Levett-Dunn & Ors v NHS Property Services Ltd

This case concerns the validity of notices served by the defendant as tenant of leasehold office premises, by which it sought to exercise a contractual break clause. The claimant landlords seek declarations that the notices were not properly served on them and that in consequence the relevant leases still subsist.

There are three leases, but as the terms in issue are identical in all three I shall refer to them without distinction. They relate between them to all three floors of a building called Coniston House at Chapel Ash on the Wolverhampton Ring Road. The leases were dated 27 September 2010 and the premises were let for a term of 10 years from 11 July 2010 at a combined rent in excess of £200,000pa, subject to the break provisions referred to below.

The leases were registered, and so consisted of a Land Registry form setting out prescribed particulars and a deed of lease executed by the parties. It is not suggested there is any material discrepancy between the two. The first party is described thus in the Deed of Lease:

“Frederick Levett-Dunn, Simon Levett-Dunn, Howard Evans and Barnett Waddingham Trustees Ltd, all of 75 Tyburn Rd Erdington Birmingham B24 8NB (hereinafter called "the Landlord" which expression shall where the context so admits include the person or persons for the time being entitled to the reversion of the premises hereby demised immediately expectant on the term hereby granted)…”

The address referred to is central to the case. The four named parties were at the time the trustees of the Howard Evans Roofing Ltd Retirement Benefit Scheme, a Small Self Administered Pension Scheme (or "SSAP"), established to provide benefits for the directors of Howard Evans Roofing Ltd ("the company"). The freehold of Coniston House is an asset owned by that scheme. The three individuals were all beneficiaries of the scheme and were or had been directors of the company. 75 Tyburn Rd was at the time the trading address of the company. Barnett Waddingham Trustees Ltd is a professional trustee company associated with the well known firm of actuaries and pension advisers.

The named tenant was Wolverhampton City Primary Care Trust ("the PCT"). It is common ground that the defendant is the statutory successor in title to the PCT.

Clause 6.1 of the Deed of Lease contains the break clause. It provides:

“If the Tenant wishes to determine this lease at the end of the third, sixth or ninth year of the Term and gives the Landlord not less than six months prior written notice of that wish… then on expiry of the said notice ("the Break Date") the Term will cease and determine…”.

Clause 5.9 deals with service of notices and provides as follows:

“For the purpose of service of all notices hereby or by statute authorised to be served the regulations as to service of notices contained in section 196 of the Law of Property Act 1925… shall be deemed to be incorporated herein but service on any one of the parties comprising the Landlord shall be deemed to be service on all and notices to be served on the Tenant are to be sent to the Director of Facilities at Coniston House…or such other address as the Tenant shall notify to the Landlord in writing.”

Section 196 provides:

“196 Regulations respecting notices

…(3) Any notice required or authorised by this Act to be served shall be sufficiently served if it is left at the last-known place of abode or business in the United Kingdom of the lessee, lessor, mortgagee, mortgagor, or other person to be served...

(4)

Any notice required or authorised by this Act to be served shall also be sufficiently served, if it is sent by post in a registered letter addressed to the lessee, lessor, mortgagee, mortgagor, or other person to be served, by name, at the aforesaid place of abode or business…”

Four separate notices, one addressed to each of the parties named as landlord, were delivered by recorded delivery on 19 December 2012 to 75 Tyburn Rd. Their receipt was recorded on an electronic terminal on which some individual made a signature using a stylus on a screen. The signature is wholly illegible. Four forms of receipt have been printed, one for each letter and showing their different registered mail numbers. The form of signature is identical, so presumably was only made once and copied electronically. Each has a printed name of the recipient: "Howard Evans". It is not known whether this was typed by the Royal Mail employee or the recipient, though one suspects it is more likely to have been the former, and again copied electronically to all four items.

The notices stated that the tenant wished to exercise the break to bring the leases to an end on 10 July 2013, being the end of the third year of the term. To be valid the notice would have had to be "given" before 11 January 2013, ie six months before the break date.

The claimants' position is that these notices were ineffective, because:

The notices would not have been a surprise to the landlord. It is accepted that there had been at least one meeting beforehand in September 2012, and possibly another in December, at which the tenant had stated its intention to exercise the break. It is not however suggested that anything said or done at these meetings was sufficient to constitute notice for the purposes of the break clause.

The notices were followed up by Mr. Tara, the property manager of the PCT, in an email to Mrs Peers, a director of the company that managed Coniston House for the claimants. In an email sent at 10.38 on Wednesday 9 January 2013 he said:

“As you are aware the PCT have given notices on all the floors for Coniston House, however Mike Goodwin from the Royal Wolverhampton Hospital Trust would like to meet [to discuss] the possibility to take a re-lease of part of the building. Are you available on [various dates]…

”

There was no reply until 9.48 on Monday 14 January 2013, by which time of course the deadline for notice had expired. Mrs Peers then said:

“We have not received any notices and I have now spoken to our clients and they cannot trace having received any. At this time it is not appropriate to convene a meeting until the position is clarified.”

