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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Siemens Hearing Instruments Ltd v Friends Life Ltd [2013] EWHC B15 (Ch) (12 July 2013) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2013/B15.html Cite as: [2013] EWHC B15 (Ch)

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In the High Court of Justice
Chancery Division

		12th July 2013.

MR N STRAUSS QC:

Introduction

1. By a lease dated 27th January 1999 ("the Lease"), made pursuant to an agreement for a lease dated 14th August 1997, Sun Life Assurance Society Plc (later Friends Life Assurance Society Ltd) let to the claimant (then A&M Hearing Ltd) premises at Site 1, Vector 2, Manor Royal, Crawley ("the premises") for a term of 25 years from and including 24th August 1998 at an initial rent of £224,000 p.a. (now £325,000 p.a.).
2. Clause 19 of the Lease provided the tenant with a break option:

"19.1 In this clause the Termination Date means 23 August 2013.

19.2 Subject to the pre-conditions in clause 19.3 being satisfied on the Termination Date, and subject to clause 19.4 the Tenant may determine the Term on the Termination Date by giving the Landlord not more than 12 month's and not less than six month's written notice, which notice must be expressed to be given under section 24(2) of the Landlord and Tenant Act 1954. The term will then determine on the Termination Date, but without prejudice to any rights of either party against the other for any antecedent breach of its obligations under this Lease. (my emphasis).

19.3 The pre-conditions are that:

19.3.1 vacant possession of the whole of the Premises is given to the Landlord; and

19.3.2 all Rent and other sums due under this Lease up to the Termination Date have been paid in full; and

19.3.3 the Tenant has paid to the Landlord on or prior to the Termination Date (in addition to the Rent and other sums due under this Lease) a sum equal to one-half of the annual Rent payable by the Tenant under this Lease as at the date of service of the Tenant's notice pursuant to clause 19.2

194. The Landlord may waive any of the pre-conditions set out in clause 19.3 at any time before the Termination Date by written notice to the Tenant.

19.5 The Tenant will cancel any registration it has made in connection with this clause within 5 Working Days of the Termination Date.

19.6 Time will be of the essence for the purposes of this clause. ..."

3. On about 28th September 2012 (that is within the notice period provided for by clause 19), the claimant's solicitors served the following notice:

"Site 1, Vector 2, Manor Royal, Crawley (the "Premises")

We act for Siemens Hearing Instruments Limited (Company No.00203774) (the "Tenant") whose registered office is Alexandria House, Newton Road, Manor Royal, Crawley, West Sussex, RH10 9TT.

We write regarding the lease of the Premises between Sun Life Assurance Plc and A&M Hearing Limited, dated 17 January 1999 (the "Lease").

We, Manches LLP, Solicitors and Agents for the Tenant, of 9400 Garsington Road, Oxford Business Park, Oxford, OX4 2HN, HEREBY GIVE YOU NOTICE, for and on behalf of the Tenant, that the Tenant intends to terminate the Lease 23 August 2013 in accordance with clause 19 of the Lease so that the Lease will determine on that date.

We have served this notice on you at your registered office in accordance with clause 17 of the Lease.

.... We should be grateful if you would acknowledge receipt by signing and returning the enclosed duplicate of this letter in the enclosed pre-paid envelope."

4. The question that I have to decide is whether this was a valid notice, taking effect (subject to the due fulfilment of the pre-conditions) so as to terminate the lease on 23rd August 2013. The issue is whether the notice was effective even though it was not, as the lease required, expressed to be given under section 24(2) of the Landlord and Tenant Act.
5. Mr. Fancourt Q.C. on behalf of the claimant submitted that the notice was effective despite the absence of the required formula for 3 reasons:

(a) There was no such thing as a notice under section 24(2), and the required formula was meaningless. Therefore, all that was required on the proper construction of clause 19 was a straightforward notice, such as the one that was given, which did not claim a tenancy under the Act.

(b) Even if clause 19 did require the stipulated words to be stated, on its proper construction the failure to state meaningless words did not render the notice invalid.

(c) In any event, the stipulation was rendered void by section 38 of the Landlord and Tenant Act 1954.

Landlord and Tenant Act 1954

6. It is common ground between the parties that the provisions of the Landlord and Tenant Act 1954, and a then unresolved issue relating to section 26(2) of that Act which I can conveniently call the Garston point, form the essential background to the construction of clause 19 of the Lease.
7. The relevant provisions of the Act are those which relate to business tenancies, and in particular the following (emphasis added):

"23. Tenancies to which Part II applies

(1) Subject to the provisions of this Act, this Part of this Act applies to any tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by him or for those and other purposes.

(2) In this Part of this Act the expression "business" includes a trade, profession or employment and includes any activity carried on by a body of persons, whether corporate or unincorporated.

(3) In the following provisions of this Part of this Act the expression "the holding", in relation to a tenancy to which this part of this Act applies, means the property comprised in the tenancy, there being excluded any part thereof which is occupied neither by the tenant nor by a person employed by the tenant and so employed for the purposes of a business by reason of which the tenancy is one to which this Part of this Act applies ...

24 Continuation of tenancies to which Part II applies and grant of new tenancies

(1) A tenancy to which this Part of this Act applies shall not come to an end unless terminated in accordance with the provisions of this Part of this Act; and, subject to the provisions of section 29 of this Act, the tenant under such a tenancy may apply to the court for a new tenancy -

(a) if the landlord has given notice under section 25 of this Act to terminate the tenancy, or

(b) if the tenant has made a request for a new tenancy in accordance with section 26 of this Act.

(2) The last foregoing subsection shall not prevent the coming to an end of a tenancy by notice to quit given by the tenant, by surrender or forfeiture, or by the forfeiture of a superior tenancy, unless -

(a) in the case of a notice to quit, the notice was given before the tenant had been in occupation in right of the tenancy for one month.

(b) in the case of an instrument or surrender, the instrument was executed before, or was executed in pursuance of an agreement made before, the tenant had been in occupation in right of the tenancy for one month.

…

24A Rent while tenancy continues by virtue of s.24

(1) The landlord of a tenancy to which this Part of this Act applies may, -

(a) if he has given notice under section 25 of this Act to terminate the tenancy; or

(b) if the tenant has made a request for a new tenancy in accordance with section 26 of this Act; apply to the court to determine a rent which it would be reasonable for the tenant to pay while the tenancy continues by virtue of section 24 of this Act, and the court may determine a rent accordingly.

