Service of notices – context is key

Key points Lack of knowledge of an assignment can displace the general rule that service on an assignor following an assignment is ineffective  The ‘reasonable recipient’ test is an objective one in the context in which the notice is served The High Court has upheld a first instance decision that a notice to quit agricultural premises under the Agricultural Holdings Act 1986, which was served on an individual shortly after the lease had been assigned to a company was valid in Turner and others v Thomas and another [2022] EWHC 1239 (Ch); [2022] PLSCS 84, underlining the importance of context in the service of notices.  The background The claimants/respondents owned agricultural land in Gwynedd let to the first defendant on an oral tenancy protected by the 1986 Act. In November 2019, their predecessor served a notice to quit on the first defendant, unaware that, days before, he had assigned the tenancy to the second defendant/appellant, a company of which he was the sole director, shareholder and company secretary.  The first defendant continued to farm the land but on behalf of the company instead of himself. The respondents first learned of the assignment when agents for the first defendant wrote to their solicitors in October 2020 arguing that the notice was invalid because it had not been addressed to the company.  The law Section 93 of the 1986 Act governs service of notices. The notice need not be addressed to the tenant by name and is duly served if it is delivered to the individual recipient, left at his proper address or sent to him by registered or recorded delivery post.  Service on an agent is good service provided that the agent is authorised to receive such notice, and service on a company may be made by giving the notice to the company secretary at its registered office.  Service on an assignor following an assignment is ineffective (Old Grovebury Manor Farms Ltd v W Seymour Plant Sales and Hire Ltd [1979] 2 EGLR 52) because the term no longer vests in the assignor.  Following the decision of the House of Lords in Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd [1997] AC 747; [1997] PLSCS 150, service of a contractual notice is to be determined on an objective basis by asking how a reasonable recipient would have understood the notice.  The appeal The judge at first instance decided that a reasonable recipient would appreciate that the notice contained an error in that it was addressed to the individual and not the company and would appreciate its meaning (Pease v Carter [2020] EWCA Civ 175; [2020] EGLR 15, applying the Mannai test to statutory notices).  The appeal court distinguished between two questions: whether the notice was given to the correct person; and whether as a matter of construction the notice complied with the statutory or contractual requirements. The first defendant acknowledged that, if the notice was construed as being addressed to the company by delivering it to the first defendant, it was effectively served because the first defendant was the company’s agent. So, the focus of the appeal was on the second question.  Landlord’s subjective intention The company argued that the judge was wrong to decide that the notice was capable of being interpreted as being addressed to and served on the company, in circumstances where the reasonable recipient – the first defendant – knew that the landlord was unaware of the assignment or of the current tenant’s existence. So, the first defendant could be sure that the landlord had intended the notice to say precisely what it did, ie notifying him to quit the land.  Had the landlord known of the assignment the reasonable recipient would appreciate that it contained an error and that the landlord had intended the notice to be addressed to the company. While the process of construction of a notice is an objective one, the critical issue is what the reasonable recipient would, objectively, have understood as to the meaning which the landlord, subjectively, intended to convey.  Objective test The High Court disagreed. The 1986 Act does not lay down any requirements as to the form or content of a notice to quit. Had the notice been addressed to “the tenant” and given to the first defendant or posted to his address – the registered office of the company – it would have been valid and effective, as the company conceded.  The Mannai test was whether, in the context in which the notice was given, the reasonable recipient would have understood it to have been addressed to the company as tenant under the lease. The context included that the notice correctly identified the lease and the land, the fact of the assignment and that the landlord was unaware of it. The court was satisfied that the reasonable recipient would have no doubt that the notice was intended to convey an intention to require the actual tenant of the lease to deliver up possession of the land.  Construction, even of a unilateral notice, is an objective process. The landlord’s actual knowledge – or more importantly, what the reasonable recipient would have known as to the landlord’s actual knowledge – was a relevant part of the context. It explains why the notice was addressed to the first defendant and demonstrates how and why it contained an obvious error. This was relevant to the conclusion the reasonable recipient would reach, that the landlord intended to serve the actual tenant but mistakenly identified the first defendant as that person.  Louise Clark is a property law consultant and mediator Image © Mohamed Hassan/Pixabay