Go West Ltd. v Spigarolo & Anor

When a landlord serves an unqualified written notice refusing consent under section 1(3) of the Landlord and Tenant Act 1988, the landlord brings the statutory reasonable period to an end. An unreasonable refusal in that notice therefore constitutes a breach of statutory duty, even though the landlord might otherwise have required more time.

The landlord cannot later justify the refusal by relying on reasons omitted from the notice. Continued negotiations or requests that the landlord reconsider do not, without a clear and unequivocal communication, waive or extinguish the tenant’s accrued right to sue. The statutory scheme does not permit the original application to remain legally continuing so that the landlord may replace an ineffective refusal with new reasons.

The tenant applied for the landlords’ consent to assign two leases. The landlords refused consent in writing on 30 May 2001 because acceptable sureties had allegedly not been proposed. His Honour Judge Hornby found that refusal unreasonable because it was premature, but dismissed the tenant’s claim after holding that the parties’ subsequent correspondence effectively treated the refusal as having no real effect.

The tenant appealed from the Central London County Court. The landlords cross-appealed on liability and loss. The principal questions were whether the refusal ended the reasonable time allowed by section 1(3) of the Landlord and Tenant Act 1988, and whether the later correspondence amounted to a continuing or renewed application, or otherwise defeated the tenant’s accrued claim.

1. The tenant’s appeal was allowed unanimously and the landlords’ cross-appeal was dismissed. Munby J gave the first judgment. Potter and Pill LJJ agreed with the result and the material reasoning.
2. By serving an unqualified written refusal under section 1(3)(b) of the Landlord and Tenant Act 1988, a landlord necessarily brings the statutory reasonable period to an end. The period protects the landlord by allowing the time reasonably needed to make and communicate a decision. Once the final notice has been served, no further time is required. The landlord cannot subsequently argue that the refusal was premature because more time could have been taken.
3. The refusal of 30 May 2001 was unreasonable. The landlords therefore failed, within the reasonable time which ended on that date, to give the consent required by section 1(3)(a). That failure was actionable as a breach of statutory duty under section 4. The possible mistaken or premature origin of the notice did not alter its objective legal effect.
4. Following and approving Norwich Union Life Insurance Society v Shopmoor Ltd [1999] 1 WLR 531 and Footwear Corporation Ltd v Amplight Properties Ltd [1999] 1 WLR 551, a landlord cannot justify a refusal by relying on reasons not stated in writing within the applicable reasonable time. The same rule applies where omitted reasons are advanced after a valid refusal notice has ended that period.
5. The statutory scheme did not permit the original application to continue legally from day to day, or successive letters to operate as renewed applications which restarted time. Ideal Film Renting Co Ltd v Nielsen [1921] 1 Ch 575 could not govern the statutory scheme. Pill LJ accepted that the tenant continued factually to seek consent, but held that this did not deprive the refusal of its legal effect.
6. Variation, release, waiver and estoppel could not be established. Applying Flacker Shipping Ltd v Glencore Grain Ltd [2002] EWCA Civ 1068, waiver or release required a clear and unequivocal communication, assessed objectively and in context. The tenant consistently maintained its threat of proceedings while attempting to resolve the dispute. Nothing in the later correspondence extinguished the accrued right to sue.
7. The tenant was entitled to the declaration sought and to an assessment of damages on the basis that the landlords were in breach on 30 May 2001. The possible mistake and subsequent correspondence did not affect the measure of loss.

1. Court of Appeal (Civil Division): The tenant’s appeal was allowed and the landlords’ cross-appeal was dismissed. The tenant was entitled to a declaration and an assessment of damages for breach of statutory duty under the Landlord and Tenant Act 1988.
2. Central London County Court: His Honour Judge Hornby found the landlords’ refusal of 30 May 2001 unreasonable but entered judgment for the landlords because the subsequent correspondence was held to have deprived that refusal of real effect.