PROCTER & GAMBLE TECHNICAL CENTRES LIMITED v BRIXTON PLC [2002] EWHC 2835 (Ch)

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
[2002] EWHC 2835 (Ch)Case No No: HC02C02565Venue Royal Courts of Justice, The Strand, London WC2A 2LL
Between
PROCTER & GAMBLE TECHNICAL CENTRES LIMITEDCLAIMANTBRIXTON PLCDEFENDANT
Before
Mr Justice NeubergerMR BROCK QC (Instructed by Messrs CMS Cameron McKenna) appeared on behalf of the ClaimantMR LEWISON QC (Instructed by Messrs SJ Berwin) on behalf of the DefendantDate 19 December 2002
[1]Thursday, 19 th December 2002 JUDGMENT MR JUSTICE NEUBERGER: The issue in this case is whether a purported break notice validly determined a lease. The lease relates to a property called Lovett House, Lovett Road, the Causeway Estate, Egham, Surrey. That property was demised on 22 nd December 1995 by the defendant, then called Brixton Estate Plc, now Brixton Plc, to Procter & Gamble Health and Beauty Care ("H&B"), with the latter's parent company, Procter & Gamble Ltd as surety.[2]The term of the lease was from 25 th December 1994 to 24 th December 2014. The rent was £798,131 a year, from 22 nd December 1995 until 24 th December 1999, and it was thereafter subject to review on 24 th December 1999, and every fifth anniversary thereafter on an upwards only basis.[3]By Clause 2.21 of the lease the tenant thereunder covenanted, among other things, not to assign without the landlord's consent, not to assign without having delivered a deed executed by the proposed assignee, wherein he covenanted to observe all the tenant's covenants, and to send the landlord a copy of any permitted assignment within 28 days of its execution.[4]Clause 7 contained a break clause in favour of the tenant. So far as relevant, it provided as follows:
"7.1 If the tenant shall desire to determine this lease on 24 th December 1999 or on 24 th December 2002 each of which dates is hereinafter called the 'determination date' and shall give to the landlord not less than six month's previous notice in writing of such desire then subject to the provisions of sub-clause 2 of this clause this lease shall cease and determine on the relevant determination date ..."
[5]Clause 7.2 contained certain conditions precedent for the tenant's right to serve a notice under Clause 7.1 including:(a) delivery of vacant possession;(b) the tenant having "paid all rents and other monies probably due hereunder up to the relevant determination date", and;(c) the tenant having "substantially observed and performed the covenant on its part herein contained".[6]On 24 th January 1997 a letter was written to the defendant landlord by solicitors, Eversheds, referring to "our clients Procter & Gamble Ltd" seeking the consent of the defendant to:
"A first assignment of the lease from Procter & Gamble Health and Beauty and Care Ltd [i.e. H&B], the original tenant, to Procter & Gamble Health and Beauty Care Europe Limited a second assignment from that company[which I will call Europe], to Procter & Gamble Technical Centres Ltd [which I will call TC], and the grant of an under lease by [TC] to Procter & Gamble L&CP Ltd [which I will call L&CP] and [Europe]."