(2) A rent determined in proceedings under this section shall be deemed to be the rent payable under the tenancy from the date on which the proceedings were commenced or the date specified in the landlord's notice or the tenant's request, whichever is the later. ...

25 Termination of tenancy by the landlord

(1) The landlord may terminate a tenancy to which this Part of the Act applies by a notice given to the tenant in the prescribed form specifying the date at which the tenancy is to come to an end (hereinafter referred to as "the date of termination"); Provided that this subsection has effect subject to the provisions of Part IV of this Act as to the interim continuation of tenancies pending the disposal of applications to the court.

(2) Subject to the provisions of the next following subsection, a notice under this section shall not have effect unless it is given not more than twelve nor less than six months before the date of the termination specified therein.

(3) In the case of a tenancy which apart from this Act could have been brought to an end by notice to quit give by the landlord -

(a) the date of termination specified in a notice under this section shall not be earlier than the date on which apart from this Part of this Act the tenancy could have been brought to an end by notice to quite given by the landlord on the date of the giving of the notice under this section; and

(b) where apart from this part of this Act more than six months' notice to quit would have been required to bring the tenancy to an end, the last foregoing subsection shall have effect with the substitution for twelve months of a period six months longer than the length of notice to quite which would have been required as aforesaid. ...

26 Tenant's request for a new tenancy

(1) A tenant's request for a new tenancy may be made where the tenancy under which he holds for the time being (hereinafter referred to as "the current tenancy") is a tenancy granted for a term of years certain exceeding one year, whether or not continued by section twenty-four of this Act, or granted for a term of years certain and thereafter from year to year.

(2) A tenant's request for a new tenancy shall be for a tenancy beginning with such date, not more than twelve nor less than six months after the making of the request, as may be specified therein:

Provided that the said date shall not be earlier than the date on which apart from this Act the current tenancy would come to an end by effluxion of time or could be brought to an end by notice to quit given be the tenant.

(3) A tenant's request for a new tenancy shall not have effect unless it is made by notice in the prescribed form given to the landlord and sets out the tenant's proposals as to the property to be comprised in the new tenancy (being either the whole or part of the property comprised in the current tenancy), as to the rent to be payable under the new tenancy and as to the other terms of the new tenancy.

(4) A tenant's request for a new tenancy shall not be made if the landlord has already given notice under the last foregoing section to terminate the current tenancy, or if the tenant has already given notice to quit or notice under the next following section; and no such notice shall be given by the landlord or the tenant after the making by the tenant of a request for a new tenancy.

(5) Where the tenant makes a request or a new tenancy in accordance with the foregoing provisions of this section, the current tenancy shall, subject to the provisions of subsection (2) of section thirty-six of this Act and the provisions of Part IV of this Act as to the interim continuation of tenancies, terminate immediately before the date specified in the request for the beginning of the new tenancy.

(6) Within two months of the making of a tenancy's request for a new tenancy the landlord may give notice to the tenant that he will oppose an application to the court for the grant of a new tenancy, and any such notice shall state on which of the grounds mentioned in section thirty of this Act the landlord will oppose the application. ...

29. Order by court for grant of a new tenancy

(1) Subject to the provisions of this Act, on an application under subsection (1) of section twenty-four of this Act for a new tenancy the court shall make an order for the grant of a tenancy comprising such property, at such rent and on such other terms, as are hereinafter provided. ...

38 Restriction on agreements excluding provisions of Part II

(1) Any agreement relating to a tenancy to which this Part of this Act applies (whether contained in the instrument creating the tenancy or not) shall be void (except as provided by subsection (4) of this section) in so far as it purports to preclude the tenant from making an application or request under this Part of this Act or provides for the termination or the surrender of the tenancy in the event of his making such an application or request or for the imposition of any penalty or disability on the tenant in that event. ...

69. Interpretation

(1) In this Act the following expressions have the meanings hereby assigned to them respectively, that is to say:- ...

"notice to quit" means a notice to terminate a tenancy (whether a periodical tenancy or a tenancy for a term of years certain) given in accordance with the provisions (whether express or implied) of that tenancy; ..."

8. It is clear that, at the time of the lease, there were several controversial issues, discussed in some detail in Kim Lewison Q.C.'s Blundell Memorial Lecture for 1995, entitled 'Tenant's Break Clauses: When And How To Operate Them'. Among them was an issue as to whether, by virtue of the proviso to section 26(2), a tenant could simultaneously exercise a break clause (which would be within the extended definition of "notice to quit" in section 69) and request a new tenancy under section 26; if so, this might be a beneficial exercise in a falling market.
9. In his lecture, Mr. Lewison Q.C. doubted whether this was possible, and he successfully argued that it was not before Rattee J. in Garston v. Scottish Widows Fund, decided on 21st March 1996, [1996] 1 W.L.R. 834:-

"Mr. Hodge's argument on behalf of the plaintiffs is as follows. (1) It is not disputed that the tenancy created by the lease, being a tenancy created by the lease, being a tenancy granted for a term of years exceeding one year, was at the material time a tenancy within section 26(1) of the Act of 1954 and, therefore, one in respect of which the plaintiffs were entitled, subject to the other provisions of section 26, to make a request for a new tenancy under section 26. (2) By virtue of section 26(2) the request had to be for a new tenancy beginning not more than 12 nor less than six months after the making of the request. This condition was satisfied by the request made by the plaintiffs on 4 October 1994, it being for a tenancy commencing on 10 July 1995. (3) The request did not infringe the proviso to section 26(2), in that the commencement date of the new tenancy requested was not earlier than the date on which, as at the date of the request, the existing tenancy could be brought to an end by notice to quit, i.e. notice under clause 7 of the lease given by the plaintiffs as tenants. (4) The plaintiffs were not disabled from making a request for a new tenancy by section 26(4), because the tenants had not given notice to quit before making their request. The purported clause 7 notice was given at the same time as the request for a new tenancy, and anyway was, it must be assumed for the purpose of the present argument, not a valid notice to quit because of the mistake as to the date. (5) Therefore, by virtue of section 26(5), subject to section 64, the tenancy under the lease terminated immediately before 10 July 1995, the date specified in the plaintiffs' request as the beginning of the new tenancy. (6) In fact the old tenancy was prolonged by section 64 until 24 August 1995, being three months after the date of the discontinuance of the plaintiffs' application to the county court. (7) Thus, irrespective of any invalidity of the purported notice under clause 7 of the lease, the lease terminated on 24 August 1995.

