Mannai Investment Co Ltd v Eagle Star Assurance: HL 21 May 1997

Minor Irregularity in Break Notice Not Fatal

Leases contained clauses allowing the tenant to break the lease by serving not less than six months notice to expire on the third anniversary of the commencement date of the term of the lease. The tenant gave notice to determine the leases on 12th January 1995, although the third anniversary of the commencement date was 13th January 1995.
Held: A tenant’s notice exercising a break clause in a lease was to be treated in the same way as other notices; minor irregularities are not to be taken to override the clear intention of the notice. The notice was defective by mis-stating the date upon which it was to operate by one day. The test is an objective one as to whether the true intended meaning can be seen: ‘The question is not whether 12 January can mean 13 January: it self-evidently cannot. The real question is a different one: does the notice construed against its contextual setting unambiguously inform a reasonable recipient how and when the notice is to operate under the right reserved?’ and ‘The question is not how the landlord understood the notices. The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene.’ (Lord Steyn) As to interpretating a commercial contract: ‘In determining the meaning of the language of a commercial contract . . . the law . . . generally favours a commercially sensible construction. The reason for this approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would construe them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language.’ Appeal allowed (majority).

Lord Goff of Chieveley, Lord Jauncey of Tullichettle, Lord Steyn, Lord Hoffmann, Lord Clyde
Times 26-May-1997, [1997] 2 WLR 945, [1997] UKHL 19, [1997] AC 749, [1997] 3 All ER 352, [1997] 24 EG 122
House of Lords, Bailii
England and Wales
Appeal fromMannai Investment Co Ltd v Eagle Star Assurance Co Ltd CA 19-Jul-1995
A notice exercising a tenant’s or landlord’s right to break a lease, must be given precisely as required by the break clause in the lease.
Nourse LJ said that the last moment of time on one day is not the same as the first moment of time on . .
DistinguishedSidebotham v Holland CA 1895
A house was let to the defendant as a yearly tenant ‘commencing on May 19 instant’, and on 17th November the landlord served a notice to quit ‘on 19th May next’.
Held: It related to a point of time which was held to be common to both dates and . .
CitedCadby v Martinez 1840
A clause in his lease allowed the tenant to determine it by notice expiring on Michaelmas day 1837. The tenant mistakenly gave notice to quit and deliver up the premises on 24 June 1837. The notice was expressed to be ‘agreeably to the covenants of . .
OverruledHankey v Clavering CA 1942
A lease term ran for 21 years from 25 December 1934. A break clause gave either party the right to determine the lease at the expiration of the first seven years, by six calendar months’ notice. The landlord gave notice to the tenant’s solicitors in . .
CitedGardner v Ingram 1889
‘Although no particular form need be followed, there must be plain, unambiguous words claiming to determine the existing tenancy at a certain time.’ . .
CitedP Phipps and Co (Northampton and Towcester Breweries) Ltd v Rogers 1925
A notice to quit a lease should be so expressed as to expire on the relevant date. ‘The date of determination must be the right date.’ . .
CitedDoe d Cox v Roe 1803
The landlord of a public house in Limehouse gave notice to quit ‘the premises which you hold of me . . . commonly called or known by the name of The Waterman’s Arms.’ However, the only property let by the landlord to the tenant was a public house . .
CitedCarradine Properties Ltd v Aslam ChD 1976
Under a break clause in a lease, the relevant date upon which a notice given by either party under the clause might take effect was a date in September 1975, but the landlord’s notice in September 1974 specified a date in 1973. The date in 1973, had . .
DoubtedMicrografix v Woking 8 Ltd ChD 1995
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CitedGermax Securities Ltd v Spiegel CA 1978
A notice was deemed valid despite an error since the error was not in the operative party of the notice. . .
CitedSunrose Ltd v Gould 1962
In construing a document ‘the principle is that that is certain which the context renders certain.’ . .
CitedReardon Smith Line Ltd v Yngvar Hansen-Tangen (The ‘Diana Prosperity’) HL 1976
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A party may be precluded by an estoppel by convention from raising a contention contrary to a common assumption of fact or law (which could include the validity of a notice) upon which they have acted. . .
CitedHeap v Ind Coope and Allsopp Ltd 1940
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The question was whether under the a notice to avoid disclaimer given by the landlord under the Act, requiring the tenant to retain the lease on the terms set out in section 10, was invalid because section 10 was irrelevant and by mistake inserted . .
CitedDoe d Spicer v Lea 1809
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CitedIn re Fish CA 1894
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Backgroun Used to Construe Commercial Contract
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CitedGarston v Scottish Widows’ Fund and Life Assurance Society ChD 1996
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CitedInvestors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
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Landlord and Tenant, Contract

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Updated: 18 December 2021; Ref: scu.158894