This proposed arrangement, it was explained, arose from a restructuring of the UK operations of the Procter and Gamble group.[7]The formalities required by the clause 2.21 of the lease were complied with. The defendant gave H&B licence to assign the lease to Europe on 30 th January 1998. On 19 th October 1998, the completed assignment from H&B to Europe was sent by Eversheds to the defendant's solicitors. On 21 st October 1998 the defendant gave Europe licence to assign the lease to TC. On 29 th October 1998 Eversheds sent the defendant's solicitors a copy of the completed assignment from Europe to TC. On 2 nd November 1998, the defendant gave TC licence to underlet to L&CP and Europe, and, on 15 th February 1999, TC duly granted an under lease to L&CP and Europe; that under lease contained an option to determine in favour of the joint tenants in similar terms to those contained in the lease. On 17 th February 1999 a copy of the under lease was sent by Eversheds to the defendant's solicitors.[8]Throughout this period, indeed throughout the duration of the lease, the defendant sent to the Procter & Gamble company in whom the lease was vested (namely, until the assignments, H&B and, after the assignments, TC) rent demands in advance of the quarter days in respect of which the rent was due, and the rent was duly paid.[9]On 23 rd August 2000, a memorandum was executed recording the rent payable with effect from 25 th December 1999 as £1,039,584 per annum. The memorandum was stated to be entered into between "the landlord", who was described as "Brixton Nominee Roads at Causeway Estate 1 Ltd and Brixton Nominee Roads at Causeway Estate 2 Ltd" (who I will call "the nominee companies"), and "the tenant", who was described as "Procter & Gamble Health and Beauty Care Ltd" (i.e. H&B). The memorandum also recited accurately in its schedule the date of, and original parties to, the lease. The memorandum was, however, inaccurate in its description both of the landlord, which remained the defendant, and not the nominee companies, and of the tenant, who by that time was no longer H&B, but TC.[10]Thereafter, the evidence of Terence Jennings, who has been employed in the Procter & Gamble Group since 1 st March 1979 in various capacities, explains that a decision was made to determine the lease pursuant to Clause 7.1. In his statement, which was not challenged, Mr Jennings says that, since 1 st January 2001, he has been regional manager in EMEA Real Estate ("EMEA"), which comprises a team of people who work together to service the corporate entities of the Procter & Gamble companies, which is a worldwide group of companies with its ultimate parent company and headquarters being based in Cincinnati. He goes on to explain that EMEA:
"Is responsible for all the estate transactions, strategic facilities planning and portfolio manager for Procter & Gamble properties within Europe, Middle East and Africa, irrespective of the individual Procter & Gamble company that either owns or occupies each property."
Mr Jennings the stantes from his own knowledge, that certain strategic decisions had been made at the Cincinnati headquarters, and that, as a result of those strategic decisions, certain properties were to be disposed of. One of those was the subject property.[11]He decided, therefore, in his capacity as a member of EMEA, to implement the break clause in the lease. Mr Jennings also says that, at the time, Penny McGregor was employed by TC. He describes her position at the time as being "an EMEA property manager with real estate property responsibilities for some Procter & Gamble properties in England." Mr Jennings then explains that, as the disposal of the subject property was part of the strategy, which had been developed in the Cincinnati headquarters:
"There was no requirement for any further authorisation to be sought in respect of the exercise of the break options."
He then goes on to say that Mrs McGregor:
"… had the appropriate authority to instruct solicitors to exercise the break clause and determine the lease on 24 th December 2002." 12. In the final part of his evidence to which I should refer, Mr Jennings says: "
I am not a lawyer and neither was Penny and at the time I was not aware of the corporate restructure that resulted in the claimant becoming the tenant of the property in October 1998. Although I was not clear which company was the tenant as set out above, there was no doubt that Procter & Gamble's contention was to determine the lease whichever Procter & Gamble company was the tenant."[13]Pursuant to Mr Jenning's instructions, Mrs McGregor sent a letter to Mr James Mitchell, a partner in the solicitors firm of Stevens & Bolton on 27 th May 2002. The letter was headed "Procter & Gamble", and, in smaller letters underneath, "Procter & Gamble Technical Centres Ltd". The letter then referred to the property and said this:
"Could you please operate the next lease break in respect of the above property. I enclose a copy of the lease together with a number of other documents we have on file. As you will see, the break is in December with six month's notice to be given in June."
[14]The story is then taken up in the witness statement of Mr Mitchell. In his evidence he says that he regarded this letter as:
" … sufficient for Stevens & Bolton to act for whichever was the relevant Procter & Gamble company. I delegated the instruction to one of my assistant solicitors, Rachel Taylor, to exercise the break the clause and Rachel Taylor carried out this work with me and [another] partner."