The defendant's argument, put very clearly and concisely by Mr. Lewison, is much shorter. It is that the plaintiffs' purported request for a new tenancy under section 26 of the Act of 1954 was invalid, because it infringed the proviso to section 26(2). For ease of reference I repeat the proviso:

"Provided that the said date" – i.e. the date of commencement of the new tenancy requested – "shall not be earlier than the date on which apart from this Act the current tenancy would come to an end by effluxion of time or could be brought to an end by notice to quit given by the tenant."

Mr. Lewison's argument was that in the present case, the relevant tenancy being of the first of the two types to which section 26 applies, namely a tenancy granted for a term of years exceeding one year, the date relevant for the purposes of the proviso to section 26(2) is the date on which, apart from the Act, that tenancy would have come to an end by effluxion of time, namely 23 June 2005. The date of the commencement of the new tenancy specified in the plaintiffs' request was earlier than this date; therefore the request infringed the proviso to section 26(2).

Despite the persuasiveness of Mr. Hodge's submissions, I prefer the argument of Mr. Lewison. Mr. Hodge's argument requires the proviso to section 26(2) to be read as though it said:

"Provided that the said date shall not be earlier than (1) the date on which apart from this Act the current tenancy would come to an end by effluxion of time or (2) if earlier, the date on which it could be brought to an end by notice to quit given by the tenant."

This is not what in fact the proviso says. In my judgment, the actual words of the proviso on their natural construction contemplate one relevant date only in respect of a given tenancy, and the two alternative definitions of that date are to take account of the fact that the relevant tenancy may be (a) one granted simply for a term of years, in which case the relevant date under the proviso will be the date on which it would come to an end by effluxion of time, or (b) one granted for a term of years certain and thereafter from year to year, in which case, as Mr. Lewison pointed out, the tenancy will never come to an end by effluxion of time, and the only possible relevant date specified in the proviso to section 26(2) is the date on which, as at the date of the request under section 26(1), the existing tenancy could be brought to an end by notice to quit given by the tenant. Thus, in the case of a tenancy granted for a term of years exceeding one year, the date for the commencement of a new tenancy cannot be earlier than the date on which the current tenancy would, apart from the Act of 1954, come to an end by effluxion of time.

This seems to me to be the natural construction of the words of the proviso in the context of section 26 as a whole, bearing in mind that the proviso has to be applicable to either of the two particular types of tenancy specified in section 26(1). Such a construction seems to me to produce a perfectly rational result in the context of Part II of the Act of 1954. I do not find it surprising that the Act does not, as would Mr. Hodge's construction of it, mean that the inclusion in a lease for a term of years of a power for the tenant to break the lease has the effect that the tenant can not only terminate his enjoyment of the benefit and suffering of the burdens of the lease on the terms agreed on its grant, but at the same time obtain the benefit of a new tenancy on, in times of recession, terms much more favourable to him than those of the lease into which he entered or which he took by way of assignment.

Mr. Hodge sought to derive some support for his argument on the construction of the proviso to section 26(2) of the Act of 1954 from the fact that section 25 of the Act enables a landlord to give notice terminating a tenancy to which Part II of the Act applies on the earliest date on which he could, apart from the Act, have brought the tenancy to an end by notice to quit. Mr. Hodge submitted that to be consistent section 26 should be construed so s to give a tenant power to request a new tenancy on the earliest date on which the tenant is entitled, apart from the act, to bring the existing tenancy to an end by notice to quit.

I do not accept this argument. Nothing in the Act prevents a tenant bringing his original tenancy to an end at any date on which he could do so apart from the Act: see section 24(2). The question is whether section 26 empowers him to request a new tenancy on new terms at the same time as exercising his power under a break clause to bring the old tenancy to an end. In my judgment, it does not. I see nothing in this conclusion inconsistent with the preservation by section 25 of the landlord's contractual right to quit, but subject to the tenant's right to apply for a new tenancy if the landlord does give such notice.

Accordingly, in my judgment, the purported request by the plaintiffs for a new tenancy under section 26 of the Act of 1954 was invalid, because the date specified in it for the commencement of the new tenancy was earlier than the date on which the existing tenancy would come to an end by effluxion of time. It follows that the request was not effective to terminate the tenancy created by the lease and, since the error in the date specified in the notice purportedly given under clause 7 of the lease made that notice ineffective, the lease continues in force. I will hear counsel as to what order I should make."

10. This was the position at the time the agreement for this lease (with draft lease attached) was entered in 1997. Subsequently, Garston went to the Court of Appeal which upheld the decision on 25th June 1998; it decided the appeal on a different issue, following the decision of the House of Lords in Mannai Investment Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] AC 749. However, the Court of Appeal, albeit obiter, agreed with Rattee J., on this issue, adding:-

"One of the main purposes of Part II of the Act of 1954 is to enable business tenants, where there is no good reason for the eviction, to continue in occupation after the expiration of their contractual tenancies. It is not a purpose of the Act to enable a business tenant who has chosen to determine his contractual tenancy to continue in occupation on terms different from those of that tenancy."

The parties' detailed submissions

11. It is common ground between the parties that the requirement to state in the break notice under this lease that it was served pursuant to section 24(2) was inserted so as to avoid or attempt to avoid the then perceived risk that otherwise the tenant could do precisely what it was held in Garston he could not do, determine the tenancy and simultaneously request a new tenancy under the Act, in the expectation of better terms.
12. Mr. Fancourt submitted as follows:

(1) The requirement for a notice under section 24(2) of the Landlord and Tenant Act 1954, was meaningless, as there was no such thing. Section 24(2) made no provision for notices, unlike (for example) section 25. All that section 24(2) did was to identify a method of determining a tenancy which was not affected by the Act, namely by a tenant's notice to quit (which has the extended meaning set out in section 69(1)).

(2) Since the purpose of the provision was to ensure that the tenant did not give a notice under section 26, which by virtue of section 26(3) would have to be in the prescribed form, on the proper construction of clause 19 all that was required was that the notice was a notice to quit, but one which did not request a new tenancy under section 26(2), and was not accompanied by such a request; the notice given was such a notice and was therefore valid.

(3) Even if clause 19 did require the notice to be expressed as a notice under section 24(2), it must be implicit that this would not be necessary if there was no question of a new tenancy. This would be so if the tenant was no longer in occupation, and would therefore have no right under the Act to request one; equally it is so in this case, it having been determined in Garston that section 26(2) did not enable a tenant to exercise a break option and claim a new tenancy. The parties cannot have intended the words to be required if there was no longer any point to them.