Somewhat to my surprise, it appears that little or no enquiry has been made as to what Mrs Peers did when she received Mr. Tara's email and whether, for instance, she contacted any of the landlords to tell them about it. Had she done so before 11 January, the existence of the notices would have been brought to their attention and, as Mr. Brennan accepted, they would have been effective. This issue seems not to have been raised by the defendants, as far as I can see. The claimants' pleading arguably skates around it- it is pleaded that the notices "were not personally delivered" and were not "served in accordance with the terms of the leases". The same may, in my view, be said of their subsequent correspondence. No point is however taken about the email or actual knowledge in the Defence. Mrs Peers gave evidence, but neither her witness statement nor that of any of the claimants makes reference to Mr. Tara's email or what she did on receipt of it. Nor do those witness statements expressly state that the notices did not come to the attention of Mr. Levett-Dunn or Mr. Evans, as might perhaps have been expected. It does not appear that any disclosure has been sought of, for instance, any email or other records of Mrs Peers that might show when and how she communicated Mr. Tara's email to her clients.

After I expressed my surprise that the witness statements did not cover this point, Mr. Levett-Dunn was asked whether he was the person to whom Mrs Peers had spoken, and if so when. He accepted that he was the usual point of contact for pension fund matters rather than Mr. Evans, and that it was possible Mrs Peers had spoken to him, but said he could not recall any such conversation or say when it may have taken place between 9^th and 14^th January. He was not pressed further on the point, and no similar questions were asked of Mrs Peers. In closing, Mr. Rosenthal confirmed that he did not take any point that the notices served had come to the actual attention of Mr. Levett-Dunn or Mr. Evans before 11 January 2013.

On 3 July 2013, shortly before the date on which the leases would end if the break was effective, Mr. Tara contacted Mrs Peers to arrange return of the keys. She replied by email saying:

“You will be aware of our client's contention that the notices served on your behalf were ineffective and that as a consequence the three leases remain in being and you will have a continuing liability to pay rent and to fulfil the other obligations under those leases.

Without prejudice to that contention and to the continued existence of the leases our clients recognise that it is in the interests of all concerned that the premises are properly secured… Accordingly, we are prepared to accept the keys back from you purely for the purpose of enabling the premises to be secured. The acceptance of the keys is not to be taken either as an acknowledgement that the notices purporting to activate the break clauses were effective to do so or as an acceptance of a surrender of the leases… If at any stage your client wishes to re-enter the premises then arrangements will forthwith be put in hand to return the keys to your clients and to take any other steps needed to enable such re-entry.”

Mr Tara replied on 5 July 2013 saying "I accept that the keys will be accepted notwithstanding the dispute regarding the validity of the notices." Mr Rosenthal accepts that this means that the return of the keys does not have the effect of either of an acknowledgement of the effectiveness of the disputed notices or of terminating the leases by way of surrender.

In September 2013 Mr Tara sent an e-mail to Mrs Peers with a list of meter readings as at the contested date of termination of the leases. On 19 September Mrs Peers sent a reply saying:

“… I am still trying to sort out these accounts.

I have received an invoice from British Gas addressed to NHS Property Services which is for the period from July 1 onwards. The Landlord took over responsibility from 11th July onwards not 1st July so this has to be rectified … NHS Property Services is responsible for payment for the period July 1st to 10th July inclusive and the invoice will have to be amended to reflect this…

Please note that the responsibility for all invoices on Coniston House is not the responsibility of Midland Commercial Properties Ltd, but responsibility lies with the landlord, Trustees of Howard Evans (Roofing) Ltd Retirement Benefit Scheme. Midland Commercial Properties Ltd has no legal responsibility for any utilities or any services from 11th July onwards. ”

Mr Rosenthal submits that this e-mail, with its references to "responsibility" of the landlord from 11^th July onwards, constitutes a change of position from that taken in the e-mails sent in July, and amounts to an acknowledgement or acceptance that the leases had come to an end on 10 July, 2013, alternatively an act sufficient to amount to surrender by operation of law. That is disputed.

In fact, Mrs Peers' company did on behalf of the landlord pay the bills on one electricity account, relating to a mater that served a security lighting circuit essential, she said, for the premises to be kept under inspection. There were a number of other accounts for other metered supplies to various parts of the premises, but these had not been paid by her. There is no evidence whether they were paid by anyone else.