[15]Mrs Taylor then sent a letter to the defendant, which is the document of central significance to this case. It was sent by recorded delivery on the writing paper of Stevens & Bolton, and was dated 17 th June 2002. It was addressed to "Brixton Plc formerly known as Brixton Estate Plc". After referring to the property the letter proceeded:
"We act on behalf of Procter & Gamble Health and Beauty and Care Ltd, your tenant of the above premises under the lease dated 22 nd December 1995 made between Brixton Estate Plc (1), Procter & Gamble Health and Beauty and Care Ltd (2), and Procter & Gamble Ltd (3)("
Lease"). Please accept this letter as our client's notice to determine the lease on 24 th December 2002 in accordance with Clause 7.1 of the lease. We are copying this letter to Brixton Nominee Roads at Causeway Estate 1 Ltd and Brixton Nominee Roads at Causeway Estate 2 Ltd, as these companies were referred to as landlord in the review memorandum dated 23 rd August 2000, although we are instructed that you remain our client's landlord. We should be grateful if you would acknowledge safe receipt of this letter by signing and returning to us the enclosed copy letter." It appears from the evidence that this letter, which I will refer to as "the Notice", was stated to have been sent on behalf of H&B, primarily because, having looked at the rent review memorandum, Mrs Taylor took the view that the lease was vested in H&B, rather than in TC.[16]In these circumstance the issue which arises is whether the notice is a valid notice to determine the lease. On behalf of the defendant landlord, Mr Kim Lewison QC takes three points as to why the Notice is invalid. First he says that TC did not have the necessary desire to determine the lease. Secondly, he says that the Notice was not served by TC. Thirdly he says that the Notice was not in any event a valid notice.[17]When considering whether a break notice is valid to determine a lease, it is important to distinguish between two different aspects of validity. The first aspect consists of the formal requirements for the notice as set out in the relevant clause in the lease. The second aspect is whether the notice is effective to convey the information required by the clause.[18]The formal requirements are normally laid down by the clause which confers the right to break, and they are to be strictly complied with. The most familiar formal requirements are time limits, in this case, the requirement that the notice is served not less than six months before the break date, and the requirement of compliance with covenants, in this case, the payment of rent and performance of other covenants in the lease. Such requirements have to be strictly complied with - see, for instance, West Country Cleaners (Falmouth) Ltd v Saly [1966] 1 WLR 1485, and Hare v Nicholl [1966] 2 QB 113.[19]On the other hand, the contents of the notice in so far as they are not prescribed by the clause concerned, are not to be so strictly assessed. The issue is whether "the notice clearly and unambiguously communicated the required message" – per Lord Hoffmann in Mannai Investment Company Ltd v Eagle Star Assurance Company Ltd [1997] AC 749 and 776B. The difference between the two types of requirements is well illustrated by an immediate preceding passage in the speech of Lord Hoffmann where he said this at 776B:
"If the clause had said that the notice had to be on blue paper it would have been no good serving a notice on pink paper however clear it might have been that the tenant wanted to terminate the lease. But the condition in clause 7.13 related solely to the meaning which the notice had to communicate to the landlord. If compliance had to be judged by applying the ordinary techniques for interpreting communications there was strict compliance."
[20]That is not, however, to say that the proper approach to the validity of the contents of a notice enables any error to be overlooked. The words used by Lord Hoffmann are "clearly and unambiguously".[21]The difference between the strict compliance which is required where there is a specific stipulation, and the question of how the notice would be interpreted by a reasonable recipient, is well illustrated by the judgment of Lord Justice Chadwick in Berman & Mount Cook Land Ltd [2002] 1 All ER 144 , especially at paragraphs 10, 11, 19, 20 and 26. Given that that was a case concerned with the interpretation of the statutory notice, it is worth drawing attention to the fact that, at the end of the last of the paragraphs to which I have referred Lord Justice Chadwick added:
"I think that that approach [ie the approach he has been describing] is the approach to be adopted not only relation to notices served under statute but also to notices served under contractual provisions such as those found commonly in leases."
