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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Levett-Dunn & Ors v NHS Property Services Ltd  EWHC 943 (Ch) (26 April 2016)
Cite as:  L &TR 26,  EWHC 943 (Ch),  2 P &CR DG18,  Ch 637,  WLR(D) 234,  3 WLR 773
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BIRMINGHAM DISTRICT REGISTRY
Bull Street, Birmingham B4 6DS
B e f o r e :
| Frederick Levett-Dunn (1)
Howard Evans (2)
Barnett Waddingham Trustees Ltd (3)
|- and -
|NHS Property Services Ltd
Adam Rosenthal (instructed by Bevan Brittan) for the Defendant
Hearing dates: 22-23 February 2016
Crown Copyright ©
HHJ David Cooke:
"Frederick Levett-Dunn, Simon Levett-Dunn, Howard Evans and Barnett Waddingham Trustees Ltd, all of 75 Tyburn Rd Erdington Birmingham B24 8NB (hereinafter called "the Landlord" which expression shall where the context so admits include the person or persons for the time being entitled to the reversion of the premises hereby demised immediately expectant on the term hereby granted)…"
"If the Tenant wishes to determine this lease at the end of the third, sixth or ninth year of the Term and gives the Landlord not less than six months prior written notice of that wish… then on expiry of the said notice ("the Break Date") the Term will cease and determine…".
"For the purpose of service of all notices hereby or by statute authorised to be served the regulations as to service of notices contained in section 196 of the Law of Property Act 1925… shall be deemed to be incorporated herein but service on any one of the parties comprising the Landlord shall be deemed to be service on all and notices to be served on the Tenant are to be sent to the Director of Facilities at Coniston House…or such other address as the Tenant shall notify to the Landlord in writing."
"196 Regulations respecting notices
…(3) Any notice required or authorised by this Act to be served shall be sufficiently served if it is left at the last-known place of abode or business in the United Kingdom of the lessee, lessor, mortgagee, mortgagor, or other person to be served...
(4) Any notice required or authorised by this Act to be served shall also be sufficiently served, if it is sent by post in a registered letter addressed to the lessee, lessor, mortgagee, mortgagor, or other person to be served, by name, at the aforesaid place of abode or business…"
i) Although the lease states that all the parties comprising the landlord are "of 75 Tyburn Rd…" that was not in fact the "place of abode or business" of any of the claimants.
ii) Simon Levett-Dunn had by that date ceased to be a trustee of the SSAP and transferred his interest in the reversion to the claimants. Although it is accepted that no notice of this had been given to the tenant, he was no longer a person comprised in "the landlord". Accordingly, even if the notice had been served or was deemed served on him (for example because 75 Tyburn Rd was his place of business) that did not bind "the landlord".
iii) The individual who received the letters and made the on-screen signature was not Howard Evans, who on that day was at various on-site meetings around Heathrow Airport. Mr. Evans gave evidence to that effect, and Mr. Rosenthal said in closing that he did not suggest this was untrue. I accept that evidence. Someone else must have given his name, and there is no way of telling who it was or why, save that one may speculate the person delivering may have required a name to be given that corresponded with at least one of the addressees.
iv) The notices did not come to their attention by any other means until after 10 January 2013.
"As you are aware the PCT have given notices on all the floors for Coniston House, however Mike Goodwin from the Royal Wolverhampton Hospital Trust would like to meet [to discuss] the possibility to take a re-lease of part of the building. Are you available on [various dates]…
"We have not received any notices and I have now spoken to our clients and they cannot trace having received any. At this time it is not appropriate to convene a meeting until the position is clarified."
"You will be aware of our client's contention that the notices served on your behalf were ineffective and that as a consequence the three leases remain in being and you will have a continuing liability to pay rent and to fulfil the other obligations under those leases.