(4) Alternatively, even if clause 19 did require the claimant to express the notice as having been given under section 24(2), it did not state what the consequence of not doing so was, and it was a separate question of construction whether the provision was mandatory, so that a non-compliant notice was invalid, or only directory.

(5) Based on the authorities on statutory interpretation, the principles of which applied equally to the interpretation of a contract, the matters to be considered on this issue included:

(a) any guidance to be derived from the language;

(b) the importance of the requirement;

(c) the extent, if any, to which non-compliance could prejudice the other party; and

(d) the likelihood and extent of any hardship or injustice being caused by the non-compliance.

See R. v. Soneji [2006] 1 AC 340 at 350 per Lord Steyn.

(6) In the present case, the requirement was meaningless and non-compliance with it would have no effect of any kind; therefore on the proper construction of clause 19 a failure to express the notice as being given under clause 24(2) would not render it invalid.

(7) Although the conditions for the exercise of an option usually required strict compliance, this was not an absolute rule, and in any event the relevant provisions here concerned only the notice and not the option conditions.

(8) Section 38 rendered void any provision which purported to preclude an application under the Act, and it was held in Joseph v. Joseph [1967] 1 Ch. 79 that this applied to any provision which had the effect of preventing such an application.

(9) Therefore, if the law was not as stated in Garston, insofar as clause 19 required the notice to state that it was given under section 24(2), it was void as it prevented the tenant from exercising his right to serve a break notice and simultaneously request a new tenancy.

(10) Accordingly, the provision was either pointless or void, and in either case of no effect.

13. Mr. Wonnacott submitted as follows:-

(1) Given that the purpose of the stipulated wording was to prevent the possible operation of section 26(2), the claimant's construction, according to which all that was required was the service of a common law notice, which is exactly what would trigger the possible right under section 26(2), was the opposite of what the parties intended.

(2) The wording of clause 19 was common (two other examples of leases were provided), and the explanation for it was to be found in the words "apart from this Act" in the proviso to section 26(2).

(3) The proviso to section 26(2) could not apply, if any notice had to be given under section 24(2) of the Act, that is a notice given under or pursuant to that section, therefore not at common law, and so not "apart from the Act".

(4) The effect of this construction was that a tenant out of occupation could not exercise the break clause, as he would have no right under the Act: section 23(1).

(5) By way of example, assuming a break right half way through a 10 year term, which could be exercised only "under section 24(2)", if at that point the tenant was in business occupation, the right applied as a matter of contract and the notice was valid by reason of section 24(2) but, if he was not, he could not give notice under section 24(2); therefore the tenancy could not be determined "apart from the Act" and the argument based on the proviso to section 26(2) would not be available.

(6) The provision was part of the process of exercising an option, and was to be construed strictly; the consequence of non-compliance was that the option was not exercised, as the tenant would not have done what was necessary to exercise it.

(7) The required wording was not meaningless or pointless; its purpose was to give the landlord arguable means to defeat the proviso to section 26(2); that was its purpose whether or not it would have been effective to achieve it.

(8) Section 38 did not arise unless Garston was wrong, which it was not. In any event, section 38 was not engaged by a provision which gave the tenant a limited break right which did not qualify him to request a new tenancy under the Act.

14. Mr. Fancourt submitted that this was an improbable explanation of the purpose of the required wording. The draftsman would have been wrong to treat section 24 as authorising the giving of a notice, and wrong to think that such a formula could be an effective means of avoiding the effect of section 26(2). Also it would make no commercial sense to deprive the tenant out of possession of a break right, when that is precisely when it would be likely to want it. However, both sides agree that the wording was intended to serve as an anti-section 26(2) weapon, and neither has come up with a better, or indeed any other, explanation of the thinking. As to commercial sense, it would make sense for the defendant's need to overcome section 26(2) to have prevailed over the claimant's requirements as a tenant.

Discussion and conclusions

(1) Mistake

15. At one stage, I thought that Mr. Fancourt's submission that the required wording was meaningless invoked the fifth Investors Compensation principle, by suggesting that "something had gone wrong with the language": [1998] 1 WLR 896 at 912-3 per Lord Hoffmann. But it is clear that this is not the case and Mr. Fancourt was not suggesting that it was. His submission was not that the meaningless language was inserted by mistake. It is clear that it was used deliberately.
16. It is also clear that Mr. Wonnacott is right in submitting that the mistake in the notice, that is the omission of the magic words, is not the kind of mistake which can be corrected in accordance with the decision of the House of Lords in Mannai Investments v. Eagle Star [1997] A.C. 249. This is not a case in which it is obvious on the face of the notice that the person drafting it had made a mistake.

(2) The meaning of clause 19

17. There is no doubt about the meaning of the words "must be expressed to be given under section 24(2)", etc. Even if they are meaningless, in the sense that there is no such thing as a notice under section 24(2), that is what clause 19 requires. As Lord Hoffmann said in Mannai at 776D:

"If the clause had said that the notice had to be on blue paper, it would be no good serving a notice on pink paper, however clear it might have been that the tenant wanted to terminate the lease."

18. Mr. Fancourt submitted that the effect of applying clause 19 literally was to require the giver of the notice to make an inaccurate statement. I do not see that this makes any difference; if he is fastidious about it, he can use some formula such as "in accordance with clause 19, this notice is expressed to be under section 24(2) ...". There is no difficulty about giving a compliant notice.
19. I therefore reject Mr. Fancourt's submission that the words can simply be disregarded, and that a notice such as the one given complies with clause 19.
20. I agree with Mr. Fancourt's submission that it may be implicit as a matter of construction that, if it became clear that the tenant had no possible right under section 26(2), so that the required wording had become pointless, they need not be included in the notice. This would be so, for example, if section 26(2) had been amended in such a way as to remove any possible argument. But I do not think that this would extend to the present situation, in which there is only a first instance decision, supported obiter by the Court of Appeal, however unlikely this is to be challenged. Nor do I think it would extend to a case in which the tenant was out of occupation and had no right under the Act: there could be a dispute of fact about that.
21. Therefore I conclude that the notice did not comply with clause 19.

