Court of Appeal decides defective notice to quit not saved by 'Mannai' principles

On 3 November 2022, the Court of Appeal handed down judgment in the second appeal in O G Thomas Amaethyddiath v Turner & Ors [2022] EWCA Civ 1446.

This was an agricultural tenancy case concerning the validity of a landlord's notice to quit and the application of the Mannai test (so named after its application in the well-known Mannai Investment Co v Eagle Star Life Assurance [1997] AC 749 case). The issue for the Court to determine was simple: whether the notice to quit the agricultural holding was valid.

Summary

The Court of Appeal overturned both the decision at the first instance and the decision on the first appeal ([2022] EWHC 1239), holding that a notice to quit unambiguously addressed to the former tenant of a holding was not given to the current tenant, and nor could it be interpreted as such.

The landlord's argument that the notice clearly and unambiguously communicated the required message, failed.

Facts of the case

Mr Thomas has been the tenant of an agricultural holding pursuant to an oral tenancy from year to year, governed by the Agricultural Holdings Act 1986.

On 1 November 2019, and without notifying the landlord, Mr Thomas instructed solicitors to assign the tenancy to a newly incorporated company called O G Thomas Amaethyddiaeth CYF, of which he was the sole director and shareholder and whose registered office was the same as his home address. Because the tenancy was oral, it contained no restriction on its assignment by the tenant.

Three days later the landlord served a notice to quit, addressed to Mr Thomas (not the company), and delivered it by hand to his home address. No counter-notice was given.

The issue for the Court to consider was whether the notice served on Mr Thomas was valid against the company.

Decision

Both of the lower Courts held the notice to be valid against the company. Applying the test from Mannai, both HHJ Jarman KC at first instance and Zacaroli J on first appeal considered that the notice clearly conveyed the landlord's intention to require the person who was in fact the tenant (whoever they may be), to deliver up possession of the land. Therefore, the notice was deemed validly given to the company.

However, the Court of Appeal disagreed (relying on the decision in R (Morris) v London Rent Assessment Committee [2002] EWCA Civ 276 and two Scottish decisions from the Inner House of the Court of Session). It held that addressing a notice to quit to the wrong recipient amounted to a failure to satisfy a "formal" condition for the notice's validity, which could not be saved by Mannai.

In Mannai itself, the House of Lords decided that, even though there was an error in the notice given, the notice was otherwise clear and unambiguous, and left no reasonable doubt about its intention. That notice was 'saved,' and the tenant was able to break its lease.

However, Mannai will only save a notice where the intention to serve on the intended recipient is nonetheless clear. The Lords in Mannai made a distinguishment between "formal" requirements on one hand, and "requirements to impart information" on the other. As an example, Mannai principles can save a notice with typographical mistakes, as these are a requirement to impart information. Lord Hoffman famously illustrated the difference between these requirements when he stated that: "If the clause had said that the notice had to be on blue paper, it would have been no good serving a notice on pink paper, however clear it might have been that the tenant wanted to terminate the lease."

In O G Thomas however, the failure to serve on the correct tenant was a "formal" condition, not an information requirement. The landlord did not know the tenancy had been assigned and did not know the company even existed, so it could never have intended to serve the notice on the company in compliance with the formal condition of the notice.

The tenant's appeal succeeded.

Comment

O G Thomas is an important decision for property practitioners and a helpful reminder of the principles laid down in Mannai - where a notice does not comply with formal requirements, it will not be valid. It naturally follows that where a notice has been clearly given to the wrong recipient, Mannai will not save it.

It serves as a timely reminder to make appropriate enquiries of the recipient whenever notices are being served.

At Charles Russell Speechlys LLP we have considerable experience in the drafting and service of notices. Please do contact us if we can assist.