Beanby Estates Ltd v The Egg Stores (Stamford Hill) Ltd [2003] EWHC 1252 (Ch)

Case No SD20242Case No CH/2003/APP/0074Neutral Citation Number: [2003] EWHC 1252(Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Friday, 9 th May 2003
B e f o r e :
THE HONOURABLE MR. JUSTICE NEUBERGER
Between
BEANBY ESTATES LIMITEDClaimantTHE EGG STORES (STAMFORD HILL) LIMITEDDefendant
Tape Transcription by Marten Walsh Cherer Ltd.,Midway House, 27/29 Cursitor Street, London EC4A 1LT.Telephone No: 020 7405 5010. Fax No: 020 7405 5026
MISS SIRI COPE (instructed by Messrs. Pothecary & Barratt) for ClaimantMISS MARIE-CLAIRE BLEASDALE (instructed by Messrs. Nathan Iwanier) for Defendant
Judgment
[1]Egg Stores (Stamford Hill) Limited is the tenant, and Beanby Estates Limited is the landlord, of premises at 46 Stamford Hill, London N6. The tenant is in occupation of the premises under a lease which attracts the protection of Part II of the Landlord & Tenant Act 1954.[2]On 7th January 2002, the landlord sent in the post by recorded delivery to the tenant at the premises a notice under section 25 of the 1954 Act. The notice was actually received by the tenant on 9th January 2002. The tenant served a counter-notice on 28th January 2002, and applied to the Central London County Court for a new tenancy on 8th May 2002.[3]Under section 29(2) of the 1954 Act, that application had to be made within four months of the service of the section 25 notice. The landlord took the point that, by virtue of section 66(4) of the 1954 Act, the notice was served on 7th January 2002, the date it was put in the post, and therefore the application was out of time and should be struck out. The tenant contended that the provisions of the 1954 Act resulted in the notice being served on the date it was actually received, 9th January 2002, and therefore the application for a new tenancy was in time.[4]Very sensibly, the parties agreed that that dispute should be determined as a preliminary issue, and it came before HHJ Cotran on 21st January 2003. He concluded that the tenant's argument was to be preferred, and that, in those circumstances, the application was valid and should not be struck out. The landlord now appeals that decision.[5]I turn to the relevant statutory provisions are concerned. Section 66(4) of the 1954 Act provides:
"Section twenty-three of the Landlord and Tenant Act, 1927 (which relates to the service of notices) shall apply for the purposes of this Act."
[6]Section 23(1) of the 1927 Act (“section 23”) is in these terms:
"Any notice request demand or other instrument under this Act shall be in writing and may be served on the person on whom it is to be served either personally or by leaving it for him at his last known place of abode in England or Wales or by sending it through the post in a registered letter addressed to him there ...... and in the case of a notice to a landlord the person on whom it is to be served shall include any agent of the landlord duly authorised in that behalf."
[7]I interpose to make two points. First of all, the place of abode includes place of business –see Price v. West London Investment Building Society [1964] 1 WLR 616. Secondly, the Recorded Delivery Service Act 1962 effectively extends any statutory provision such as section 23 of the 1927 Act, which deals with delivery by a registered letter to delivery by recorded delivery.[8]Section 7 of the Interpretation Act 1978 (“section 7”), which is effectively identical to section 26 of the Interpretation Act 1889, which it replaced, is in the following terms:
"Where an Act authorises or requires any document to be served by post (whether the expression 'serve' or the expression 'give' or 'send' or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
[9]The arguments which have been addressed before me are in summary as follows. The landlord contends that the effect of section 23 is that, if a notice is posted by recorded delivery, then it is irrevocably deemed to have been received on the date of posting. The tenant contends either(a) that there is an implied term under section 23 that such a notice is irrevocably deemed to have been served when it would have been received in the ordinary course of post, or(b) that section 23 is to be read as effectively subject to section 7.[10]The effect of the landlord's argument is that the section 25 notice in this case was served on 7th January 2002, so that the tenant's application for a new tenancy made on 8th May 2002 was out of time, and this appeal should be allowed. The effect of the tenant's first contention is that the notice is irrevocably deemed to have been served on 8th January 2002 (if the ordinary course of post would have involved receipt the day following posting) so that the application was just in time made, namely, on the last possible day. The effect of the tenant's alternative contention is that the notice would be deemed to have been served on 8th January 2002 unless the contrary has been proved. In this case it has been proved, so that the notice is deemed to have been served on the date it was received, 9th January 2002, and therefore the application was made in time.[11]The precise point at issue in the present case, namely, the deemed date of service, has not been the subject of any decision, albeit it has been the subject of one observation in the Court of Appeal. However, there are a number of cases to which I have been referred where the court has been concerned with the effect of section 23. Miss Siri Cope, who appears on behalf of the landlord, contends that those cases establish the proposition that, if a notice is posted by recorded delivery and addressed to the recipient at his “place of abode”, then it is irrevocably deemed to have been served on the addressee by virtue of the posting.[12]I accept her submission that, if the effect of section 23 is that where a notice is sent through the post by recorded delivery to the addressee at his place of abode it is irrevocably deemed to have been served, then it follows that service is deemed to have been made on the date the notice was put in the post for recorded delivery, and not the date of actual receipt.[13]There are five reasons for this conclusion, albeit that the reasons may overlap. First, section 23 describes three alternative permitted methods of service, personal service, service at the premises, and service through the post by recorded delivery. The first two options clearly envisage service occurring at the moment that it is described as effected, i.e. the moment of personal service in the one case, and the moment the notice is left at the premises in the other case. Accordingly, logic strongly suggests that, if the act of posting of the notice by recorded delivery effects service, then the moment at which the notice is put in the post is the moment at which service is effective.[14]Secondly, if the effect of the authorities is as contended for by Miss Cope, the actual receipt of the notice plays no part in the role of service of the notice under section 23. Accordingly, if the vital action is posting the notice, actual receipt of the notice is irrelevant. It would seem to me to follow that it is the act of posting, rather than the act of receipt, that is vital for the purpose of determining the moment of service.[15]Thirdly, if an addressee could say that a notice was received very late, he would be better off than an addressee who never received the notice at all: the addressee who received a notice very late could rely on the date of late receipt as the date of service, but the addressee who never received the notice could not rely on the fact that he had never received the notice, and would be bound to accept that service was effected on posting (or in the ordinary course of post, if the tenant’s case is correct).