Two recent (at time of writing) cases have provided a reminder of the importance of getting basic details correct in leases and formal notices relating to leases, and underlined the ongoing relevance of the House of Lords judgment Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd [1997] AC 749.
South of the border, the High Court judgment in Vanquish Properties (UK) Limited Partnership v Brook Street (UK) Limited [2016] EWHC 1508 (Ch) centred around the redevelopment of Fenchurch Street, London. From the judgment, it would appear that Vanquish were granted a lease by the owner of part of 108 Fenchurch Street. This meant that the previous tenant, Brook, became the subtenant. Vanquish promptly served a formal notice on Brook requiring them to vacate the premises – presumably to enable Vanquish to realise some value from the property during the redevelopment works.
Unfortunately for Vanquish, it would appear that someone forgot that under English law, a limited partnership (which Vanquish was) does not have a separate legal personality. This means that it could not hold title to the lease in its own right. The court noted that Vanquish “seeks to establish what is legally impossible” (para. 22). Accordingly, the break notice was rendered invalid.
Vanquish sought to argue, as one of the fall backs, that the lease must have been granted in favour of one or other of the partners of the limited partnership, and that the break notice should be read as if it said it was from that partner, and not the limited partnership. Reference was made to Mannani, which deals with the test for errors in formal lease notices. Unfortunately for Vanquish, the court did not take to this argument either. It will doubtless be of no comfort to Vanquish to note that, had they registered their limited partnership in Scotland, they would have been able to argue that it had a separate legal personality under Scots Law, and accordingly be capable of taking title to the lease.
North of the border, the Court of Session required to consider in detail a tenant’s break notice relating to an Aberdeen business park in Tyco Fire & Integrated Solutions (UK) Limited v Regent Quay Development Company Limited [2016] CSOH 97. The original lease was varied by a minute of variation, which incorporated an additional area into the definition of the premises in the lease. This appears to have caused the drafter of the break notice to come slightly unstuck in two ways, according to the Defender (landlord). Firstly, by defining the premises in the break notice as the original leased extent, and not including the additional area, and secondly by defining the lease as the original lease, not as varied.
Lord Tyre noted, with reference to Mannani, that “absolute freedom from ambiguity [in a notice] is not necessary” (para. 12). Applying the House of Lord’s logic to the facts before him, he held that “the reasonable recipient would not have been perplexed in any way by the error in the letter heading” (para. 16), and accordingly confirmed that the break notice was effective. The opinion does, however, note that the decision is being challenged, so watch this space…
Neither of these cases break new legal ground, but do serve as a reminder of the importance of fundamentals in leases and notices – and the worry and expense that entails when basic errors are spotted by the other side.
If you have any questions about service of formal notice, or other lease disputes, please get in touch.
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