[22]The first and second points taken by Mr Lewison fall into the first category. It is a strict requirement that the tenant, ie TC, must desire to determine the lease, and it is a strict requirement that the notice must be given by the tenant, ie TC. However, this second requirement clearly can be satisfied if the include notice is given by a third party on the tenant's behalf, provided that the third party is properly authorised by the tenant. The third point taken by Mr Lewison, on the other hand, is in the second category, in that it raises the question of how the notice is to be interpreted.[23]I turn to the first requirement: did the tenant, that is TC and no one else, have the relevant desire. In my view it did. I appreciate that one should not be cavalier about running together companies in the same group and treating them as one, even if they have the same ownership and are run by the same individuals. Two companies are two different persons and are to be regarded by the court and by the law generally as such. If this sometimes leads to technical problems for the two companies, then the short answer is that those who live by the sword of choosing to set corporate structures, often to take advantage of company and revenue law, sometimes die by the sword.[24]However, it seems to me unrealistic, indeed counter-factual, in the present case to conclude that TC did not have the necessary desire to determine the lease at the time the Notice was served. In effect, the various companies in the Procter & Gamble Group, including TC, deputed to Cincinnati, the headquarters of the Procter & Gamble Group, the power to make strategic decisions, and deputed to EMEA to decide what to do, as a result of those decisions, in relation to the various property interest of the various Procter & Gamble companies in this country.[25]I see no reason why a tenant company, which is a member of a group of companies, cannot delegate its desire to determine a lease to another company in the same group. An emotional desire may not be capable of delegation, but I do not see why a commercial desire, of the sort contemplated by Clause 7.1 of the lease in the present case, should not be capable of delegation. In those circumstances I think that Mr Jonathan Brock QC, who appears on behalf of TC, is right in his contention that, on the facts of this case, the necessary desire of TC has been established.[26]I turn to the second question, that is whether the Notice was served with the authority of TC. In this connection there is no doubt that it was not TC who drafted or sent the Notice; it was the solicitors, Stevens & Bolton. That in itself would not invalidate the notice. Not only a desire to serve a notice, but, even more clearly, the giving of a notice, can be delegated, provided it was delegated by the person who is required to give the notice.[27]Accordingly, the question is: was the giving of the Notice delegated to the solicitors by TC? I find that a more difficult question. However, despite Mr Lewison's submissions, I have come to the conclusion that the solicitors did have the authority of TC to serve the Notice. I revert to the evidence from which I have quoted. Decisions as to what to do about property owned by companies in the Procter & Gamble group, and in particular whether to serve the break notice under the lease, were effectively delegated to EMEA by each company within the group which owned property. For this purpose it does not seem to me unrealistic to treat the Procter & Gamble Group as having made a collective decision, imposed on them by Cincinnati, that decisions to serve notices and other decisions relating to English property, and in particular the decision whether to serve the break notice in relation to the subject property, would be dealt with by EMEA.[28]Even ignoring the fact that the letter of instruction to the solicitors was on TC writing paper and was written by Mrs McGregor, who was, I am satisfied, an employee of TC, it seems to me that the instruction to the solicitors to serve the Notice came from the group member, EMEA, to which the relevant decision has in practice been delegated by TC. The fact that nobody within the group had given his mind to the identity of the tenant does not seem to me to invalidate this conclusion. There was, in effect, a general view of all the companies in the group that EMEA would make the decision: it did so, and it instructed the solicitors to serve the Notice.[29]I think it can fairly be said that EMEA took that course on behalf of TC. In terms of commercial common sense, any other conclusion would appear to me to be perverse, given that only TC could serve the Notice.[30]Mr Lewison eloquently suggest that the correct analysis is, nonetheless, that it was left to Miss Taylor to decide for whom she was acting, and that she wrongly decided that it was the original tenant, H&B, as is indicated by the fact that she put its name in the Notice. Therefore, he says, it was H&B which was her client, and the Notice was served on behalf of H&B, and was therefore a bad notice, because it was not served on behalf of the tenant, TC.