WX Investments v Khalida Begg (2002)
Under s.196(4) Law of Property Act 1925 service on a lessor by either registered post or recorded delivery was deemed to be on a presumed date of delivery regardless of when delivery of the registered letter or recorded delivery in fact took place.
Appeal by the claimant landlord ('WX') from the order of HH Judge Cowell at Central London County Court on 27 April 2001 dismissing its claim for rent arrears. WX had sought to exercise its right to review the rent of premises let to the defendant ('B') under the terms of the lease by serving a notice specifying the proposed rent. The tenant had 14 days in which to serve a counter notice specifying the rent that she was willing pay in default of which the rent specified in the landlord's rent notice became the rent payable from the review date. Time was made expressly of the essence for service of the counter notice. The lease incorporated s.196 Law of Property Act 1925, as amended by the Recorded Delivery Service Act 1962, which contained a provision in s.196(4) that "service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered". The rent notice was served on 22 September 1997 by the landlord's agent ('J'). B's agent (the Part 20 defendant) sent the counter notice on 24 September 1997 by first-class recorded delivery. It was not returned undelivered. On 25 September two attempts were made to deliver the counter notice but both failed because the offices of J were closed. On 30 September a further attempt was made to deliver it and, on this occasion, a P739 "When you were out" card was left. J completed the P739 card requesting re-delivery on 10 October at which point the counter notice was delivered to and accepted by him. The judge held that a valid counter notice had not been served within the 14 day period, but that WX had breached an implied a term in the lease requiring it to take reasonable steps to accept delivery of the counter notice and that such breach precluded WX from relying on the failure of B to serve her counter notice in time. The central issue on the appeal was the interpretation and application of s.196(4) of the 1925 Act.
(1) "Ordinary course" in s.196(4) of the 1925 Act was a shorthand for "ordinary course of post". (2) The phrase "deemed to be made" connoted an imaginary state of affairs that might or might not accord with the reality of what had taken place. That imaginary state of affairs was also usually conclusive having regard to the purpose of the legislation and the language of the deeming provision itself. (3) The language of s.196(4) led to the conclusion that the sub-section could not have been intended merely to provide for service by recorded delivery at the time at which delivery, in accordance with the recorded delivery system, was in the particular case in question actually effected. The addition of the deeming provision must have been intended to introduce a presumed date of delivery regardless of when the registered letter or recorded delivery in fact took place. The presumed date was governed by what the court found to have been the time when delivery in the ordinary course of post would take place, but this was to be judged by normal practice and expectations, not by the circumstances or whims of the addressee at the time. (See Holwell Securities v Hughes (1973) 1 WLR 757 and John Kinch & Anor v Ivan Bullard & Ors (1998) 4 All ER 650. (4) The judge did not consider himself bound by Stevenson & Sons v Orca Properties Ltd (1989) 2 EGLR 129, because he disagreed with the approach of Scott J, who held that delivery in the ordinary course of post required the actual presence of an available recipient before the deeming provision could be applied. (5) In the present case there were no reasons for not deeming delivery of the counter notice to have taken place on 25 September. The office was, or should have been, open on that day and delivery in the ordinary course of post should be presumed to have taken place then. If the events of 30 September were considered, the agent could have requested delivery as early as 2 or 3 October, when the office was open. Therefore, the counter notice had been served in time. (6) Had it been necessary the judge would have rejected the defence based on an implied term as the lease provided an exhaustive code for the service of the rent review notices.