In the course of a lease there will be times when either the landlord or the tenant has reason to serve notice on the other. 

While serving a notice may seem simple, two recent cases have highlighted the importance of accurately following the service provisions in the lease.

Notices served under section 196 Law of Property Act 1925(LPA 1925) - EON UK Plc v Gilesports Limited [2012] EWHC 2172

The lease in this case incorporated the provisions on notices contained in section 196 of the LPA 1925.

Section 196 of the LPA 1925 is a common notice provision used in commercial leases. The section states that notice shall be sufficiently served if it is in writing and it is either:

  • left at the last known place of residence or business or if it is to be served on a tenant by affixing   notice to the property; or
  • sent by post in a registered letter addressed to the lessee or lessor at the last known place of abode or business, if that letter is not returned undelivered; and that service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered.

In this case the tenant served notice of a request for assignment by email (not one of the methods permitted under section 196). The tenant argued that this was valid on the basis that the email was received by the landlord and that the methods of service under section 196 are only permissive and not mandatory. The tenant relied on the wording in the section that service by these methods shall be ‘sufficient’ in support of this view. 

Surprisingly, the court held that service by email was not valid and that section 196 of the LPA 1925 requires that service must be in one of the permitted ways, contrary to the generally held view of service under section 196.

The effect of the notice failing to be valid was that the tenant had not made a formal request for assignment to the landlord and so had not started the clock running for the landlord to consider the request. This meant the landlord had not unreasonably refused consent by delay.

Ener-G Holdings Plc v Hornell [2012] EWCA Civ 1059

This case involved a breach of warranties claim which turned on when a notice of claim was validly served on the other party. The service provisions stated that ‘any such notice may be served by delivering it personally or by sending it by pre-paid recorded delivery post’.

The buyer arranged for the notice of claim to be served in two ways:

  • by a process server who visited the property on 30 March 2010. As the home was vacant at the time, the process server left the notice on a table where it was found later that day by the seller.
  • by registered post, the notice was sent on 30 March 2010 and was deemed served on 1 April 2010. 

The seller argued that service of the notice of claim by the process server was valid on 30 March 2012 despite it not being by one of the two methods specified.

The seller's argument was that the service provisions were permissive not mandatory and therefore service by other means was possible.

The Court of Appeal, with some difficulty, agreed with the seller on this point on a ratio of two to one.

The Master of the Rolls pointed to the word ‘may’ within the service clause in support of this conclusion. He went on to say that in the absence of clear words, it would seem curious to ascribe to the parties an intention that a recipient who actually received the notice in time should nonetheless be treated as not having been served.

Points for practice

Given the mixed approach of the courts, it is vital to avoid being a borderline case where it is arguable that notice was not served. To avoid this there are some obvious points to follow:

  • when serving notices ensure that service is carried out in strict compliance with the method of service specified in the lease;
  • where possible serve by two methods for a belt and braces approach, at least one of which is specified in the lease;
  • when calculating any time deadlines running from the date of service, always err on the side of caution and if possible allow a degree of flexibility either side.