Read on its own, it seems to me that Mrs Peers' email would arguably amount to an acceptance that the landlord had assumed responsibility of utilities from 11 July onwards, implying an acceptance that the leases were at an end and it was the occupier after that date. However, in the context of the earlier very carefully drafted email exchange establishing a "without prejudice" regime in which the landlord was given the keys (and therefore access) for purposes of securing the premises, it would be reading too much into that email to regard it as a fundamental change of position. It may have been incautiously worded, but in my view was intended as no more than (a) furthering the practical arrangements necessary for securing the building (b) confirming that if the landlord were to be liable for any bills it would only be from 11 (and not 1) July and (c) emphasising that if anyone other than the tenant was liable for utilities it would be the landlord and not the management company. For the same reason, that letter cannot be regarded as an unequivocal act valid only on the footing that the leases were at an end and so amounting to a surrender (see below). I accordingly reject the defendant's argument on this point.

Strangely, certain payments in respect of rent were made by the tenant after the alleged date of termination of the leases. There does not seem to be any pattern to this, and I have no correspondence surrounding the payments. It appears that rent invoices continued to be sent to a centralised accounting department and some (but not all) were paid. There is evidence from Mr. Tim Dean, who is a property manager for the defendant that these payments were made by mistake, which Mr. Tara suggested may have happened because the newly established central finance department was at the time amalgamating the functions previously carried on by over 160 separate PCTs. Mr. Dean's evidence was not challenged, nor was Mr. Tara's explanation. I accept it and find that the payments were made by mistake and cannot amount to any acceptance by the defendant that the leases remained in force.

In mid 2014 the landlords' agents began marketing Coniston House with a view to reletting it. It seems they were fairly swiftly contacted by Marstons Plc which was looking for temporary office space while its own nearby head office was being refurbished. On 4 August 2014 heads of terms were signed and on 13 October 2014 a lease was entered into for a fixed term from that date until 31 January 2016 of the whole of Coniston House, at a rent of £216,500. A short extension was later agreed. There can be no doubt from the correspondence surrounding this lease that Marstons were intending to and did go into occupation under it. The defendants contend that this amounts to a retaking of possession by the landlord inconsistent with the continuance of the disputed leases, which must therefore have come to an end by way of surrender on 4 August 2014, alternatively 13 October 2014, if they had not already been terminated prior to that date. That is disputed.

The reletting occurred after a failed mediation between the parties. It is clear from the evidence that there was some discussion at the mediation relevant to the reletting, but both parties are agreed that everything that occurred at the mediation is privileged. I have not therefore received any evidence about it and must consider the effect of the reletting without speculating what if any such discussions there may have been.

I must first set out a summary of the history of the involvement of the various parties comprising the landlord with the premises at 75 Tyburn Rd.

Howard Evans Roofing Ltd was established in the 1980s. It was initially owned equally between Mr. Evans and Frederick Levett-Dunn who were both directors and their wives, and traded from premises in Aston Church Rd in Birmingham. It moved to 221 Tyburn Rd and subsequently, in about 1995, to 75 Tyburn Rd.

Mr. Evans remained a director until about 2002, and up to about 2001 he went to the premises at 75 Tyburn Rd on a daily or virtually daily basis as his main place of work on behalf of the company of which he was a joint owner. At about that time he established another business with his daughter called SPV Group. In September 2002 he resigned as a director and transferred his shares to Simon Levett-Dunn, Frederick's son, having disagreed with Simon about the future of the business. It was his evidence that he did not go to 75 Tyburn Rd, at least regularly, after his resignation.

Frederick Levett-Dunn said he had not been to 75 Tyburn Rd for 17 years. He had always been the financial partner in the business, and production and trading had been dealt with by Mr. Evans. Mr. Levett-Dunn said he effectively retired from the company in 1996 and resigned as a director in 1998. He transferred his shares to Simon over a period such that he had disposed of all of them by 2009. He had however throughout remained responsible for the affairs of the pension scheme and its investments, which he had conducted from an office at his home.

Barnett Waddingham Trustees Ltd does not conduct, and never has conducted, any actual operations of its own at 75 Tyburn Rd.

It appears that Simon Levett-Dunn became a trustee of the SSAP at some point between 21 July 2004 and 20 June 2005, since his name appears on a lease of the latter date but not the former. He appears to have been the controlling director of the company since at least 2002, and was also a beneficiary of the SSAP. It must be assumed that he regularly attended at its business premises. At some point in 2010 or early 2011 he ceased to be a trustee of the SSAP and the freehold was transferred to the present claimants. This transfer was registered on 14 January 2011. It is common ground that the defendant was never told about it and had no reason to believe that Simon Levett-Dunn had ceased to be one of the landlords.

In May 2011 the company went into administration and its business was sold (as it happens, to a company controlled by Mr. Evans, which operated from different premises). Thereafter it appears that 75 Tyburn Rd was occupied by a company called "Floors 2 Go Ltd" which was owned or controlled by Simon Levett-Dunn. It must be assumed that he continued to attend at the premises for the purposes of that company's business.

