Pennycook v Shaws (EAL) Ltd

Business lease — Appellant landlord serving notice to terminate tenancy — Respondent tenant erroneously serving counternotice stating willingness to vacate premises Respondent serving second notice to rectify error — Whether tenant able to revoke counternotice once served — Judge erring in distinguishing decided authority — Appeal allowed The respondent tenant leased premises under a tenancy that was subject to Part II of the Landlord and Tenant Act 1954. In 2001, the appellant landlord served a notice purporting to terminate the tenancy on the basis of certain breaches of covenant. The respondent served a counternotice, which had erroneously stated that he would be willing to vacate the property. Before the expiry of the two-month time limit for service of a counternotice, the respondent issued a second counternotice to rectify the error. He subsequently applied to the county court for the grant of a new tenancy. In allowing a strike-out application by the landlord, the county court judge held that, once issued, a counternotice could not be withdrawn. However, he granted to the respondent permission to take the matter to the High Court on a point concerning the respondent’s rights under the Human Rights Act 1998. The High Court judge allowed the appeal, not on human rights grounds, but on the basis that the authority upon which the county court judge had relied was distinguishable: see [2002] EWHC 2796 (Ch); [2003] 45 EG 176. The appellant appealed, claiming, inter alia, that: (i) the parties had prepared their submissions on the human rights grounds and they had not been prepared to re-argue the case on the basis of previous authority concerning the validity of the second counternotice; and (ii) if they had have been so prepared, the judge would have had the benefit of hearing authority concerning such service and would have found in the appellant’s favour on that basis. Held: The appeal was allowed. A counternotice where served was irrevocable, and it had not been open to the respondent to revoke his notice: see Re 14 Grafton Street [1971] 1 Ch 935 and Bridgers v Stanford [1991] 2 EGLR 265. The High Court judge had been bound by that decision, and would have understood himself to be so even if he had had the benefit of those authorities being cited to him. The judge had erred in deciding the case on points other than those upon which the parties had prepared their arguments. On that basis, the appeal would be allowed. Judith Jackson QC (instructed by asb law, of Croydon) appeared for the appellant; William Geldart (instructed by Hallmark Atkinson Wynter) appeared for the respondent. Vivienne Lane, barrister