[16]Fourthly, if an addressee was permitted to contend that a notice sent by recorded delivery, but which was actually received many months later, was served at the date of actual receipt, that would take away much, perhaps most, of the intended effect of section 23 if, as I say, the presumption under which I am proceeding is correct, namely, that section 23 deems service to be effective by post. Fifthly, my view is supported by an observation in the Court of Appeal and in Woodfall on Landlord and Tenant (which I quote below).[17]Accordingly, it is necessary for me to consider whether section 23 has the effect for which Miss Cope contends, namely, that service is irrebuttably deemed to have been effected when the notice, addressed to the addressee at the right premises, is put in the post through recorded delivery.[18]That point raises an issue of statutory construction. Although one would therefore normally go straight to the statutory provisions, the state of the authorities, and Miss Cope's understandable reliance on them, means that I should start with those authorities.[19]In Chiswell v. Griffon Land and Estates Limited [1975] 1WLR, 1181, a notice under the 1954 Act had been sent by ordinary post. Accordingly, the observations of Megaw LJ at 1188G to 1189B were obiter. They were as follows:
"Section 23 of the Landlord and Tenant Act 1927 lays down the manner in which service of a notice can be effected. It is provided, as what I may call at any rate the primary means of effecting service, that it is to be done either by 'personal' service or by leaving the notice at the last-known place of abode, or by sending it through the post in a registered letter, or (as now applies) in a recorded delivery letter. If any of those methods are adopted, they being the primary methods laid down, and, in the event of dispute, it is proved that one of those methods has been adopted, then sufficient service is proved. Thus, if it is proved, in the event of dispute, that a notice was sent by recorded delivery, it does not matter that that recorded delivery letter may not have been received by the intended recipient. It does not matter, even if it were to be clearly established that it had gone astray in the post. There is the obvious, simple way of dealing with a notice of this sort. But, as I think may be assumed for the purposes of this appeal, if the person who gives the notice sees fit not to use one of those primary methods, but to send the notice through the post, not registered and not by recorded delivery, that will nevertheless be good notice, if in fact the letter is received by the person to whom the notice has to be given. But a person who chooses to use that method instead of one of the primary methods is taking the risk that, if the letter is indeed lost in the post, notice will not have been given."
[20]Although an obiter observation, this amounts to a strong, clear and authoritative statement that supports Miss Cope's submission. It appears to me to be a view with which Roskill LJ also agreed: see at 1188E-F.[21]However, there is in that observation no express consideration of either of the two ways in which Miss Marie-Claire Bleasdale, who appears on behalf of the tenant in this case, puts the contrary argument. Certainly, there appears to have been no argument along the lines of Miss Bleasdale’s first point relating to an implied term.[22]So far as Miss Bleasdale’s second point, based on the interrelationship of section 23 and section 7 (or section 26 of the 1889 Act as it then was) is concerned, it is clear that section 26 of the 1889 was discussed in argument in Chiswell.Indeed, it is considered in some detail by Megaw LJ in a passage which immediately follows that which I have quoted, namely, at 1189B-1190. However, he did not consider the interrelationship of section 23 and section 7.[23]In Italica Holdings SA v Bayadea (1985) 1 Estate Gazette Law Reports, 70, a notice under the 1954 Act was sent by recorded delivery. Although French J found that the notice had actually been received by an agent of the tenant, he also found, as the first basis for his conclusion, that, because the notice had been sent by recorded delivery addressed to the tenant, at the premises concerned, it was therefore validly served following the reasoning of Megaw LJ in Chiswell: see at 71, at the bottom of the first column.[24]In Galinski v McHugh 57 Property & Compensation Reports, 359, the issue before the court was whether the service of a notice under the 1954 Act on an agent of a tenant was valid service; accordingly, the issue which I am considering did not directly arise. However, in giving the judgment of the Court of Appeal, Slade LJ had to address the contention that, because section 23 does not expressly provide for service on an agent of the tenant, albeit that it provides the service on an agent of the landlord, service in that case was ineffective.[25]He said, at page 365: "That submission involves a misunderstanding of the nature and purpose of section 23 .... this is a subsection appearing in an Act which like the 1954 Act contains a number of provisions requiring the giving of notice by one person to another and correspondingly entitling that other person to receive it. In our judgment the obvious object of its inclusion .... is not to protect the person upon whom the right to receive the notice is conferred by other statutory provisions. On the contrary, section 23(1) is intended to assist the person who is obliged to serve the notice by offering him choices of mode of service which will be deemed to be valid service even if in the event the intended recipient does not in fact receive it .... Where the intended recipient is an individual the modes of service alternative to personal service so specified ....".[26]In Lex Service Plc v Johns (1990) 1 Estate Gazette Law Reports, 92, the Court of Appeal had to consider a case where a notice under the 1954 Act had been sent through the post by recorded delivery but allegedly had not been received. In the leading judgment, Glidewell LJ, having set out the facts, turned to the relevant statutory provisions which I have set out. He then referred to two authorities not concerned with section 23 but with service of process in the magistrates' court, namely, the R. v. London County Quarter Sessions Appeals Committee ex parte Rossi [1956] 1 QB 682 and Hosier v Goodall [1962] 2 QB 401. He then turned to Chiswell and, at 94K-L, cited the passage which I have quoted in the judgment of Megaw LJ. At 94M, Glidewell LJ said: "The passage which I have read is of course in the context of the case obiter dicta but obviously it is a considerable persuasive authority and was adopted and followed by the learned judge in this case. The sentence 'does not matter, even if it were to be clearly established that it had gone astray in the post' may perhaps apply only in particular circumstances, but the antecedent sentence, 'if it is proved in the event of dispute that a notice was sent by recorded delivery' it does not matter that that recorded delivery may not have been received by the intended recipient" is of course directly in point in this case.”[27]Glidewell LJ went on:
"The real issue in the present case is whether for the purposes of section 7 .... the evidence of Mr. Johns that he did not receive the letter .... proves the contrary."