(3) The consequence of non-compliance

22. There have been dicta in two recent cases stressing the flexibility of the approach of English law to the interpretation of written instruments, whether statutes, contracts or any other. First, in Newbold v. The Coal Board [2013] EWCA Civ 584, which concerned the validity of notices of subsidence damage, Sir Stanley Burnton (with whom Longmore and MacFarlane L.JJ. agreed) said:

"69. There was a suggestion before us that there are two not very consistent lines of authority on the effect of failures to comply strictly with statutory or contractual requirements. On the one hand there is the line exemplified by the judgment of Lord Woolf MR in R v Secretary of State for the Home Department ex p Jeyeanthan [2000] 1 WLR 354, and on the other the judgment of Rimer J in Speedwell Estates v Dalziel [2001] EWCA Civ 1277, followed in Burman v Mount Cook Land [2002] Ch 256, EWCA Civ 1712, in neither of which was Jeyeanthan cited.

70. I do not consider that there is any such conflict. In all cases, one must first construe the statutory or contractual requirement in question. It may require strict compliance with a requirement as a condition of its validity. In Mannai at 776B Lord Hoffmann gave the example of the lease requiring notice to be given on blue paper: a notice given on pink paper would be ineffective. Against that, on its true construction a statutory requirement may be satisfied by what is referred to as adequate compliance. Finally, it may be that even non-compliance with a requirement is not fatal. In all such cases, it is necessary to consider the words of that statute or contract, in the light of its subject matter, the background, the purpose of the requirement, if that is known or determined, and the actual or possible effect of non-compliance on the parties. We assume that Parliament in the case of legislation, and the parties in the case of a contractual requirement, would have intended a sensible, and in the case of a contract, commercial result.

71. In the present case, the wording of section 3 of the Act does suggest that a damage notice to be effective must contain the prescribed particulars. However, I think it right to consider what are the prescribed particulars before reaching a conclusion, since they throw light on what Parliament must have had in mind, particularly since the Regulations are relatively close in date to the parent Act. When I do so, it is not possible to conclude that Parliament intended a notice to be invalidated by an inaccuracy in the particulars. I do not think Parliament would have intended a notice that wrongly stated that a property was semi-detached, when it was in fact connected to other houses on both sides (possibly only at a small location) and so was technically a terraced house would invalidate a notice; or that an incomplete description of the non-residential user would be fatal; or an error in the date of the construction of the property outside the range of approximation. In the case of particular 6, a residential tenant who pays his rent to an agent for his landlord may not know what is the interest of this landlord or who is the freeholder or whether there is a mortgage on the property. I think that Parliament would not have intended a failure to give correct and full information on particular 6 to be fatal.

72. In my judgment, therefore, a notice is valid provided it adequately provides the information required by the Regulations. The damage notices in this case provided adequate information to the Authority. It identified the property in question and the damage it had suffered; it identified the Newbold brothers as the owner of the freehold, and therefore competent to give a notice under section 3. I am confirmed in my view that the information provided by the notices was adequate, since the Authority was able to and did respond to them and was able to and did investigate the claims."

23. Then in Cusack v. London Borough of Harrow [2013] 1 WLR 2022, Lord Neuberger said the following about the application of canons of construction:-

"57. It was suggested on behalf of the council that this case represented an opportunity for this court to "make it clear that canons of construction should have a limited role to play in the interpretation" of statutes (and indeed contacts). In my view, canons of construction have a valuable part to play in interpretation, provided that they are treated as guidelines rather than railway lines, as servants rather than masters. If invoked properly, they represent a very good example of the value of precedent.

58. Interpretation of any document ultimately involves identifying the intention of Parliament, the drafter, or the parties. That intention must be determined by reference to the precise words used, their particular documentary and factual context, and, where identifiable, their aim or purpose. To that extent, almost every issue of interpretation is unique in terms of the nature of the various factors involved. However, that does not mean that the court has a completely free hand when it comes to interpreting documents: that would be inconsistent with the rule of law, and with the need for as much certainty and predictability as can be attained, bearing in mind that each case must be resolved by reference to its particular factors.

59. Thus, there are some rules of general application – eg that a statute cannot be interpreted by reference to what was said about it in Parliament (unless the requirements laid down in Pepper v Hart [1993] AC 593 are satisfied), or that prior negotiations or subsequent actions cannot be taken into account when construing a contract. In addition, particularly in a system which accords as much importance to precedence as the common law, considerable help can often be gained from considering the approach and techniques devised or adopted by other judges when considering questions of interpretation. Even though such approaches and techniques cannot amount to rules, they not only assist lawyers and judges who are subsequently faced with interpretation issues, but they also ensure a degree of consistency of approach to such issues.

60. Hence the so-called canons of construction, some of which are of relatively general application, such as the so-called golden rule (that words are prima facie to be given their ordinary meaning), and some of which may assist in dealing with a more specific problem, such as that enunciated by Sir John Romilly in Pretty v Solly. With few, if any, exceptions, the canons embody logic or common sense, but that is scarcely a reason for discarding them: on the contrary. Of course there will be many cases, where different canons will point to different answers, but that does not call their value into question. Provided that it is remembered that the canons exist to illuminate and help, but not to constrain or inhibit, they remain of real value."

Although this was not a case involving the efficacy of a contractual or statutory notice, it seems to me that the above should be borne in mind in considering whether there is a strict and inflexible rule relating to options, whereby any non-compliance with its terms is fatal.

24. The flexible approach indicated by the above is apparent in many cases on statutory or contractual requirements, where the statute or the contract says nothing about the consequences of non-compliance. The traditional distinction is between requirements which are mandatory and those which are merely directory, or permissive, but recent case law demonstrates that there are also some requirements which might be described as hybrids. In such cases, the consequence of the non-compliance may depend on its extent: has there been adequate compliance? Or it may depend on its effect: has it made a difference to the other party?
25. This approach is well illustrated by the decision of the Court of Appeal in Hollins v. Russell [2003] 1 WLR 2487, in which it was held that minor breaches of section 58(1) of the Courts and Legal Services Act 1990, or of the Regulations made under it, relating to conditional fee agreements, should not deprive the legal representative of his costs: adequate or substantial compliance sufficed, and the relevant question was whether the breach(es) of the section and/or the regulations had had a materially adverse effect on the protection afforded to the client or on the proper administration of justice: see in particular at paras 103-9 of the judgment. The approach is strikingly different from the position under, for example, the Moneylenders Acts, where any failure to include a term of the contract in the memorandum was fatal: see, for example, Egan v. Langham Investments Limited [1938] 1 All E.R. 193. That was because section 6 of the 1927 Act expressly provided that in such circumstances the contract was unenforceable, leaving the court no room to consider whether the non-compliance had made any difference to the borrower.
26. Mr. Wonnacott referred me to the decision of the Court of Appeal in Burman v. Mount Cook Land Ltd [2002] Ch 256, in support of his submission that this was a case of a prescribed requirement, any deviation from which was fatal. The case concerned a landlord's counter-notice, relating to a tenant's right to acquire a new lease under the Leasehold Reform, Housing and Urban Development Act 1993, which failed to state, as section 45(2) required, whether the landlord admitted or did not admit that the tenant had a right to acquire a new lease under the Act. The Court of Appeal overruled the decision of the judge at first instance, who had decided the issue by asking himself whether a reasonable tenant could have been misled into thinking that the landlord's counter-notice did not admit the right to a new lease. The Court of Appeal held that the landlord's counter-notice was integral to the proper working of the statutory scheme, and that a non-compliant notice was ineffective; it did not matter that the recipient was not prejudiced. Chadwick L.J. (with whom Sir Murray Stuart-Smith agreed) said:

