Trafford Metropolitan Borough Council v Total Fitness (UK) Ltd

The validity of a contractual notice depends first on its true construction, assessed objectively from the standpoint of a reasonable recipient. The notice must be read as a whole. An express expiry date may explain how an otherwise apparently unqualified period is to be calculated and may remove, rather than create, ambiguity. The rule excluding the day on which notice is given when calculating elapsed time does not determine the construction of the notice where its terms expressly show that the date of service is included. The principles in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd apply to contractual notices even where the surrounding circumstances do not identify a single legally available expiry date.

Total Fitness appealed against summary judgment granted to Trafford by His Honour Judge Howarth in the Chancery Division. The judge had declared invalid two notices purporting to terminate Trafford’s lease of a car park under a contractual break clause.

The appeal concerned only the notice dated 8 October 2001. It referred to 17 days’ notice and stated that the car park would close at midnight on 24 October 2001. Excluding the day of service under the rule in Lester v Garland produced a different date. The central issue was whether the notice left a reasonable tenant in real doubt about its expiry date.

1. Appeal allowed. The order below was set aside. A declaration was to be made in an agreed form.
2. The court adopted the two-stage approach identified in Speedwell Estates Ltd v Dalziel and Burman v Mount Cook Land Ltd. First, the notice must be construed to determine what it says. Secondly, its contents must be matched against the requirements of the contractual provision. The latter stage does not permit the court to rectify defects or omissions.
3. The present case concerned the first stage. The objective test approved in Carradine Properties Ltd v Aslam and applied by the majority in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd was directly relevant: the question was whether the notice was clear to a reasonable tenant reading it.
4. The rule in Lester v Garland, as recognised in Dodds v Walker, did not resolve the construction issue. It could be relevant to calculating the minimum contractual notice, but the notice expressly gave more than the required minimum.
5. Reading the whole notice, the statement that the car park would close at midnight on 24 October 2001 expressly established that the 17-day period included the day on which notice was given. It therefore removed doubt about the expiry date. The judge had wrongly treated the statement as creating ambiguity rather than explaining the computation of the period.
6. The respondent was ordered to pay the costs of the appeal, including £10,000 on account. There was no order as to the costs of the summary judgment application. Leave to appeal to the House of Lords was refused.

• High Court, Chancery Division: His Honour Judge Howarth granted summary judgment under CPR Part 24 and declared the notices invalid.
• Court of Appeal (Civil Division): The appeal concerning the second notice was allowed, the order below was set aside, and a declaration was directed in an agreed form.