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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 >> MW Trustees Ltd & Ors v Telular Corporation  EWHC 104 (Ch) (31 January 2011)
Cite as:  L & TR 19,  EWHC 104 (Ch)
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Strand, London, WC2A 2LL
B e f o r e :
| (1) MW Trustees Limited
(2) Robert Posel
(3) Pamela Posel
|- and -
Mr Weekes (instructed by Speechly Bircham) for the Defendant
Hearing dates: 18th January 2011
Crown Copyright ©
Peter Smith J :
"If the Tenant shall wish to terminate this Lease on the Break Date [i.e. 1st March 2010] and shall give to the Landlord not less than six months [notice] in writing to do so and up to the Break Date the Tenant has paid all the Rent and other sums due under this Lease, then on the Break Date this Lease shall cease and determine, but without prejudice to any claims which either party may have against the other for breaches of the covenants and conditions of this Lease occurring prior to the Break Date."
"Any notice to be served by any party to this Lease must be given in writing and shall be valid only if:-
(a) It is sent by special delivery post or delivered by hand.
(b) It is sent:
(i) To a company, at the registered office of the company
(ii) Where the receiving party is not a company, at the address shown in this Lease or such other address as that party may notify to the other parties from time to time.
(iii) in the case to the Tenant only, to the premises.
7. Clause 8.7.2 provides that service of any notice will be deemed to be effected:-
(a) By hand, at the time of delivery, or if delivered after 4pm on a working day, on the next working day
(b) By special delivery post, on the expiry of 2 days from delivery into the custody of the postal service."
DECISION TO TERMINATE THE LEASE
"Mr Posel, Telular recently sent a letter to Suffolk Life regarding our desire to terminate our Lease on the Break Date (please see attached). I was informed (and confirmed with Sherry Swehla of our Finance team) that Mattioli Woods is now in charge of this property. If you could let me know the necessary steps to appropriately terminate our Lease on the Break Date, I would greatly appreciate it. Thanks in advance for your help!"
THE DEFENDANT'S CONTENTIONS
"the construction of the notices had to be approached objectively, and the question was how a reasonable recipient would have understood them, bearing in mind their context; that the purposes of the notices was to inform the landlord of the tenants decision to determine the leases in accordance with the break clauses; that a reasonable recipient with knowledge of the terms of the leases and of the third anniversary date would have been left in no doubt that the tenant wished to determine the leases on 13th January 1995 but had wrongly described it as 12th January 1995; and that accordingly the notices were effective to terminate the leases."
"(1) This is not a case of a contractual right to determine which prescribes as an indispensable condition for its effective exercise that the notice must contain specific information. After providing for the form of the notice ("in writing"), its duration ("not less than six months") and service ("on the landlord or its solicitors"), the only words in clause 7(13) relevant to the content of the notice are the words "notice to expire on the third anniversary of the term commencement date determine this lease". Those words do not have any customary meaning in a technical sense. No terms of art are involved. And neither side has suggested that anything should be implied into the language. That is not surprising since the tests governing the implication of terms could not conceivably be satisfied. The language of clause 7(13) must be given its ordinary meaning. A notice simply expressed to determine the lease on third anniversary of the commencement date would therefore have been effective. The principle is that that is certain which the context renders certain: Sunrose Ltd v Gould  1 W.L.R. 20.
(2) 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 this question the notices must be construed taking into account the relevant objective contextual scene. The approach in Reardon Smith Line Ltd v Yngvar Hansen-Tangen (trading as H.E. Hansen-Tangen)  1 W.L.R. 989, which deals with the construction of commercial contracts, is by analogy of assistance in respect of unilateral notices such as those under consideration in the present case. Relying on the reasoning in Lord Wilberforce's speech in the Reardon Smith case, at 996D to 997D, three propositions can be formulated. First, in respect of contracts and contractual notices the contextual scene is always relevant. Secondly, what is admissible as a matter of the rules of evidence under this heading is what is arguably relevant. But admissibility is not the decisive matter. The real question is what evidence of surrounding circumstances may ultimately be allowed to influence the question of interpretation. That depends on what meanings the language read against the objective contextual scene will let in. Thirdly, the inquiry is objective: the question is what reasonable persons, circumstanced as the actual parties were, would have had in mind. It follows that one cannot ignore that a reasonable recipient of the notices would have had in the forefront of his mind the terms of the leases. Given that the reasonable recipient must be credited with knowledge of the critical date and the terms of clause 7(13) the question is simply how the reasonable recipient would have understood such a notice. This proposition may in other cases require qualification. Depending on the circumstances a party may be precluded by an estoppel by convention from raising a contention contrary to a common assumption of fact or law (which could include the validity of a notice) upon which they have acted: Norwegian American Cruises A/S (formerly Norwegian American Lines A/S) v Paul Munday Ltd  2 Lloyds Rep. 343. Such an issue may involve subjective questions. That is, however, a different issue and not one relevant to this appeal. I proceed therefore to examine the matter objectively.
(3) It is important not to lose sight of the purpose of a notice under the break clause. It serves one purpose only: to inform the landlord that the tenant has decided to determine the lease in accordance with the right reserved. That purpose must be relevant to the construction and validity of the notice. Prima facie one would expect that if a notice unambiguously conveys a decision to determine a court may nowadays ignore immaterial errors which would not have misled a reasonable recipient.
(4) There is no justification for placing notices under a break clause in leases in a unique category. Making due allowance for contextual differences, such notices belong to the general class of unilateral notices served under contractual rights reserved, e.g. notices to quit, notices to determine licences and notices to complete: Delta Vale Properties Ltd v Mills  1 W.L.R. 445, 454E-G. To those examples may be added notices under charter parties, contracts of affreightment, and so forth. Even if such notices under contractual rights reserved contain errors they may be valid if they are "sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate": the Delta case, at p. 454E-G, per Slade L.J. and adopted by Stocker L.J. and Bingham L.J: see also Carradine Properties Ltd v Aslam  1 W.L.R. 442, 444. 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 a recipient of the notice. I would gratefully adopt it".
"If one applies that kind of interpretation to the notice in this case, there will also be no ambiguity. The reasonable recipient will see that in purporting to terminate pursuant to clause 7(13) but naming 12 January 1995 as the day upon which he will do so, the tenant has made a mistake. He will reject as too improbable the possibility that the tenant meant that unless he could terminate on 12 January, he did not want to terminate at all. He will therefore understand the notice to mean that the tenant wants to terminate on the date on which, in accordance with clause 7(13), he may do so, i.e. 13 January."
THE ESTOPPEL AND WAIVER
i) a clear and unequivocal promise or assurance;
ii) by one party to contract to another;
iii) that the promisor will not enforce its strict legal rights under the contract;
iv) which promise or assurance is intended to effect the legal relations between them; and
v) which is reasonably understood by the other party to have that effect; and
vi) which is in fact acted upon by the other party.