It follows that since 2002 Mr. Evans had had no connection with any business at 75 Tyburn Rd. Frederick Levett-Dunn had on his evidence not been to the premises since about 1999, but had a connection with the business carried on there by Howard Evans Roofing Ltd as shareholder until about 2009. Thereafter he had no such connection. They nevertheless gave 75 Tyburn Rd as their address for the purpose of leases in 2003 and 2004. If they thought about it at all, they must have been content that any correspondence sent to that address would find its way to them. Simon Levett-Dunn had an active business connection with that address from the date he became a trustee, which continued at the date of the leases in 2010, in that he was a director and sole shareholder of Howard Evans Roofing Ltd which carried on business there. That company ceased to do so in May 2011, but thereafter he had a similar business connection through Floors 2 Go Ltd until the notices were served. By that date however he had ceased to have any interest in the freehold of the property.

Accordingly, at the date of the leases in 2010 Simon Levett-Dunn was the only one of the persons comprising the landlord with any active business connection with the premises at 75 Tyburn Rd, in the sense of business activities carried on by him. These were on behalf of the company which he owned and controlled rather than a business owned by him personally. I would accept that such activities were sufficient to make the premises a "place of business" for him. It was contended that they were not, relying on a decision of my own in Brooks v AH Brooks [2010] EWHC 2720 (Ch), but that decision turned on specific wording of the CPR and the question whether an individual sued as a partner in a firm was herself "carrying on business" at an address at which she was now an employee without an ownership interest.

The question arises whether the tenant is entitled to rely on service on Simon Levett-Dunn notwithstanding that he no longer had any interest in the demised property. The tenant was not aware that he had transferred his interest. If it was entitled to regard him still as one of the persons comprising "the landlord" and had served him effectively, that would be good service on all, as provided for by clause 5.9 of the leases. Mr. Rosenthal argued that the tenant was so entitled, by virtue of s 23(2) Landlord and Tenant Act 1927. S23 provides as follows:

“23 Service of notices.

(1)

Any notice, request, demand or other instrument under this Act shall be in writing and may be served on the person on whom it is to be served either personally, or by leaving it for him at his last known place of abode in England or Wales, or by sending it through the post in a registered letter addressed to him there ...

(2)

Unless or until a tenant of a holding shall have received notice that the person theretofore entitled to the rents and profits of the holding (hereinafter referred to as “the original landlord”) has ceased to be so entitled, and also notice of the name and address of the person who has become entitled to such rents and profits, any claim, notice, request, demand, or other instrument which the tenant shall serve upon or deliver to the original landlord shall be deemed to have been served upon or delivered to the landlord of such holding.”

Subsection (1) is in terms confined to a "notice, request, demand or other instrument under this Act" and so could not apply to a contractual notice unless incorporated into the contract. Subsection (2) however is not expressly so limited, and Mr. Rosenthal submitted it is of general application to any sort of notice to be served by a tenant. He points out that subsection (2) also applies to any "claim" that the tenant may serve, a word which does not appear in subsection (1) and submits this indicates it is intended to be wider in effect.

Neither counsel could identify any decided authority on the issue. Mr. Brennan points to an extract from Weekes: Property Notices, Service and Validity (2011) which says at para 7.40 "…s23 applies to notices served under [the 1927] Act", going on to refer to other statutes into which it has been incorporated. No reference is made to any possible distinction between the subsections, and it is not clear whether the author was intending to make any specific point denying a general effect for s23(2) or merely assuming that the two provisions were to be treated together.

There would be force in the argument that a provision for the protection of tenants such as s23(2) is needed just as much for purposes of any notice or document a tenant may wish to serve as it is for notices for the specific purposes of the 1927 Act. There is obvious potential for injustice, even frustration of the rights of tenants, if they may in good faith serve the person whom they believe to be their landlord, never having been told of any change, only to be told, possibly as in this case too late to rectify matters, that that person has transferred his interest. However, I do not consider that Parliament can have intended to make a provision of general effect in s23(2).

There are a number of reasons for that conclusion:

Mr. Rosenthal confirmed in closing that he did not place any reliance on service on Simon Levett-Dunn other than his argument based on s23(2) (for instance by arguing that the same result might flow by construction of the leases). I move on therefore to consider the arguments relating to service on the claimants themselves.

I was referred to a number of authorities. Many of these dealt with the interpretation of service under the CPR, or relying on legislative provisions to establish that service had been validly effected at an address determined by the person serving, rather than having been provided by the person to be served. In such cases the court must be concerned that a sufficient degree of connection in fact exists between the address chosen and the person to be served, so that it is likely that it would come to their attention.