"18. The importance of the landlord's counter-notice to the proper working of the statutory scheme is reflected in the language of section 45(2) and (3) of the Act. The counter-notice must comply with the requirements in one or other of paragraphs (a), (b) or (c) in subsection (2). It must state whether the landlord admits, or does not admit, that the tenant had the right to acquire a new lease. If the counter-notice complies with the requirement in subsection (2)(a)–that is to say, if it does state that the landlord admits the right–subsection (3)(a) requires that it must in addition state which (if any) of the proposals contained in the tenant's notice are accepted by the landlord and which are not so accepted; and subsection (3)(b) requires that it must specify, in relation to each proposal which is not accepted, the landlord's counter-proposal. The words which I have emphasised are mandatory and specific. There is good reason why they should be. The proper working of the statutory scheme requires that the tenant is left in no doubt as to what the landlord admits, how far the tenant's proposals are accepted, and what (if any) are the landlord's counter-proposals. Further, the importance of the statement which subsection (2)(a) requires, as an admission, is emphasised by subsection (5) of section 45 of the Act.

19. In my view the answer to the question "what does section 45(2)(a) of the 1993 Act require?" is not open to doubt. If a notice is to comply with the requirement under that paragraph it must state that the landlord admits that the tenant had on the relevant date the right to acquire a new lease of his flat. Further, the notice must state which (if any) of the proposals contained in the tenant's notice are accepted by the landlord, as well as stating which of those proposals are not accepted and specifying, in relation to each proposal which is not accepted, the landlord's counter-proposal. Section 45(2)(a) must be read in conjunction with section 45(3) of the Act.

…

23. I have said that it is important to appreciate that in neither of the two cases on notices served under break clauses to which I have referred–Carradine Properties Ltd v Aslam [1976] 1 WLR 442 and Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749–did the break clause in the lease require the notice to be given in any particular form. Had the break clause required the notice to be in a particular form, the result would have been different. The point was recognised by Peter Gibson LJ in York v Casey [1998] 2 EGLR 25, 27:

"It is of course right, as [counsel] for the defendants has submitted, that one should bear in mind that in a statutory context there may be requirements which have to be observed and without which a notice will be invalid. But the same may be true in the case of a contractual notice. For my part, I can see no material distinction between the approach in a case such as the present and the approach which the House of Lords has said [in Mannai] should be adopted in the case of a notice in a contractual setting.""

27. Mr. Fancourt referred me to a number of authorities, starting with the dictum of Millett L.J. in Petch v. Gurney [1994] 3 All ER 731, a case in which it was held that the taxpayer could not challenge an income tax assessment having failed to comply with the relevant time limit, at 736:

"The question whether strict compliance with a statutory requirement is necessary has arisen again and again in the cases. The question is not whether the requirement should be complied with; of course it should: the question is what consequences should attend a failure to comply. The difficulty arises from the common practice of the legislature of stating that something "shall" be done (which means that it "must" be done) without stating what are to be the consequences if it is not done. The court has dealt with the problem by devising a distinction between those requirements which are said to be "mandatory" (or "imperative" or "obligatory") and those which are said to be merely "directory" (a curious word which in this context is taken as equivalent to "permissive"). Where the requirement is mandatory, it must be strictly complied with; failure to comply invalidates everything that follows. Where it is merely directory, it should still be complied with, and there may be sanctions for disobedience, but failure to comply does not invalidate what follows."

28. In R v. Soneji, to which I have already referred, Lord Steyn said at 350:

"... a more flexible approach of focusing intensely on the consequences of noncompliance, and posing the question, taking into account those consequences, whether Parliament intended the outcome to be total invalidity. In framing the question in this way it is necessary to have regard to the fact that Parliament ex hypothesi did not consider the point of the ultimate outcome. Inevitably one must be considering objectively what intention should be imputed to Parliament."

29. He also approved the following passage from the Australian decision of Project Blue Sky Inc. v. Australian Broadcasting Authority (1998) 194 C.L.R. 35:

"A better test [than asking whether compliance with a provision is mandatory or directory] is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid ... In determining the question of purpose, regard must be had to "the language of the relevant provision and the scope and object of the whole statute."

30. Mr. Fancourt also referred me to 2 decisions in which some of the provisions relating to the notice were mandatory and others directory, the dividing line being whether the provisions which had not been complied with concerned information which it was essential for the party receiving the notice to have, namely Kay Green v. Twinsectra Limited [1996] 1 W.L.R. 1587 and Tudor v. M25 Group Limited [2004] 1 WLR 2319. The latter case concerned the right of the majority of qualifying tenants of flats to require the purchaser of the flats to give particulars of the terms for disposal. The Court of Appeal upheld the decision of the judge at first instance that a notice which failed to specify the addresses of the flats of which they were qualifying tenants was valid. Carnwath L J. said at 2327-30:-

"[HHJ Cooke] concluded that the "irreducible minimum" of matters that must be regarded as mandatory are "mattes which but for the notice the landlords could never know". He gave as examples:

"Who is giving the notice, what their proposals are, whether they accept the other party's proposals, what property they seek to acquire, are all things the recipients of a notice must be entitled to receive "en clair" and not to have to guess at. By contrast it seems to me that where the information which the notice contains achieves the purposes of the notice then the further statements which the statute requires but which once given the mandatory facts are common ground or readily and indisputably ascertainable are likely to be regarded as directory only. It will be helpful to have them but the purpose of the notice is achieved without them."

