Lay & Ors v Ackerman & Anor

A landlord’s counter-notice under section 45 of the Leasehold Reform, Housing & Urban Development Act 1993 is not invalid merely because it misidentifies the landlord. Its validity depends on the statutory requirements and on how a reasonable recipient, aware of the relevant factual context, would understand it. Applying Mannai [1997] AC 749, the essential question is whether the tenant could be in no real doubt that the notice was given by or with the authority of the actual landlord and conveyed the landlord’s statutory position. Section 45 does not require the landlord to be named. Where the actual landlord authorises a notice which names another as landlord, the tenant may generally rely on that identification in later proceedings unless unequivocally corrected.

The respondent tenants served a claim notice under section 42 of the Leasehold Reform, Housing & Urban Development Act 1993 seeking a new lease of 8 Alexton Yard. Their freeholders were the Portman Trustees. The trustees’ solicitors served a section 45 counter-notice which opposed the claim, but described the sender as the trustees of a different, associated Portman settlement.

HHJ Cowell in the Central London County Court held that the counter-notice was invalid and struck out the freeholders’ section 46 application. The freeholders appealed. The central issue was whether the erroneous identification of the landlord invalidated a counter-notice which the tenants knew had been sent by the Portman Estate’s solicitors in response to their claim notice.

1. Appeal allowed. Neuberger LJ, with whom Arden LJ agreed, held that the counter-notice was valid despite naming the wrong Portman trustees as landlord.

2. The validity of a statutory notice depends first on the requirements and purpose of the particular statutory provision. The objective and contextual approach in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 applied to a section 45 counter-notice. The court had to identify any error, ask how a reasonable recipient would understand the notice in its factual setting, and decide whether it conveyed the information required by the statute.

3. Section 45 requires the notice to be given by the landlord. A counter-notice is therefore invalid if a reasonable tenant could be in real doubt whether it was given by, or with the authority of, the actual landlord. It is not, however, an additional requirement that the notice must leave the tenant in no doubt of the landlord’s precise legal identity. Unlike a tenant’s claim notice under section 42, section 45 contains no express requirement to name the landlord.

4. A landlord which authorises a counter-notice identifying another person as landlord makes a representation on which the tenant may rely in later notices or proceedings. Subject to an unequivocal correction, the actual landlord would be estopped from alleging that those later steps failed because they named the person identified in the counter-notice. This removed the suggested statutory prejudice to the tenant.

5. On the facts, the counter-notice was an answer to the tenants’ own claim notice, described itself as a landlord’s counter-notice, gave the Portman Estate’s address, and was served by solicitors known to act for the actual landlords. The prior dealings and enfranchisement litigation also made it plain that the different settlement name was an error. A reasonable recipient could have been in no doubt that the notice was authorised by the actual landlord. Arden LJ further considered that the tenants’ subsequent letter confirmed that they had not been misled about the notice’s authority.

• Court of Appeal (Civil Division) Allowed the freeholders’ appeal and held the section 45 counter-notice valid: [2004] EWCA Civ 184.
• Central London County Court (HHJ Cowell) Held the counter-notice invalid on 27 January 2003 and struck out the freeholders’ section 46 application.