When is a notice validly served?

It holds that a term of a lease incorporating Section 196 of the Law of Property Act 1925 should be interpreted as mandating the methods of service specified in that provision.

In Lamba, the council let a shop in Ponders End, north London, to an estate agent. The lease enjoyed security of tenure under the Landlord and Tenant Act (LTA) 1954. In an attempt to end the lease, the council posted a Section 25 notice to the tenant using registered post, but it was returned undelivered. Nevertheless, the council treated the lease as having terminated, changed the locks and demolished the shop.

Having not received the S25 notice, the tenant felt aggrieved by that turn of events and issued proceedings alleging it had been unlawfully evicted. The question was: had the S25 notice been validly served so as to terminate the lease?

On the face of it, the answer was straightforward. Section 66 of the 1954 LTA incorporates Section 23 of the 1927 LTA, which provides that a notice may be served by “sending it through the post in a registered letter”. Section 7 of the Interpretation Act 1978 provides that where an act authorises postal service, there is – unless the contrary intention appears – a rebuttable presumption, if a notice has been properly posted, that it was delivered “in the ordinary course of post”.

But a line of cases held that the fact S23 refers to “sending” a notice is not only a contrary intention disapplying S7, but refers simply to the act of dispatching a notice into the post. Accordingly, under S23, a notice sent by registered post will be regarded as having been validly served, even if it is returned undelivered.

In Freetown v Assethold (2013), a case about the service of notices under the Party Wall etc. Act 1996, the Court of Appeal criticised that line of authorities. Lord Justice Bernard Rix said he was “struck at how the S23 jurisdiction has not proceeded so much by reference to S7 […] as by reference to the construction of S23 on its own terms”. He added: “In such circumstances, I do not consider that it would be appropriate to extend the reasoning applicable to S23 […] into a different statute.” He pointed out that it was “essentially unfair” if a notice was regarded as having been validly served if it had not been received.

Line of authorities

Nevertheless, until challenged in the Supreme Court (which one day might happen), that line of authorities remains good law. So, applying the line of authorities concerning S23, the judge in Lamba should have held that the S25 notice had been validly served, despite being returned undelivered.

But Judge Rosalind Coe clearly disliked that idea and held that S23 had been excluded by a term of the lease that provided that S196 of the Law of Property Act “shall apply to the giving and service of notices”. S196 is a permissive service provision – in other words, it gives the server of a notice the option of using specified methods of service along with all other valid service methods.

One of the specified methods of service is service by registered post if the notice is “not returned to the postal operator […] undelivered”. The judge held that, by incorporating S196, the parties to the lease had intended to mandate the methods of service under S196 to the exclusion of any other method of service (including service under S23).

So the judge was able to conclude that given the S25 notice had been returned undelivered, it had not been validly served. But the idea that by incorporating a permissive service provision the parties to a lease have, by a strange alchemy, turned it into a mandatory provision is startling. Unless overturned on appeal, the consequences of Lamba could be unfortunate.

S196 provides that “the provisions of this section shall extend to notices required to be served by any instrument affecting property […] unless a contrary intention appears”. Given that S196 does not expressly extend to notices “permitted” to be served, Lewison’s Drafting Business Leases (8th edition) suggests leases expressly incorporate S196 (alternatively S23). Lots of leases do so.

But if Lamba is correct, it would suggest that terms of leases incorporating S196 might have restricted the valid methods of service to the methods stipulated in S196. So notices will not be regarded as having been served if, for example, they have been sent by ordinary post or by email. Very often, parties who have received notices will be held not to have been validly served – the outcome the judge was so keen to avoid in Lamba.

It is a classic example of a hard case making bad law.

Tom Weekes KC and Anna Toynton is a solicitor at Cripps