Glidewell LJ then turned to consider the facts and the evidence, and concluded that the contrary was not established.[28]The other member of the Court of Appeal, Balcombe LJ, began his judgment in agreement by saying, at 95C:
"As my Lord has said, the case really turns on section 7."
[29]In Railtrack Plc v Gojra (1998) 1 Estates Gazette Law Reports, 63, the Court of Appeal had to consider a case where a notice under the 1954 Act was allegedly misaddressed. In the course of his judgment, with which Evans LJ agreed, Wilson J set out at 65A-B the passage which I have also quoted of Megaw LJ in Chiswell.[30]Wilson J then said this, at 65C:
"I agree with the tentative conclusion in Woodfall Landlord & Tenant Volume 2 para 22.068 that, since the primary methods of service do not depend on receipt, the date of receipt is irrelevant and …. that the notice is served -- and given -- on the date when it is sent by registered post or recorded delivery."
[31]He then emphasised that the position was different where, as in the case before him, the notice had been served in the ordinary course of post. The passage I have quoted is obiter, but it is the one observation, to which I have made a passing reference, which could be said to bear precisely on the point I have to consider.[32]Miss Bleasdale draws attention to the fact that the current edition, January 2003 update, of Woodfall, says at paragraph 22.068.2: "It is not entirely clear when a notice serviced by one of the primary methods of service is to be treated as having been served .... Since the primary methods of service are designed to cast the risk of non delivery on the intended recipient the actual date of receipt will appear not to be a relevant date. This 'tentative conclusion' has been endorsed by the Court of Appeal”, being, of course, Railtrack.[33]In Commercial Union Life Assurance Co. Ltd v Mustapha (1999) 2 Estates Gazette Law Reports, Smedley J was faced with a case where a notice under a different Act, namely, the Landlord and Tenant (Covenants) Act 1995, had been sent by recorded delivery but had in fact been returned to the sender as undelivered. Section 27(5) of the 1995 Act incorporates the provision of section 23, and accordingly the case is directly in point.[34]The argument Smedley J had to deal with was the addressee's contention that he had not been served, and should not be treated as having been served, because section 23 should be read together with section 7, the second argument raised by Miss Bleasdale. Smedley J was faced with the somewhat unenviable task of deciding whether he should follow the observations of Megaw LJ, as applied by French J and supported by the reasoning in Galinski, and consistent with the approach in Railtrack, or whether he should follow the approach of the Court of Appeal in Lex Service.[35]At 48C-D, Smedley J said of Galinski v McHugh and Lex Service v Johns:
"Clearly the two decisions are not reconcilable. Bearing in mind that the decision in Galinski was given by a court composed of three Lord Justices and that it was subsequently followed in Railtrack v. Gojra it seems to me that I have to follow the decision of the Court of Appeal in Galinski v McHugh."
[36]The final case to which I must refer in this review of the authorities is Blunden v Frogmore Investments Ltd. (2002) 2 Estates Gazette Law Reports, 29. In that case the issue before the Court of Appeal was whether a notice under the 1954 Act which had been sent by recorded delivery was validly served even though, as in Mustapha, it had been returned to the sender.[37]In the principal judgment, Robert Walker LJ considered the authorities to which I have referred and a number of other authorities. After referring in particular to Lex Service and Mustapha, he said, at paragraph 39 on page 34:
"Smedley J commented that it was not clear how any of the earlier authorities had been cited in Lex Service and in particular there was no reference to Galinski. He regarded the two cases as irreconcilable and he thought he should follow Galinski and Railtrack. I am not convinced that these cases are irreconcilable rather than concerned with different aspects of service. Galinski and Railtrack were both concerned with the identity of the recipient of the notice rather than delivery or non delivery of a letter through the post. On the other hand, most legal notices, especially in the field of landlord and tenant, are time specific in one way or another."
[38]At paragraph 44 on the same page, Robert Walker LJ said:
"Section 23 .... does not contain any exception for letters that are returned. Once Mr. Barclay's main pre-emptive point is out of the way, therefore, the only possible means of avoiding the conclusion that there was good service under section 23(1) would be an argument on the lines of that in Lex Service. That argument would involve (1) relying upon section 7 .... (2) contending that [a certain contractual provision] was time specific and (3) establishing that Commercial Union was wrongly decided. Mr. Barclay did not put forward any argument on those lines and I would certainly not criticise him for not doing so."
