2 Validity of notice to quit: Issues of Construction
(a)Certainty and Unambiguity
7.03 The common law rules of construction apply to notices to quit an agricultural holding, although the designation of different types of notice to quit as appropriate in different cases means that in agricultural cases the courts have had to develop additional principles of construction.
To be valid, a notice to quit must contain ‘plain, unambiguous words claiming to determine the existing tenancy at a certain time’.9 It must be expressed sufficiently clearly that a reasonable person of ordinary capacity could not mistake its nature,10 nor would be left in doubt as to when possession is demanded.11 Although the notice can be coupled with the offer of a new tenancy, the notice to quit itself must not be ambiguous or optional.12 Notice to ‘vacate’ by a given date has been held good, but notice to quit ‘at the earliest possible moment’ will be void for ambiguity.13 A notice to quit ‘on or before’ a given date is valid and will take effect as an irrevocable notice to terminate the tenancy on the date specified.14(b)Waiver of Minor Errors
7.04 Until comparatively recently there had been some ambiguity in the courts’ willingness to uphold notices containing minor (but arguably material) errors. One line of cases, exemplified by the decision in Hankey v Clavering15 favoured a strict construction that would render invalid a notice to quit which incorrectly specified material facts, such as the identity of the landlord giving it or the termination date of the tenancy.16 Another line of cases favoured a liberal interpretation, exonerating those minor errors in a notice to quit that would not mislead a reasonable landlord or tenant receiving the notice.17 This ambiguity was resolved by the House of Lords in Mannai Investment Co.
Ltd. v Eagle Star Life Assurance Co. Ltd.18 in favour of the liberal approach. The Mannai Investment case concerned the construction of a break clause in the lease of commercial premises. The tenant served a break notice to terminate the tenancy that, instead of specifying 13 January 1995 as the termination date, was incorrectly expressed to expire on 12 January 1995. The notices were held to be valid. The correct approach was held to be that in Carradine Properties Ltd v Aslam19 and the test set out in that case by Goulding J was endorsed: ‘Is the notice quite clear to a reasonable tenant reading it? Is it plain that he cannot be misled by it?’.20 The test set out in Mannai Investments will apply to all notices characterised by the court as ‘unilateral notices served under contractual rights reserved’: this category will include not only break notices (as in Mannai itself) but also notices to quit, and a notice to complete a purchase and sale.21 The test in the Mannai Investments case has been endorsed and applied in subsequent decsions, some of which are referred to in the following text.227.05 It follows from the Mannai Investments rule that the construction of the notice is primarily objective, although the court will also take into account the surrounding facts and circumstances that were known to both landlord and tenant. These go to the question whether the particular landlord or tenant would be misled by the terms of the notice.23 Minor inaccuracies will be overlooked if a reasonably intelligent tenant would have understood the notice correctly.24 An unqualified notice will not, for instance, be invalid if the name of either landlord or tenant is inaccurately stated, provided the identity of the person giving the notice and its intended recipient are beyond reasonable doubt.25 It must, however, be given by the legal owners of the freehold reversion and not eg ‘on behalf of the residuary beneficiary’ of the deceased landlord.26 Different considerations apply where the notice to quit invokes one of the Cases for Possession in Sch 3 to the 1986 Act.
Because the procedure here is akin to forfeiture, the courts have developed strict rules of construction applicable to both the notice to quit itself and any preliminary notice to remedy or to pay rent on which it is based. These are discussed below.27 The stricter approach to notices endorsed in cases on notices to quit under Sch 3 should, it is suggested, remain unaffected by the Mannai Investments ruling.(c)Form of Notice to Quit
7.06 An unqualified notice to quit given under s 26(1) can be general in its terms – it need not refer to the 1986 Act, or to the fact that the tenant has a protected tenancy. Neither, most importantly, does it have to inform the tenant of his right to serve a counter notice, or of the consequences of failing to do so.28 In cases where there is a dispute as to whether a tenancy exists, it seems the landlord can even give a notice to quit ‘without prejudice’ to his contention in other proceedings that no tenancy has been created. In Grammer v Lane29 the landlord gave notice to remedy breaches of tenancy30 and to review the rent, in circumstances where he was in dispute with the occupier of farmland as to whether a farm tenancy had been created. He then sought the appointment of an arbitrator to adjudicate on the notice to remedy. It was held that the notice was valid, and that the protective system of the 1986 Act was not flouted by allowing the landlord to serve notices seeking to use the arbitral machinery of the Act without prejudice to his alternative claim that no tenancy had been created.
7.07 It was held in National Trust v Knipe31 that a notice to quit an agricultural holding which includes a farmhouse or cottages does not have to comply with the requirements of s 5 of the Protection from Eviction Act 1977 – in particular, it does not have to include the prescribed information set out in regulations made under the Protection from Eviction legislation.32 It should be noted, however, that although an unqualified notice to quit (under s 26(1)) need state no reasons, in practice it is both advisable – and common practice – to do so in order to exclude a claim by the tenant for ‘additional’ compensation for disturbance.
The compensation rules are considered below.33 Additional compensation34 will be excluded where the reason stated in the notice to quit falls within paras (a)–(c) of s 27(3) (for example good husbandry or sound estate management), or is that hardship will be suffered by the landlord if the notice takes effect.35 For this reason it is commonplace to specify the reason for the notice.(d)Potential Impact of Fraud
7.08 Where reasons are given, a notice to quit will be void at common law for fraud if the landlord had no genuine belief in the accuracy or truth of the reasons stated at the time the notice to quit was given. Particular care is required, consequently, when giving notice to quit pursuant to the Cases for Possession in Sch 3 to the 1986 Act, where the reasons that the landlord relies upon to terminate the tenancy have to be expressly stated in the notice to quit.
7.09 In Rous v Mitchell36 the Court of Appeal held that all notices given under the Cases for Possession in Sch 3, if fraudulently given, are calculated to deceive in that they are assertions that the landlord honestly believed that he had good grounds to terminate the tenancy. The fact that the tenant is not deceived is irrelevant. Furthermore, the court there gave ‘fraud’ a wide meaning. A notice to quit is fraudulent and invalid if it contains a statement which is false, and made fraudulently by reason of the landlord either knowing it was false or being reckless as to whether it is true or false. This places a duty on the landlord to ensure the stated grounds for the notice exist, or at least to take all reasonable steps to ascertain the facts before giving notice to quit.37 It does not, however, place him under a duty to warn the tenant of the consequences of his actions, or inactivity, eg of the consequences of failing to comply with the time limit for paying rent after notice to pay rent under Case D.38 Neither will mere carelessness which falls short of reckless conduct invalidate a notice to quit. So, for example, a notice to quit served with a plan, which showed an area of the farm larger than that for which planning permission for development had been obtained by the landlord, was not fraudulent and was therefore valid.39