The litigation in Ben Cleuch Estates Ltd v Scottish Enterprise [2008] CSIH 1; [2008] PLSCS 163 concerned the effect of a break notice that was served on a landlord’s parent company (instead of the landlord). The companies shared the same registered office. Consequently, the notice came to the landlord’s attention before the deadline for the service of the notice expired. None the less, the landlord claimed that the break notice was ineffective because it had been incorrectly addressed to its parent company.
The tenant relied upon Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 1 EGLR 57; [1997] 24 EG 122; [1997] 25 EG 138. It argued that the landlord had understood the purpose of the notice and had not been misled by it. However, the Scottish Court of Session ruled that this was irrelevant. Nothing turned on the construction of the notice in this case. The notice was invalid because it had been addressed to the incorrect party person. Consequently, the question of how the notice would have been understood by the correct recipient was also irrelevant, as was the fact that the notice ultimately found its way into the right hands.
The litigation in Ben Cleuch Estates Ltd v Scottish Enterprise [2008] CSIH 1; [2008] PLSCS 163 concerned the effect of a break notice that was served on a landlord’s parent company (instead of the landlord). The companies shared the same registered office. Consequently, the notice came to the landlord’s attention before the deadline for the service of the notice expired. None the less, the landlord claimed that the break notice was ineffective because it had been incorrectly addressed to its parent company.
The tenant relied upon Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 1 EGLR 57; [1997] 24 EG 122; [1997] 25 EG 138. It argued that the landlord had understood the purpose of the notice and had not been misled by it. However, the Scottish Court of Session ruled that this was irrelevant. Nothing turned on the construction of the notice in this case. The notice was invalid because it had been addressed to the incorrect party person. Consequently, the question of how the notice would have been understood by the correct recipient was also irrelevant, as was the fact that the notice ultimately found its way into the right hands.
However, the landlord had represented, by means of statements contained in rent invoices, that its parent company was, in fact, the tenant’s landlord. The representation was repeated, quarter after quarter, and was still being repeated when the break notice was served. At first instance, the Outer House of the Scottish Court of Session ruled that a reasonable party in the position of the tenant would not have relied upon the invoices, and other communications, when deciding on whom to serve the break notice. However, the Inner House of the Court of Session disagreed.
The landlord had caused the tenant to believe that its parent company was, in fact, the landlord. The tenant had reasonably and justifiedly believed that the parent company was the landlord and no further checks had been required to verify that that was, in fact, the case. Consequently, the landlord was barred from denying the validity of the tenant’s notice.
This case confirms that, in some circumstances, the courts may excuse reliance upon invoices and other communications to establish the identity of a landlord. However, it would be unsafe to rely upon this decision. Tenants should always check the registers of title, and the information held by the Registrar of Companies, before deciding on whom break notices should be served.
Can one merely address a notice to “the landlord” in cases where a landlord’s identity is in doubt? This is probably not a viable solution, especially in the case of notices sent by recorded delivery to a company’s registered office. The reasons for this are entirely practical. Companies often share the same registered office and it would be impossible to identify the party to which the notice should be delivered unless the notice is addressed to a recipient by name. The simple solution in such cases is to serve notices on them all.
Allyson Colby is a property law consultant
