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Never take chances when serving legal notices

Published 04/10/2016

The House of Lords ruled in favour of a tenant due to the terms of a notice
The House of Lords ruled in favour of a tenant due to the terms of a notice

It is a basic rule in law that requirements for the service of notices, whether pursuant to a contract or statute, must be strictly complied with. This is a harsh rule which has been continually tested by the courts, culminating in the 1997 House of Lords case in which a principle was developed - known as the Mannai principle after one of the parties to the action.

This mitigated against the harshness of the rule by allowing a defect in a notice not to invalidate the notice in circumstances where the defect is minor and the reasonable recipient, with knowledge of the factual and contextual background, would not be perplexed by the error.

Mannai concerned a break clause in a lease. The tenant had a right to break the lease by "serving not less than six months' notice in writing ... to expire on the third anniversary of the term commencement date".

The notice served by the tenant stated that the termination date was January 12, 1995. The third anniversary date that should have been stated, however, was January 13, 1995.

The House of Lords decided that, even though the notice was erroneous, the notice was otherwise clear and unambiguous, and left the landlord in no reasonable doubt about the tenant's intention. A landlord in England has recently not been so lucky. In a High Court action heard earlier this year, Vanquish Properties (UK) Ltd v Brook Street (UK) Ltd, the judge agreed with the tenant that the notice served by the landlord on the tenant was invalid because the wrong party had served the notice.

The landlord's interest in the lease had been vested in a limited partnership which itself did not have separate legal entity.

The landlord tried a number of arguments to prove the validity of the notice, and its last ditch attempt to argue the Mannai principle failed on a number of grounds, including that the reasonable recipient of the notice would have been left in doubt about what was intended.

The case highlighted not only the importance of checking and double checking the detail when serving notices, including naming the correct party serving the notice, but also the importance of naming the correct legal entity in a contract in the first place. This can be straightforward where the contracting party is a limited company or a sole trader, but can be more complex where there is a partnership, a trust or other form of unincorporated body.

In the Vanquish case, the landlord was a limited partnership, not to be confused with a limited liability partnership.

A limited partnership, while it is registered at Companies House, is not a separate legal entity in its own right, whilst a limited liability partnership has its own legal personality and can contract with third parties.

Care needs to be taken to ensure that the correct legal entity is named in contracts and notices arising out of them.

Celia Worthington, senior partner of the commercial department of Worthingtons Solicitors, Belfast office, can be contacted on celia@worthingtonslaw.co.uk or 028 9043 4015

Belfast Telegraph

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