Lay & Ors v Ackerman & Anor [2004] EWCA Civ 184

Case No B2/2003/1724/CCRTF[2004] EWCA Civ 184
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(HHJ Cowell)
Venue Royal Courts of JusticeDate Thursday 4 March 2004
Strand,
London, WC2A 2LL
Before
LADY JUSTICE ARDENLORD JUSTICE NEUBERGER
Between
LAY & OTHERSAppellantsACKERMAN & ANOTHERRespondents
(Transcript of the Handed Down Judgment ofSmith Bernal Wordwave Limited, 190 Fleet StreetLondon EC4A 2AGTel No: 020 7421 4040, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
W Clark Esq (instructed by Messrs Farrer & Co) for AppellantsA Radevsky Esq (instructed by Messrs Wallace & Partners) for Respondents
Judgment

Preliminary

[1]This is an appeal from His Honour Judge Cowell who, on 27 January 2003 decided that a counter-notice purportedly served pursuant to s45 of Chapter II of Part I of the Leasehold Reform, Housing & Urban Development Act 1993 (“the 1993 Act”) was invalid.[2]The basic facts are as follows. Mr Mark Ackerman and Mr Barry Ackerman, the respondents, are tenants of premises known as 8 Alexton Yard, London W1 (“the Premises”), having taken an assignment of a lease dated 14 July 1954, on 29 May 1998. The appellants, Mr Richard Lay, Baron Geddes of Rolvenden and Mr John Adrian Watney, are the freeholders of the premises, holding the same in their capacity as Trustees of the Portman Family Settled Estates (“the Portman Trustees”).[3]The respondents are also tenants of adjoining premises, 59 Great Cumberland Place (“the adjoining premises”), again having taken an assignment of a lease thereof on 29 May 1998. The freehold of the adjoining premises was said by the solicitor acting for the Portman Trustees, Mr Furber, to be vested in three individuals. However, the Land Registry entries for the adjoining premises (which, unlike the premises, are registered) records the proprietors as four individuals, only one of whom is included in the three identified by Mr Furber.[4]Both the premises and the adjoining premises are part of what is known as the Portman Estate in Central London. With the impact of Inheritance Tax (and its predecessors) since the end of the 19th century, and of leasehold enfranchisement since 1967, the freeholds of some of the properties comprised in the Estate have inevitably been acquired by interests outside the Portman family. However, there is still a recognisable, if somewhat smaller and more fissiparous, collection of land and buildings, including the premises and adjoining premises, known as the Portman Estate (“the Estate”).[5]The identity of the legal owner of the properties on the Estate is somewhat unclear. Mr Furber explained that different buildings on the Estate are informally allocated “for internal administrative purposes” to various funds in favour of different beneficiaries and “hence reference to primary funds and collateral funds”, the name of the fund being “adopted simply to enable the better administration of the Portman Trust”. He emphasised that there is only “one trust, although within that trust there are different legal owners of some of the properties comprised within that one trust”. This, according to him, “has been done for internal administrative reasons”.[6]That there is some confusion within the Estate and its advisers as to precisely who owns which properties on the Estate is confirmed by examination of the documents relating to the premises and adjoining premises, eg licences to assign, to carry out works etc. Even in the short period between the respondents acquiring the leases of the two properties and the service of the Counter-Notice, there seem to have been inconsistencies in the identification of the precise legal landlords in that documentation. However, one thing is clear and would have been clear to the respondents, namely that the two properties were part of the Portman Estate, managed from 38 Seymour Street, and represented by Farrers[7]Although Mr Furber’s evidence could have been clearer, it would appear that there is one main trust, known variously as the Portman Family Estate, the Portman Family Settled Estates or the Portman Estate, of which the Portman Trustees are the trustees. It would also seem that there are various subsidiary trusts set up by the Portman Trustees, which sometimes have different trustees from the main trust. I should also mention that it appears to be the case that the legal titles to the various properties beneficially owned by these trusts are not always kept up to date.[8]All the properties owned by or on behalf of the various trusts are administered from 38 Seymour Street London W1, normally under the name “the Portman Estate”, and, since 1998, the various trusts have employed Farrer & Co of Lincoln’s Inn Fields, of whom Mr Furber is a partner, as their solicitors. One of the subsidiary trusts is the Portman Family Collateral Settlements (“PFCS”) and that it is the Trustees of PFCS which appears to own the adjoining premises beneficially (even if its Trustees are not the registered proprietors).[9]On 26 September 2001, the respondents served a “Notice of Claim” pursuant to s42 of the 1993 Act in respect of the Premises. This notice (“the Notice of Claim”) was addressed to “the Landlord, the Trustees of the Portman Family Settled Estates of 38 Seymour Street London W1 …”. The Notice of Claim identified the respondents as the tenants of the premises and set out particulars of the lease granted on 14 July 1954. It also stated that Mr Mark Ackerman “has occupied the whole of these [premises] as his only or principal home since May 1998”. The Notice of Claim proposed a new lease of the premises for a term expiring on 28 September 2091 at a rent of a peppercorn for a premium of £180,000. The Notice of Claim also stated that 7 September 2001 was the date “by which you must respond to this notice by giving a Counter-Notice under s45 of the 1993 Act”.[10]The Notice of Claim was accompanied by a letter addressed to the Portman Trustees at 38 Seymour Street. It stated that the Notice of Claim was enclosed and that “a copy of the letter and enclosure” was being sent to Farrer & Co (“Farrers”). Such copies were presumably served on Farrers at their offices, 66 Lincoln’s Inn Fields, London WC2.[11]At the same time as they gave the Notice of Claim in respect of the premises, the respondents also served a notice of claim under s42 in respect of the adjoining premises. This notice of claim was addressed to the PFCS Trustees. Both notices of claim were served at a time that the respondent was seeking “collective enfranchisement” of the premises and the adjoining premises under Chapter I of Part I of the 1993 Act. Their application for such collective enfranchisement was, at the time of service of the Notice of Claim, due to be heard in the Central London County Court in the next three or four months.[12]At least one of the reasons the respondents knew that they should address the notices of claim in respect of the two properties to the Portman Trustees and the PCFS Trustees respectively, was because they were the parties who held themselves out as the landlords of the two respective properties, and were treated as such by the respondents in the collective enfranchisement proceedings.[13]Because of the existence of the collective enfranchisement proceedings, time was extended for the service of both counter-notices pursuant to the 1993 Act. The respondents’ collective enfranchisement application was dismissed by Judge Cowell on 23rd January 2002. Accordingly, shortly thereafter, time was agreed to start running for the service of a counter-notice in respect of each of the properties.[14]On 28 March 2002, a “Landlord’s Counter-Notice” addressed to the respondents was served in respect of the premises, with a short covering letter. It was stated to be “From: Trustees of the Portman Collateral Settlements, 38 Seymour Street London W1 … in connection with [the premises]”. It is common ground that the Portman Collateral Settlements do not exist, and that this was meant to be, and the respondents say was understood to be, a reference to the PFCS.[15]The notice (“the Counter-Notice”) was in a printed form and after the word “From” was a superscript “2”, which referred to a notice in the margin:
