Whelton Sinclair (A Firm)(Plaintiff) Appellant) v Raymond William Hyland Respondent)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE GLIDEWELL |
| Judgment Date | 01 May 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J0501-7 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 91/0535 |
| Date | 01 May 1991 |
[1991] EWCA Civ J0501-7
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE DOVER COUNTY COURT
HIS HONOUR JUDGE GRIFFITHS)
Royal Courts of Justice.
Lord Justice Glidewell
Mrs. Justice Bracewell
91/0535
MR. R. WARNE (instructed by Messrs. Sinclairs of Canterbury) appeared on behalf of the Appellant.
MR. K. KNIGHT (instructed by Messrs. J.W. Saunders & Co.) appeared on behalf of the Respondent.
This is an appeal against a decision of His Honour Judge Griffiths given at Dover County Court on 17th and 18th October 1990 when, on the claim of the plaintiffs, Whelton Sinclair (a firm of solicitors) he gave judgment for the defendant, Mr. Hyland, and on the defendant's counterclaim he gave judgment also for the defendant in the sum of £5,000 with £3,000 interest.
The facts which led to this dispute can be expressed reasonably shortly. In 1983 Mr. Hyland took an assignment of a lease of a shop at 33 Queen Street, Ramsgate, Kent. That was a lease made on 17th September 1976 between a Mr. Nethercott (whom I shall call "the landlord"), who was the landlord at the time of the assignment to Mr. Hyland and at the time of the events out of which these proceedings arise, and a Mr. Dashwood, the lessee in the lease. The lease was to hold the premises from 27th June 1976 for a term of 10 years at a rent to be paid by weekly payments in advance from Monday of every week, the first of such payments to be made on 27th June 1976. One of the arguments both before the judge and before us depends upon the wording of the lease, to which I shall return, but for the moment it will be seen that the assignment that Mr. Hyland took was of the residue of the lease which then had some three years to run.
Messrs. Whelton Sinclair acted for Mr. Hyland on that assignment, the partner who dealt with the matter for him being Mr. Sinclair. Unhappily the business which Mr. Hyland carried on with his wife at those premises (that of a greengrocer) was not successful, so that, according to the evidence, by the end of 1985 it was trading at a loss and some debts had accumulated.
On 9th December 1985 solicitors acting for Mr. Nethercott served on Mr. Hyland by post a notice under section 25 of the Landlord and Tenant Act 1954, giving him notice terminating the tenancy of the premises on 26th June 1986. The notice in common form informed Mr. Hyland that:
"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 me in writing within two months after the giving of this notice."
That period is laid down by the Act. And:
"If you apply to the court under Part II of the Landlord and Tenant Act 1954 for the grant of a new tenancy, I will not oppose your application."
Mr. Hyland, although he was trading at a loss, did wish to apply for a new tenancy. It is agreed that had he applied and been granted a new tenancy it would have been at a rent which would have been less than the market rent and which would thus have enabled him to assign the tenancy for a premium, and it was agreed before the learned circuit judge that that premium would have been in the sum of £5,000. So a new tenancy was a valuable asset for Mr. Hyland.
There was some discussion before us as to what his intentions truly were, but the judge accepted that what he intended to do was to renew his lease, then to dispose of it and use the premium he anticipated receiving to pay off his debt, and then no doubt to set-off on a new course. I say there was some discussion before us because these matters were not put as clearly as they might have been in certain correspondence, but that was the judge's finding and I need say no more about it.
The landlord's solicitors not merely served the section 25 notice on Mr. Hyland, they also sent at the same time a letter to him, saying:
"…we enclose in duplicate Notice to Quit"—that is inaccurate, it should have been "notice to terminate", but nothing turns on that—"the premises 33 Queen Street, Ramsgate under the Landlord and Tenant Act 1954 and should be obliged if you would kindly sign and return the duplicate to us by way of acknowledgement.
If you are in any doubt as to the effect of this Notice could you please communicate as soon as possible with your Solicitors requesting that they contact us."