[39]That, then, is a summary of the relevant authorities for the purpose of considering whether or not I am effectively bound to find in favour of the landlord on the issue of whether or not posting a notice by recorded delivery leads to the irrebuttable presumption under section 23 that it is served, irrespective of whether it is actually received and even if it is returned to the server as undelivered.[40]I do not consider that I am strictly bound to reach that conclusion. There are arguably conflicting decisions of the Court of Appeal in that Lex Service does appear to treat section 23 as subject to section 7, whereas the other four decisions suggest the opposite. Chiswell and Railtrack have only obiter observations on the issue, and it is arguable that that is true of Galinski as well. In Galinski it would seem likely, and in Blunden it appears clear, that the points specifically raised by Miss Bleasdale in this appeal were not raised.[41]There are also two first instance decisions of importance, Italica, and (perhaps more importantly because it considered all the relevant authorities, other, inevitably, than Blunden) Mustapha. In each case, a judge of coordinate jurisdiction to myself has decided the case (as one of two grounds in the case of Italica and as effectively the only ground in the case of Mustapha) on the basis that section 23 results in the irrebuttable presumption for which Miss Cope argues.[42]It would not be impermissible for me to reach a conclusion on a question of the construction and effect of a statute which is different from that reached by two judges of coordinate jurisdiction, and which would mean that a very recent and carefully considered decision of the Court of Appeal, namely, Blunden, was effectively per incuriam. However, I consider that it is a course which I should take only if I am clearly satisfied that it is right. In Colchester Estates Cardiff v Carlton Industries Plc [1986] Ch 80, Nourse J was faced with two previous decisions of other High Court judges which were inconsistent, the second decision having considered the first. At 85C, he quoted an observation of Denning J in Minister of Pensions v Higham [1948] 2 KB 153 to this effect:
"In this respect I follow the general rule that where there are conflicting decisions of the courts of coordinate jurisdiction the later decision is to be preferred, if it is reached after full consideration of the earlier decision."

Nourse J agreed with that and then said, at 85E:

"It is desirable that the law, at whatever level it is declared, should generally be fair. If a decision of this court reached after full consideration of an earlier one which went the other way is normally to be open to review on a third occasion when the same point arises for a decision at the same level, there will be no end of it."
[43]A little later, at 85G Nourse J said:
"I would make an exception only in the case, which must be rare, where the third judge is convinced that the second was wrong in not following the first."
It can be said that it should be at least as difficult for me to refuse to follow the earlier first instance decisions on the point at issue here: there are two first instance decisions, as in Colchester, but, unlike that case, they are mutually consistent.[44]A similar point was considered in DPP v C (an infant) [1994] AC 1 at 12F-13B, where the Divisional Court stated that it had power to depart from its own previous decision but that it would follow that decision, unless persuaded that it was “clearly wrong”.[45]Miss Bleasdale referred to the decision of Megarry J in English Exporters (London) Ltd v Eldonwall Ltd [1973] 1 Ch 415, where he explained why he was differing from Stamp J: see 431E-432B. I think there is some force in the contention that his approach indicated a slightly greater preparedness to depart from an earlier decision than that expressed by Nourse J, but the difference is one of emphasis rather than principle. Megarry J emphasised that the court's duty, irrespective of other earlier decisions of coordinate jurisdiction, was ultimately, in that case as in this, to construe the statutory provision which was before it.[46]I therefore approach this case on the basis that I should only reach a conclusion which would mean that the decision of Smedley J was effectively wrong, that one of the two grounds for French J's decision was wrong, that the decision of the Court of Appeal in Blunden was per incuriam and that clear observations in three other Court of Appeal cases, Chiswell, Galinski and Railtrack, were also per incuriam,if I am satisfied that that conclusion is clearly right.[47]I turn to the arguments which Miss Bleasdale raises to support her contention that I should be so satisfied. The first such argument is that it is anomalous and unfair if a tenant is effectively deprived of his right to a new tenancy because he is unaware of a notice which has been put in the post by the landlord, and which, through no fault of the tenant, has never been served on him.[48]There is no doubt that, from the point of view of a tenant in such a case, it would seem a very unfair result. However, a tenant would normally have nothing to complain of if he was absent from the premises when delivery was attempted because, as cases such as Mustapha and Blunden show, and indeed one's own experience shows, if the postman attempts to deliver a recorded delivery letter to premises where nobody is present, he will, and certainly should, post notification through the letterbox to inform the absent person that there is a recorded delivery letter for collection.[49]This aspect of the recorded delivery system is particularly relevant, as Miss Cope points out, in relation to notices under the 1954 Act from the tenant's point of view. One of the places, and indeed the obvious place, for service of a notice, other than the registered office where the tenant is a company, is the demised premises themselves and a tenant is only entitled to the protection of the 1954 Act if he is occupying those premises for business purposes: see section 23(1) of the 1954 Act.[50]So far as anomaly is concerned, it seems to me that the purpose of a provision such as section 23, if its effect is as Miss Cope contends, is to introduce an element of certainty and allocation of risk so far as service is concerned. It is important that the parties know where they stand and that the possibility of satellite litigation is kept to a minimum. Any system of service of notices can lead to hardship in particular cases. A provision such as service on the premises, specifically catered for in section 23, can involve hardship if, as happened in one case, the notice is posted under the door and goes under the floor covering, or if it is given to someone employed by the addressee who forgets to hand it over to him, or if it is eaten by the dog, or if the addressee is absent due to prolonged illness.[51]If section 23 has the effect for which Miss Cope contends, it provides that if the server (and it should be remembered that in many cases it will be the tenant who is serving a notice on the landlord) chooses a method of service which is within section 23, then the risk of non service shifts from the server to the addressee. That is effectively the approach of the Court of Appeal in Galinski and it is the way in which Mr. Kim Lewison QC put the point in Blunden, and it does not seem that Robert Walker LJ disagreed: see paragraph 27.[52]Furthermore, the idea of an addressee being deemed to receive a document, if it is posted, at the date of posting irrespective of when, or even whether, it is actually received, is by no means foreign to English law. In relation to contract, the law is as set out in Halsbury's Laws of England, 4th Edition (Re-issue) Volume 9(1) at paragraphs 676 to 679. In paragraph 677, this is stated:
"…. if the circumstances are such that it must have been within the contemplation of the parties that according to the ordinary usages of mankind the post might be used as a mean of communicating the acceptance the offer may be accepted by letter sent through the post. Such posted acceptance is prima facie to take effect on posting."
