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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Trafford Metropolitan Borough Council v Total Fitness (UK) Ltd [2002] EWCA Civ 1513 (18 October 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1513.html Cite as: [2003] 2 P & CR 2, [2002] 44 EG 169, [2002] EWCA Civ 1513 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MANCHESTER DISTRICT REGISTRY
(His Honour Judge Howarth)
Strand London WC2 Friday 18 October 2002 |
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B e f o r e :
LORD JUSTICE JONATHAN PARKER
____________________
TRAFFORD METROPOLITAN BOROUGH COUNCIL | ||
Claimant/Respondent | ||
-v- | ||
TOTAL FITNESS (UK) LIMITED | ||
Defendant/Appellant |
____________________
Smith Bernal Reporting Limited
190 Fleet Street London EC4A 2AG
Tel: 020 7421 4040 Fax: 020 7831 8838
(Official Shorthand Writers to the Court)
Mr E Cole (instructed by Messrs Nabarro Nathanson, Sheffield) appeared on behalf of the Respondent Claimant.
____________________
Crown Copyright ©
"... a reasonable recipient who had seen [the notices] at the time would have been left in reasonable doubt as to which of two termination dates the notice purported to rely on as being the determining date for the lease."
"If the Landlord requires the Premises for the purpose of demolition or reconstruction or redevelopment of the Premises or a substantial part of them or for the purpose of carrying out substantial works of construction on the Premises or part of them (whether or not the works of demolition reconstruction redevelopment or construction shall be intended to be carried out by the Landlord) it shall be lawful for the Landlord to determine this Lease at any time by giving the Tenant as much notice as possible but with a minimum of three months' notice in writing."
"In accordance with the terms of [the agreement dated 31 March 2000] as varying [the lease] I hereby give you two weeks' notice of determination of the same and would further confirm for the avoidance of all doubt that the car park, the subject of the Lease, will be closed as at and from Monday the 8th October 2001 ..."
"In accordance with the terms of the Car Park Lease (as varied by the Agreement) and for and on behalf of [the landlord] I hereby give you 17 days notice of determination of the same and would further confirm for the avoidance of all doubt that the Car Park, the subject of the Lease, will be closed as at and from midnight on the 24th October 2001 ..."
"My Lords, reference to a `month' in a statute is to be understood as a calendar month. The Interpretation Act 1889 says so. It is also clear under a rule that has been consistently applied by the courts since Lester v Garland (1808) 15 Ves Jun 248, that in calculating the period that has elapsed after the occurrence of the specified event such as the giving of a notice, the day on which the event occurs is excluded from the reckoning."
"The question is not how the landlord understood the notices. The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene. The approach in Reardon Smith Line Ltd v Yngvar Hansen-Tangen (trading as H E Hansen-Tangen [1976] 1 WLR 989, which deals with the construction of commercial contracts, is by analogy of assistance in respect of unilateral notices such as those under consideration in the present case. Relying on the reasoning in Lord Wilberforce's speech in the Reardon Smith case, at pp.996D-997D, three propositions can be formulated. First, in respect of contracts and contractual notices the contextual scene is always relevant. Secondly, what is admissible as a matter of the rules of evidence under this heading is what is arguably relevant. But admissibility is not the decisive matter. The real question is what evidence of surrounding circumstances may ultimately be allowed to influence the question of interpretation. That depends on what meanings the language read against the objective contextual scene will let in. Thirdly, the inquiry is objective: the question is what reasonable persons, circumstanced as the actual parties were, would have had in mind."
"There is no justification for placing notices under a break clause in leases in a unique category. Making due allowance for contextual differences, such notices belong to the general class of unilateral notices served under contractual rights reserved, eg notices to quit, notices to determine licences and notices to complete: Delta Vale Properties Ltd v Mills [1990] 1 WLR 445, 454E-G. To those examples may be added notices under charter parties, contracts of affreightment, and so forth. Even if such notices under contractual rights reserved contain errors they may be valid if they are `sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate:' the Delta case, at p.454E-G, per Slade LJ and adopted by Stocker and Bingham LJJ; see also Carradine Properties Ltd v Aslam [1976] 1 WLR 442, 444. That test postulates that the reasonable recipient is left in no doubt that the right reserved is being exercised. It acknowledges the importance of such notices. The application of that test is principled and cannot cause any injustice to a recipient of the notice."
"I propose to begin by examining the way we interpret utterances in everyday life. It is a matter of constant experience that people can convey their meaning unambiguously although they have used the wrong words. We start with an assumption that people will use words and grammar in a conventional way but quite often it becomes obvious that, for one reason or another, they are not doing so and we adjust our interpretation of what they are saying accordingly. We do so in order to make sense of their utterance: so that the different parts of the sentence fit together in a coherent way and also to enable the sentence to fit the background of facts which plays an indispensable part in the way we interpret what anyone is saying. No one, for example, has any difficulty in understanding Mrs Malaprop. When she says `She is as obstinate as an allegory on the banks of the Nile', we reject the conventional or literal meaning of allegory as making nonsense of the sentence and substitute `alligator' by using our background knowledge of the things likely to be found on the banks of the Nile and choosing one which sounds rather like `allegory'.
