What happens when a property notice is served on the wrong party?

It is frequently the case that those involved in property or landlord and tenant relationships are required to give notices to one another. Whether it is a possession notice, a notice offering a new lease, a break or option notice, questions often arise when the notice contains mistakes.

The court considered these questions most recently in OG Thomas v Turner [2022] where a landlord’s notice to terminate an agricultural tenancy was served on the wrong party, following the tenant’s assignment of his tenancy to his company.

The case is the latest in a long line to consider the application of the Mannai principle as established in Mannai Investment Co v Eagle Star [1997] which is that notices may sometimes be valid, despite their mistakes, if a reasonable person receiving the notice would have understood what was intended.

As we set out below, however, that will not always be the case.

A reminder of the Mannai principle

The principle sets out that a minor defect in a notice will not necessarily invalidate the notice where the reasonable recipient, with knowledge of the factual and contextual background, would not be misled by the error.

Handing down judgment in Mannai, Lord Hoffmann famously said that if a clause required notice to be given on pink paper, the notice would not be valid if it was given on blue paper, no matter how clear the intention of the serving party was. It is debatable whether the Mannai principle will save a notice where it fails to comply with a formal requirement in the contract or statute under which the notice is being served, which is discussed later in this article.

Although this appears to be a straightforward concept, the Mannai principle has been applied somewhat inconsistently over the years.

OG Thomas v Turner (2022)

In OG Thomas v Turner (2022) the landlord issued a notice to quit to terminate the tenant’s tenancy.

The tenancy was originally an oral tenancy of an agricultural holding, made between Mr Thomas and the original freeholder. Mr Thomas later assigned the tenancy to his company. There was no requirement for him to seek landlord’s consent for the assignment. 

The assignment had completed by the time the landlord served its notice, which was addressed to Mr Thomas.  

It was held at first instance that the notice to quit was valid despite having been addressed to Mr Thomas, rather than his company. The court held that a reasonable recipient of the notice would have appreciated that it was a mistake addressing the notice to Mr Thomas rather than the company, and the recipient would have read it as being addressed to the company.

Mr Thomas appealed and won both on the first appeal and at the Court of Appeal. The notice had to satisfy common law requirements, so it had to be served on the right person to be effective.

The judge in the first instance had asked what the notice meant. However, he should have asked whether the notice had been given to the tenant. The tenant was Mr Thomas’ company and by addressing the notice to Mr Thomas, the wrong recipient was identified. Mannai could not rescue its validity.

What notices will the Mannai principle be unable to save?

There are certain situations where the Mannai principle will not apply:

1. A notice served at the incorrect location when a place of service is prescribed by the lease. In Claire’s Accessories v Kensington High Street [2001] the notice was considered to be invalid because the landlord served notice at the premises instead of the registered office address.
2. The Mannai principle will not save a statutory notice if essential information is missing or incorrect, contrasting the point above. Interestingly, in Sunrose Ltd v Gould (1962), which pre-dates Mannai, a section 25 notice which merely stated an expiry date of “15 July” without a year was held to be valid because there was an explanatory note on the reverse of the notice form.
3. When statutory notices are not in their prescribed form the Mannai principle will not generally be able to save their validity. However, if the legislation is flexible in allowing deviations from the prescribed form, there is some movement on this: if a notice can “substantially” comply with statutory requirements, and information is missing, Mannai may save the notice. However, each issue would have to be examined on a case-by-case basis.
4. Where notices have been served by the wrong person or on the wrong person the Mannai principle will not usually apply. However, in Havant International Holdings v Lionsgate [1999]; the court held that break notices were valid even though they were served by a subsidiary of the tenant company rather than the tenant. The court concluded that a reasonable landlord would not have been misled by the error.
5. Where there are contradictory notices being served, the Mannai principle will not usually apply. In Barclays Bank plc v Bee [2001], an otherwise valid section 25 notice offering the tenant a new lease was invalidated because it was served simultaneously with another section 25 notice refusing the grant of a new lease. However, the second notice failed to state the statutory grounds of opposition. The court held that the tenant could not be expected to understand the landlord’s intentions and both notices were held to be invalid.

Despite the cases on serving notices which name the wrong entity, the Mannai principle did act to save a landlord’s statutory counter-notice under the Leasehold Reform, Housing and Urban Development Act 1993.

In Lay v Ackerman [2004] the landlord mistakenly expressed its own name as the Trustees of the Portman Collateral Settlements when it should have been the Portman Family Collateral Settlements.

The Court of Appeal held that a reasonable person in the position of the recipient tenant would have been in no doubt that the notice was intended to have been served by the landlord, and it was irrelevant that the tenant might have been confused as to the actual identity of the landlord.  

Conclusion

The recent OG Thomas decision and the various conflicting cases only serve to highlight the importance of ensuring that notices (whether statutory, contractual or common law) are fully correct, before they are served.

The importance of carrying out enquiries via the Land Registry or even an agent in order to confirm the entity of the person to be served is crucial, as is fully checking the contractual and statutory requirements for notices. 

Experienced solicitors may use particular wording (such as addressing a notice to “the Tenant”) in cases where there is doubt in order to maximise the chances of the notice being valid and/or serve a variety of different notices, each without prejudice to the validity of the other.