[53]At paragraph 679, there is this:
"Where the postal rule applies, the acceptor is not responsible for any delay or failure on the part of the Post Office provided that it is not caused by any default on his part. Whilst even though he was unaware of that fact the offeror is bound by the acceptance from the time when it was posted notwithstanding the letter of acceptance is lost in the post or that its delivery is delayed, or that it is returned to the acceptor owing to a mistake in the address caused by the person who made the offer."
The postal rule applies even to a document sent by ordinary pre-paid post.[54]Further, money is often deemed to be paid once a properly executed cheque is put in the post (if sending a cheque by post is an appropriate way of payment) even if the cheque goes astray: see Norman v Ricketts (1886) 3 Times Law Reports 182, recently followed and applied by HHJ Rich QC sitting as a Deputy High Court Judge in Commercial UnionLife Assurance Co Ltd v Label Inc Ltd (2001) Landlord and Tenant Reports, 29. Further, the notion of letters being deemed to be served at the date of posting irrespective of whether or not they are received was briefly considered and approved by the Court of Appeal in ex parte Coate 9 Ch Appeal, 27.[55]Of course, the common law rule relating to notices served by post is different because the purpose of a notice is, as Robert Walker LJ emphasised at paragraph 26 in Blunden, to notify a person. Therefore I accept that a common law notice is not served merely by putting it in the post unless, of course, the terms of the contract under which the notice is served indicate otherwise. However, the point I wish to emphasise is that the notion of a person being bound by a document which was put in the post but which he did not actually receive is by no means unknown or foreign to English law.[56]The second argument that Miss Bleasdale raises is that I should follow Lex Service. Of all the cases to which I have been referred, it is the most difficult to follow. As I see it, Glidewell LJ appears to have accepted that, while there may be some (albeit unspecified) exceptions, the obiter observations of Megaw LJ in Chiswell should be treated as being correct. Certainly nothing in his judgment, either in the passage I have read, or elsewhere, suggests in terms that Glidewell J had any reason to disagree with what Megaw LJ said. Indeed, one would have expected him to say so if that was his view.[57]If, as appears to have been Glidewell J’s view, Megaw LJ’s obiter remarks were correct, then that would have been the end of the appeal: it would not have been necessary for him to go on to do that which he did, namely, to consider the effect of section 7. Further, as pointed out by Smedley J, it does not seem that the observations of the Court of Appeal, arguably obiter but on any view powerful, in Galinski were considered in Lex Service.[58]In those circumstances, it seems to me that, even ignoring the fact that Lex Service was considered by Smedley J in Mustapha and by the Court of Appeal in Blunden, it does not provide a particularly comfortable basis on which to rest a reason for departing from Smedley J's conclusion. If, as could be the case, the Court of Appeal in Lex Service effectively decided not to follow Megaw LJ but to follow the two decisions not concerned with section 23 to which it made reference, then examination of those two cases does not cause me to doubt my view that I should not be persuaded to depart from Smedley J on a closer analysis of Lex Service.[59]Hosier contains a short judgment from the Divisional Court, effectively applying Rossi. So far as Rossi is concerned, it involved notification to a party of an appeal in connection with criminal proceedings, which could be served by registered post under section 3(1) of the Summary Jurisdiction Appeals Act 1933. There were earlier decisions such as Sandland v Neale [1956] 1QB 241 where the Divisional Court had held that that provision irrevocably deemed service to have been effected and that section 7 had no part to play. The Court of Appeal in Rossi rejected that conclusion. Accordingly, it could be said that the reasoning in Rossi gives support for Miss Bleasdale’s second argument, and her reliance on Lex Service.[60]However, it seems to me that great emphasis was laid in all three judgments in Rossi on the argument that one has to construe a provision such as section 23 of the 1927 Act, or section 3 of the 1933 Act, by reference not only to its phraseology, but also to its context and the purpose with which it was concerned.[61]At [1956] 1 QB 691-692, Denning LJ gave an eloquent analysis of the importance that the common law attached to the fact that in the context of criminal proceedings "a defendant is fully apprised of the proceedings before it makes any order against him." The effect of the decision of the Divisional Court, which was overruled in that case, was that a defendant could be, as it were, condemned in criminal proceedings of which he was unaware. The present case is purely concerned with the loss of a property right or privilege. Morris LJ made the same point at 696, where he said:
"We were referred to a number of statute provisions relating to serving or sending various kinds of notices in various circumstances and certain decisions relating to these provisions, where it was proper and helpful to be referred to such provisions and decisions, the present case must depend upon the interpretation of this particular section of this particular Act."
[62]Parker LJ in his judgment made the same point, and at 701 he quoted from a judgment of Ridley J in Retail Dairy Co Ltd v Clark [1912] 2KB 388 at 393, where he said this, which seems to me consistent with the contention of Miss Cope in this case:
"Sending in the ordinary sense is merely despatching. The word 'send' may however be used in connection with other words so as to imply that by 'sending' is meant such a sending as that the thing may by the time specified pass into the hands of the person to whom it was sent."