“Insert full name and address of the landlord”
. The Counter-Notice went on to say that:
“The landlord does not admit that the tenant had on the relevant date the right to acquire a new lease … for the following reasons … the landlord does not accept that the residence condition under the 1993 Act is satisfied. ”
It also stated:
“the landlord intends to make an application under section 47(1) of the Act on the grounds the he or she intends to redevelop …”
. The Counter-Notice further stated that notices to be served on the landlord under the 1993 Act could be served on Farrers. The Counter-Notice was signed by Farrers. A virtually identical counter-notice in respect of the adjoining premises, also purporting to be from the PFCS Trustees, was served under cover of the same letter.[16]On 18 April 2002, the respondents’ solicitors, Wallace and Partners (“Wallaces”) wrote to Farrers, saying that they understood that the freehold of the premises “was vested in the Trustees of the Portman Family Settled Estates” ie the Portman Trustees, the appellants, rather than the PFCS Trustees. Farrers replied the following day confirming this understanding and stating that “the counter-notices were mistaken”. The appellants then issued the instant proceedings in the Central London County Court, seeking a determination of whether the respondents were entitled to a new lease of the premises under s39 of the 1993 Act.[17]In order to decide whether or not the Counter-Notice is valid, it is necessary to explain the statutory background. Chapter II of Part I of the 1993 Act gives to a “qualifying” tenant of a flat the right to acquire a new lease to that flat, effectively running from the date of the expiry of his current lease. By virtue of s39(2A), a qualifying tenant has to have “occupied the flat as his only or principal home” for a total of three years in the last ten years. In order to exercise his right, a tenant must give “to the landlord” a notice of claim: see s42(2). Section 42(3) sets out the requirements of a notice of claim, and those requirements include the obligation for a notice to:
“(a) state the full name of the tenant and the address of the flat … (c) specify the premium which the tenant proposes to pay … (d) specify the terms which the tenant proposes … (f) specify the date by which the landlord must respond to the notice by giving a Counter-Notice under section 45. ”
The date so specified must be at least two months after the notice of claim is given: see s42(5).[18]Section 42(7) provides that, where a notice of claim is withdrawn, or deemed to be withdrawn, the tenant shall not serve another Notice of Claim for 12 months after such withdrawal or deemed withdrawal.[19]Section 45 is concerned with the landlord’s counter-notice, and sub-section (1) is in these terms:
“(1) The landlord shall give a Counter-Notice under this section to the tenant by the date specified in the tenant’s notice …. ”
Subsection (2) requires the counter-notice to state that: (i) the landlord admits the tenant’s right to acquire a new lease, or (ii) he does not admit it, or (iii) that he admits it, or does not admit it but that he wishes to carry out a redevelopment. Section 45(3) provides that, where the landlord admits the tenant’s right, he must identify which of the tenant’s proposals he accepts, and which he rejects. Section 45(4) is in these terms:
“A counter notice must specify an address in England and Wales at which notices may be given to the landlord …. ”
[20]If a tenant serves a notice of claim under s42 of the 1993 Act, and the landlord does not give a counter-notice, then, by virtue of s49(1) of the 1993 Act:
“The court may, on the application of the tenant, make an order determining, in accordance with the proposals contained in the tenant’s notice, the terms of acquisition. ”
This power is subject to certain exceptions and conditions, and one of those conditions, as set out in s49(3) is that the application for such an order “must be made not later than the period of six months beginning with the date by which the counter-notice … was required to be given. ”[21]Where the landlord serves a counter-notice admitting the tenant’s claim, either party may apply (within six months of the date of the counter-notice) to the Leasehold Valuation Tribunal (“LVT”) for the terms to be determined, if the parties cannot agree them: see s48(2). If such an application is made by the tenant, he must serve the landlord as the respondent: see paragraph 6 of Schedule 1 of the Rent Assessment Committee (England & Wales) (Leasehold Valuation Tribunal) Regulations 1993 (SI 1993/2408).[22]On the other hand, where a landlord serves a valid counter-notice under s45 not admitting the tenant’s claim, then it is for the landlord to make an application to the court for a determination whether the tenant is entitled to what he has claimed in his notice of claim. The grounds of challenge which the landlord can raise include the tenant not being a qualifying tenant, the property not being a flat, and, under s47, the landlord wishing to redevelop. However, if the landlord is to make such an application, he must do so within two months of the date of the giving of his counter-notice, and, if he does not do so, he is to be treated as if he has served no counter-notice, in which case s49 applies: see s46(2).[23]If the landlord serves a counter-notice which challenges the tenant’s right to obtain a new lease and the landlord’s challenge succeeds, then that is the end of the matter. If the landlord’s challenge fails, in the sense that the court decides that the tenant is entitled in principle to a new lease then, within a period specified by the court, the landlord can serve a further counter-notice: see s46(4), (5). If he does so, then, by virtue of s48, the terms upon which the new lease is to be granted, are to be determined by a LVT on the application of either party (again, within six months of the date of the counter-notice). . If the landlord fails to serve this further counter-notice, then s49 applies.[24]In these circumstances, the question in this case, namely whether the Counter-Notice is valid, is very important to the parties. If it is valid, then it will be open to the appellants to argue that the respondents are not entitled to a new lease of the premises, and, if the appellants fail on that argument, it will be open to them to challenge the terms of the new lease proposed by the respondents in the Notice of Claim. On the other hand, if the Counter-Notice is invalid, the appellants’ ability to challenge the entitlement of the respondents to a new lease, and the terms the respondents have proposed in their Notice of Claim, will be very attenuated, indeed, probably non-existent.

