Legal experts at Knights have urged caution to practitioners and business landlords who assume statutory provisions regarding the service of notices will override contractual terms that deal with the service of notices, following a High Court ruling which saw a judge rule in favour of a tenant claiming that notice to evict had not been properly served.
Adrian McClinton, a Partner in property litigation at Knights, issued the warning after the presiding judge in Lamba v Enfield LBC ruled in favour of the tenant who did not receive notice of eviction.
The case involved Mr Lamba who ran an estate agency business from a leased property protected by the Landlords and Tenants Act 1954 (‘1954 Act’). In December 2017, Enfield acquired the freehold of the property by way of compulsory purchase as part of a regeneration scheme.
In November 2017, a notice under section 25 of the 1954 Act was served on Mr Lamba, purporting to terminate the lease in June the following year. The notice was sent by special delivery but was returned undelivered. No further copy of the notice was sent, with the judge not convinced by Enfield’s argument that there had been a further copy sent by post.
Following the compulsory purchase order, Mr Lamba negotiated for compensation, with negotiations continuing into 2018. In June that year, Enfield gained access to the property to carry out a survey. The following month, Mr Lamba discovered the locks had been changed and said he was not aware of the section 25 notice until the locks had been changed.
He eventually received a copy of the notice in June 2019 and issued a claim for unlawful eviction and associated damages. The damages sought included the cost of fitting out alternative premises (£235,000), and loss of business profit for several years, estimated at £98,689 a year.
Enfield pushed back, claiming the notice was validly served under the 1954 Act even though it had been returned undelivered.
Concluding, the judge found that the contractual notice provisions in the lease, which had been freely negotiated and agreed by the parties, took precedence and overrode the statutory method prescribed by the 1954 Act and that Enfield could not prove delivery of notice in accordance with these provisions. This meant the purported service of the section 25 notice was not valid.
Commenting on the practical implications of the case, McClinton says: “Whilst not in any way being critical of the lawyers that dealt with a notice that had been returned as ‘not delivered’, there is always a danger for practitioners to rely on statutory interpretation alone where there is a possible practical solution to arrange service by an alternative method – and this case demonstrates that.
Going forward, practitioners may want to:
1. Examine service clauses closely and pay particular attention to whether the service provisions dictate how any notices should be served.
2. Allow for sufficient time for the notice to be served when calculating the minimum notice period required; and,
3. Look at considering serving notice in person if there is any uncertainty in effecting delivery.
This case has wider implications for any statutory notice served in relation to a lease. It should act as a cautionary tale that mandatory contractual service provisions can, where drafted broadly enough, override statutory defaults and that each lease must be scrutinised on its own terms when serving statutory notices and requests.”
The decision is being appealed.