[63]In light of those observations, it seems to me that the two cases cited in Lex Service, Rossi and Hosier, do not provide a convincing basis for invoking section 7 when construing section 23, especially in the light of the obiter observations of Megaw LJ with which Roskill LJ agreed in Chiswell and the unanimous (if arguably obiter) observations of the Court of Appeal in Galinski (which does not appear to have been cited in Lex Service).[64]I must also confess to a little difficulty in understanding the reasoning of the court in Lex Service when they came to apply section 7. It seems to me that, in the passage in the judgment of Glidewell LJ at 95A-B, he was not applying the normal civil burden of proof in relation to the question of whether “the contrary is proved”. It appears to me that he was seeking to reconcile section 23 and section 7 in such a way that section 23 was not absolute in its effect in relation to service by recorded delivery (as suggested in all the other authorities on the section to which I have referred), but none the less affected the standard of proof imposed by section 7 on the addressee if he wished to establish non service. It seems to me that such an approach to section 7 is hard to justify in principle or logic.[65]Miss Bleasdale’s third point is that it would be peculiar if, by serving a notice through the post, a landlord could, as it were, knock a couple of days off the period for the service of the tenant’s counter-notice (which has to be done within two months of the landlord's notice) or the making of the tenant’s application to the court (which has to be done within four months of the landlord's notice).[66]I do not find that a particularly surprising result. If the notice was delivered to the premises on, say, a Friday night, or even on the evening of 24th December, it would not actually be received by the addressee until a few days, or even a couple of weeks, later, but that would not alter the fact that the notice would have been served by leaving it at the premises. I accept that, if Miss Cope’s argument is correct, it would be an inevitable consequence of serving through the post that one or two days would always be knocked off the period according to the tenant, whereas service on the premises would only sometimes have such a result. However, I do not find that a particularly persuasive point in relation to this case.[67]Before turning to the human rights aspect, which was raised during argument, there are two additional points I should mention. Miss Cope contends that, given that section 7 would apply to service of a notice under the 1954 Act by ordinary post, rejection of her argument would result in the reference to delivery by registered post in section 23 having no real effect. She says that, if Miss Bleasdale is correct, sending the letter by registered post or recorded delivery would have no different effect from sending through the ordinary post.[68]Miss Bleasdale’s answer is that section 7 does not apply to service of a notice, under the 1954 or the 1927 Acts, through the ordinary post. That is because of the opening words of section 7 and the fact that there is nothing in section 23, or elsewhere in the 1927 or 1954 Acts, which expressly permits service by ordinary post. In other words, she says that there is nothing in those two Acts which “authorise or requires service by post” other than the reference to registered post in section 23. I am of the view that Miss Bleasdale is right on this point, although it does not cause me to alter my conclusion. I do not consider that the mere fact that a statute requires or permits service of, sending, or giving a notice or other document without any reference to posting brings it within section 7.[69]Miss Cope says that there are two ways in which it could be said that it did so. The first is on the basis that any reference to giving, sending, or serving should as a matter of common sense extend to service by post. I do not think that the way section 7 is worded, at least if one forgets the words in brackets, are apt to cover such an implied concept in a statute. Miss Cope’s second, and primary, point on the issue is that the words in brackets in section 7 are of general application and are not limited to cases where the Act refers to "by post". I do not think that is a correct reading of section 7. It appears to me that the words in brackets all refer back to the words "served by post", i.e. they envisage an authorisation or requirement which is expressly by post. The words in brackets are simply there to rebut an argument that, where an Act refers to giving by post or sending by post, section 7 does not apply because it only refers to service by post. However, if I am right on that point, it merely means that one of Miss Cope's additional arguments does not apply. If I am wrong on that point, then it is an additional reason for supporting the landlord's case.[70]The second additional point is that it is not uninstructive to compare section 23 with section 196(3) and (4) of the Law of Property Act 1925, which deal with notices “required or authorised” to be served under that Act. Sections 196(3) and (4) specifically refer to any such notice which is to be served on a “lessee or lessor”. Section 196(4) provides that such a notice is “sufficiently served” if “sent by post in a registered letter”. However, unlike section 23, section 196(4) of the 1925 Act adds the qualifications “and if that letter is not returned through the post-office undelivered” and that “service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered.”[71]I do not think that it is illegitimate to compare section 196(4) of the 1925 Act, which was concerned with notices served between, inter alia, landlords and tenants with section 23 which was included in a statute which was passed only two years later, and which was almost exclusively concerned with landlords and tenants. The fact that the legislature did not include in section 23 the two additional qualifications included in section 196(4) of the 1925 Act lends some support to the reasoning in the cases relied on by Miss Cope, and also for her argument as to the deemed day of service under section 23.[72]In these circumstances, subject to the Human Rights Act point to which I will very shortly turn, it appears to me that I should reject Miss Bleasdale's two arguments. In relation to the first argument, which, as far as I am aware, has never been raised before, I consider that, while it is not without its attractions, I do not think it could succeed in any event. First, it involves implying words into section 23, and to imply words into a statute is a course that the court should take only as a matter of absolutely last resort. It is to my mind, if anything, more difficult to imply words into a statute than into a commercial contract.[73]Secondly, it seems to me that the implication does not get rid of what Miss Bleasdale identifies as the primary anomaly in section 23 if it has the meaning for which Miss Cope contends. Section 23 would still result in a notice returned in the post being deemed to be served; the only difference the implied term would make is that it would deem the notice to have been served one or two days after the date upon which it was put in the post.[74]As for Miss Bleasdale’s second argument, which found favour with Judge Cotran, for the reasons I have given, I am not clearly satisfied that the decisions of French J in Italica and of Smedley J in Mustapha were wrong and I am equally not clearly satisfied that the decision of the court of Appeal in Blunden was per incuriam, or that the clear and strong observations in Chiswell and Galinski were per incuriam.