Home Information Cases Prudential Assurance Company Ltd v Exel UK Ltd (2009)

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Prudential Assurance Company Ltd v Exel UK Ltd (2009)

Summary

The case concerned the validity of a break notice under a lease of a substantial distribution warehouse.

The break notice referred to only one of the two joint tenants under the lease.  The defendant tenants alleged that, on its true construction, the break notice was valid.  Alternatively, they alleged that the claimant landlord was estopped from denying that it was valid.  An issue also arose as to the authority of the solicitors who served the notice.

Facts

This decision contains a useful summary and analysis of the relevant principles to be applied where a notice has not apparently been served by the correct parties, and is an important example of their application.

Practitioners will note that the various attempts to have the notice upheld were all rejected, and that the decision thereby reinforces the need to take care in drafting formal notices.

The tenants were granted permission to appeal to the Court of Appeal.  The appeal was withdrawn on agreed terms shortly before it was due to be heard.

Michael Driscoll QC appeared for the Defendant tenants and Andrew Walker for the Claimant landlord.

Held

  1. On the facts, the solicitors who served the notice had the authority of both tenants to serve it.
  2. Information available from Companies House could be taken into account in construing the notice; but even taking into account that information, the notice was invalid. The court considered the authorities relevant to notices given by the wrong party (Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749,  Lemmerbell Ltd v Britannia LAS Direct Ltd [1998] 3 EGLR 67, Havant International Holdings Ltd v Lionsgate (H) Investment Ltd [2000] L&TR 297, Procter & Gamble Technical Centres Ltd v Brixton plc [2003] 2 EGLR 24, and Lay v Ackerman [2005] 1 EGLR 139).  Applying the principles to be derived from those cases, the Havant case was distinguished, and the court held that the notice would not unambiguously have been understood by a reasonable recipient to be an effective notice.  Accordingly, it was invalid.
  3. The landlord was not estopped from denying that the noticed was invalid, either on the basis of an estoppel by convention or on the basis of an estoppel by representation.
Chancery Division
Jeremy Cousins QC
Judgment date
25 June 2009
References

[2010] 1 P&CR 7; [2009] EWHC 1350 (Ch); AC0121324 

Practice areas