The judgment below and Mannai

[25]The appellants proceedings were purportedly issued in accordance with s46 of the 1993 Act. The respondents applied to strike out on the basis that the Counter-Notice was invalid, and that therefore s46 was not engaged. The Counter-Notice was said to be invalid on the basis that it was served in the name of the PFCS Trustees, and not in the name of the appellants. Judge Cowell upheld that contention and accordingly struck out the appellants’ s46 application. The question which we have to determine is whether he was right to do so.[26]One is here concerned with the question of the validity of a purported Counter-Notice under a particular provision of a particular Act, namely s45 of the 1993 Act. So far as the provisions of that section are concerned, two points may be noted at once. The first is that, unlike in the case of some statutory provisions relating to notices, there is no question of a prescribed form of Counter-Notice under s45. Secondly, there is nothing in s45 which, in terms, requires a Counter-Notice to identify the landlord. In other words, s45, in relation to Counter-Notices, has no equivalent to s42(3)(a) in relation to notices of claim.[27]However, it is clear that it must be “the landlord” who serves the counter-notice. Of course, that does not mean that, in order for a counter-notice to be valid, the landlord must serve it personally, or that the landlord need even sign it. What is required is that the counter-notice is served with the authority of the landlord, and not somebody else. In the present case, I do not understand Mr Radevsky, who appears on behalf of the respondents, to suggest that Farrers, who prepared and served the Counter-Notice, did not have the authority of the landlord, namely the appellants, to serve it. It seems to me that that concession is entirely realistic. It is clear from the evidence, and indeed wholly in accordance with common sense, that, in relation to relatively routine (albeit very important) matters such as service of statutory and contractual notices in relation to properties on the Portman Estate, the legal owners of the properties have left day to day decisions and actions in relation to notices, in the hands of their solicitors, Farrers.[28]In these circumstances, it appears clear that Farrers prepared the Counter-Notice on behalf of the Portman Trustees, the freehold holders of the premises, ie the appellants. Unfortunately, however, Farrers wrongly identified the freehold owners as the PFCS Trustees.[29]Accordingly, I turn to the question of whether the Counter-Notice was valid on its face, notwithstanding the fact that it wrongly identified the landlord. When considering that question, the learned judge identified the centrally relevant case as the majority decision of the House of Lords in Mannai Investment Co Ltd -v- Eagle Star Life Assurance Co Limited [1997] AC 749. In that case, a tenant had been granted two leases for ten years from 13 January 1992, each with a provision in clause 7(13) entitling the tenant to determine by giving notice to take effect at the expiry of the third year of the term, ie, 13 January 1995. The tenant served notices referring to clause 7(13) of the lease, and which were otherwise valid, save that they gave notice to determine the leases “on 12 January 1995”.[30]The majority of the House of Lords held that the notices were valid, notwithstanding the mistake. Lord Steyn said at 767D:
“The question is not how the [recipient] landlord understood the notices. The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene. ”
[31]A little later at 768D-G he said:
“It is important not to lose sight of the purpose of a notice under the break clause. It serves one purpose only: to inform the landlord that the tenant has decided to determine the lease in accordance with the right reserved. That purpose must be relevant to the construction and validity of the notice. Prima facie one would expect that if a notice unambiguously conveys a decision to determine a court may nowadays ignore immaterial errors which would not have misled a reasonable recipient. … Even if such notices under contractual rights reserved contain errors they may be valid if they are ‘sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate’ … per Slade LJ. ”
[32]At 772G-H, Lord Steyn observed:
“The question is not whether 12 January can mean 13 January: it self-evidently cannot. The real question is a different one: does the notice construed against its contextual setting unambiguously inform a reasonable recipient how and when the notice is to operate under the right reserved?”
[33]In his speech, Lord Clyde also cited the observation of Slade LJ with approval, and then said this at 782C:
“The standard of reference is that of the reasonable man exercising his common sense in the context and in the circumstances of the particular case.”
[34]In that case, if one fastened on the date specified in the two notices, the tenant was seeking to do something which he could not do, namely to determine the leases on 12 January, rather than doing what he could do, namely to determine them on 13 January. The majority of the House of Lords held that a reasonable recipient of the two notices in the position of the landlord would have been in no doubt as to what was intended, namely to determine the leases on 13January.[35]After considering the decision in Mannai, and one or two other cases, Judge Cowell concluded that the Counter-Notice in the present case was invalid.[36]In reaching his conclusion, the learned

judge said:

