More reasons to take Notice?

In Prudential Assurance Company -v- Excel UK and Another the Court has given tenants another warning as to the need to ensure that Notices are clear and expressed on behalf of the correct party. 

The Prudential entered into a Lease with Tibbett & Britten Limited and Tibbett & Britten Consumer Group Limited for 10 years at an initial rent of close to £1 million per annum. The tenants had the right to break after 5 years on not less than 9 months notice. Thereafter Exel Group acquired Tibbet & Brittain Limited and the company then changed its name to Exel UK Limited. 

On 13 June 2006, the solicitors for the two tenants served the break notice to terminate the Lease in March 2007. However they only served the Notice in the name of the first Tenant, being Exel UK Limited. By the time the mistake became apparent there was no time in which to serve a further notice and so litigation ensued as to whether the original notice was valid. 

The tenants argued that the Notice was valid as the solicitors who served it were authorised to act for both companies and so the omission of any reference to Tibbet & Brittain Consumer Group Limited was either readily apparent to the Prudential or, as a result of past dealings, if that was not the case then the Prudential had in any event accepted that the actions of Exel covered both tenants so that, again, the Notice was effective. 

Prudential argued that the law on the point required any Notice to clearly and unambiguously communicate what was intended by it. The solicitors that served the Notice had, prior to service of the same, only held themselves out as acting on behalf of Exel and had referred in other proceedings to Exel being the only tenant under the terms of the Lease.  Prudential therefore said that the position of Tibbet & Brittain Consumer Group Limited would not have been at all apparent to anyone receiving the Notice i.e. reference to Tibbet & Brittain Consumer Group Limited could have been deliberately omitted for some reason. 

The Court agreed with Prudential and held that in light of previous dealings it was not clear that the Notice had been served on behalf of both Tenants.  The Court found that as the heading to the Notice had correctly referred to both Tenants but had then referred to the solicitors acting only for Exel it could not have been assumed that the position of Tibbet & Brittain Consumer Group Limited had simply been overlooked. 

In terms of the previous dealings argument the Tenants sought to rely upon, the Court found that Prudential had not previously focussed on the correct identity of the Tenants and had not given any assurance or reached any common understanding that Exel could act as if it was the only Tenant.  As a result of the Court's finding, the Lease will now continue until 2012, although the Tenants have secured permission to appeal. 

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