He regarded the Kay Green decision as strongly influenced by the fact that the recipient of the notice would have "uncontroversially known the true position as to the relevant facts.

…

"In my view, the judge was entirely correct in upholding the validity of the notice, and I would be content to adopt his reasons. The same result may be arrived at by applying the analytical approach advocated by Hobhouse LJ in Belvedere Court Management Ltd v. Frogmore Developments Ltd [1997] QB 858. That involves considering which of the provisions are substantive and which are secondary or "machinery"; and in relation to the latter, considering whether they are "essential parts of the mechanics or merely supportive of the other provisions". Here the substantive provisions are those conferring the right to acquire the freehold. The secondary (machinery) provisions include the notice requirements of section 11A itself, and the formal requirements of section 54, including the requirement for the addresses. The requirement for a notice is essential machinery, as not doubt is the requirement to indicate who is giving the notice. However, in agreement with the judge, I would hold that the requirement to state addresses in the notice is "merely supportive"; and that accordingly a failure in this respect does not invalidate the notice."

31. The case of 7 Strathray Gardens Limited v. Pointstar Shipping & Star Finance Limited [2005] 1 EGLR 53 is one in which, unusually, the Court of Appeal held that on the proper construction of the regulation, the requirement was mandatory if the information to be given in the notice was positive, but not if it was negative. Where tenants had served a notice of collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act, 1993, the landlord's counter notice was obliged to state whether the premises came within an area of an estate management scheme (EMS) approved under section 70. In this case, it did not, but the counter notice did not so state. Arden L.J. (with whom Ward and Jacob L.JJ. agreed) cited Petch and Burman, as authority for the proposition that it was necessary to consider the legislative intention having regard to the particular statutory scheme in point. She said that there was no difficulty in principle in holding that a statutory requirement could be in part directory and in part mandatory, and that a contrary conclusion would be "the triumph of form over substance in a context where substance has to be examined". Since the absence of the negative statement could cause no possible prejudice to the tenants, it could not have been intended to be mandatory, and its absence therefore did not affect the validity of the notice.
32. Mr. Wonnacott submitted that, whatever force these authorities might have in other cases, in a case concerning an option a strict approach was necessary. He cited the dictum of Lord Hoffmann about a notice on blue paper, and the proposition in Lewison on The Interpretation of Contracts, 5th Ed. para. 16.14, p.760:

"In the case of unilateral contracts, such as options, all conditions must be strictly performed otherwise no binding contract comes into existence at all".

33. However, as Lewison states at page 761, some breaches have been made in this principle, and in particular, citing the well known decision of the House of Lords concerning rent review clauses, United Scientific Holdings Limited v. Burnley Borough Council [1978] A.C. 904:-

"...part of a bilateral contract which is drafted using the language of options will not necessarily be construed as an option, with the strict consequences which flow from such a construction. Whether it does amount to an option depends on the proper construction of the contract as a whole...".

34. Lewison also refers to the decision of the Court of Appeal in Yates Building Co. Ltd. v. Pulleyn (RJ) & Sons (York) Limited [1975] 237 E.G. 183, in which an option to acquire land was exercisable "by notice in writing given by or on behalf of [the plaintiff] to [the defendant] at any time between April 6 1973 and May 6 1973 such notice to be sent by registered or recorded delivery post to 1 of [two specified addresses]"; the plaintiff sent a notice by ordinary post, which arrived well in time, and was seen and opened by the defendant's solicitors.
35. The Court of Appeal held that the notice was valid. Lord Denning M.R. (with whom Orr and Scarman L.JJ. agreed) said:-

"It seems to me that this depends on the construction of the option clause. The option is an offer: an irrevocable offer. When a person makes an offer, he does sometimes prescribe the method by which it is to be accepted. If he prescribes it in terms which are mandatory or obligatory, the acceptance is only good if it complies with the stated requirements. Thus in the present case the notice of acceptance must be in writing, and must be given to Pulleyns or to PLulleyns' solicitors, and must be given between April 6 1973 and May 6 1973. But the question is whether the words such notice to be sent by registered or recorded delivery post" are mandatory or directory. That test is used by lawyers in the construction or statutory instruments, but it can also be used in the construction of other documents. The distinction is this: a mandatory provision must be fulfilled exactly according to the letter, whereas a directory provision is satisfied if it is in substance according to the general intent applying this rule of construction, you must look to the subject-matter, consider the object to be fulfilled, and then see whether the provision must be fulfilled strictly to the letter or whether the substance of it is enough. So in the present case the question is whether the letter of acceptance must be sent by registered or recorded delivery post, else it is bad; or whether it is sufficient if it gets there in time, as, as for instance, by ordinary post or by special messenger. Orr LJ gave this instance in the course of the argument. Suppose there were a postal strike during the last week, and the buyer, to make sure it was in time, sent the letter by special messenger, would this not be sufficient? Looking at the object of this provision, it seems to be this. It is inserted for the benefit of the buyer so that he can be sure of his position. So long as he sends the letter by registered or recorded delivery post, he has clear proof of postage and of the time of posting. But if the buyer sends it by ordinary post, he will have no sufficient proof of posting, or of the time of posting. In that case, if the seller proves that he never received it, or received it too late, the buyer fails. None of those reasons apply, however, when the seller does receive it in time. So long as he gets the letter ion time, he should be bound. So I would hold, simply as a matter of interpretation, that if the letter did reach the sellers in time, it was a valid exercise of the option."

36. While this case is authority for the proposition that, even where an option is concerned, it may be sufficient if the notice substantially complies "according to the general intent", it is not entirely helpful to the claimant in this case, because there is a strong suggestion that, where the word "must" was used, it implied a mandatory requirement.
37. More recently, the Court of Appeal in Rennie v. Westbury Homes (Holdings) Limited [2007] EWCA Civ. 1401 had to construe an option to purchase a property for £50,000, which provided that at any time during the last year at the option period "the intending Purchaser made by notice in writing served on the intending Vendor require such period to be extended by five years", upon service of that notice and payment of £20,000. The defendant's solicitors wrote to the claimant's solicitors, stating that they would shortly be placed in funds for the extension of the option for a further five years, and asking for details of where payments should be made.
38. The Court of Appeal held that on an objective construction of the notice it conveyed to the recipient the defendant's decision to exercise the option, and rejected the argument that it was an "indispensable condition" for the effective exercise of the option that the notice should expressly state in terms that the defendant required the period to be extended. Dyson L.J. (with whom Jacob and Latham L.JJ. agreed) said:-

"13. In Mannai Investments, Lord Steyn set out five propositions, starting at page 767D. The first was that:-

"This is not a case of a contractual right to determine which prescribes as an indispensable condition for its effective exercise that the notice must contain specific information."