The landlord's solicitors, of course, were aware that Messrs. Whelton Sinclair had acted for Mr. Hyland three years before on the assignment, and they also (although they were under no obligation to do so) courteously wrote to Messrs. Whelton Sinclair on the same date enclosing a copy of their letter to Mr. Hyland. They did not enclose a copy of the notice, but they made it clear that they had served a section 25 notice.
That letter came to the attention of Mr. Sinclair, and on 17th December 1985 he wrote to Mr. Hyland, saying:
"Dear Mr. Hyland, I understand from your Landlord's Solicitors that they have served a Notice to Quit on you and I recommend you discuss it with me as quickly as possible since if your position is to be preserved there is action that must be taken on your behalf within a short time limit."
He did not spell out the time limit. He did not really need to because Mr. Hyland was not reading the document with any clarity. There it was spelled out in the notice he received.
At that stage it is quite correct, as Mr. Warne for the plaintiff submits, that Messrs. Whelton Sinclair had no instructions to act in any way on behalf of Mr. Hyland. He had been their client three years before, and that transaction had been completed. They had no continuing retainer of any sort. But nevertheless they had been given notification that a section 25 notice had been served and they had very properly taken the step of writing to Mr. Hyland, in effect advising him to consult them about the notice that had been served upon them.
After the letter from the plaintiffs to Mr. Hyland on 17th December 1985, there was no further correspondence as between those parties until 3rd April 1986, by which time the two months for the service of a counter-notice indicating that Mr. Hyland was not willing to give up possession of the premises had expired. There is no doubt that in March 1986, after the expiry of the two months, Mr. Hyland received from the landlord's solicitors a letter of 10th March, saying:
"…[we] are rather surprised not to have received from you any reply, nor from any Solicitors acting on your behalf.
As no counter-notice to the original Notice has been served on your behalf, we have to advise you that your rights to a new Lease under the terms of the Landlord and Tenant Act 1954 have now expired, and in the circumstances could you please let us know if it is your intention to vacate the premises on the 26th June this year, or, if you still hope to negotiate the terms of a new Lease with our Client, Mr. Nethercott."
At that point, as a result of the receipt of that letter, Mr. Hyland took steps to instruct Mr. Sinclair and Mr. Sinclair got in touch with the landlord's solicitors. After some initial discussion, Mr. Nethercott decided that he did not want to grant Mr. Hyland a new lease, and of course by this time he was under no legal obligation to do so. Mr. Hyland, if the notice under section 25 was valid, had lost the protection of the 1954 Act.
Mr. Sinclair then considered the matter and he advised Mr. Hyland that there was a sensible argument that the section 25 notice was not valid and thus was of no effect. If that were correct, the effect of the 1954 Act was that Mr. Hyland's tenancy would continue until a valid notice was served. At the stage when this was being dealt with the old lease was still in being because it was still only April and the old lease ran to 8th June 1986. Mr. Sinclair spent time and effort in putting forward this argument in correspondence to the landlord's solicitors. Not surprisingly, they declined to accept the validity of the argument, and in the end Mr. Hyland decided to solve the problem by vacating the premises, withdrawing instructions from Messrs. Whelton Sinclair, ceasing the argument with his landlord, and of course losing any prospect of selling the new lease which he had been hoping for at a premium.
Messrs. Whelton Sinclair then in due course sent Mr. Hyland an account for their fees in the sum of £293.88 for fees incurred in work involved on his behalf after 10th March 1986. That is when he came to instruct them having received the letter from the landlord's solicitors telling him that he had lost his right under the Landlord and Tenant Act. All these fees were for work done after that date; none of them for work done during the two months following the service of the section 25 notice. In retrospect the plaintiffs may feel that perhaps it would have been better if they had not started the action for their fees, but, nevertheless, nobody knows what would have happened if they had not.
The original defence was "homemade", so to speak. It was drafted by Mrs. Hyland on her husband's behalf. As is not infrequently the case, in this marriage it seems that Mrs. Hyland is the party who is the more accustomed to writing letters and drawing up any documents which have to be prepared on behalf of both of them. Later solicitors came on the scene, and the defence was reformulated by counsel, together with a counterclaim.
The defence is that the plaintiff firm was instructed by Mr. Hyland in or about the month of December 1985 to act on his behalf in obtaining the grant of a new lease...
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