[75]Finally, I must deal with a point which has not so far been raised in any proceedings relating to section 23 so far as I am aware. The point, raised by Miss Bleasdale, is that section 23 should be construed as being subject to section 7 because otherwise the construction of section 23, which I would otherwise favour, would or at least could infringe the human rights of an addressee of a notice sent by recorded delivery.[76]In the present case, I do not consider that there could be a human rights point on the facts. As Miss Cope says, the fact that the tenant was deprived of two days of his two-month period for serving a counter-notice, and two days of his four-month period for applying to the court, cannot constitute a significant infringement, or even an infringement, of any of its human rights.[77]However, the point is obviously more arguable in a case such as Mustapha or Blunden, where a notice sent by recorded delivery was not received by the tenant and was returned to the landlord, where the very existence of the notice was unknown to the tenant. The fact that, in such a case the notice should none the less be deemed to have been served on the tenant on the date it was posted could be said to infringe the tenant's right to property, namely, to a new tenancy under the provisions of the 1954 Act, and his right of access to the courts in light of the fact that, as I have mentioned, his application to the court had to be made within four months of receipt or deemed receipt of the notice.[78]As a matter of principle, it appears to me that, if this human rights argument is correct, then by virtue of section 3 of the Human Rights Act the court has a duty, if it can properly do so, to construe section 23 so it does not have this effect. In my judgment, irrespective of previous decisions, if Miss Cope’s argument falls foul of section 3 of the 1998 Act, then it is possible to construe section 23 as being subject to section 7, albeit that, in the absence of the human rights dimension, I would not so construe it. The central issue, therefore, is whether there is an infringement of the tenant's human rights, if my construction of section 23 is correct.[79]In that connection, the point is not entirely dissimilar from that considered in Anderton v Clwyd County Council (No.2) [2002] 1 WLR 3174 where the Court of Appeal had to consider whether deemed service on a certain date under the CPR r.6.7 was inconsistent with the 1998 Act, bearing in mind that, in that case, the deemed receipt was one day later than actual receipt. and that therefore the claim was statute barred, whereas if one took the date of actual receipt it would not have been.[80]In paragraph 36 of the judgment, at 3191H-3192E, Lord Phillips Master of the Rolls, giving the judgment of the court, explained why the court was not persuaded that the provision was incompatible with Article 6, the right of access to courts. He said:
"The aim of rule 6.7 is to achieve procedural certainty in the interests of both the claimant and the defendant. Certainty in the time of service of a claim form is an important requirement for the efficient performance of the case management functions of the court. It is legitimate to promote that aim by setting a deadline of four months from issue for the service of the claim form by one of the permitted methods and by using the legal technique of deemed service to bolster the certainty. The rules employ a carefully and clearly defined concept of the 'service' of a document, which focuses on the stated consequences of the sending of the document by the claimant, rather than on evidence of the time of its actual uncertainties, expense and delays in satellite litigation involving factual disputes and statutory discretions on purely procedural points."
[81]In my judgment, while those observations were concerned with a somewhat different issue, namely, service of process, and a slightly different and on the facts a less potentially unfair result than that which I am considering, they do assist the landlord's case here.[82]The purpose of section 23, as explained in Chiswell, Galinski and Blunden, is very much like that of CPR r.6.7, as explained by Lord Phillips in Anderton. It is not as if there will be no occasions when another form of service cannot lead to hardship: thus, as I have mentioned, service on the premises can result in unfairness where the service is on an absent-minded employee, where the notice goes under the floor covering, where the notice is eaten by the dog, or where the addressee has an unexpected and long absence.[83]Furthermore, as already mentioned, if a letter is sent by recorded delivery then, absent incompetence on the part of the Post Office or rank bad luck, even if nobody is at the relevant premises, a note will be put through the letterbox drawing the attention of the tenant, who, as I have mentioned, should in some way be in occupation in light of section 23 of the 1954 Act, to the fact that there is a letter to be picked up from the nearest Post Office which has been sent to the premises by recorded delivery.[84]Additionally, this is not, as it were, a result which prejudices tenants or confers an advantage on landlords. The 1954 Act provides for notices (see, for instance, section 26) or counter-notices (see, for instance, section 25) to be served by the tenant on the landlord. My conclusion on the effect of section 23 applies both ways.[85]It is true that it is somewhat unattractive that, as Miss Bleasdale points out, the server of the notice will in many cases know that the addressee has not received it because it will have been returned in the post, or, as I understand it, will be able to see it as not being delivered by looking at the Post Office's website.[86]It seems to me, however, that one has to balance the sort of factors identified by Lord Phillips in Anderton, namely, certainty, and as identified in Blunden, allocation of risk, and the purpose behind section 23 as explained in Galinski, against the fact that there will be occasional harsh or unfair results. In my view the legislature was entitled, on the assumption that section 23 has the effect which I hold it has, to carry out the balancing act in the way in which it did. That view is reinforced when one considers the nature of the rights which the tenant claims to be infringed. Although it may be characterised as a right to property and a right of access to the court, it is, in fact, an extra-contractual privilege conferred on business tenants to obtain a new tenancy if certain steps – including the service of notices – are taken (sections 24 to 29 of the 1954 Act) and unless certain conditions are satisfied (sections 30 to 31A of the 1954 Act). The access to the court is merely the means by which the privilege is exercised. If the legislature imposes provisions as to the taking of the steps, such as the service of notices which occasionally, due to mischance or oversight, result in the privilege being lost, in the interest of certainty, that does not appear to me to engage, let alone to fall foul of, the 1998 Act, unless those provisions are unreasonable. Accordingly, in my view there is no human rights infringement dimension to this case.