceedings were commenced or the date specified in the landlord's notice or the tenant's request, whichever is the later. …
25 Termination of tenancy by the landlord
(1) The landlord may terminate a tenancy to which this Part of the Act applies by a notice given to the tenant in the prescribed form specifying the date at which the tenancy is to come to an end (hereinafter referred to as "the date of termination"); Provided that this subsection has effect subject to the provisions of Part IV of this Act as to the interim continuation of tenancies pending the disposal of applications to the court.
(2) Subject to the provisions of the next following subsection, a notice under this section shall not have effect unless it is given not more than twelve nor less than six months before the date of the termination specified therein.
(3) In the case of a tenancy which apart from this Act could have been brought to an end by notice to quit give by the landlord —
(a) the date of termination specified in a notice under this section shall not be earlier than the date on which apart from this Part of this Act the tenancy could have been brought to an end by notice to quite given by the landlord on the date of the giving of the notice under this section; and
(b) where apart from this part of this Act more than six months' notice to quit would have been required to bring the tenancy to an end, the last foregoing subsection shall have effect with the substitution for twelve months of a period six months longer than the length of notice to quite which would have been required as aforesaid. …
26 Tenant's request for a new tenancy
(1) A tenant's request for a new tenancy may be made where the tenancy under which he holds for the time being (hereinafter referred to as "the current tenancy") is a tenancy granted for a term of years certain exceeding one year, whether or not continued by section twenty-four of this Act, or granted for a term of years certain and thereafter from year to year.
(2) A tenant's request...
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