[31]That is an attractive argument but I do not think it is right. I suppose it is possible for a group of companies to appoint an agent, leaving it to the agent to decide which company in the group is the agent's principal. However, the argument does strike me as involving pulling oneself up by one's own bootstraps, on the facts of this case.[32]It seems to me that the solicitors were instructed by EMEA, who were acting on behalf of the tenant, whoever that was. EMEA was therefore acting on behalf of the tenant, who was in fact TC, when EMEA instructed Miss Taylor, and it was therefore TC which was Miss Taylor's client. Miss Taylor put the wrong name into the Notice. That does not mean that, unwittingly acting contrary to her instructions, she was changing the identity of her principal. She simply got the name of her principal wrong when she put it in the Notice. The fact that they letter of instruction for Stevens and Bolton was sent on TC writing paper by a TC employee reinforces this conclusion.[33]Accordingly, I think that the first two points raised by the defendant landlord are bad. The necessary desire was formed by, and the Notice was as a matter of fact served on behalf of, the tenant, TC.[34]I turn to the third issue, which is whether the Notice was valid on its face. I have already referred in that connection to the speech of Lord Hoffmann in Mannai . Lord Steyn in the same case said this at 767:
"The question is not how the 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 that question, the notices must be construed taking into account the relevant objective contextual sense."
At 768D-H he said this:
"It is important not to lose sight of the purpose of the 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 the notice unambiguously conveys a decision to determine, the court may nowadays ignore immaterial errors which would not have misled a reasonable recipient."

Lord Steyn went on:

"There is no justification for placing notices under a break clause in leases in a unique category. Making due allowance for contextual difference such notices belong to the general class of unilateral notices served under contractual rights reserved eg notices to quit, notices to determine licenses and notices to complete … Even such notices under contractual rights reserved contain errors, they may be valid if they are 'sufficiently clear and unambiguous to leave the reasonable recipient in no reasonable doubt as to how and when they are intended to operate'."
He then cited the authority from which that quotation came and continued:
"That test postulates that the reasonable recipient is left in no doubt that the right reserved is being exercised. It acknowledges the importance of such notices the application of that test is principled and cannot cause any injustice to the recipient of the notice. I will gratefully adopt it."
[35]It is important to read those observations as a whole because, like Lord Hoffmann, Lord Steyn did not give a green light to inaccurate and sloppily drafted notices. The test, even in relation to the construction of notices, is relatively strict. In Mannai , what had gone wrong was that the tenant (or the tenant's agent who had served the notice) had got the break date one day wrong. He therefore had put forward in the notice an impossible date on which to determine the lease, because the right to determine the lease could only be effective on one specific date. By a bare majority, the House of Lords held that that did not invalidate the notice because it would have been plain and obvious to a reasonable recipient of the notice what the notice intended to do, namely to determine the lease on the permitted date.[36]In Havant International Holdings Ltd v Townsgate H Investments [2000] LTR 297 at 306, Mr

Justice Hart said this:

"I do not consider that the mere fact that the ambiguity of the notice goes to the question of who is purporting to give it, put this into some special category. The question in every case is whether on a fair construction of a notice it is quite plain that the reasonable recipient cannot be misled by it."
I agree with that, altough there is, of course, a potential difference between the wrong date and the wrong person identified in the notice, as the decision upon which both parties rely, Lemmerbell Ltd v Britannia LAS Direct Ltd [1998] 3 EGLR 67 , demonstrates.[37]In Lemmerbell the lease had been granted to Britannia LAS Direct Ltd ("Direct"). A letter had been sent by Direct's solicitors, Amery Parkes, to the landlord, asking whether a company in the same group, Life Association of Scotland Ltd ("Life"), could occupy the premises. I am satisfied from the report, despite what Mr Brock says, that that letter was received by the landlord (see at 68F and 78). the letter was no answered and the request was not pursued. The lease contained a break clause in somewhat similar terms to that in the present lease, and Amery Parkes wrote the following letter to the landlord:
"We act on behalf of [Life], successors in title to [Direct]. We therefore give notice of our client's intention … to determine the lease [see at 68H]."