“[The respondents] say the landlord had made a point of distinguishing between the Trustees of the Portman Family Collateral Settlements and the Trustees of the Portman Family Settled Estates as different people …, and if the landlord departs from that in his Counter-Notices and is making no distinction, then the reasonable recipient can reasonably think it possible that the landlord has done so advisedly or deliberately and not by mistake. I have ultimately come to the conclusion that that last point is the one that I think is determinative, because so long as the possibility of deliberation as opposed to mistake exists it seems to me that the Mannai test cannot operate. ”
[37]In other words, the decisive factor which caused the judge to reach his conclusion was that a reasonable recipient in the position of the respondents receiving the Counter-Notice would (or could) have thought that the reference to the PFCS Trustees as the landlord was deliberate, and this was determinative of the issue. While it appears attractive at first sight, I do not consider that that can be the correct approach. It is, on analysis, an unhelpful test, inconsistent with Mannai, and, above all, not appropriate under the 1993 Act.[38]So far as unhelpfulness is concerned, it appears to me that the answer to the question whether the mis-identification of the landlord was “deliberate” or not depends on how one puts the question. If one were to ask whether the solicitors who prepared the Counter-Notice intended to identify the landlord in the Counter-Notice as the PFCS Trustees, the answer would be in the affirmative. To that extent the mis-identification was deliberate. On the other hand, if one was to ask whether the solicitors had intended to identify someone other than the actual landlord as the landlord, the answer would be in the negative. To that extent the mis-identification was a mistake.[39]The unhelpfulness of the test can also be demonstrated by reference to the facts in Mannai. The landlord who received the two notices could well (and indeed probably would) have believed that the identification of the termination date as 12 January was deliberate, on the basis that was apparently the date on which the tenants (albeit mistakenly) thought that the two leases would come to an end. On the other hand, if one asked whether the landlord believed the tenant intended to put in the correct date of termination, and that therefore the reference to 12 January was a mistake, the answer would be in the affirmative.[40]For this reason, it also appears to me that the test applied by the learned judge cannot have been the test applied in accordance with Mannai. The correct approach on the basis of the decision and reasoning in Mannai is as follows. One must first consider whether there was a mistake in the information contained in the notice (as there was as to the date in Mannai, and there was as to the landlord, in the present case). If there was such a mistake, one must then consider how, in the light of the mistake, a reasonable person in the position of the recipient would have understood the notice in the circumstances of the particular case. Finally one must consider whether, as a result, the notice would have been understood as conveying the information required by the contractual, statutory or common law provision pursuant to which it was served.