Without prejudice to that contention and to the continued existence of the leases our clients recognise that it is in the interests of all concerned that the premises are properly secured… Accordingly, we are prepared to accept the keys back from you purely for the purpose of enabling the premises to be secured. The acceptance of the keys is not to be taken either as an acknowledgement that the notices purporting to activate the break clauses were effective to do so or as an acceptance of a surrender of the leases… If at any stage your client wishes to re-enter the premises then arrangements will forthwith be put in hand to return the keys to your clients and to take any other steps needed to enable such re-entry."
"… I am still trying to sort out these accounts.
I have received an invoice from British Gas addressed to NHS Property Services which is for the period from July 1 onwards. The Landlord took over responsibility from 11th July onwards not 1st July so this has to be rectified … NHS Property Services is responsible for payment for the period July 1st to 10th July inclusive and the invoice will have to be amended to reflect this…
Please note that the responsibility for all invoices on Coniston House is not the responsibility of Midland Commercial Properties Ltd, but responsibility lies with the landlord, Trustees of Howard Evans (Roofing) Ltd Retirement Benefit Scheme. Midland Commercial Properties Ltd has no legal responsibility for any utilities or any services from 11th July onwards. "
Was 75 Tyburn Rd the place of abode or business of any of the landlords?
"23 Service of notices.
(1) 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 ...
(2) Unless or until a tenant of a holding shall have received notice that the person theretofore entitled to the rents and profits of the holding (hereinafter referred to as "the original landlord") has ceased to be so entitled, and also notice of the name and address of the person who has become entitled to such rents and profits, any claim, notice, request, demand, or other instrument which the tenant shall serve upon or deliver to the original landlord shall be deemed to have been served upon or delivered to the landlord of such holding."
i) It would in my view be odd if one of two subsections dealing with similar subject matter would be intended to have a general effect where the other was not. Mr. Rosenthal was able to identify one instance in which he said this had been done, in para 7 of Sch 15 Law of Property Act 1922, but this is hardly evidence of regular drafting practice.
ii) The long title of the 1927 Act is:"An Act to provide for the payment of compensation for improvements and goodwill to tenants of premises used for business purposes, or the grant of a new lease in lieu thereof; and to amend the law of landlord and tenant."Part 1 sets out the scheme for compensation for improvements. S1 provides that the tenant's entitlement is dependant on his making a "claim" satisfying the conditions set out. S23 is not placed in Part II of the 1927 Act, which is headed "General Amendments to the Law of Landlord and Tenant" and deals with matters of general effect such as covenants for repair and not to assign, but in Part III which is headed "General". The other sections in that part provide for a tribunal to determine claims under Part 1 of the Act, for the Act to apply to Crown land and an interpretation section. The second no doubt is intended to ensure that the Crown is bound by the compensation scheme and the general changes in the law, but does not itself have any application to the law beyond that. Accordingly if s23(2) was intended to be of general effect it would be the only such provision in Part III in circumstances in which it would more naturally have fitted in Part II.
iii) As noted in Mr. Weekes' textbook, s23 has been incorporated into a number of other statutes; he refers to the Landlord and Tenant Act 1954 (by s66(4)), the Leasehold Reform Act 1967 (by s22(5) which incorporates s66(4) of the 1954 Act) and the Landlord and Tenant (Covenants) Act 1995 (by s 27(5)). In each case the whole of s23 is incorporated. This would not be necessary if s23(2) already had general effect.
iv) Although it is correct that the additional word "claim" occurs in s 23(2), that in my view is too thin a ground for the interpretation Mr. Rosenthal seeks. It is a term that is clearly capable of relating to the subject matter of Part 1 of the 1927 Act (ie a claim for compensation for improvements) and so not an indication that s23(2) was intended to relate to matters outside that Act. One may well then ask why that word was not also used in subsection (1), but it seems to me that if that subsection is arguably less explicit than it might be that is no basis for saying that subsection (2) has a different scope.