[38]The issue in that case was whether the notice was valid. The tenant's primary argument, to which I will briefly return, was that the notice was served by Amery Parkes as general agents for Direct. The tenant's second argument, which bears on the issue I am currently considering, related to the construction of the notice. That agreement was considered by Lord Justice Peter Gibson (with whom Lord Justice Hutchison (?) and the President agreed) at 71G-M. At 71H Lord Justice Peter Gibson said this:
"The present case seems to me to bear little resemblance to the type of error addressed in Mannai . There word 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 the explanation as to why it was so given vis Life was the successor entitled to Direct. I find it impossible to see how in these circumstances it is permissible to construe the break notice as given on behalf of Direct."
A little later to similar effect he said this at 71K-M:
"On the face of [the] notice Life was said to be the tenant as successor entitled to Direct and that, if true, could only have come about as a result of an assignment without consent but such an assignment would be effective to make the assignee the lessee for the purpose of Clause 7.10 [I interpose to say that that is the break clause]. The reasonable recipient could not know in the absence of proof of the assignment whether Life was the lessee. It might have been. If Life was not in fact the lessee but Direct was the reasonable recipient could not know whether Amery Parkes were authorised by Direct to act for it and to serve the break notice contrary to the expert terms of the notice. To my mind because it is not obvious from [I interpose the word 'the'] the notice that there was an error on the name of the lessee, nor is it obvious who the actual current lessee was, nor whether Amery Parkes were duly authorised by anyone other than Life. It is impossible as a matter of construction to cure what we know to be the defect by substituting Direct for Life as a person on whose behalf Amery Parkes were giving such notice."
[39]Mr Lewison contends that the reasoning applies here, while, of course, he accepts that each case must be determined on its own facts, and that there is the point that in the notice in that case, the wrong person, Life, was specifically described as "successors in title to the original tenant". Nonetheless, he says that this case is at least as strong as that case from the landlord's point of view, and that, in those circumstance, I am effectively bound by the reasoning in Lemmerbell to determine that the notice is the present case is invalid.[40]Despite Mr Brock's argument to the contrary, I have, with some reluctance, concluded that that argument is indeed correct and that the notice is invalid on this ground. I accept that I have to very careful of relying on another case, because in each case the question is whether a particular document would have been unambiguously understood to be an effective notice by a reasonable recipient, and that is a question which turns very much on the terms of the particular break clause, the terms of the particular notice, and the particular contextual factors. It would be wrong to rely the outcome of another case, as opposed to the approach or principles to be extracted from another case. It is clear from the decision in Havant that Mr Justice Hart was well aware of this. He held that a notice with a similar defect was valid, on the basis that, in that case, the clause giving the right to serve the notice was limited in clear terms only to the original tenant, and only if there had been no assignment of the lease. In those circumstances he was able to hold that a notice served in the name of the wrong person could not have been misunderstood by the landlord: the reasoning of Lord Justice Peter Gibson in Lemmerbell did not apply to the notice, and the reasoning of the majority of the House of Lords as to the wrong date in Mannai did apply to it.[41]In the present case, however, to my mind, the facts show it to be at least as strong from the landlord's point of view as Lemmerbell . It is trite law that a lease can be effectively assigned by the tenant without the landlord's knowledge or consent, even if the lease contains provisions such as clause 2.21 in the present case. I accept that in Lemmerbell there was reference in the notice to the fact that Life was the successor in title to the original tenant. However, the fact remains that the notice was served on behalf of somebody who the recipient of the notice could reasonably have assumed was the person in whom the lease was vested, and that it was therefore the person entitled to serve the notice. That conclusion appears to me to apply equally if one looks at the first paragraph of the Notice, but it does not stop there.