Mrs Malaprop's problem was an imperfect understanding of the conventional meanings of English words. But the reason for the mistake does not really matter. We use the same process of adjustment when people have made mistakes about names or descriptions or days or times because they have forgotten or become mixed up. If one meets an acquaintance and he says `And how is Mary?' it may be obvious that he is referring to one's wife, even if she is in fact called Jane. One may even, to avoid embarrassment, answer `Very well, thank you' without drawing attention to his mistake. The message has been unambiguously received and understood.
If one applies that kind of interpretation to the notice in this case, there will also be no ambiguity. The reasonable recipient will see that in purporting to terminate pursuant to clause 7(13) but naming 12 January 1995 as the day upon which he will do so, the tenant has made a mistake. He will reject as too improbable the possibility that the tenant meant that unless he could terminate on 12 January, he did not want to terminate at all. He will therefore understand the notice to mean that the tenant wants to terminate on the day on which, in accordance with clause 7(13), he may do so, ie 13 January."
"Now if one applies that proposition, a proposition which has apparently been good law from 1808 to 1981, and we can all if we sit down do the arithmetic, but it is between 170 and 180 years, if one applies that proposition to this notice, one excludes 24 September 2001 from the two weeks which have to be given, and according to the first words of the letter are being given, and thus the period starts at the first moment of 25 September, and two weeks then will end on the last possible moment of Monday 8 October and not in accordance with the words of the letter as at and from Monday 8 October 2001, which must in my judgment mean as at and from the first moment on which the date becomes 8 October 2001. In other words, one minute past midnight. Indeed, one second past midnight if one has a stopwatch. Thus, the notice while purporting to give two weeks notice of determination, has in it later a provision that only gives 13 days notice, not two weeks notice."
"It seems to me that that is not a matter whereby construction can cure the notice. That is a matter where in reality what the court would be doing would be rectifying the notice and rectification of a unilateral notice, which whilst not I think technically impossible, is not what I am being asked to do in this case. One has to look at a notional reasonable recipient of the notice. A person who Lord Justice Nourse said has been added to the category of various people to whom the law for different purposes gives imaginary life. The man on the Clapham omnibus. No-one ever actually brings him off the omnibus and into court to give evidence. The objective bystander or nosy parker, as sometimes it might be called, in regard to cases where an implied term is being inserted, puts a question to the parties `But if such and such arises, what would you mean?', and they both unhesitatingly give the same answer. We know they are never there and they do not exist, and similarly the reasonable recipient is not the recipient necessarily in each and every case and one could not call someone who is a professional reasonable recipient of notices to give his interpretation of what he would have understood in this particular case. It is a colourful way of describing what the trial judge believes ordinary members of the relevant part of the community concerned would have understood in the context in which this notice was served."
"Now it seems to me that the first notice is too short. It does not give or may not give, and that is fatal, two full weeks, and it must fail on that ground, and also it seems to me it fails on the ground that there is an ambiguity which cannot be cured, in the case of a break clause of this kind by looking at Mannai principles, and I do not think I need to go into this matter. The notice has to be construed against the background of the terms of the lease, and I accept that. The question is when doing so, does it make an uncertainty on the face of the notice into a certainty, and I do not think it does, for reasons which I have endeavoured to state."
"One thus cannot, it seems to me, impose a degree of conveyancing failsafe approach to the words of this notice. One has to postulate what a reasonable recipient of it would think, and he would be left, it seems to me, in the same doubt as the reasonable recipient of the first notice would have been left, does the 17 days starting on the next day apply or does midnight as between 24 and 25 October govern the notice? There is a 24 hour period which remains in limbo. Is the recipient of that notice, to use religious analogy, to be left in purgatory for 24 hours? I think the answer is no, and the notice fails for that reason."
