Business tenancies

Citation

(1998), "Business tenancies", Property Management, Vol. 16 No. 3. https://doi.org/10.1108/pm.1998.11316cab.027

Business tenancies

Business tenancies

Sabella Ltd v. Montgomery [1998] 09 EG 153

Again, an interesting and important case, this time concerning the validity or otherwise of a landlord's s.25 notice, where this was not in the precise form required by the relevant regulations. The 1954 Act, in s.66(1), requires that any such notice shall be in the form prescribed by regulations to be made by the Secretary of State and s.66(2) states that the form to be prescribed "shall include such an explanation of relevant provisions of this Act as appears to the Secretary of State requisite for informing persons [to be served] of their rights and obligations under [the relevant] provisions." In this case the form of the s.25 notice was prescribed by the Landlord and Tenant Act 1954, Part II (Notices) Regulations 1983 (as amended) and the question which had to be answered in this case was whether the notice actually served was in the prescribed form, or in a form substantially to like effect.

A variety of matters had been omitted from the notice: the landlord had originally stated that it opposed the granting of a new tenancy on grounds (b) and (f) of s.30(1) of the 1954 Act, but part of the advisory notes relating to sub-sections (f) and (I) were omitted. The landlord contended that this did not cause the tenant prejudice as he no longer intended to rely upon ground (f) but the court held that this was not relevant as it was the similarity of the forms as such which was the key issue, rather than any material detriment actually suffered by the tenant in a particular case, and in any event the fact that the landlord no longer intended to rely upon ground (f) had apparently not been communicated to the tenant. Moreover, the "Time warning" was not enclosed by a rectangle as in the form set out in the Regulations, and the "Act Quick" notice was omitted altogether. This was even more serious: in the words of Aldous LT:

" In the present case a comparison between the notices and the form shows the agreed differences to which I have referred. In my view, they are such that it cannot be said that the notices are substantially to like effect as the form. The notices states that the landlord would oppose the grant of a new tenancy on the grounds in paras (b) and (f) of section 30(1) of the Act ...

Clearly so, in my view. The notices said that the landlord would oppose on subsection (b) and (f) of section 30(1). Note 5, which was omitted formed part of the substance in respect of one of those subsections. I also cannot accept that the omission of the "Act Quick" warning notice was an immaterial difference as submitted. A notice must be the same as the form or substantially to like effect. The warning notice is in prominent lettering and appears to be an important part of the form. It gives to the recipient an important explanation of his rights and obligations; namely that the notice is intended to bring the tenancy to an end and, if the recipient wanted to continue to occupy the property: he should read the notes and act quickly. That is just the sort of information that section 66(2) envisages as being in the form that would be prescribed ..."

Otton, LJ and Sir Richard Scott, VC agreed. Both Aldans, LJ and Sir Richard Scott, VC, made comment upon the earlier decision in Morris v. Patel [1987] 1 EGLR 75; (1987) 281 EG 419:to the extent that that case might suggest that the omission of such an important part of the prescribed form as the "Act Quick" notice it could not longer be regarded as sound law.

Railtrack plc v. Gojra [1998] 08 EG 158

In this case, the key question was whether the tenants' s.26 notice had been properly served on the landlord. The premises in question, a sandwich bar located on London's Victoria Station, had originally been leased from the British Railways Board. On midnight of 31 March/1 April 1994, ownership of the reversion became vested in Railtrack plc. At some time prior to this, the tenants had received a pro forma letter informing them of the proposed changes by saying, inter alia ... "in future, your rent, acknowledgement and/or other payments will be collected by Railtrack rather than British Railways Board, and when appropriate this will be notified to you by the appropriate invoice or bill ... Please note that you should not take any action at present and all payments should be made in the usual way until further notification ... In the meantime, if you have any queries whatsoever, please do not hesitate to call your current [British Railways] Property Board contact who will be pleased to assist you ..." It was not clear whether a copy of this letter had been passed on to the tenants' solicitors. On 31 March 1994, the tenant's solicitors posted a s.26 notice addressed to "The Solicitor Department, British Railways Board ..." and this was apparently received on 6 April 1994. On 25 April 1994, British Rail Property Board responded, purportedly on behalf of Railtrack, stating that they would oppose the grant of a new tenancy. After a "chasing" letter the solicitors who had sent the original s.26 notice replied stating that they no longer acted for the tenants, and there was no subsequent application by the tenants to the court asking for the grant of a new tenancy.

Subsequently, the tenants sought to serve a further notice, claiming that the original had not been served upon the landlord as required by the 1954 Act, and had therefore been of no effect. The court disagreed: The British Railways Board had been the agent of Railtrack at the time for purposes of service of the notice, which accordingly had been validly served.