Kodak Processing Companies Ltd v Shoredale Ltd

Landlord and tenant – Law Reform (Miscellaneous Provisions)(Scotland) Act 1985 – Sublease providing for termination of lease by respondent landlord if rent arrears not paid within 14 days of notice requiring payment – Respondent effecting service of such notice by sheriff officer – Whether notice validly served – Whether section 4(4) of 1985 Act requiring use of Royal Mail recorded delivery service – Appeal allowedThe respondent held a lease of premises that it sublet to the appellant at a rent of £60,000 pa payable quarterly in advance. The agreement entitled the respondent, subject to sections 4 to 6 of the Law Reform (Miscellaneous Provisions)(Scotland) Act 1985, to terminate the lease for rent arrears if it had served notice on the appellant requiring the breach to be remedied and the appellant had failed to pay the required sum within 14 days.The appellant failed to pay the rent falling due in September 2007 and the respondent served a notice requiring payment of that sum within 14 days of the effective date of service. The notice was served on the respondent’s behalf by a sheriff officer, in the presence of a witness, and a certificate of execution of service was produced. The appellant did not pay the full amount within the specified time and the respondent served a further notice stating that the lease was terminated and requiring the appellant to give up possession. The appellant did not do so and the respondent brought proceedings, seeking declarations that the lease was at an end and that it was entitled to possession, and orders requiring the appellant to give up possession and pay the outstanding rent.The appellant contended that the respondent had not validly terminated the lease since its notice requiring payment of the rent arrears was a notice falling within section 4(2) of the 1985 Act and had not been sent by “recorded delivery”, as required by section 4(4).Allowing the claim, the sheriff held that “recorded delivery” in the context of the Act was not confined to the Royal Mail recorded delivery service but encompassed other methods of delivery that involved formal recording, such as where service was executed by a sheriff officer who issued a certificate of execution of service. The appellant appealed.Held: The appeal was allowed. The resolution of the issue turned on a matter of statutory interpretation as to what parliament had intended by the words used in section 4(4). Although other Acts, such as the Recorded Delivery Service Act 1962, had used the expression “the recorded delivery service” in making provision for a lawful alternative to registered post, the absence of the word “service” from section 4(4) of the 1985 Act did not signify that parliament had intended something different. Since 1962, the expression “recorded delivery” had come to be used to refer to the recorded delivery service provided by the Royal Mail. Section 4(4) could be read only as a reference to that mechanism. Had parliament intended otherwise, different language would have been used. That did not produce unreasonable or absurd results that would justify a different conclusion: Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 distinguished. It was understandable that recorded delivery, which was recognised as a cheap and reliable method of formal communication, should have been adopted in the context of the service of notices regarding the termination of leases as a commonplace event that could be easily undertaken by a layperson.Moreover, if the words “recorded delivery” were not given that precise meaning, it could cause difficulties when identifying the kind of compliance to which they might properly relate; the need to avoid repeated litigation was a powerful reason for construing section 4(4) in the manner contended for by the appellant.Gregory Sanders (instructed by Fyfe Ireland LLP) appeared for the appellant; Craig Sandison QC (instructed by DLA Piper Scotland LLP, of Glasgow) appeared for the respondent.Sally Dobson, barrister