The proper approach

[41]The Counter-Notice was a notice purportedly served pursuant to a statutory provision, and the validity must therefore be assessed, by reference to, and in the context of, Chapter II of Part 1 of the 1993 Act, and s45 in particular. That appears to me to be the correct approach as a matter of principle, and it is the approach approved and adopted by Chadwick LJ in Burman -v- Mount Cook Land Limited [2002] Ch 258 - especially at paragraphs 11, 19 and 26.[42]At paragraph 26 of his judgment, Chadwick LJ cited with approval the approach of Rimer J in Speedwell Estates Limited -v- Dalziel, The Times, 19th October 2001:
“[T]he better approach is to look at the particular statutory provisions pursuant to which the notice is given and identify what it’s requirements are. Having done so, it should then be possible to arrive at a conclusion as to whether or not the notice served under it adequately complies with those requirements. If anything in the notice contains what appears to be an error on its face, then it may be that there will be scope for the application of the Mannai approach, although this may depend on the particular statutory provisions in question. The key question will always be: is the notice a valid one for the purpose of satisfying the relevant statutory provisions?”
[43]In his excellent argument on behalf of the respondents, Mr Radevsky contended that, in order to be valid, a counter-notice under s45 which mis-identified the landlord, would have to satisfy two requirements. The first is that, notwithstanding the misidentification of the landlord in the counter-notice, a reasonable person in the position of the recipient tenant would be in no real doubt but that the counter-notice is served by the actual landlord. The second requirement is that the counter-notice must leave the tenant in no real doubt as to the identity of his landlord.[44]I would accept Mr Radevsky’s first requirement. It is true that s45(1) merely states that “[t]he landlord shall give a counter-notice …” which, it can be said, does not, as a matter of logical necessity, carry with it the requirement that the recipient tenant should appreciate that the counter-notice actually comes from the landlord. However, I think there is a powerful argument to the effect that it is plainly implicit in the requirement that the landlord gives a notice that the recipient tenant appreciates that it is the landlord who has given the notice. Thus, s45(2) requires the counter-notice to “state that the landlord” either “admits” or “does not admit” the tenant’s right to a new lease. If it is not clear to the recipient tenant that the counter-notice is served by or on behalf of the landlord, it seems to me that any admission or non-admission in the counter-notice cannot be said to be one which the tenant appreciates as being made by “the landlord”.[45]In this connection, I revert to Lord Steyn’s observation as to “the purpose of a notice under the break clause” in Mannai. In this case, the purpose of a counter-notice is to convey to the tenant the landlord’s position in relation to the issues set out in s45(2) - (4). I do not see how such a counter-notice could be valid if the tenant was not clear that the information was indeed given by or on behalf the landlord.[46]I turn, then to Mr Radevsky’s second requirement, namely that a counter-notice will be invalid if it leaves the tenant in any real doubt as to the identity of his landlord. When one examines the effect of the provisions following s45 in the 1993 Act, that submission appears to have some attraction. In the present case, if the appellants had not begun proceedings within the time limited by s46(2), then it would have been up to the respondents to apply to the court under s49(1) and, if they failed to do so within the time limited by s49(3), their Notice of Claim would lapse, which would prevent them not only from acquiring a new lease pursuant to that notice, but also from serving a further notice of claim for another twelve months. If the respondents brought proceedings within the time limited by s49 against a person other than their landlord, they would be at risk of having those proceedings dismissed, and being out of time for issuing further proceedings. Accordingly, argues Mr Radevsky, a counter-notice will be invalid if it wrongly identifies the landlord, because it could result in the tenant being misled in a highly relevant way, namely into issuing proceedings under s49(1) which turn out to be invalid as a result which he may lose the benefit of the notice of claim.[47]Indeed, in relation to the tenant’s need to know who his landlord is, one can go further. I would accept Mr Radevsky’s argument that the same approach and principles for determining if a landlord’s counter-notice is valid, whether it opposes or does not oppose the claim for a new lease. Where a landlord serves a counter-notice stating that he does not oppose the claim for a new lease, the tenant may end up applying to the LVT, in which case he has to identify his landlord as the respondent. That is another circumstance in which the identification of the landlord in a counter-notice might be relied on by the tenant.[48]Despite this argument, I have reached the conclusion that a counter-notice under s45 would not be invalid simply because it leave the tenant in doubt as to the identity of his landlord.[49]It seems to me that the tenant is quite sufficiently protected if the first requirement of the counter-notice is correct, namely that a reasonable person in the position of the tenant could be in no doubt but that the counter-notice is served by or on behalf of the landlord. In such a case, the tenant would ex hypothesi know that the landlord had served the counter-notice, and was therefore responsible for identifying “the landlord” in the counter-notice. In those circumstances, it appears to me that if the tenant thereafter begins proceedings, or serves documents, in connection with his application for a new lease, against or on the person identified in the counter-notice as “the landlord”, it would not be open to the actual landlord to contend that the proceedings or documents were invalid because they named the wrong person as landlord.[50]In other words, while I accept that it is important for the tenant to know who to name as the landlord, whether in correspondence or proceedings, it seems to me that, provided the tenant has been provided with a name in the counter-notice, which he can be confident has come from the actual landlord, he cannot go wrong if he relies on that identification in subsequent documents and proceedings. (Of course, different considerations might apply if, subsequent to the service of the counter-notice, the landlord made it unequivocally clear to the tenant that he had been mis-identified in the counter-notice).[51]I believe this conclusion is supported by the reasoning of this court in Shelley -v- United Artists Corporation Limited (1989) 60 P&CR 241 at 250-251, per Dillon LJ, with whom Russell and Butler-Sloss LJJ agreed. In that case, United Artists, who were the tenant’s “landlord” for the purposes of Part II of the 1954 Act, served a notice on the tenant, following which United Artists served a further notice on the head landlord, as a result of which United Artists ceased to be the “landlord” of the tenant, although the tenant was unaware of this. The tenant thereafter served a Counter-Notice on, and issued proceedings against, United Artists, in ignorance of the fact that they should have served the notice and issues proceedings on the head landlord, because United Artists were not the “landlord”. United Artists then took a fresh over-riding lease, as a result of which they became, once again, the “landlord” of the tenant. The Court of Appeal unanimously held that United Artists were effectively estopped from denying that they were the “landlord” at the time the tenant served the notice and issued the proceedings, partly because they were under an obligation to tell the tenant that they had ceased to be the “landlord”, and partly because they must have appreciated that the tenant was labouring under a misapprehension.[52]In my judgment, the appellants’ case here is stronger than that of the successful tenant in Shelley. If a landlord serves a notice on a tenant wrongly identifying a third party as “the landlord”, there is a plain and unambiguous representation to the tenant, who ex hypothesi, knows the representation is made by the landlord (because he is confident that the notice was served on behalf of the actual landlord) to the effect that the third party is the landlord. The tenant is plainly entitled to rely upon that statement, as against the actual landlord, at least until the landlord has unambiguously put the tenant right.[53]The notion that this sort of estoppel could apply to the 1993 Act, in the same way it applies to the 1954 Act, receives support from the decision of Cooke J in Latifi -v- Colherne Court Freehold Limited [2003] 1 EGLR 78: see at paragraphs 23-31. I agree with the reasoning and conclusion of principle in that case, namely that estoppel and waiver are open to the recipient of a notice (including a counter-notice) under 1993 Act, in the same way as they are open to the recipient of a notice (or indeed, a counter-notice) under Part II of the 1954 Act.