" Mr Wood suggests that a registered office is not in itself an address. I think it must be… The very nature of a registered office is the place to which communications and notices may be addressed. That is the definition of it. And by saying 'our registered office is so and so' as the defendants did in this lease they are saying 'that is our address to which communications may be sent.' Then further it is suggested that if a registered office always is an address it was unnecessary surplusage for both 'registered address' and 'last known address' to be mentioned in the clause. I think that both are mentioned for perfectly good reasons … I, for my part, am entirely satisfied that the last known address of the defendants within the meaning of this clause was the Victoria Street address and accordingly the notice was validly served. "
i) The landlord may be served at his last known place of abode or business, and
ii) The landlord's address is 75 Tyburn Rd. Describing the landlord as "of" an address plainly means, in my judgment that that is his address.
Although the terminology does not exactly match, in my judgment any reasonable person considering these two statements would understand them to mean that the address given was being stated to be a "place of abode or business" for the purpose of the service clause.
"... The meaning of the doctrine of surrender by operation of law is not in doubt. It was well summarised by Peter Gibson LJ in Bellcourt Estates v Adesina  EWCA Civ 208,  18 EG 150,  2 EGLR 33, in these terms:
"The doctrine of surrender by operation of law is founded on the principle of estoppel, in that the parties must have acted towards each other in a way which is inconsistent with the continuation of the tenancy. That imposes a high threshold which must be crossed if the tenant is to be held to have surrendered and the landlord is to be held to have accepted the surrender."
 In my judgment the propositions derived by the judge from the authorities and stated in para 68 of her judgment are correct:
'(1) The issue of whether there has been a surrender by operation of law after a tenant's abandonment of the leased premises must be determined by evaluating the effect of the landlord's conduct as a whole (cf London Borough of Brent v Sharma (1992) 25 HLR 257 at 259). I accept Mr Kremen's argument that the totality of such acts can amount to a resumption of possession even though individual acts might each be only equivocal. With this in mind –
(2) The test is whether the landlord's conduct is 'so' inconsistent (Oastler v Henderson 1877 2 QBD 575 at 577) with the continuation of the tenant's lease that it could only be justified as being lawful on the basis that the landlord has accepted the tenant's implied offer to give back possession, and has taken possession of the premises beneficially for himself.
(3) Accepting back the keys without more will always be equivocal. As a matter of practicality and common sense, one party has to hold the keys to prevent an absurd situation in which they are passed back and forth because neither party wants to risk it being suggested that it has made an admission by holding them.
(4) Any act of the landlord which is consistent with its rights under the lease, such as entering the premises to inspect or to repair them, will not in itself give rise to a surrender because, by definition, it is not inconsistent with the lease continuing.
(5) Any further act of the landlord which amounts to protecting or preserving the property, such as taking security measures or doing necessary repairs, will not in itself give rise to a surrender because such self-help, necessary to preserve the landlord's interest in the value of his property, is a reasonable response to the tenant's evinced intention not to perform the obligations of the tenancy: cf McDougall's Catering Foods Ltd v BSE Trading Ltd 1998 P & CR 312; Relvok Properties Ltd v Dixon (1972) 25 P & CR 1, at p 7.
(6) Similarly, any act of the landlord which amounts to the landlord's performing the tenant's covenants under the lease, such as keeping the garden tidy, would not necessarily amount to a resumption of possession as it is not inconsistent with holding the defaulting tenant to performing the lease.
(7) Any further act of the landlord referable to the landlord's seeking to re-let the premises will not necessarily give rise to a surrender by operation of law, as it is no more than what the landlord might reasonably be expected to do in the circumstance for the potential benefit of all parties: Oastler v Henderson (above). The landlord must be entitled to seek to mitigate the damage caused in reality (even if not yet technically in law so long as the lease remains extant) by the tenant's abandoning the lease, by seeking to obtain another tenant, without thereby losing his rights against the original tenant if he is unable to do so.
(8) However, if the landlord goes further and uses the premises for his own benefit beyond the totally trivial – and certainly, in my judgment, if such use amounts to occupation of the premises – then he re-takes possession of the premises inconsistently with the continuance of the lease. This will give rise to a surrender by operation of law, since it is only on the basis of having accepted such a surrender that the landlord's acts would be lawful.' "