Thus for instance in O'Hara v McDougal [2005] EWCA Civ 1623 a claim form against a landlord was served at a residential property owned by the landlord but let to (other) tenants, relying on this being the landlord's "place of business" for the purposes of CPR 6.5. The Court of Appeal held that this was untenable; the mere letting of a property did not make it a place of business. The landlord had no general right to enter the tenanted property and any visits to it by him or his agent to collect rent would be merely to the front door, unless they happened to be invited in. It was noted at para 14 of the judgment that the court might well adopt a more generous approach for other purposes, such as service on an overseas company which might have no other place at which it could be served.

I agree with Mr. Rosenthal's submission that provisions for service under rules of court necessarily contemplate service on a party who has not volunteered or agreed to be served and may have no prior connection or relationship with the person seeking to serve him. Those rules must reflect a balance between ensuring so far as possible that potentially adverse documents actually come to that person's attention and providing an effective method for an opposing party to proceed against a possibly recalcitrant party. It will not necessarily be appropriate to draw an analogy between such cases and those where the notice is served in the context of an existing contractual relationship between the parties. In such cases the terms of the contract may themselves regulate service of notices (and may do so by incorporating statutory service provisions). In cases based on contractual provisions for service particularly it seems to me that the court may take account of the fact that the parties do have an existing relationship and should be taken to have agreed practicable arrangements by which it can be conducted.

In construing the terms used in the statutory provisions it is clear that a purposive approach is adopted. The language often referred to the "place of abode" of a person (see s23, eg) which most obviously applies to the place at which an individual has his home and sleeps. Yet both counsel acknowledge that there are many decisions construing this term widely. In Price v West London Investment Building Society Ltd [1964] 1WLR 616 a landlord sent a notice under the Landlord and Tenant Act 1954 to a tenant of business premises at the demised premises themselves. The relevant statutory provision was s23 of the 1927 Act, as incorporated in the 1954 Act, and the tenant contended that since the premises were his business address and not his residential address they were not his "place of abode". Danckwerts LJ referred to several cases which he concluded were (p 622) "a considerable body of authority that the phrases 'residence' or 'last known place of abode' may very well include a business address if the context is appropriate… On the authorities I have mentioned it is plainly the intention of the [1954] Act to include a business address which is not confined to a personal residence".

Perhaps the closest of the cases cited to me on the facts was National Westminster Bank v Betchworth Investments (1975) 234 EG 675. In that case the tenant's registered office was stated in the lease to be 157 Victoria St. No other address was given. The lease provided for service of notices "at its registered office or last known address". The landlord served notice to exercise a break at that address, but by the date of service it had ceased to be the tenant's registered office and the building at that address had been demolished. No other address had been given to the landlord. It was held that the former registered office was nevertheless the tenant's "last known address". Cairns LJ placed emphasis on the fact it was the address provided by the tenant in the lease. He referred to the requirement of a company to have a registered address "to which all communications and notices may be addressed" and said:

“ Mr Wood suggests that a registered office is not in itself an address. I think it must be… The very nature of a registered office is the place to which communications and notices may be addressed. That is the definition of it. And by saying 'our registered office is so and so' as the defendants did in this lease they are saying 'that is our address to which communications may be sent.' Then further it is suggested that if a registered office always is an address it was unnecessary surplusage for both 'registered address' and 'last known address' to be mentioned in the clause. I think that both are mentioned for perfectly good reasons … I, for my part, am entirely satisfied that the last known address of the defendants within the meaning of this clause was the Victoria Street address and accordingly the notice was validly served. ”

There was a question whether the address had ceased to be the "last known" address because after a while the tenant ceased to write from that address and instead correspondence was dealt with by agents from the agents' own office address at St James's Place. All three Lords Justices were clear that the agents' address did not become the address of their principal merely because the agents corresponded from that address on behalf of their principal. But it appears that Cairns LJ considered that the result may have been different if the tenant itself had told the landlord that St James's Place was its address- he said "…it would have been more businesslike on their part if they had informed the plaintiffs of the change of their registered office and indeed, if they desired to say so, that they were carrying on business thenceforth from St James's Place…". Thus, it would appear, simply telling the landlord that St James's Place was the tenant's place of business would have made it the tenant's "address", even if all the activity at that address was in fact carried on by an agent when the agent's carrying on of the activity would not by itself have sufficed.

Betchworth is the only case cited to me in which a party who has given an address in a contract has subsequently sought to argue that it was not an address at which it could be served. It would I think strike the detached observer as very odd if a person may tell someone what his address is, never give any indication to the contrary and yet subsequently deny that it is in fact his address. It is true of course that in this case the address given for the landlord was not a registered office of any of them and was not expressly stated to be an address for service. But, Mr Rosenthal asks, what other purpose can there have been for giving an address for the landlord if it was not an address to which communications could be sent?