[54]I believe this view is supported by contrasting ss42 and 45. As mentioned above, unlike s42, there is nothing in s45 which imposes an obligation on the landlord to identify himself in his counter-notice. It would be somewhat surprising if a counter-notice which the tenant was in no doubt had been served by his landlord was nonetheless invalid just because it mis-described his landlord, if there was no need to identify the landlord in the counter-notice.[55]It also appears to me that it would be hard to argue against the view that a counter-notice served by a third party on behalf of “the landlord”, without actually identifying the landlord, would be valid. Assume the Counter-Notice in the present case did not purport to identify the landlord but merely stated that it was addressed to the respondents and was served by Farrers “for and on behalf of your landlord”. There is nothing in s45 of the 1993 Act to suggest that such a counter-notice would be invalid. In such a case, if the counter-notice had been served on behalf of the appellants, it seems to me that it would indeed have been valid. If the respondents had begun proceedings against the landlord on the basis of the name used for the landlord in their Notice of Claim, I consider that there would be a very strong case for saying that the appellants would have been estopped from denying that that was a proper description of the landlord, bearing in mind that they had served a counter-notice to that notice of claim.[56]Mr Radevsky suggested that this conclusion is inconsistent with authority. Before turning to consider the authorities, it is right to emphasise three points. First, the question of whether a particular notice is valid depends on the contractual or statutory provision pursuant to which it is served, as illustrated by the observation of Rimer J, quoted with approval by Chadwick LJ in Burman. Secondly, many notices served pursuant to statutory provisions have to be in a certain prescribed form; consequently, particular pieces of information may have to be included in the notice because it is specifically so prescribed. Thirdly, especially in a case where the approach in Mannai has to be adopted, much will depend upon the particular facts, given the importance of the contextual circumstances.[57]In Morrow -v- Nadeem [1986] 1 WLR 1381, a notice served pursuant to s25 of the 1954 Act was held to be invalid in circumstances where the landlord was described as the individual who was effectively the sole shareholder and director of landlord company, rather than the landlord company itself. In my view there are two reasons for distinguishing that decision. First, the notice in that case was in a form prescribed by the Landlord & Tenant (Notices) Regulations 1957 (SI 1957/1157), which effectively required “the landlord” to be identified as such in the notice: see per Nicholls LJ at 1386B-C. It is true that he referred to the importance of the correct person being identified as landlord, because of the tenant’s need to join the right person as respondent to proceedings for a new tenancy, but, as I read his judgment, that was simply an explanation as to why the prescribed form required the correct landlord to be identified.[58]Quite apart from this, it does not seem to me, at least from a reading of the report in Morrow, that the recipient tenant of the notice could have been clear that the notice was authorised by the person who was in fact the landlord. In other words, at the time of the service of the s25 notice, the tenant could not have been sure that the person who was in fact the landlord had authorised its service. All she knew was that an individual had served the notice holding himself out as her landlord, but what she could not have been sure of, at the time she received the notice, was that, if the landlord was another person, such as the company, the notice was actually served with that other person’s authority. Certainly, no argument to that effect appears to have been raised. I consider that the decision in Morrow is therefore in any event perfectly consistent with the notion that, if a notice is served identifying the wrong person as landlord, it will not be a valid notice unless the tenant can be sure that person who is the landlord was nonetheless responsible for the service of the notice.[59]We were also referred to Pearson -v- Alyo [1990] 1 EGLR 114, another case on the 1954 Act, but it does not seem to me that it takes matters any further. The Court of Appeal considered that Morrow was not properly distinguishable - see per Nourse LJ at 116A.[60]Mr Radevsky also relied on the decision of the Court of Appeal in Lemmerbell Limited-v- Britannia LAS Direct Ltd [1998] 3 EGLR 67, a case concerned with the service of a notice on a landlord to determine a lease in accordance with the provisions of a break clause. The original tenant, Direct, had let an associated company, Life, occupy the demised premises, and the break notice was served on behalf of Life. It was held to be invalid. Giving the only reasoned judgment, Peter Gibson LJ said this at 71H:
“The present case seems to me to bear little resemblance to the type of error addressed in Mannai. There, words containing a mere slip, obvious to the reader of the notice when read in context, were construed as meaning what they were plainly intended to mean. In the present case there is no equivalent error. The break notice is not merely given on behalf of Life rather than Direct, but it contains no explanation as to why it was so given, viz Life was the successor in title to Direct. I found it impossible to see how, in these circumstances, it is permissible to construe the break notice as given on behalf of Direct.”
[61]It does not appear to me that the decision or reasoning of this court calls into question my rejection the second of the two suggested requirements of a s45 counter-notice. As I have indicated, the essential requirement of a s45 counter-notice, in connection with the issue in the present appeal, is that a reasonable person in the position of the recipient tenant could be in no real doubt but that the counter-notice had been served on behalf of the actual landlord. In my judgment, the notice in Lemmerbell was invalid not merely because it wrongly identified the tenant, on whose behalf it should have been served, but because a reasonable person in the position of the recipient landlord, would not have been confident that it had been served on behalf of the actual tenant. It is for this reason that Peter Gibson LJ said this at 71L:
“To my mind, because it is not obvious from each notice that there was an error of the lessee, nor was it obvious who the actual current lessee was nor whether [the solicitors who served the notice] were duly authorised by anyone other than Life, it is impossible as a matter of construction to cure what we now know to be the defect by substituting Direct for Life as the person on whose behalf [the solicitors] were giving … notice.”
[62]In my judgment, if it had been clear that the solicitors in that case were indeed serving the notice on behalf of the actual tenant, whoever it was, then it would have been a good notice. After all, the purpose of the break notice in Lemmerbell was not to identify the tenant to the landlord, but to communicate to the landlord an intention on behalf of the tenant, and no-one other than the tenant, an unequivocal desire to determine the lease in accordance with its terms. Once a person other than the actual tenant was identified in the notice as the person on whose behalf the notice was served, the notice could only be valid if it could be shown that, despite the mid-identification, a reasonable person in the position of the landlord could have been in no doubt but that the notice was served on behalf of the person who was the tenant. For the reasons given, the Court of Appeal held that a reasonable landlord could have been in such doubt.[63]We were also referred to decisions of this court in relation to notices required to be given by a landlord by a tenant on the grant of a shorthold tenancy pursuant to s20 of the Housing Act 1988, and in particular B Osborn & Co Limited -v- Dior (unreported, 22nd January 2003). The notices in that case were in a form prescribed by the Assured Tenancies and Agricultural Occupancies (Forms) Regulations 1988 (SI 1988/2203), albeit that those Regulations permitted a notice to be in “a form substantially to the same effect” to that which was prescribed.[64]In the leading judgment in that case, upholding the validity of the notices notwithstanding certain undoubted defects in them, Arden LJ, with whom Simon Brown LJ agreed, applied the approach of Mummery LJ in an earlier case. That approach was to the effect that “the objective test which the House of Lords set in Mannai … applied to the validity of a contractual tenancy notice also applied to the validity of a section 25 notice”: see Ravenseft Properties Limited -v- Hall [2002] HLR 624 at paragraph 12.[65]In my judgment, while one must be careful of applying the reasoning in a case relating to a prescribed form of notice, that decision nonetheless provides very recent authoritative support for the proposition that, provided that there is nothing in the statutory context indicating otherwise, the effect of an error in a statutory notice can and should be judged by reference to the approach laid down in Mannai.