[42]There had been a rather complex series of transactions in 1998-1999, to which I have referred. It is by no means inconceivable that, after those transactions, there had been one or more other transactions relating to the property which had accidentally not been communicated to the landlord. In particular, it is not as if H&B had nothing more to do with the property other than being original tenants because they, of course, were one of the two joint tenants under the under lease of 15 th February 1999.[43]Furthermore, there is the third sentence of the Notice. It showed that the writer had carefully considered the rent review memorandum executed in 2000, and had appreciated that the landlord had apparently been wrongly identified as the nominee companies, and that this seemed to be a mistake, because the defendant, to whom the notice was sent, was still the landlord. The, or at any rate a, natural deduction of a reasonable recipient of the Notice would have been that, if the tenant's own solicitors had taken sufficient care to read the memorandum and noticed that it wrongly identified the landlord, then a fortiori they must have considered, whether it wrongly identified the tenant, their own client. It seems to me that that third sentence of notice is therefore another factor which at least could reasonably have reinforced the view of a reasonable recipient that the Notice was indeed intentionally being served by the person on behalf of whom it was stated to be served, namely H&B.[44]Additionally, in this case, unlike in Lemmerbell , the person on whose behalf the notice was stated to be served, was the original tenant. There is therefore, as Mr Lewison points out, the additional possibility that a reasonable person in the defendant's position could not have ruled out, that the Notice was being served on behalf of someone who had good reason for wishing to put an end to the lease, but in fact had no right to do so. That is not a fanciful idea, because as Mr Brock says, albeit only by a week or two, the lease was not subject to the Landlord and Tenant Covenants Act 1995 and therefore H&B, as the original tenant, remained liable on the tenant's contracts, despite the subsequent assignments in 1998 and 1999.[45]I note that, in Lemmerbell , the solicitor who served the notice, Amery Parkes, would have been known by the defendant to have been acting for the actual tenant, Direct, because they had written previously to the landlord on its behalf. Accordingly, it could have been said that at least the landlord would have had reasons to believe that the notice might well have been authorised by Direct. No such point could be advanced here: there is no evidence to suggest that Stevens and Bolton had acted for TC to the defendant: knowledge prior to the service of the Notice.[46]In these circumstances, in light of the reasoning in Lemmerbell, it seems to me that the Notice was not valid. Notices of this sort, particularly if served near the last minute, as happened in this case, have to be clear and unambiguous because the recipient is entitled, and may need, to make dispositions in the faith of such notices, i.e. on the basis that such notices can be confidently relied on. If such a notice contains a mistake then, while any mistake which cannot possibly mislead a reasonable recipient should not stand in the way of validity, a mistake which could reasonably mislead a reasonable recipient cannot fairly be overridden.[47]Mr Brock raises another argument, namely that of general agency, which was the primary argument raised in Lemmerbell . As the analysis, I hope, has so far demonstrated, the mere fact that the solicitors had authority to serve the notice does not of itself validate the notice. It has to be good on its face. Reliance on Mannai is the primary way in which Mr Brock puts his case on validity, although it was the secondary argument advanced in Lemmerbell . The primary point advanced by the tenant in Lemmerbell was an extension of the agency argument. It was that there was a general agency. A general agency is one where the agent is entitled to carry out the functions of his principal in the agent's own name. That argument, although successful at first instance in Lemmerbell was rejected in the Court of Appeal.[48]The Counsel's opening argument was advanced in the present case on the basis that the solicitors, Stevens and Bolton, were the general agents for TC. However, Mr Brock realistically accepted, in closing, that this argument faced substantial difficulties. I think that those difficulties are insurmountable. The analysis of Lord Justice Peter Gibson in Lemmerbell at 70B-C of the requirements of the general agency, and the principles he accepted and set out at 70D-F, indicate the very strong facts required before a general agency can be established.[49]I do not see how, on the facts of this case, TC can get within shouting distance of establishing that the solicitors acted as general agents on their behalf. In any event it seems to me that it would be necessary for TC to establish that H&B, not the solicitors, were general agents for TC.[50]In those circumstances I conclude that the notice was ineffective to determine the lease.

Cited in 5 later judgments