It is understandable that a party wishing to serve a notice at a particular address selected by him bears the burden of showing that it fits the statutory or contractual criteria he relies upon. In Collier v Williams [2006] EWCA Civ 20 a number of appeals relating to service under the CPR were conjoined. In one of them, Marshall v Maggs, a claim had been served on a litigant in person at an address to which correspondence had previously been sent, which had been responded to, and which the claimant therefore reasonably believed was the defendant's "usual or last known residence" as provided for in CPR 6.5(6). The evidence eventually before the court was however accepted as showing that he never had resided there. The court held (para 68) that an address could not be a "last known residence" if the person to be served had not in fact at any time resided there. It was not a case, it seems, in which the defendant had himself provided that address.

There followed a passage (para 71) in which Dyson LJ discussed what the position might be if the defendant to be served had in fact resided at the address in question. The issue was whether the claimant could rely on that as his "last known" residence if he had not exercised reasonable diligence to discover whether he currently resided at another address. Although obiter, the view was stated that "last known" must include knowledge that could have been acquired exercising reasonable diligence. It would follow then that for the purposes of the CPR at least, if at the date of service the defendant does not in fact any longer reside at the address and the claimant could by reasonable diligence have found his current address (or, presumably, a more recent address even if not current), the former address is not the "last known". It would not be enough, presumably, if the claimant believes the address still to be current but reasonable diligence would have shown (a) that he had left but (b) not any more recent address, because even actual knowledge that he did not reside there would not by itself have prevented it being the last known address (Cranfield v Bridgegrove Ltd [2003] 1 WLR 241).

But this decision is in the context of the CPR and service at an address determined by the server and not one provided by the person to be served in a contract, as is the case here.

There is, it seems to me, a wide range of circumstances in which an address may be considered to be a "place of business" of a natural or legal person. A person may have more than one place of business, and he may carry out more business activities at some than others. A person may choose to describe one place as his place of business for a particular purpose, even if he in fact carries out more business activities somewhere else. If he does so, is the person he tells required to look behind that statement and investigate the extent and nature of the business activity carried on there? I would suggest not.

The service provision in this case is to be construed as part of a contract. This includes those words that are imported from the statute; as used or deemed to be used in the contract they are to be construed in the light of the contract as a whole with the aim of determining objectively what a reasonable person would understand the contract to mean (ICS v West Bromwich Building Society [1997] UKHL 28). The leases conveyed two relevant pieces of information:

The principal purpose of a service provision is to set out a practicable method by which a party serving a notice can be reasonably sure how he should do so, and the party to be served can be reasonably sure he will receive it. The address given by a party as his own address serves both these purposes- it gives clarity to the party serving, and the party to be served has made his own decision as to the likelihood of documents sent to that address actually coming to his attention. If circumstances change, he has it in his own power to inform the other party of a new address. If he does not do so, it is not unreasonable that any risk that the documents do not in fact reach him falls on him.

In reaching this conclusion, I should say that in my view it is no objection that looked at apart from the provisions of the contract an address might not be considered to be a "place of abode or business". As is clear from the authorities referred to in Price, such terms are to be construed in the context they are used. "Abode" may for instance include premises at which an individual carries on business but does not reside, so it is not necessarily limited to residential premises. Indeed, in the case of a company, it must mean something other than a residential address. There is no reason why that term should not extend to an address nominated by a person. If he nominates a residential property, it is then a matter for him and not his contractual counterparty whether he in fact resides there. If he nominates non-residential property, it is equally a matter for him what connection he has with it, and whether it relates to any business of his or not.

Nor is it an objection that the landlord in fact carries on little or no business there. If he chooses to describe it as his address, the nature or quality of his business activity is a matter for him and not the tenant. He may for instance elect to do so because, even though he does not himself go there for business purposes, he has confidence that those who do will pass on any communication received. Thus in Betchworth the tenant could, as Cairns LJ seemed to envisage, have nominated its agents' office as being its own address. In the present case, the Third Claimant trust company was apparently content to state that its address was at premises where it had no connection other than that it was associated with its fellow trustees and the company for which the scheme was established. That must be a very common state of affairs. The trustee company must presumably have been content that if anyone used that address to communicate with it for purposes connected with the lease, the other trustees would make sure they became aware of it. In the present case, the trustee company appears to have played no active part in the claim, and has put forward no evidence of its own, though of course it must be assumed to have authorised the allegation to that effect in the Particulars of Claim. Likewise, if Frederick Levett-Dunn and Mr. Evans were prepared to continue to give 75 Tyburn Rd as their address after they ceased to attend the premises, they must have assumed or been content that Simon Levett-Dunn would pass on anything addressed to them.