"Of course, the statement that every person is presumed to know the law, is wrong. A better way of putting it usually in a criminal context is ignorance of the law is no defence, and it seems to me that one cannot predicate that a reasonable recipient of a notice served pursuant to a break clause is ignorant of the law. That it frankly seems to me is to go too far. They may know the law, they may not, and on any view of the matter if you give two methods of calculating the date on which a lease is going to come to an end, it seems to me the giver of the notice has a duty to ensure that those two methods when used lead one to the self-same date, not to a date in one case which is either 24 hours earlier or 24 hours later than the date given by the second method. If you do that, it seems to me that you sow the seeds of confusion and ambiguity in such a way that unless the context of the break clause as in the Mannai case can inevitably lead you to one conclusion, namely that one of the two dates must be the correct one, one leaves the tenant receiving the notice hopelessly and instantaneously confused, to adopt the words of Wilson J from the case of Barclays Bank Plc v Bee [[2002] 1 WLR 332, at p.344] ... and not just Wilson J but also when one looks at the judgment of Aldous LJ who gave the first judgment in the Court of Appeal, the test is was the recipient left in any reasonable doubt by the notice, and on the facts of that case, which were very different from this, the Court of Appeal had no doubt that the tenant was left in reasonable doubt and a reasonable recipient would have been left in that doubt, and in my judgment on the facts of this case, without seeking to in any way lay down guidelines for the future in other and different cases, on the facts of this case, I conclude without any hesitation at all that in the case of each of these notices, a reasonable recipient who had seen them at the time would have been left in reasonable doubt as to which of two termination dates the notice purported to rely on as being the determining date for the lease. Was it in the case of the second notice 24 or 25 October, and in the case of the first notice, was it 8 or 9 October, and for those reasons I have concluded that each of the two notices was a bad notice."
"Secondly, I anyway do not regard the Mannai case as supporting Mr Gerald's approach. The House of Lords did not suggest that anything less than full compliance with clause 7(13) would operate to effect a valid operation of the break clause in that case. The majority held that, on the true construction of the break notice, it had been validly operated: it communicated the information which the clause required. Similarly, in cases such as this one, if the tenant is to exercise his Part 1 rights validly, he has to serve a notice in the prescribed form containing the mandatory particulars. If and to the extent that he does not provide those particulars, it is no answer that it does not matter because the landlord already knows them. In principle, subject only to the saving effect of paragraph 6(3) of Schedule 3 with regard to inaccuracies in the information provided, any omissions either will or may be fatal to the validity of the notice."
"I have said that it is important to appreciate that in neither of the two cases on notices served under break clauses to which I have referred - the Carradine case and the Mannai case - did the break clause in the lease require the notice to be given in any particular form. Had the break clause required the notice to be in a particular form, the result would have been different. The point was recognised by Peter Gibson LJ in York's case [1998] 2 EGLR 25 at 27:
`It is of course right, as [counsel] for the defendants has submitted, that one should bear in mind that in a statutory context there may be requirements which have to be observed and without which a notice will be invalid. But the same may be true in the case of a contractual notice. For my part, I can see no material distinction between the approach in a case such as the present and the approach which the House of Lords has said [in Mannai] should be adopted in the case of a notice in a contractual setting.'"
"We were referred, also, to the decision of this court in Speedwell Estates Ltd v Dalziel [2001] EWCA Civ 1277, [2001] All ER (D) 454 (Jul). The notices, in that case, were notices of the tenants' desire to have the freehold under Pt I of the Leasehold Reform Act 1967. Paragraph 6 in Pt II of Sch 3 to the 1967 Act required such a notice to be given in a prescribed form; and set out the particulars which it should contain. At the relevant date the form prescribed was Form 1 in the schedule to the Leasehold Reform (Notices) Regulations 1997, SI 1997/640. The schedule to Form 1 contained nine paragraphs directed to the provision by the tenant of various information. The deficiencies in the forms, as completed by the tenants, included failure to identify the instruments creating the tenancies, failure to provide any information as to the rateable values of the houses on the appropriate day sufficient to show that the rent was a low rent, and failure to provide particulars as to the tenants' occupation of the houses. The court held that the failure to provide particulars as to the tenants' occupation, and the failure to provide information as to rateable value, was fatal to the validity of the notices.
Rimer J (with whose judgment the other members of the court, Pill and May LJJ, agreed), after referring to the speeches in the House of Lords in the Mannai case, pointed out (at [17]) that it was important -
`to emphasise that the House of Lords was not saying that anything less than proper compliance with the terms of a contractual break clause would be sufficient to effect the break.'
He referred, also, to the passage in the judgment of Peter Gibson LJ in York v Casey [1998] 2 EGLR 25 at 27 which I have already set out. He went on (at [22]) to say this:
`... I consider that the better approach is to look at the particular statutory provisions pursuant to which the notice is given and to identify what its requirements are. Having done so, it should then be possible to arrive at a conclusion as to whether or not the notice served under it adequately complies with those requirements. If anything in the notice contains what appears to be an error on its face, then it may be that there will be scope for the application of the Mannai approach, although this may depend on the particular statutory provisions in question. The key question will always be: is the notice a valid one for the purpose of satisfying the relevant statutory provision.'
In my view, that passage encapsulates, succinctly and accurately, the correct approach. I may add that I think that that is the approach to be adopted not only in relation to notices served under statute but also to notices served under contractual provisions such as those commonly found in leases."
Order: appeal allowed and order below set aside; declaration made in form to be agreed by counsel; respondent to pay costs of appeal, to be subject to detailed assessment, and to pay within 14 days £10,000 on account of appellant's costs; order for costs below relating to the whole action set aside; no order as to costs on application for summary judgment; leave to appeal to the House of Lords refused; counsel to lodge an agreed minute of order.