Conclusion

[66]In these circumstances, in my judgment the only question with therefore fell to be decided in the present case was whether a reasonable person, in the position of the respondents when they received the Counter-Notice, could have been in any doubt but that it was sent by and with the authority of their landlords in respect of the premises.[67]Applying that test to the present facts, I consider that the Counter-Notice in this case was valid, despite the mis-description of the landlord as the PFCS Trustees, rather than the appellants. I reach that conclusion in light of the following factors.[68]First, the notice in the present case was a counter-notice, served purportedly on behalf of the landlord under s45 of the 1993 Act, in answer to a notice of claim served by the respondent tenants on their landlord under s42 of the same Act. As required by s42(3)(f), the Notice of Claim stated that the landlord “must respond to this notice by giving a Counter-Notice under s45” by the date specified therein (which was subsequently extended). The respondents had therefore served a notice on the landlord which invited the landlord to serve a counter-notice, and the Counter-Notice which was duly served would therefore presumably come from the landlord. Indeed, the Counter-Notice described itself as “Landlord’s Counter-Notice”.[69]In this connection, it appears to me that, in the context of the present type of dispute, there is a difference between an originating notice, such as the Notice of Claim, and a notice in reply, such as the counter-notice. An originating notice normally has no documentary source other than the statutory or contractual provision pursuant to which it was served. On the other hand, a notice in reply must be judged not merely in its statutory or contractual context, but also by reference to the originating notice in answer to which it is served. Where an originating notice has been served on a landlord in the context of a statutory or contractual provision under which the recipient can be expected to protect his position by serving a notice in reply, such a notice is obviously very likely to come from the landlord. First, like the originating notice, it is only the landlord who can validly serve the notice. Secondly, and unlike an originating notice, it is inherently improbable that anyone other than the landlord will serve the notice in reply. If the originating notice was served on the wrong person, then the question of a notice in reply is academic. If the originating notice was served on the right person, then it would seem little short of absurd that a counter-notice would have been served by the wrong person, although it is far from absurd, or even unlikely, that the right person’s agent may identify the wrong person as the landlord.[70]Secondly, although wrongly purporting to come from the PFCS Trustees, the Counter-Notice identified the landlord’s address as “38 Seymour Street, London W1”. Rent demands had been served on the respondents in respect of the premium every quarter (and indeed one was served less than three weeks before the Counter-Notice) always emanating from “the Portman Estate” at 38 Seymour Street. On and from June 2001, the rent demands contained the words “Acting As Agents For 23 Primary Fund (15%) - Children’s Fund”. There is no suggestion of the respondents being in any doubt but that the freehold of the premises remained part of the Portman Estate, whose office was at 38 Seymour Street. Accordingly, even though the wrong Portman Estate Trustees were identified as the landlord, the respondents can have been in no doubt but that, even if the wrong landlord had been named in the notice, the Counter-Notice had been authorised by, and served on behalf of, the person who was actually the landlord.[71]Thirdly, the Counter-Notice stated that it was served by the landlord’s agents, “Farrer & Co of 66 Lincoln’s Inn Fields”, who were identified as “the address … at which the landlord may be given notices” under the 1993 Act. The respondents well knew that Farrers were the solicitors not only to the PFCS Trustees, but also to the Portman Estate generally and the Portman Trustees in particular. In that connection, the Notice of Claim was not only served at 38 Seymour Street: a copy was served on Farrers as the covering letter recorded.[72]Furthermore, particularly in light of collective enfranchisement litigation which had taken place between the parties in 2001, the respondents were well aware of the fact that, irrespective of the precise identity of the legal landlord or of the trusts which owned the premises, emanations of the Portman Estate instructed Farrers to act as their solicitors in connection with conveyancing, and in connection with litigation, at least so far as the two properties were concerned.[73]There is a final point raised by Mr Clark relying on the collective enfranchisement litigation and subsequent events. As already mentioned, at the same time as the respondents served the Notice of Claim in respect of the premises, they served a notice of claim in respect of the adjoining premises. The subject Notice of Claim was, correctly, addressed to the Portman Trustees, and the Notice of Claim in respect of the adjoining premises was, also correctly, addressed to the PFCS Trustees. The counter-notice in relation to the adjoining premises, like the Counter-Notice, was served purportedly in the name of the Trustees of the “Portman Collateral Settlements”, but as mentioned above, it is realistically accepted by the respondents that this should be treated as a reference to the PFCS Trustees.[74]Mr Clark contends, with considerable force, that, because of the history of this matter, the respondents would have appreciated that the description in the Counter-Notice of the landlord of the premises as the PFCS Trustees must have been a mistake. In the earlier collective enfranchisement proceedings, both parties proceeded on the correct basis that the freeholder of the premises was the Portman Trustees, and the freeholder of the adjoining premises was the PFCS Trustees. One of the arguments raised by the two sets of trustees, although it was not an argument necessary for Judge Cowell to deal with when deciding the claim for collective enfranchisement, was that the claim should fail on the grounds that the freeholds of the two properties were owned by different persons.[75]In that connection, the respondents can have been in no doubt but that it was in the interests of the appellants and of the PFCS Trustees to ensure that the freeholds of the two properties remained in different hands. Indeed, there would have been a possibility of the two properties being enfranchised pursuant to the provisions of the Leasehold Reform Act 1967 (as amended) until the House of Lords held that that Act could not be relied on in such circumstances (see Malekshad -v- Howard de Walden Estates [2003] 1 AC 1013, decided on 5th December 2002). Accordingly, argues Mr Clark, the respondents must have appreciated, when receiving the counter-notices in respect of the premises and the adjoining premises, that not merely was there a mistake in describing the landlord of the adjoining premises as the Trustees of the Portman Collateral Settlements (rather than of the Portman Family Collateral Settlements) but that the description of the landlord of the premises as the Trustees of the Portman Collateral Settlements was, as it were, even more inaccurate: they could not be the same.[76]Further the respondents rightly believed that the appellants were the landlord of the premises when they served their Notice of Claim. There had been no question of the respondents having been subsequently informed of a change in the identity of the landlord of the premises. By virtue of s3 of the Landlord & Tenant Act 1985, a change of landlord would have to have been communicated to the respondents within two months of the change. It is true that a change of landlord could have occurred within two months before service of the Counter-Notice.[77]In all these circumstances, Mr Clark contends that any reasonable person in the position of the respondents, on receiving the Counter-Notices, would have appreciated not merely that the Counter-Notice should not have been in the name of the PFCS Trustees, but that there had been no transfer of the premises out of the Portman Estate. Indeed, he goes further and says that, in all the circumstances, there can have been no doubt in the mind of a reasonable recipient but that there had been no change in the identity of the landlord of the premises, who remained the Portman Trustees, namely the appellants.[78]I agree. In light of the factors just identified, I consider that a reasonable person in the position of the respondents would have appreciated, on receiving the Counter-Notice, that it was served on behalf of the landlord, and that the Portman Estate, and indeed Farrers, were serving the notice on behalf of the landlord. Accordingly, so far as the correct test, as I see it, is concerned, I am satisfied that any reasonable person in the position of the respondents would have appreciated that the Counter-Notice was served on behalf of the landlord, and that the landlord’s position was as set out in the Counter-Notice. Accordingly, the appeal should, in my view, succeed.