Further, I reject the submission that the address could not be used since it was not the "last known" address, because the defendant had not exercised reasonable diligence to determine whether at was still a business address of any of the landlords. That was based on Collier v Williams and the meaning of the CPR, as discussed above. In this case, in my view, the address given is an "abode or place of business" because the landlord has, on the true construction of the leases, nominated it as such, and not because in any other sense, the landlord actually abided there or carried on any business there. That being so, it remains such a place until the landlord nominates some other address or, perhaps, the tenant acquires actual knowledge that it cannot be an address at which the landlord can be reached. That might occur if for instance the tenant discovers that the premises have been destroyed, or are occupied by a person known to be unconnected. Until then, no question arises as to whether it is the "last known" place of abode or business, because that question necessarily contemplates that it has at some time ceased to be a current place of abode or business.

On this basis then, the claim is dismissed and the defendant is entitled to a declaration that the leases were terminated on 10 July 2013. In case I am wrong however I go on to consider the alternative cases put, firstly based on estoppel and secondly that the leases were terminated by surrender by operation of law by virtue of the landlord having relet them to Marstons.

So far as estoppel is concerned, I do not consider that it adds anything to the case based on construction of the contract. I accept fully that by stating in the contract that 75 Tyburn Rd was the address of the parties comprising the landlord, a representation to that effect was made, and the tenant relied on it by serving at that address in circumstances where, if it was not a proper address for service, the opportunity to exercise the contractual break would be lost. But the representation did not in terms describe the address as, eg, a place of business or an address for service. If I am wrong as to the construction of the contract and the address did not become his place of business by virtue of the landlord stating it to be his address, it was and remained some other species of address and has not been represented to be a place of business. The argument that a reasonable contracting party seeing that the landlord names a place as his address would assume that is the place of business at which he agrees to be served is one that goes to construction of the contract itself and not to establishing a representation that bridges the gap between a place of business and some other type of address.

In relation to surrender by operation of law in circumstances where a tenant has left the property and evinced an intention to bring the lease to an end, both counsel agreed that the law is as stated by the Court of Appeal in Artworld Financial Corporation v Safaryan [2009] EWCA Civ 303. All the judges of the court agreed that the judge below (HHJ Marshall QC) had correctly set out the principles to be applied in her judgment. Dyson LJ said:

“[28]... The meaning of the doctrine of surrender by operation of law is not in doubt. It was well summarised by Peter Gibson LJ in Bellcourt Estates v Adesina [2005] EWCA Civ 208, [2005] 18 EG 150, [2005] 2 EGLR 33, in these terms:

“The doctrine of surrender by operation of law is founded on the principle of estoppel, in that the parties must have acted towards each other in a way which is inconsistent with the continuation of the tenancy. That imposes a high threshold which must be crossed if the tenant is to be held to have surrendered and the landlord is to be held to have accepted the surrender.”

…

[29] In my judgment the propositions derived by the judge from the authorities and stated in para 68 of her judgment are correct:

'(1) The issue of whether there has been a surrender by operation of law after a tenant's abandonment of the leased premises must be determined by evaluating the effect of the landlord's conduct as a whole (cf London Borough of Brent v Sharma (1992) 25 HLR 257 at 259). I accept Mr Kremen's argument that the totality of such acts can amount to a resumption of possession even though individual acts might each be only equivocal. With this in mind –

(2)

The test is whether the landlord's conduct is 'so' inconsistent (Oastler v Henderson 1877 2 QBD 575 at 577) with the continuation of the tenant's lease that it could only be justified as being lawful on the basis that the landlord has accepted the tenant's implied offer to give back possession, and has taken possession of the premises beneficially for himself.

(3)

Accepting back the keys without more will always be equivocal. As a matter of practicality and common sense, one party has to hold the keys to prevent an absurd situation in which they are passed back and forth because neither party wants to risk it being suggested that it has made an admission by holding them.

(4)

Any act of the landlord which is consistent with its rights under the lease, such as entering the premises to inspect or to repair them, will not in itself give rise to a surrender because, by definition, it is not inconsistent with the lease continuing.

(5)

Any further act of the landlord which amounts to protecting or preserving the property, such as taking security measures or doing necessary repairs, will not in itself give rise to a surrender because such self-help, necessary to preserve the landlord's interest in the value of his property, is a reasonable response to the tenant's evinced intention not to perform the obligations of the tenancy: cf McDougall's Catering Foods Ltd v BSE Trading Ltd 1998 P & CR 312; Relvok Properties Ltd v Dixon (1972) 25 P & CR 1, at p 7.

(6)

Similarly, any act of the landlord which amounts to the landlord's performing the tenant's covenants under the lease, such as keeping the garden tidy, would not necessarily amount to a resumption of possession as it is not inconsistent with holding the defaulting tenant to performing the lease.

