No margin of error – unilateral notices

The Court of Appeal has allowed a landlord’s appeal in an important case on break notices: Friends Life Ltd v Siemens Hearing Instruments Ltd.  The case concerned a lease clause entitling the tenant to terminate the lease early subject to certain conditions, and stated that the notice to quit ‘must be expressed to be given under section 24(2) of the Landlord and Tenant Act 1954’.  The tenant served notice on the landlord to terminate the lease in compliance with the break clause in all respects except that the notice did not contain the specified wording.  Mr Strauss QC held the break notice was valid despite the omission.

The Court of Appeal disagreed, deciding the break notice was invalid.  It explained that the reason the lease contained the specified wording was that at the time the lease was drafted there was some uncertainty over whether a tenant would be able to serve a notice to quit, and at the same time invoke the security of tenure provisions of the 1954 Act.  Case law has subsequently confirmed this concern redundant and the Court of Appeal acknowledged the wording is effectively meaningless.  Nevertheless the Court held that the terms of a unilateral contract must be fully complied with.  There is no principle of ‘sufficient compliance’ in relation to unilateral notices which are effective without the consent of the receiver.

Lord Justice Lewison summed up the moral of the story himself: ‘if you want to avoid expensive litigation, and the possible loss of a valuable right to break, you must pay close attention to all the requirements of the clause, including the formal requirements, and follow them precisely’.

by Freddie Jackson, Solicitor