14. I accept the submission of Mr. Reynolds QC, that it is implicit in this formulation that, where the case is one where it is an indispensable condition that the notice should contain "specific information", the omission of that information invalidates the notice. Mr. Reynolds submits that clause 9.1, in describing a notice thereunder as being one "require[ing] such a period to be extended", was making it an indispensable condition that the notice should contain this specific information that that was what the defendant required. The notice of 12 September contained no words which "required" the Option Period to be extended.

15.1 I cannot accept this submission for the reasons given by the judge at paragraph 21 of his judgment, and Mr. Male QC on behalf of the defendant. In my view, Lord Steyn's first proposition cannot sensibly be pressed into service, as contended by Mr. Reynolds. A typical case of an "indispensable condition" is where the contract states that the relevant notice shall be in writing and shall contain particular information. Some clauses may expressly say that "the notice shall only be valid if...". Where express language of this kind does not appear in the clause, it will be a question of construction whether it is an indispensable condition for validity that the notice satisfies the requirements of the clause. I accept the submission of Mr. Male that it would be formalism in the extreme if the notice in the present case were to be held to be invalid because it failed to say in terms "I require such a period to be extended", if the notice clearly conveyed to the recipient that the defendant was seeking to exercise its right under clause 9.1 to require the period to be extended.

16. To put the point another way, it is not a condition precedent to the proper exercise of the right conferred by clause 9.1 that the defendant should state in terms that it requires the Option Period to be extended. Clause 9.1 does not so provide expressly or by necessary implication. It is sufficient, if the defendant makes it clear to a reasonable recipient, that it is exercising the right conferred by the clause."

39. From these authorities, it seems to me that the position relating to non-compliant notices is as follows:-

(a) The principles apply equally to statutory and contractual notices: see Newbold para. 69-70; York v. Casey cited in Burman para. 23; Yates.

(b) Where the statute or the contract term provides that a non-compliant notice will be invalid or ineffective, that is of course the end of the matter: see for example section 26(3) of the 1954 Act.

(c) Where it does not, the court must assess the statutory or contractual intention by the usual objective criteria, including the background and purpose of the provision, and the effect if any of non-compliance.

(d) Where the notice is provided for by a statute or by a professionally drafted contract, and the draftsman has not provided, either way, for the consequence of noncompliance, one may reasonably assume that this is deliberate, and that it has been left to the court to decide; while it may go too far to say that there is a presumption, it is natural to conclude that it was intended that the notice should, at least in some circumstances, but not necessarily in all, survive non-compliance.

(e) The use of "must", "shall" etc. is not decisive, as Millett L.J. indicated in Petch v. Gurney. I do not think Lord Denning M.R. was going any further in Yates than to say that the provisions of that lease which were so worded were mandatory. The court will look to the substance, not the form.

(f) What is often decisive in practice is the effect of the non-compliance: see in particular the dictum of Lord Steyn in Soneji cited at para. 28 above. Was the omitted information material which it was essential for the other party to have? Has the noncompliance prejudiced the other party? For this reason, notice provisions may be what I have called hybrids, sometimes "mandatory", sometimes not, depending on the nature and extent of the error, and its effect.

(g) Although provisions relating to the exercise of an option are usually mandatory, any such rule is the court's servant, not its master, and is not inflexible. I agree with Mr. Fancourt's submission that, whilst non-fulfilment in any respect of the conditions for the exercise of an option (in this case the pre-conditions to be fulfilled by 23rd August next), will be fatal, the same may not be true as to the form of an advance notice of the exercise of the option, which in this case was explicitly required to be timely, but not explicitly required to be in due form, to be effective.

40. Applying the above to the present case, I hold that the notice was not invalidated by the failure to state that it was given under section 24(2) of the Landlord and Tenant Act, for the following reasons:-

(a) Clause 19 is part of a well drafted lease, and it does not so provide.

(b) By contrast, by clause 19.6 time is of the essence for the whole clause, including for the service of the notice, and the terms of clause 19.2 and 19.3 make it clear that the lease will not terminate without fulfilment of the pre-conditions for the exercise of the option: only the consequence of a non-compliant form of notice is not specified.

(c) The failure to use the required wording made no difference at all. All that mattered was that there was no simultaneous request for a new tenancy in the form prescribed by section 26(3). Once notice to quit had been served, section 26(4) precluded any later such request.

(d) I therefore do not think that the incantation of the magic words was an indispensable condition; it was not something which gave the defendant necessary or even relevant information.

(e) Although everything else in the option process, in particular the timeliness of the notice and the fulfilment of the preconditions, is almost certainly mandatory (I will not formally decide this in case an issue arises later) it would not be a sensible construction of clause 19 to hold that the use of the required words is mandatory in the circumstances. So to hold would be to adhere slavishly to a supposed rule of construction that makes everything about the process of exercising an option mandatory. As Mr. Fancourt submitted, one cannot realistically attribute to the parties an intention to make the tenant's exercise of an important right dependent on compliance with a meaningless formula.

(4) Is the provision for the required wording void?

41. In view of my previous conclusion, this point does not matter but, in case the matter goes further, I will deal with it shortly. I think that Mr. Wonnacott is right on this, for both the reasons he gives. Nobody suggests that Garston was wrongly decided and it represents the present law; therefore the stipulated formula had no effect on the claimant's rights under the 1954 Act, and section 38 does not bite.
42. Even if Garston had gone the other way, Joseph v. Joseph is distinguishable. In that case, the Court of Appeal held, obiter, that, on a construction of an agreement which it rejected, that agreement would have had the effect of destroying the tenant's existing rights under the 1954 Act, and would have been void. In the present case what would have been done, on Mr. Wonnacott's construction, would– as he says – have limited the tenant's contractual break rights in such a way as to prevent it from qualifying in a particular way for 1954 Act rights.

Decision

43. For all the reasons stated above, I will declare that the notice referred to at paragraph 3 above was a valid notice, having the effect of terminating the Lease on 23^rd August next, subject to fulfilment of the pre-conditions.