(7)

Any further act of the landlord referable to the landlord's seeking to re-let the premises will not necessarily give rise to a surrender by operation of law, as it is no more than what the landlord might reasonably be expected to do in the circumstance for the potential benefit of all parties: Oastler v Henderson (above). The landlord must be entitled to seek to mitigate the damage caused in reality (even if not yet technically in law so long as the lease remains extant) by the tenant's abandoning the lease, by seeking to obtain another tenant, without thereby losing his rights against the original tenant if he is unable to do so.

(8)

However, if the landlord goes further and uses the premises for his own benefit beyond the totally trivial – and certainly, in my judgment, if such use amounts to occupation of the premises – then he re-takes possession of the premises inconsistently with the continuance of the lease. This will give rise to a surrender by operation of law, since it is only on the basis of having accepted such a surrender that the landlord's acts would be lawful.' ”

Thus, in that case, where the tenant had left the premises and returned the keys the landlord (which was an offshore company and effective alter ego of a Mr. Tatanaki) was taken to have accepted an implied offer to surrender by the cumulative effect of various acts by it, in particular the redecoration of parts of the property and Mr. Tatanaki's moving in to it as his residence for various periods, one of at least 3 months. This was so notwithstanding that the landlord had throughout continued to assert in correspondence that the lease remained in existence and rent was due.

Applying these principles to the present case, it is accepted that the tenant is to be taken as making an implied offer to surrender by vacating in July 2013 and returning the keys, in the event that its contention that the leases were validly terminated by operation of the break clause is incorrect. What happened immediately thereafter, in that the landlord accepted the keys, is agreed to be at best equivocal as to the existence of the tenancy. That acceptance was expressly without prejudice and done because, as HHJ Marshall said at para (3) quoted above, in practice someone has to hold them and take responsibility for security of the premises for the benefit of all concerned.

Equally, as I have held above, the email from Mrs Peers in relation to payment of utility bills was an equivocal act.

The lease to Marstons was in my view however not an equivocal act. By it, the landlord took back possession of the property and demised it to Marstons. Mr. Brennan submits that it is possible for a landlord to grant an intermediate lease of property without disturbing the possession of an existing tenant- the intermediate leaseholder obtains the right to receive rent from the existing tenant and, if the new lease continues after the existing one comes to an end, has the right to take possession when the previous occupational tenant vacates. But that is plainly not what happened here.

The premises were marketed and taken for occupation and not by way of investment. Marstons' need was for occupation by its office staff while their own premises were being refurbished. During the negotiations its solicitors sought assurance that the leases to the defendant had come to an end. The claimants' solicitors gave them that assurance. Mr. Eyre, the solicitor with conduct, at one point sent to Marstons' solicitors a document which he described as "an order of the court" with a view to satisfying them on this issue. That document is not before me. It is common ground that it was not in fact an order of the court but a document of some kind generated during the mediation between the parties that I have referred to above. In consequence, it is privileged and I have not seen it. But it is plain that, whatever it is, it was represented to Marstons as being proof that the defendant's leases were at an end and Marstons would therefore enjoy undisturbed possession of the premises. After that document was sent, Mr. Eyre ignored or deflected further requests from Marstons' solicitors for more formal evidence that the leases had been terminated, rightly (as it turned out) gambling that Marstons would be prepared to complete on the basis of the assurance they already had.

Marstons did in fact move in and occupy the premises, and even negotiated an extension of their lease when they were unable to move out again by the contractual end date. The notion that they would have been prepared to vacate the premises and receive rent from the defendant, had it wished to reoccupy the premises itself, is entirely fanciful.

Accordingly, the grant of this lease could not have taken place if the defendants' leases were still subsisting and was in my judgment an unequivocal act of acceptance and recognition that they were not. This is so notwithstanding that the claimants may have been maintaining in correspondence and negotiations with the defendant that the leases subsisted- the effect of their acts are to be determined objectively and taken as a whole, and the plain fact that they retook possession in order to let to a new occupational tenant cannot be undone by simultaneous denial to the defendant.

The same can not be said for the earlier steps of marketing the premises for reletting, and agreeing "subject to contract" heads of terms. As HHJ Marshall said, the landlord in circumstances where his tenant had left the property must be entitled to seek to mitigate the loss arising by seeking a new tenant, without losing his rights against the existing tenant if he is unable to do so. The claimants could, if they had chosen, have withdrawn from the reletting and relied on their contention as to the continuation of the defendants leases at any point up to the date at which a binding lease to Marstons was entered into. Accordingly, their acts up to that point were equivocal as to their position in relation to the defendants leases.

If I had not found for the defendants on the construction issue, therefore, I would have held that the lease came to an end by surrender on 13 October 2014.

I invite the parties to agree the order resulting. I will list a hearing at which this judgment will be handed down. I will take any matters arising at that hearing, if it is convenient for the parties and they will not require more than 30 minutes. In any other event, there need be no attendance at handing down and I will list a later hearing if required for any matters arising, if the parties submit an agreed time estimate and their available dates.