[87]In those circumstances, with gratitude for the arguments which I have been addressed on this short and case-ridden point, I propose to allow the landlord’s appeal. MISS COPE: My Lord, I am grateful. The only issue which arises is that of costs. I would ask for costs of today and of the hearing below. I do not know what the position is in relation to summary assessment. MR. JUSTICE NEUBERGER: I have to say, although maybe you will tell me I cannot, I am inclined to give you the costs here but make no order for costs below. I think it is jolly hard on the tenant, but is that my heart ruling my head? MISS COPE: My Lord, the point was taken and been held to be a valid point that there should be no rational basis for holding that the landlord is not entitled to his costs of the court below. MR. JUSTICE NEUBERGER: The state of the cases are a bit of a mess. You have a bit of a windfall. I think it would be quite wrong to deprive you of your costs generally but I am inclined to leave costs where they lay below and give you the costs of the appeal, subject to what Miss Bleasdale says. MISS COPE: The only other ---- MR. JUSTICE NEUBERGER: You can try and persuade me not because it may be wrong in principle and, if it is, then you should jolly well tell me. MISS COPE: The only other argument I would say is that it is right to note that the only reason we are here is because the tenant left it to the very last minute to serve counter-notice. MR. JUSTICE NEUBERGER: That is a fair point, brought it on himself. I had not thought of that, of course. You want your costs here and below. I will hear what Miss Bleasdale says. Do you want me to assess them? I am going to give you some costs unless I am persuaded otherwise. MISS COPE: The difficulty is that the costs of today and yesterday, I think, have not yet been examined ---- MR. JUSTICE NEUBERGER: What I could do is to say that I will have written submissions on costs and deal with them. If that is acceptable to both of you, I will deal with it that way. The only question is what order I should make on costs and I have not heard from Miss Bleasdale. You have heard what I have said and you have heard what Miss Cope has said. What do you say about costs? MISS BLEASDALE: I would encourage you to make the order that your heart suggests you should make. In relation to the court below, there was no order as to costs because there were actually two issues that were being decided. One was in relation to the fact we had served the claim form late. That point was argued and we won on that point. We also won on the other point but since we were seeking the indulgence of the court in relation the late service of the claim form, the judge made no order as to costs, whereas we would have had, if he had not decided to make that order, the costs of what we did. MR. JUSTICE NEUBERGER: Miss Cope, therefore, is saying that, in effect, his order would have been that you should have your costs of this issue and the landlord should have his costs of the other issue, so they cancelled out. Miss Cope says, quite so, costs follow the event so you should pay the costs below because that decision, if I am right, was wrong. MISS BLEASDALE: Except that the basis of the no order as to costs below was that we did not get our costs of another issue which was fought, and which we won. MR. JUSTICE NEUBERGER: Yes, because you were asking for an indulgence. The normal thing is if you ask for indulgence you pay the costs, unless it is being unreasonably opposed.88. I think it is quite important to bear in mind that when the landlords served that section 25 notice they said they did not oppose the grant of a new tenancy to us. The long and the short, I would suggest, of this litigation is that the landlords are quite prepared to grant the tenant a new tenancy but are fighting this point; otherwise, we have statutory rights in relation to rent for a new tenancy and if we lose our rights to remain there, then there is the possibility of trying to argue commercially and increase the rent.89. It is particularly unattractive where you are not actually opposed to the grant of a tenancy to the tenant that this point is being taken. Admittedly, they have taken the point and they have won the point. I would suggest that that is another factor which should suggest to you that, yes, we are here today and I would not oppose that we should pay the costs of today, but it gives a better indication as to what really is going on there. MR. JUSTICE NEUBERGER: Can you tell me this, what was the other issue to be decided by Cotran J? I am afraid I overlooked that. You had served late and you were asking for an extension of time, or what? MISS BLEASDALE: We issued the proceedings. It then became apparent that there was something wrong and the proceedings needed to be amended. We sent the proceedings back to the court to ask them to seal them but a member of the court lost them. We did not have a sealed copy that we could serve and we did not get the sealed copy ---- MR. JUSTICE NEUBERGER: Basically, it was the court's ---- MISS BLEASDALE: It was the court's fault. We could not serve until after four months. We served an unsealed copy of the documents that we sent to be amended within the time limit. MR. JUSTICE NEUBERGER: But you needed to have the indulgence of the court. MISS BLEASDALE: To serve a proper sealed copy. MR. JUSTICE NEUBERGER: It would have been outrageous if they had not given you the indulgence, given it was all their fault anyway. I have the point. MISS BLEASDALE: Absolutely. The point was taken by the defendants that we had not served it properly even though we had served them a copy. MR. JUSTICE NEUBERGER: I understand. Thank you very much. MISS BLEASDALE: I do not think I can assist any further. MR. JUSTICE NEUBERGER: Thank you. MISS COPE: In reply, if your Lordship is minded to look at the costs below, I would say we are still entitled to the costs on this issue below.[88]I will award the landlord its costs of the appeal and half its costs below. It seems to me that if I give the landlord no costs below, I would be letting my heart rule my head. On the other hand, it would be unfair on the tenant if I gave the landlord all his costs below.[89]There are “merits” factors which perhaps should not play much part in my thinking. I think that the outcome of this appeal is something of a windfall for the landlord and the law is something of a mess, and that is not the tenant's fault. On the other hand, that is balanced, as Miss Cope says, by the fact that the tenant did leave it almost till the last minute to make its application, and people who leave things to the last minute do not deserve too much sympathy.[90]Perhaps more importantly, there was an issue below which, on what I have heard, the landlord should not have opposed; the tenant was seeking an extension of time for service of the sealed application, because the tenant had only been able to serve it unsealed as the court had lost the sealed document. The notion that the time would not be extended seems to me to be fanciful, given that it was entirely the fault of the court that the sealed application had not been served in time.[91]Although normally when an indulgence is given to a person by the court that person has to pay the costs, it is also the case that, when the application is unreasonably opposed by the other party, then the other party should pay the costs. I think given this history the fairest order to make is the one I have indicated.[92]I am happy to assess costs now. I understand that because this hearing has been slightly dislocated not all the schedules are available, and even if they were it might be unfair to assess costs because Miss Bleasdale has not seen Miss Cope’s schedules. What I propose is that the parties agree among themselves a suitable timetable (bearing in mind I am not available on Monday or Tuesday next week) for submitting written submissions on costs, which should be very short, and I will deal with costs in writing myself. MISS BLEASDALE: I wonder if I could ask for permission to appeal? MR. JUSTICE NEUBERGER: You can ask but I cannot give it because this would be a second appeal. You would have to ask the Court of Appeal but, subject to the Court of Appeal's view and subject to this being a small case, I believe my judgment would indicate that this is an appropriate point of principle for the Court of Appeal. Although I think that this would probably be an appropriate case for the Court of Appeal, I cannot give permission. It is a matter for the Court of Appeal. MISS BLEASDALE: I am very grateful. MR. JUSTICE NEUBERGER: Thank you very much. ----------

Cited in 3 later judgments