[79]Even if that test is too generous to the appellants, I am still of the view that this appeal should succeed. The highest the respondents put their case is that the Counter-Notice would be invalid unless a reasonable person in the position of the respondents would have been in no doubt but that it came from the Portman Trustees, namely the appellants, who were their landlords. In light of the final point made by Mr Clark, when taken together with the other points, I have reached the conclusion, on the unusual facts of this case, that high hurdle would be crossed by the appellants.[80]Finally, it is right to mention that, when considering the effect of the Counter-Notice, Mr Radevsky relied on the subsequent letter sent by Wallaces on 18 April 2002. I am unconvinced about the admissibility of a letter from the tenant, or his solicitor, as an aid to construing the validity of a notice served on the tenant. As I have mentioned, validity is to be judged by objective, not subjective, criteria. Quite apart from this, there is an obvious danger that a letter written by the recipient of a notice, who wishes to establish that it is invalid, to write letters which assist his case. I emphasise that there is no suggestion of the particular letter in the present case being in any way misleading: I am concerned with making a general point.[81]In these circumstances, I would allow the appeal. I consider that the Counter-Notice was valid even though it identified the wrong person as the landlord, because it satisfied the test which in my view needs to be satisfied, namely that a reasonable person in the position of the recipient tenant could have been in no doubt but that it was given by and on behalf of the person who at the time was his landlord. If I have put the test too generously to the appellants, and it is also a requirement that the respondents should have been in no doubt but that the appellants were their landlord, I consider that, on the unusual facts of this case, that more stringent test was satisfied.[82]I agree that the counter notice dated 28 March 2002 under section 45 of the Leasehold Reform Housing and Urban Development Act 1993 (“the 1993 Act”) in connection with 8 Alexton Yard, London W1 was not rendered invalid by virtue of the fact that the landlord was stated to be the Portman Collateral Settlement rather than the Portman Family Settled Estates.[83]I gratefully adopt what Neuberger LJ has stated in regard to the statutory scheme. As he points out, there is no express statutory requirement for the landlord actually to be named in the counter notice. In other words, it is not part of the statutory purpose of the notice to identify the landlord. In this case, the problem is that a name was given, but it was not the name of the landlord.[84]On this appeal the appellants rely on Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749. On this approach, the court does not take a strict approach to the construction of contractual notices, but a common sense approach. It is sufficient for the appellants to show that the meaning of the notice would have been plain to a reasonable recipient.[85]The test whether a notice is plain is thus an objective one. However, as Neuberger LJ has stated, the court must take into account the factual background. As Lord Clyde said in the Mannai case at 782:- “The standard of reference is that of the reasonable man exercising his commonsense in the context and in the circumstances of the particular case. It is not an absolute clarity or an absolute absence of any possible ambiguity which is desiderated. To demand a perfect precision in matters which are not within the form or requirements of the relevant power would in my view impose an unduly high standard in the framing of notices such as in issue here. While careless drafting is certainly to be discouraged the evident intention of a notice should not in matters of this kind be rejected in preference for a technical precision.”[86]Lord Steyn, Lord Hoffmann and Lord Clyde all approved the test laid down by Goulding Jin Carradine Properties Ltd v Aslam [1976] 1 WLR 442, 444: “Is the notice quite clear to a reasonable tenant reading it? Is it plain that he cannot be misled by it?” (see per Lord Steyn at 772, per Lord Hoffmann at 780 and per Lord Clyde at 782).[87]The determinative factor which led the judge to the contrary conclusion was that in the past the landlord had been careful to distinguish between the Portman Family Collateral Settlements and the Portman Family Settled Estates. The judge took the view that the reasonable recipient would conclude that the choice of the Portman Family Collateral Settlements in the counter notice was deliberate. He said at the end of his judgment:- “So in this case, it seems to me, the reasonable recipient, knowing of the background, would wonder as follows. If this is deliberate then, of course, the 1967 Act will operate. If it is not deliberate it is a mistake. It is more likely to have been a mistake but I cannot be sure. As I say, it does seem to me that the point which is determinative is that there having been deliberation in the past in the choice of the expression of the identity of the landlord, one cannot rule out the possibility of deliberation as opposed to mistake in this case, and so I have ultimately come to the conclusion that the counter-notice was invalid.”[88]It seems to me, with respect to the judge, that the point that he makes works the opposite way. The fact that, for the reasons given by Neuberger LJ, it was important for the landlord to maintain a distinction between the Portman Family Collateral Settlements and the Portman Family Settled Estates would, in my judgment, have led the reasonable recipient to the view that the reference to the Portman Family Collateral Settlements in the counter notice was plainly a mistake. After all, he would know that the landlord would have every incentive not to assign the reversion to the landlord of the adjoining premises. Moreover, he had received no notice of any such assignment. Furthermore, the notice was stated to be a notice under section 45 of the 1993 Act and so it was intended to be a notice from the landlord. He would also knew that both parties were closely connected and had very similar names.[89]Moreover, in my judgment, the evidence as to the respondents’ conduct shows that the recipient was not in fact misled by the incorrect name of the landlord. Neuberger LJ has referred to the letter dated 18 April 2002 from Mr Serota, a partner in the respondents’ solicitors, Wallace & Co. I share my Lord’s caution in taking into account evidence after the event on behalf of the tenant. It is in general in a tenant’s interest to show that such a notice is invalid and that may have a subconscious effect on the tenant’s expressed reaction. Nonetheless, Mr Serota’s letter is of some relevance, though of course it is not conclusive as to what effect the notice would have had on a reasonable person because that is a question for the court.[90]The important point about the letter of 18 April 2002 to my mind is that it expresses no doubt whatever that the notice was authorised. It merely expresses a doubt as to whether the landlord is the Portman Family Collateral Settlements or the Portman Family Settled Estates. The crucial fact was not in doubt, namely that the counter notice was authorised. The enquiry is simply directed to whether there was a change in the ownership of the reversion from one party to another known to be connected and represented by the same solicitors.[91]In these circumstances, it is plain that the respondents were not in fact misled into thinking that the notice came from someone other than their landlord. That supports the conclusion that I have reached that, applying the standard of reference of a reasonable recipient in the context of the circumstances of this case, including the prior unsuccessful enfranchisement proceedings, the meaning of the notice would have been plain and the error would not have misled a reasonable recipient.[92]The respondents actually queried the position. If they had not done so, and had timeously started proceedings against the landlord as stated in the section 45 notice, then, for the reasons given by Neuberger LJ, the true landlord could not have taken the point that the proceedings were not brought in accordance with the requirements of section 49 of the 1993 Act. The inclusion of the wrong name was, therefore, in fact immaterial.[93]In my judgment, all that has to be shown is that the reasonable recipient in the circumstances of this case could have been in no doubt that the counter notice was given with the authority of the landlord. I am satisfied that that is shown.[94]For these reasons, I too would allow this appeal.

Order

Appeal allowed; order made in the terms of the order agreed between counsel and solicitors in terms of the draft presented to the court. (Order does not form part of the approved judgment)

Cited in 37 later judgments

and 28 more of the most senior